Tue, 23 Apr 2024
06:48:46
'Exchange Loss':
16 Jul 2013
13:43:17
Dialog is expected to create an Exchange Loss of Rs.450 million in Financial Year 2013 Quarter 2 - NDB Stock Brokers
Jul 16, 2013 (SLBO) - Sri Lanka's one of the leading stock brokering company NDB Stock Broker's research arm outlines that Sri Lanka's flagship telco - Dialog Axiata PLC's (DIAL) financials are expeected to create an exchange loss of nearly Rs.450 million in Financial Year 2013 Quarter 2.
In a recent research publshed by NDB Stock Brokers give 'Hold' recommendation for Sri Lanka's flagship telco service provider' - Dialog shares as the data revenue of Dialog (DIAL) is about 5% of total revenues of company and significant impact on revenue is unlikely in the short term.
"Hence we only expect a moderate growth in revenue due to the mobile data" NDB notes adding that an 'Exchange Loss is also expected' as DIAL had approximately US $ 145 million in foreign currency borrowings as at 31st March 2013 and since the Sri Lankan Rupee depreciation of 2.5% in Financial Year 2013 Quarter 2 is expected to create an exchange loss of approximately Rs.450 million for the quarter.
"We expect the borrowings to remain at current levels due to high capital expenditure in the short term which will create earnings volatility due to the exchange losses in future periods as well" NDB stock brokers note.
However the report notes that Dialog is in a drive positioning for growth in data whilst in order to capitalize on the next phase of telecommunication growth, mobile data, DIAL has secured the spectrum for 4G auctioned in March 2013, for a sum of Rs.3.3 billion. Accordingly DIAL has already commenced its 4G roll out.
Additionally, in order to support the growth in data connectivity, a further sum of US $ 30 million will be invested through Bay of Bengal Consortium in undersea optical fibre connectivity, the report outlines.
However,it also highlights that with a view of consolidating in the fixed telephony market in May 2013, the Dialog (DIAL) acquired Sky Television & Radio Network Private Limited and its spectrum resources for Rs.800 million to further boost its fixed LTE network.
"Fixed LTE is the successor for Wimax and CDMA technologies and DIAL expects it will improve its standing in the fixed segment" the report notes.
The report also predicts lower profits in FY13Q2, remain neutral – DIAL is expected to post lower profits in Financial Year 2013 Quarter 2, approximately 25% lower from Financial Year 2013 Quarter 1 and thus , NDB analysts says they maintain their recommendation despite the recent decline in share price as 'Hold' signal for Dialog.
In a recent research publshed by NDB Stock Brokers give 'Hold' recommendation for Sri Lanka's flagship telco service provider' - Dialog shares as the data revenue of Dialog (DIAL) is about 5% of total revenues of company and significant impact on revenue is unlikely in the short term.
"Hence we only expect a moderate growth in revenue due to the mobile data" NDB notes adding that an 'Exchange Loss is also expected' as DIAL had approximately US $ 145 million in foreign currency borrowings as at 31st March 2013 and since the Sri Lankan Rupee depreciation of 2.5% in Financial Year 2013 Quarter 2 is expected to create an exchange loss of approximately Rs.450 million for the quarter.
"We expect the borrowings to remain at current levels due to high capital expenditure in the short term which will create earnings volatility due to the exchange losses in future periods as well" NDB stock brokers note.
However the report notes that Dialog is in a drive positioning for growth in data whilst in order to capitalize on the next phase of telecommunication growth, mobile data, DIAL has secured the spectrum for 4G auctioned in March 2013, for a sum of Rs.3.3 billion. Accordingly DIAL has already commenced its 4G roll out.
Additionally, in order to support the growth in data connectivity, a further sum of US $ 30 million will be invested through Bay of Bengal Consortium in undersea optical fibre connectivity, the report outlines.
However,it also highlights that with a view of consolidating in the fixed telephony market in May 2013, the Dialog (DIAL) acquired Sky Television & Radio Network Private Limited and its spectrum resources for Rs.800 million to further boost its fixed LTE network.
"Fixed LTE is the successor for Wimax and CDMA technologies and DIAL expects it will improve its standing in the fixed segment" the report notes.
The report also predicts lower profits in FY13Q2, remain neutral – DIAL is expected to post lower profits in Financial Year 2013 Quarter 2, approximately 25% lower from Financial Year 2013 Quarter 1 and thus , NDB analysts says they maintain their recommendation despite the recent decline in share price as 'Hold' signal for Dialog.
© Sri Lanka Business Online,
All Rights Reserved.