Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Dialog Axiata posts strong Q1 results on mobile, TV growth

Dialog Axiata Plc (COL:DIAL), Sri Lankan's largest telecommunications company, said Thursday it increased first quarter profits and revenue on strong growth in its mobile and TV segments.

The company, which operates Dialog Mobile, posted net profit of LKR1.37 billion (US$12.49 million), or LKR0.17 per share, an increase of 7% over LKR$1.28 billion (US$11.67 million), or LKR0.15 per share, in the year-ago period. 

Revenue, meanwhile, rose 10% to LKR10.03 billion (US$91.41 million). The company said that growth in mobile revenues was driven by greater mobile subscribers, as well as the increased adoption of mobile broadband services. Dialog's customer base surpassed 7 million in the first quarter.

Interconnection revenues further bolstered the company's top-line.

Operating costs, excluding depreciation, grew by 17% year-over-year as international origination costs and domestic interconnection charges rose in tandem with the growth in revenues.

Dialog said network costs rose 18% as it aggressively expanded its network infrastructure footprint, surpassing 2000 base stations during the quarter. Price hikes with respect to key inputs such as electricity and fuel also impacted network costs.

Meanwhile, Dialog Group, which includes subsidiaries Dialog Broadband Networks and Dialog Television, reported that net profit rose 64% to LKR1.16 billion (US$10.57 million) in the first quarter, or LKR0.14 per share, from LKR 705.06 million (US$6.43 million), or LKR 0.08 per share, a year earlier.

The group reported strong 10% year-over-year growth in revenue to LKR 10.95 billion (US$99.80 million). Group EBITDA grew 7%, due to cost cutting measures and revenue gains.

The television segment saw revenues improve by 15%, as its pay television service added approximately 13,000 new customers during the quarter, cumulating to a subscriber base of more than 181,000 at quarter-end.

Dialog's broadband networks business reversed course to post a positive EBITDA during the quarter, from a prior year loss, underpinned by substantial reductions in operating and direct costs due to cost re-scaling initiatives implemented over past quarters.
 
Dialog said it recently launched its, advanced LTE, or Long Term Evolution, pilot wireless network in Colombo.

In February, it also agreed with the country's board of investment to committ a further US$150 million to expand and develop ICT (information and communication technology) infrastructure in the region.