Sri Lanka Equity Analytics Markets 27 July 2010 37 views No Comment  Print This Post  Email This Post

Sri Lankan mobile phone operator Dialog Axiata made a net profit of 1.37 billion rupees in the June 2010 quarter compared with a loss of 7.24 billion rupees a year ago, a stock exchange filing said. Sales rose 14.3 percent to 10.16 billion rupees over the period while administration costs fell to 1.6 billion rupees from nine billion rupees the year before owing to cost cutting. Basic earnings per share were 0.16 rupees compared with a loss of 0.99 rupees per share in the June quarter of the previous year.

The number of Dialog subscribers rose 10 percent to 6.6 million at end of June 2010 from a year ago.

“The company continued to register positive gains in the mobile market during the second quarter of 2010, on the backdrop of aggressive competition,” a statement said.

“Company revenue grew by a robust 15 percent compared to the first half of 2009 and by two percent quarter-on-quarter.”

The Dialog group returned to profitability in the March 2010 quarter after suffering a string of losses in previous quarters owing to higher costs and a price war brought on by stiff competition.

It said in the first half ending June 2010 it made a foreign exchange translation gain of 279 million rupees in contrast with an exchange loss of 136 million in the first half of 2009.

Dialog said its pay television and broadband subsidiaries continued to be in the red but that their finances were improving with both having positive earnings before interest, tax depreciation and amortization (EBITDA).

Dialog Broadband Networks, which operates CDMA wireless local loop fixed telephony and WiMAX broadband wireless access networks, made a positive EBITDA of 33 million in the June quarter of 2010, up 113 percent compared to the year before although sales fell slightly.

Dialog said this signalled a ” turnaround at EBITDA level following negative performance over the past seven quarters.

“EBITDA turnaround at DBN was underpinned by operating and direct cost savings accruing from continued focus on the implementation of strategic cost rescaling initiatives.

“Broadband revenues grew by 26 percent fuelled by a 17 percent year-on-year growth in fixed broadband subscribers,” the statement said.

DBN’s fixed line CDMA subscriber base increased by three percent to reach 182,000 by June from a year ago although CDMA usages revenues fell by 10 percent.

Dialog Television (DTV), a digital satellite television service, reported an EBITDA of 30 million rupees in the June 2010 quarter, “signifying the second successive quarter of positive EBITDA performance, an improvement of 23 percent and 135 percent on quarter-on-quarter and year-on-year basis.

“EBITDA growth was fuelled by robust increase in usage revenues.”

Pay TV subscribers increased by 17 percent by June 2010 to reach a total of 160,000 from a year ago.

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