Dialog’s Core Business Demonstrates Resilience in 1H 2024

• 1H 2024 Revenue recorded at Rs82.5Bn, Core Revenue up 2% YTD
• 1H 2024 EBITDA remained flattish at Rs27.1Bn, Core EBITDA Margin reach 39.2% for 1H 2024
• Total Taxes Paid to GoSL Rs23.3Bn for 1H 2024 which included Rs6.5Bn in Direct and Rs16.8Bn in Indirect Taxes; The total taxes paid increased 6% YTD
• Capex Investments of Rs7.7Bn in first half; Operating Free Cashflow reached Rs12.6Bn for 1H 2024

Dialog Axiata PLC announced, Friday 9th August 2024, its consolidated financial results for the six months ended 30th June 2024. Financial results include those of Dialog Axiata PLC (the “Company”), Bharti Airtel Lanka (Private) Limited (“Airtel”) and of the Dialog Axiata Group (the “Group”).

The Group concluded the 1H 2024 with positive revenue performance being recorded across business segments, namely, Mobile, Fixed Line, Digital Pay Television, and Tele-infrastructure. However due to forex appreciation and continued scaling down of low margin International Wholesale Business, the consolidated Revenue for the Group declined by 13% YTD to reach Rs82.5Bn for 1H 2024 albeit core- revenue growing 2% YTD. Group revenue declined 1% QoQ to reach Rs41.0Bn for 1H 2024.

During the quarter the Revenue recognition policy for H-One (Private) Limited changed and consequently, Revenue is now recognized net of cost, as opposed to the previous policy of recognizing Revenue on gross basis. Accordingly, the comparative numbers have been updated for this change.

Despite the elevated cost base due to unfavourable externalities, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) remained flattish to record at Rs27.1Bn for 1H 2024 and Rs13.5Bn for Q2 2024 as cost rescaling initiatives delivered an estimated saving of Rs2.3Bn for 1H 2024. Overall, the core business remained resilient to record a core EBITDA margin of 39.2% for 1H 2024. The Group Net Profit After Tax (“NPAT”) was recorded at Rs1.3Bn for 1H 2024 resulting in a decline of 89% YTD due to forex gains recorded in 1H 2023.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs23.3Bn to the Government of Sri Lanka (GoSL) during the first six months of 2024, an increase of 6% YTD. Total remittances included Direct Taxes and Levies amounting to Rs6.5Bn and Rs16.8Bn in Consumption Taxes collected on behalf of the GoSL.

The Group continued to support infrastructure investments in 1H 2024 to ensure seamless customer experience and leadership in Sri Lankas’ Broadband and ICT sectors. Accordingly, the Capital expenditure reached Rs5.0Bn for 1H 2024 representing a decline of 45% YTD. In line with the above Capex, the Group recorded positive Operating Free Cash Flow (“OFCF”) of Rs12.5Bn for 1H 2024, up over 100% YTD.

On 26 June 2024, Dialog Axiata PLC (“Dialog”), Axiata Group Berhad (“Axiata”), and Bharti Airtel Limited (“Bharti Airtel”) successfully completed the share sale transaction, with Dialog acquiring 100% of the issued shares in Bharti Airtel Lanka (Private) Limited (“Airtel Lanka”) through a share swap. Post this share swap, Axiata holds 73.75% of Dialog while Bharti Airtel will own 10.355% and the remaining 15.895% of shares are held by the public. Bharti Airtel financials have been incorporated in the consolidated statement of financial position as at 30 June 2024. Dialog aims to amalgamate Airtel Lanka under the applicable provisions of the Companies Act, with Dialog remaining as the amalgamated entity. Post- merger, Dialog and Airtel brands will continue to serve their respective customers under two brands, while the two networks will begin consolidation aimed at delivering exceptional value and superior connectivity solutions to consumers and enterprises.

At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (63%) and Group EBITDA (65%). Company revenue was recorded at Rs51.6Bn for 1H 2024 and Rs26.0Bn for Q2 2024 up 2% YTD and 1% QoQ respectively, resulting from the growth in data segment. Profitability improved as Company EBITDA was recorded at Rs17.6Bn for 1H 2024 and Rs8.9Bn for Q2 2024 up 2% on both YTD and QoQ basis. However, amid higher depreciation, Company recorded a Net Loss of Rs371Mn for 1H 2024 and Rs2.0Bn for Q2 2024.

Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space with the subscriber base being maintained at 1.6Mn as of end 1H 2024. DTV Revenue reached Rs6.1Bn for 1H 2024 recording a growth of 1% YTD albeit declining 4% QoQ to record at Rs3Bn, as total indirect taxes at over 42% continued to impact negatively. DTV EBITDA declined 22% YTD to reach Rs954Mn for 1H 2024 resulting from cost escalations due to forex, albeit growing 6% QoQ to reach Rs491Mn. Consequently, DTV Net Loss was recorded at Rs424Mn in 1H 2024.

Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded Revenue of Rs28.1Bn for 1H 2024 and Rs13.5Bn for Q2 2024, down 32% YTD and 8% QoQ respectively. The headline Revenue decline was due to the scaling down of low margin international wholesale business. However, DBN EBITDA was up 3% YTD to reach Rs8.0Bn for 1H 2024 while NPAT reached Rs1.7Bn for 1H 2024 up 18% YTD.

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