Dialog Core Revenue Remains Resilient; Margins Expand YoY.

7th May 2024         Colombo


  • Q1 24 Core Revenue recorded at Rs 34.6Bn, up 1% YoY
  • Q1 24 EBITDA recorded at Rs.13.5Bn, up 3% YoY
  • EBITDA Margin reach 31.4% up 5.4pp
  • Total Taxes Paid to GoSL Rs12.3Bn which included Rs4.3Bn in Direct and Rs8.0Bn in Indirect Taxes
  • Capex Investments of Rs3.3Bn during the Quarter; OFCF reached Rs6.6Bn for Q1 24

Dialog Axiata PLC announced its consolidated financial results for the three months ended 31st March 2024. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Macro environment continued to improve in Q1 2024 as indicators such as exchange rate and Inflation moved in the favourable direction though settling at elevated levels relative to pre-crisis. As a result of the high inflationary environment that prevailed in the past, the consumer spending on telecommunication services yet remains challenged whilst the cost base also remains elevated leading to challenges for margin expansion.

The Group concluded the quarter with positive revenue performance being recorded on core revenue as it reached Rs34.6Bn up 1% Year-on-Year (“YoY”) mainly driven by growth in Mobile Data and TV Revenues. The Group continued its strategy to scale down low margin International Wholesale Business which is expected to expand reported margins for the Group while absolute impact to the EBITDA remains neutral. The consolidated Revenue for the Group was reported at Rs43.2Bn down 14% YoY and 0.7% Quarter-on-Quarter (“QoQ”). The QoQ revenue growth was impacted due to the appreciation of the Sri Lankan Rupee (“LKR”) against the United States Dollar (“USD”) by 8.2% YoY and 7.3% QoQ and the increase in Value Added Tax (“VAT”) from 15%-18% effective 01 January 2024.

Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) recorded a growth of 4% YoY to record at Rs13.5Bn albeit declining 20% QoQ due to moderation in core Revenue growth. Headline EBITDA margin improved 5.4pp as compared to same period YoY. The Group Net Profit After Tax (“NPAT”) was recorded at Rs2.8Bn for Q1 2024 resulting in a decline of 68% YoY and 47% QoQ. The NPAT benefited from a forex gain of Rs3.7Bn on account of the LKR strengthening.

Dialog Group continued to be a significant contributor to state Revenues, remitting a total of Rs12.3Bn to the Government of Sri Lanka (“GoSL”) during Q1 2024. Total remittances included Direct Taxes and Levies amounting to Rs4.3Bn as well as Rs8.0Bn in Consumption Taxes collected on behalf of the GoSL.

The Group remained steadfast to meet growing demand from both retail and corporate sectors, whilst also ensuring seamless experience and leadership in Sri Lankas’ Broadband and ICT sectors. Dialog mobile network was recognised by third party network monitoring platform OPENSIGNAL as the leader across all categories for experience, coverage and consistency. The capital expenditure for Q1 2024 reached Rs3.3Bn representing a drop of 38% YoY. As a result of strengthening LKR and lower capex, the Group recorded Operating Free Cash Flow (“OFCF”) of Rs6.6Bn for Q1 2024 up 34% QoQ though declining 43% YoY.

The proposed merger with Aritel Lanka Limited, initially announced on 2nd May 2023, reached a milestone on 18th April 2024 as Dialog, Axiata Group and Bharti Airtel signed a Definitive Agreement to combine operations in Sri Lanka. Under this agreement, Dialog will acquire 100% of the issued shares in Airtel Lanka, in consideration of which Dialog will issue to Bharti Airtel, ordinary voting shares which will amount to 10.355% of the total issued shares of Dialog by way of a share swap. The Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has granted its approval for the proposed merger in March 2023. The transaction is subject to the approval of Dialog's shareholders and is pending the completion of specific conditions outlined in the Share Sale Agreement, including clearance from the Colombo Stock Exchange (CSE) and completion of other applicable legal and compliance procedures.

In the recent quarter, Dialog secured several awards, highlighting its industry-leading commitment to transparency and performance. Notably, the Company topped the Transparency in Corporate Reporting (TRAC) assessment of 2023 conducted by Transparency International Sri Lanka, underscoring its commitment to the core values of Uncompromising Integrity and Exceptional Performance. Dialog was also voted in as the ‘Telecommunication Brand of the Year’ for a record thirteenth year by Sri Lankan consumers at the SLIM-KANTAR People’s Awards 2024.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (59%) and Group EBITDA (65%). Company Revenue remained stable YoY as Revenue reached Rs25.6Bn for Q1 2024, whilst on a QoQ basis Revenue declined by 3% due to appreciating LKR impacting dollar denominated international revenues and increase in VAT. EBITDA was recorded at Rs8.7Bn for Q1 2024 representing a growth of 5% YoY on the back of cost moderation in IT and Manpower. On a QoQ basis EBITDA declined by 18%. The Company NPAT was recorded at Rs1.6Bn for Q1 2024, declining 79% and 30% on YoY and QoQ basis respectively. Company NPAT was supported by a forex gain of LKR 3.5Bn for the quarter.

Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space maintaining a strong subscriber base of over 1.6Mn as of end Q1 2024. DTV Revenue reached Rs3.1Bn for Q1 2024, recording a growth of 2% YoY driven by advertising revenue albeit declining 2% QoQ due to slow down in subscription revenue as total indirect taxes on Pay Tv was recorded at 42.02% due to increase in VAT from 01 January 2024. DTV EBITDA was recorded at Rs463Mn a growth of 25% YoY whilst declining 56% QoQ while the NPAT was recorded at Rs32Mn for the quarter.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded Revenue of Rs14.6Bn for Q1 2024, down 31% YoY and 1% QoQ. The headline Revenue decline was due to the scaling down of low margin international wholesale business. The EBITDA for DBN grew 5% YoY albeit declining 19% QoQ to record at Rs4.0Bn. NPAT reached Rs945Mn for Q1 2024 increasing 19% YoY.

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