Dialog Profitability Improves in 1H 2023 Driven by Cost Rescaling Initiatives and Favorable Forex

10th August 2023         Colombo


  • 1H 2023 Revenue recorded at Rs97.7Bn up 20% YTD
  • 1H 2023 NPAT recorded at Rs11.8Bn recording over 100% growth YTD
  • Total Taxes Paid to GoSL Rs21.9Bn for 1H 2023 which included Rs6.4Bn in Direct and Rs15.5Bn in Indirect Taxes; The total taxes paid increased 29% YTD
  • Capex Investments of Rs14.0Bn in first half; OFCF reached Rs6.2Bn for 1H 2023

Dialog Axiata PLC announced, Thursday 10th August 2023, its consolidated financial results for the six months ended 30th June 2023. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Group concluded the 1H 2023 with positive revenue performance being recorded across all business segments, namely, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure to record a consolidated Revenue of Rs97.7Bn, demonstrating a growth of 20% Year-to-Date (“YTD”). However, Revenue declined of 5% Quarter-on-Quarter (“QoQ”) to reach Rs47.7Bn for Q2 2023 due to drop in non-core revenue1 resulting from LKR appreciation against the USD. Despite the elevated cost base due to unfavourable externalities, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) maintained flattish and marginally declined by 1% YTD to record at Rs27.2Bn. The EBITDA for Q2 2023 was recorded at Rs14.2Bn up 9% QoQ as cost rescaling initiatives gained more traction to record a saving of Rs5Bn for the quarter (Rs7.5Bn for 1H 2023). Overall, the core business remained resilient to record a core EBITDA margin of 40.2% for 1H 2023.

The Group Net Profit After Tax (“NPAT”) continued to benefit from forex gains to record at Rs11.8Bn for 1H 2023, with a growth exceeding 100% YTD, whilst on a QoQ basis NPAT recorded a decline of 64% to reach Rs3.1Bn for Q2 2023. The Sri Lanka Rupee (“LKR”) appreciated against the United States Dollar (“USD”) by 5.6% during the quarter resulting in a forex gain for the group. Normalised for the forex gain a Net Loss was recorded at Rs.0.5Bn for 1H 2023 and Rs0.3Bn for Q2 2023.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs21.9Bn to the Government of Sri Lanka (GoSL) during the first six months of 2023, an increase of 29% YTD. Total remittances included Direct Taxes and Levies amounting to Rs6.4Bn and Rs15.5Bn in Consumption Taxes collected on behalf of the GoSL.

The Group continued to support infrastructure investments in 1H 2023 to ensure seamless customer experience and leadership in Sri Lankas’ Broadband and ICT sectors. Accordingly, the Capital expenditure reached Rs14.0Bn for 1H 2023 representing a decline of 38% YTD. In line with the above Capex, the Group recorded positive Operating Free Cash Flow (“OFCF”) of Rs6.2Bn for 1H 2023, up over 100% YTD.

In its 20th annual review, Brand Finance, the world's foremost independent brand valuation consultancy, bestowed the prestigious title of 'Sri Lanka's Most Valuable Brand' upon Dialog Axiata PLC, for the fifth consecutive year, with a brand value of Rs52Bn. Dialog emerged as the strongest brand in Sri Lanka, earning the esteemed AAA+ brand rating. The Company was also accorded the title of ‘Most Valuable Telecommunications Brand’ for the 16th consecutive year.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (52%) and Group EBITDA (63%). Company revenue was recorded at Rs50.4Bn for 1H 2023 up 3% YTD resulting from the growth in data segment. On a QoQ basis revenue declined 3% QoQ to reach Rs24.8Bn due to the impact from consumer affordability challenges. Profitability continued to be impacted YTD due to higher network spend and rise in operating expenses resulting from LKR depreciation against the USD as alluded to earlier. Accordingly, Company EBITDA was recorded at Rs17.2Bn for 1H 2023 down 10% albeit improving on a QoQ basis by 7% to reach Rs8.8Bn due to traction gained on cost rescaling initiatives. Company NPAT was recorded at Rs9.6Bn for 1H 2023 and Rs2Bn for Q2 2023.

Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space with the subscriber base being maintained at 1.7Mn as of end 1H 2023. DTV Revenue reached Rs6.1Bn for 1H 2023 recording a growth of 9% whilst declining 2% QoQ to record at Rs3Bn. DTV EBITDA recorded growth of 12% to reach Rs1.2Bn for 1H 2023 supported by revenue performance and cost rationalization. Consequently, DTV NPAT was recorded at Rs685Mn in 1H 2023 also aided by the strengthening LKR against the USD.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses continued to record strong revenue growth at 44% YTD to reach Rs41.4Bn for 1H 2023 due to growth in wholesale revenue. However, on a QoQ basis revenue declined 5% QoQ to reach Rs20.2Bn for Q2 2023 due to lower wholesale revenue amid strengthening exchange rate. Following the revenue performance, DBN EBITDA was up 5% YTD to reach Rs7.8Bn for 1H 2023 while NPAT reached Rs1.4Bn for 1H 2023 up 13% YTD.

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