Dialog profitability improves in 1H 2023

Dialog Axiata PLC announcing its consolidated financial results for the six months to end June 2023 resulted in the group concluding 1H 2023 with positive revenue performance being recorded across all business segments, namely, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure.

Consolidated revenue was recorded at Rs. 97.7billion, demonstrating a growth of 20 per cent Year-to-Date (YTD). However, revenue declined 5 per cent Quarter-on-Quarter (QoQ) to reach Rs. 47.7 billion for Q2 2023 due to drop in non-core revenue1 resulting from LKR appreciation against the USD, the company said in a statement.

Despite the elevated cost base due to unfavourable externalities, Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) was flat and marginally declined by 1 per cent YTD to record at Rs.27.2 billion. The EBITDA for Q2 2023 was recorded at Rs.14.2 billion up 9 per cent QoQ as cost rescaling initiatives gained more traction to record a saving of Rs.5 billion for the quarter (Rs.7.5 billion for 1H 2023). Overall, the core business remained resilient to record a core EBITDA margin of 40.2 per cent for 1H 2023.

The group Net Profit After Tax (NPAT) continued to benefit from forex gains to record at Rs.11.8 billion for 1H 2023, with a growth exceeding 100 per cent YTD, whilst on a QoQ basis NPAT recorded a decline of 64 per cent to reach Rs.3.1billion for Q2 2023.

Normalised for the forex gain a Net Loss was recorded at Rs.0.5 billion for 1H 2023 and Rs.0.3 billion for Q2 2023.

The Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs.21.9 billion to the Government during the first six months of 2023, an increase of 29 per cent YTD. Total remittances included Direct Taxes and Levies amounting to Rs.6.4 billion and Rs.15.5 billion in Consumption Taxes collected on behalf of the Government.

The group continued to support infrastructure investments in 1H 2023 to ensure seamless customer experience and leadership in Sri Lanka’s Broadband and ICT sectors. Accordingly, the Capital expenditure reached Rs.14 billion for 1H 2023 representing a decline of 38 per cent YTD.

At an entity level, company revenue was recorded at Rs.50.4 billion for 1H 2023 up 3 per cent YTD resulting from the growth in data segment. On a QoQ basis revenue declined 3 per cent QoQ to reach Rs.24.8 billion due to the impact from consumer affordability challenges.

Dialog Television (DTV) continued to consolidate its leadership position in the Digital Pay Television space with the subscriber base being maintained at 1.7 million as of end 1H 2023. DTV Revenue reached Rs.6.1 billion for 1H 2023 recording a growth of 9 per cent whilst declining 2 per cent QoQ to record at Rs.3 billion.