Norwegian bank increases stake in Dialog Axiata PLC
View(s):
Telecommunications entity Dialog Group’s revenue expanded by 18.7 per cent to reach Rs. 21 billion in 2Q16 against Rs. 17.7 billion reported in 2Q15. A media statement from the company revealed that a feature of the quarter under review was that Norges Bank increased its shareholding in Dialog Axiata PLC to 96.6 million shares as of end June. Norway’s Norges Bank, managing the world’s biggest sovereign wealth fund, has its local operations managed by Lyner Wealth Fund. It is now the fifth largest shareholder in Dialog with a 1.19 per cent stake. Dialog’s mobile operation segment recorded a 17.4 per cent year on year (yoy) growth in revenue at Rs. 17.52 billion during 2Q16 compared to Rs. 14.93 billion reported in 2Q15.
The fixed telephony and broad band operation segment at Dialog recorded a growth of 32.4 per cent yoy to reach Rs. 1.98 billion Rs.1.5 billion reported in 2Q15. The television operation segment grew 18.6 per cent yoy to reach Rs. 1.56 billion during the quarter against Rs. 1.32 billion reported last year. According to the company, the quarter performance has been significantly impacted by the introduction of VAT (value added tax) and NBT (Nation Building Tax) on their mobile and fixed telecommunications and DTH pay TV services. They said that the severe weather conditions in May had a (bad) effect on the telecommunication consumption patterns impacting the overall performance during the period.
Meanwhile the propose merger deal between Dialog Axiata and the Sri Lankan unit of Indian-backed Bharti Airtel is still under discussion, unconfirmed reports said. The taxes on telecom industry have had a negative impact on this deal, according to some sources. They said that the much discussed share-swap deal has taken a beating in this complicated tax structure. Industry analysts are still hopeful of a consolidation in these two with Sri Lanka being a most crowded market with five operators serving a population of 21 million. They say that consolidation is an attractive option for telcos based on uncertainty over proposals to increase taxes that could lower profitability and raise leverage.