Dialog Axiata PLC stated that despite the challenging environment, all its business segments, namely, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses positively contributed to record a consolidated revenue of Rs 38.3 billion for Q1 2022, demonstrating a strong growth of 16 per cent Year-on-Year (“YoY”) and three per cent Quarter-on-Quarter (“QoQ”). Underpinned by Revenue growth, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew eight per cent YoY albeit declining four per cent QoQ to record at Rs 14.7 billion for Q1 2022.
The QoQ decline in EBITDA was driven by higher spend on network and direct costs due to escalation of dollar denominated expenses and increase in energy costs due to power cuts. The Group Net Profit After Tax (“NPAT”) was negative for Q1 2022 at Rs 15.8 billion, impacted by the steep depreciation of the LKR against the United States Dollar (“USD”) by 46 per cent for Q1 2022 versus a depreciation of 7.1 per cent for Q1 2021 and a stable movement in Q4 2021. The Forex loss of Rs 20.2 billion recorded by Dialog Group was due to outstanding USD denominated debt obligations and foreign vendor liabilities. The USD debt obligation for the Group totalled USD 145 million by end Q1 2022. Normalised for the said foreign exchanges loss Group NPAT was recorded at Rs 4.3 billion for Q1 2022 declining four per cent YoY and 11 per cent QoQ.
Dialog Group continued to be a significant contributor to State Revenues, remitting a total of Rs 5.9 billion to the Government of Sri Lanka (“GoSL”) during Q1 2022. Total remittances included Direct Taxes and Levies amounting to Rs 2.1 billion as well as Rs 3.8 billion in Consumption Taxes collected on behalf of the GoSL.
The Group remains committed to provide seamless and consistent connectivity to all Sri Lankans during these unprecedented times and accordingly spent Rs 7.5 billion in capital expenditure for the quarter ended 31 March 2022, resulting in a Capex to Revenue ratio of 20 per cent for Q1 2022. Capital expenditure was directed towards investments in High-Speed Broadband infrastructure to further expand Dialog’s leadership in Sri Lanka’s Broadband sector. The Group recorded Operating Free Cash Flow (“OFCF”) of Rs 6.2 billion for Q1 2022. The Group balance sheet continued to be low geared, despite new USD borrowings during the quarter, to record the Net Debt to EBITDA ratio at 0.49x by end Q1 2022. The Return on Invested Capital (“ROIC”) remained at healthy levels to recorded at 16.5 per cent for Q1 2022 albeit declining 0.6pp YoY and 1.4pp QoQ
Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space with a subscriber growth of nine per cent YoY, recording a total subscriber base of 1.7 million as at end of March 2022
Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded Revenue of Rs 12.6 billion for Q1 2022, up 36 per cent YoY and one per cent QoQ. The top line growth was mainly driven by favourable movement in international wholesale revenue.