Dialog Axiata PLC announced, its consolidated financial results for the three months ended March 31 2022. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).
Sri Lanka is engulfed in an economic and political crisis resulting from the impacts of COVID-19, significant tax cuts and large sovereign debt repayments collectively depleting the limited foreign reserves of the country. As a result, the Sri Lankan Rupee (“LKR”) depreciated by 46% against the USD during Q1 2022.
Despite the challenging environment, all business segments, namely, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses positively contributed to record a consolidated Revenue of Rs 38.3bn for Q1 2022, demonstrating a strong growth of 16% Year-on-Year (“YoY”) and 3% Quarter-on-Quarter (“QoQ”).
Underpinned by Revenue growth, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew 8% YoY albeit declining 4% QoQ to record at Rs14.7bn for Q1 2022. The QoQ decline in EBITDA was driven by higher spend on network and direct costs due to escalation of dollar denominated expenses and increase in energy costs due to power cuts. The Group Net Profit After Tax (“NPAT”) was negative for Q1 2022 at Rs15.8Bn, impacted by the steep depreciation of the LKR against the United States Dollar (“USD”) by 46% for Q1 2022 versus a depreciation of 7.1% for Q1 2021 and a stable movement in Q4 2021. The forex loss of Rs.20.2 bn recorded by Dialog Group was due to outstanding USD denominated debt obligations and foreign vendor liabilities. The USD debt obligation for the Group totalled USD145 mn by end Q1 2022. Normalised for the said foreign exchanges loss Group NPAT was recorded at Rs4.3bn for Q1 2022 declining 4% YoY and 11% QoQ.
Dialog Group continued to be a significant contributor to state Revenues, remitting a total of Rs5.9 bn to the Government of Sri Lanka (“GoSL”) during Q1 2022. Total remittances included Direct Taxes and Levies amounting to Rs2.1 bn as well as Rs3.8 bn in Consumption Taxes collected on behalf of the GoSL.
The Group remains committed to provide seamless and consistent connectivity to all Sri Lankans during these unprecedented times and accordingly spent Rs7.5Bn in capital expenditure for the quarter ended March 31, 2022, resulting in a Capex to Revenue ratio of 20% for Q1 2022. Capital expenditure was directed towards investments in High-Speed Broadband infrastructure to further expand Dialog’s leadership in Sri Lanka’s Broadband sector.