Dialog Axiata Rebounds in Q3, Delivering Growth in Core Revenue and Profitability

• Group Revenue gained momentum as core Revenue grew 6% YTD and 15% QoQ
• EBITDA Reached Rs45.1Bn up 1% YTD and up 33% QoQ
• Total Taxes Paid to GoSL Rs35.1Bn for nine months ending 30th September 2024 which included Rs8.6Bn in Direct and Rs26.5Bn in Indirect Taxes
• Net Profit reported at Rs4.5Bn for Q3 2024, up >+100% QoQ
• Operating Free Cash Flow up 35% YTD and 7% QoQ
• Capex Investments of Rs14.5Bn

Dialog Axiata PLC announced, Thursday 7th November 2024, its consolidated financial results for the nine months ended 30th September 2024. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Group completed the amalgamation with Bharti Airtel Lanka (Private) Limited ("Airtel") during the quarter under the applicable provisions of the Companies Act, with Dialog remaining as the surviving entity. This marks the official cessation of Airtel as a corporate entity, effective 30th August 2024, with its operational performance fully subsumed and consolidated within Dialog's financial statements.

The Group¹ delivered a strong performance across Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses recording a positive core Revenue growth of 6% Year to Date (“YTD”). Excluding revenue from Airtel Lanka, YTD core Revenue growth was at 3%. Group Revenue reached Rs125.4Bn down 11% mainly resulting from the scaling down of low margin international wholesale business. The Q3 2024 Revenue was recorded at Rs42.8Bn up 5% Quarter-on-Quarter (“QoQ”). Excluding Airtel Lanka, Q3 2024 Revenue was down 3% QoQ albeit up 15% QoQ on Core Revenue basis. The Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) reached Rs45.1Bn up 1% YTD supported by top line performance. On a QoQ basis Group EBITDA demonstrated a strong recovery to record at Rs18.1Bn up 33% QoQ with an EBITDA margin of 42.0% as Cost Rescaling Initiatives yielded positive results. Group EBITDA margin reached 35.9% for first nine months of 2024, up 4.4pp.

Group Net Profit After Tax (“NPAT”) reached Rs.4.5Bn for Q3 2024 up >+100% QoQ and 45% Year on Year (“YoY”) while the NPAT was recorded at Rs5.7Bn for first nine months of 2024, down 62% YTD which predominantly resulted from significantly higher favourable forex movement in 2023. Normalized for forex, PAT was down 54% YTD to record at Rs1.9Bn for the first nine months of 2024, owing to higher Deprecation, dilution from Airtel consolidation and Taxation.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs35.1Bn to the Government of Sri Lanka (GoSL) during the first nine months of 2024. Total remittances included Direct Taxes and Levies amounting to Rs8.6Bn and Rs26.5Bn in Consumption Taxes collected on behalf of the GoSL.

The Group continued to support infrastructure investments to ensure seamless customer experience and leadership in Sri Lanka’s Broadband and ICT sectors. During the quarter Company completed the consolidation of Airtel’s 2G/4G radio networks thereby improving network experience to over 20Mn Dialog and Airtel Subscribers. The YTD capital expenditure reached Rs14.5Bn for the nine months ended 30th September 2024 down 32% YTD. Dialog Axiata Group recorded positive Operating Free Cash Flow (“OFCF”) of Rs18.3Bn for the first nine months of 2024, up over 35% YTD.

Reinforcing the Group’s commitment to Sustainable Development Goals, Dialog introduced DeafTawk interpreter services at its customer care centers island wide, a move poised to enhance the accessibility and user-friendliness of its services to the deaf community. Highlighting the company's unwavering dedication to enhancing outreach for Persons with Disabilities (PWDs), this initiative aligns with the GSMA Assistive Tech Programme, which drives inclusivity by improving access and use of mobile technologies and related services for PWDs.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (66%) and Group EBITDA (67%). Company² revenue was recorded at Rs82.7Bn for the first nine months of 2024 up 8% YTD and Rs31.1Bn for Q3 2024 up 19% QoQ, resulting from growth in Data segment. On the back of Revenue uplift and positive realizations from Cost Rescaling Initiatives, profitability improved as Company EBITDA was recorded at Rs30.3Bn, up 9% for the nine months ended 30th September 2024 and Rs12.8Bn for Q3 2024, up 44%. However, PAT was recorded at Rs3.2Bn for the first nine months of 2024, down 67% YTD, amid higher depreciation and significantly higher favourable forex impact in 2023. PAT recorded strong improvement for Q3 2024 to reach Rs3.6Bn, up >+100% QoQ underpinned by lower Depreciation, lower Net Finance Cost and favourable forex impact.

Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television as the subscriber base being maintained at over 1.6Mn as of end Q3 2024. DTV revenue remained flat at Rs9.1Bn for nine months ended 30th September 2024, while on a QoQ basis revenue was up 2% to reach Rs3.0Bn for Q3 2024. DTV EBITDA was down 22% to reach Rs1.5Bn for the first nine months of 2024, due to escalation in transponder cost. Consequently, DTV PAT was recorded at a negative Rs706Mn for the nine months ended 30th September 2024 amid higher Depreciation and Net Finance Costs.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded Revenue of Rs38.2Bn and Rs10.1Bn for nine months ended 30th September 2024 and Q3 2024 respectively, down 35% YTD and 25% QoQ. The headline Revenue decline was due to the scaling down of low margin international wholesale business. DBN EBITDA recorded a marginal decline of 2% YTD to reach Rs12.5Bn for nine months ended 30th September 2024 while NPAT reached Rs2.8Bn for the same period, down 21% YTD.

¹Group performance includes Bharti Airtel Lanka Private Limited performance from 1st July 2024 onwards.

²Company performance includes Bharti Airtel Lanka Private Limited performance from 1st July 2024 onwards.

More details are available at the following links:
Dialog Axiata PLC direct weblink
CSE direct weblink
Dialog sustainability