Dialog Impacted by Further Forex Losses in Q2

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Despite the challenging environment witnessed in Q2 2022, Dialog sustained its consistent performance to record strong Revenue growth across all business segments, namely, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure, relative to prior periods, namely, Year-To-Date (‘YTD’) and Quarter-on-Quarter (‘QoQ’).

Accordingly, the Group recorded consolidated Revenue of Rs 81.6Bn for 1H 2022 and Rs 43.3Bn for Q2 2022. However, driven by higher network spend and escalation in the cost base, Group Earnings Before Interest, Tax, Depreciation and Amortisation (‘EBITDA’) declined to Rs 27.5Bn for 1H 2022 down by a moderate 1% YTD. On a QoQ basis EBITDA declined 14% to record Rs12.7Bn for Q2 2022.

The Group Net Profit After Tax (‘NPAT’) was impacted by the forex losses amid continued depreciation of the Sri Lankan Rupee (‘LKR’) against the United States Dollar (‘USD’). The resulting forex losses reached Rs 14.2Bn for Q2 2022 and Rs 34.3Bn for 1H 2022.

Group NPAT recorded a loss of Rs 28.3Bn for 1H 2022 and a loss of Rs 12.5Bn for Q2 2022 amid forex losses. Normalised for the said forex losses, NPAT continued to decline albeit recording profits of Rs 6.0Bn for 1H 2022 and Rs1.6Bn for Q2 2022.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs 16.9Bn to the Government of Sri Lanka (GoSL) during the first six months of 2022. Total remittances included Direct Taxes and Levies amounting to Rs 9.2Bn and Rs 7.7Bn in Consumption Taxes collected on behalf of the GoSL. The total taxes paid increased 46% YTD and 56% QoQ. The Direct Taxes included Rs3.8Bn paid during the quarter in lieu of one-off Surcharge Tax of 25% applicable on PAT of FY2020.

The Capital expenditure reached Rs 22.4Bn for 1H 2022. The Group Operating Free Cash Flow (‘OFCF’) declined to Rs 2.8Bn for 1H 2022.

At an entity level, Dialog Axiata PLC (the ‘Company’) continued to contribute a major share of Group Revenue (60%) and Group EBITDA (69%). Company revenue was recorded at Rs49.1Bn for 1H 2022 up 11% YTD and Rs 25.1Bn for Q2 2022 up 4% QoQ, resulting from growth in Data segment.

The EBITDA was recorded at Rs 19.0Bn for 1H 2022 down 5% and Rs 9.0Bn for Q2 2022 down 11%. Downstream of EBITDA performance, Company NPAT recorded a loss of Rs 25.9Bn for 1H 2022 and Rs 10.7Bn for Q2 2022. Normalised for forex losses NPAT was recorded at Rs 4.6Bn for 1H 2022 and Rs 1.5Bn for Q2 2022.

Dialog Television (DTV) revenue was recorded at Rs5.6Bn for 1H 2022 albeit on a QoQ basis revenue declined 2% to reach Rs 2.8Bn for Q2 2022. DTV EBITDA declined 24% to reach Rs 1.1Bn for 1H 2022. Consequently, DTV Net Loss increased to Rs 2.9Bn in 1H 2022.

Dialog Broadband Networks (‘DBN’) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded strong revenue growth of 42% YTD to reach Rs28.8Bn for 1H 2022 and Rs 16.2Bn for Q2 2022.

Following the revenue performance, DBN EBITDA increased to reach Rs 7.4Bn for 1H 2022 while Net Profit reached Rs1.3Bn for 1H 2022.