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Financial Statement Analysis – Dialog & Mobitel

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Financial Statement Analysis – Dialog & Mobitel                                                                                                                        Word count 4154

Description

Table of Contents

Executive Summary

1.0 Introduction.

Dialog Axiata PLC.

Ownership & Board of Directors

Sri Lanka Telecom Mobitel

2.0 Analysis of financial performance of companies

Profit & Loss Analysis (Profitability Analysis)

Gross profit Ratio

Net profit Ratio

Sales Growth

3.0 Investor Ratios

Earnings per share (EPS)

Price to Earnings Ratio (PE ratio)

4.0 Cash Flow Analysis (Financial Liquidity Analysis)

5.0 Liquidity Ratios

Debt Ratio

Interest coverage ratio

6.0 Balance Sheet Analysis (Financial Position Analysis)

Return On Assets (ROA)

Return On Equity (ROE)

7.0 Strengths & Weaknesses

8.0 Recommendations

References

 

Additional information

Preview

Executive Summary
This report consists of a comparison between the Dialog Axiata PLC and its competitor. All the figures compared are taken from the publicly available data which were downloaded from Colombo Stock exchange.
The first part consists of a brief introduction to the company and its main competitor Mobitel. Then the financials of both companies for a period of three years are compared. The industry analysis is not focused much as in collaboration, Dialog and Mobitel covers more than 60% of the telecommunication industry and telecommunication industry standards and criterias not being publicly available. All the financials are the latest available publicly. Both of them being the year ending on 31st December, the latest available figures are from 2016.
After the financial analysis, a brief analysis of strengths and weaknesses along with the recommendations are done.

1.0 Introduction
Dialog Axiata PLC
Dialog Axiata PLC is the Sri Lanka’s largest mobile internet service provider. They have the highest market share in the mobile technology and they have diversified in to many areas from cellular services, Broadband services to Satellite services. It was noted that they have a base of 10.8 million subscribers and they serve a market share of more than 52%, making them the leader in the telecommunication industry.
The Company is also one of the largest listed companies on the Colombo Stock Exchange in terms of market capitalization. Dialog, being in the industry for just 23 years, have been able to capture the majority of the customers with their real time services and products which have attracted more customers to their base. Being the fourth telecommunication service provider to arrive to Sri Lanka in 1995, they have registered in the Colombo Stock Exchange with a market capitalization of USD 500 million. They have been the changing force and the leader in the industry with their latest technology adaptions with the moving world such as new technology and new services along with the best and art of state devices. The success of their business is majorly with the marketing and adoption to the new technology.
Ownership & Board of Directors
The controlling power of Dialog Axiata PLC is with Axiata Group Bernhard which is a major telecommunication service provider company in Malaysia. Axiata Investments (Labuan) Limited which is a 100% owned subsidiary of Axiata Group Bernhard owns 83.32% of the shares of Dialog Axiata PLC which makes Axiata Group Bernhard the ultimate parent of Dialog Axiata PLC. The Board of Directors of Dialog consists of 9 directors who are led by Mr. Datuk Azzat Kamaludin. The Company is led by Dr. Hans Wijayasuriya who is the Chief Executive Director of Dialog from 1997.
Sri Lanka Telecom Mobitel
Sri Lanka telecom PLC is also a Sri Lankan telecommunication provider. They are a semi government owned company with the second largest customer base in the telecommunication industry. Just like Dialog, they serve both inside and outside Sri Lanka and they adopt almost the same technology as dialog does. They are the main competitor for Dialog as the other key players in the industry does not have the required resources to compete with those two. The Mobitel is led by Mr Kumarasinghe Sirisena who is the Chairman of Sri Lanka Telecom as well. The Chief Executive Officer Mr Dileepa Wijesundera handles the Mobitel overlooking the operations aspects of the company.