10 May 2024 09:43 am Views - 643
Dialog Axiata PLC saw its revenue languish during the first three months of the year as fixed telephony and broadband operations performed weaker while the mobile and television services too failed to impress much.
Sri Lanka’s largest mobile telephone operator reported a top-line of Rs.43.17 billion in the January – March quarter, down 13.8 percent from the same period last year.
It wasn’t immediately clear why the three key segments didn’t do well and what was behind the 35.5 percent slump in the revenue in the fixed telephony and broadband business.
The operators raised their tariffs beginning from January 2024 in proportion to the 3 percent increase in the value added tax. But the underwhelming performance at Dialog is hard to be attributed entirely to the tariff hike which was nominal.
The competition is also intense with the new generation technologies being introduced. But just a single quarter’s numbers aren’t sufficient to jump into definitive conclusions for why the slowdown in the company’s performance.
The mobile operations, the group’s largest, reported revenues of Rs. 27.15 billion for the quarter, not much different from a year ago.
The television operation meanwhile logged a 3.78 percent growth in its top-line to Rs. 3.12 billion.
The company reported an operating profit of Rs.2.72 billion, stable from the same period last year.
Meanwhile the company reported earnings of Rs.34 Cents a share Rs.2.77 billion for the quarter, compared to Rs.1.05 a share or Rs. 8.69 billion reported in the same period in 2023.
The profit slump is mainly caused by the sharp fall in the foreign exchange gains. The net foreign exchange gains were Rs. 3.72 billion in the foregoing quarter compared to Rs. 8.86 billion in the same period last year.
It was structural that Dialog’s financial performance gets caught between the sharp movements between the rupee and dollar exchange rate.
This is because the company has dollar denominated borrowings in its balance sheet and the rupee appreciation has had an impact.
The finance cost too rose by nearly 21 percent to Rs. 3.36 billion in the quarter.
In April, Dialog entered into a share sale agreement with Bharthi Airtel Limited to acquire the entirety of the issued shares of the Bharthi Airtel Lanka Limited to merge the two entities.
Axiata Investments (Labuan) Limited had 82.27 percent stake in Dialog while Employees Provident Fund has 2.88 percent as of March 2024.