Dialog Axiata 3Q revenue, profits soar

Dialog Axiata PLC’s revenues returned to pre-pandemic levels in the September quarter (3Q20) while profits rose, as the company settled debt and booked translation gains on foreign borrowings amid measures deployed to cut costs paid off.

The leader in mobile and home broadband reported revenues of Rs.30.5 billion for the quarter under review, compared to Rs.29.1 billion in the comparable period in 2019 and Rs.28.2 billion in the previous quarter ended in June 2020 (2Q20). 

“With the easing of strict lockdown measures starting mid-May, business activity resumed across the country and the group saw a gradual recovery in revenue and collections,” Dialog said 
in a statement. 

However, the company remains cautious of the new restrictions caused by the resurgence of the virus since early October, as such could slowdown the business momentum.

“The current unprecedented situation is yet evolving and the future impact will heavily depend on the complete removal of restrictions and time taken for economic activity to rebound to pre-COVID-19 levels.” the company said.  

“The overall impact on consumer spending and the recovery of the country’s enterprises will also be key determinants of future impact on our business. The group has resorted to aggressive cost rescaling and rationalisation initiatives, both in operating and capital expenditure, to soften the impact on the business,” it added.
Despite the immediate challenges, telcos largely remain beneficiaries of the pandemic as stay-at-home orders shifted work, education, meetings, entertainment and human interactions into virtual silos, which some call the ‘new normal’. 

While the technology stocks in the United States powered the most of the market rally this year, they received a drubbing on Monday to the news that the vaccine with a 90 percent efficacy was waiting to be deployed. 

Meanwhile, Dialog reported earnings of 59 cents a share or Rs.4.8 billion for the July-September quarter, compared to 18 cents a share or Rs.1.5 billion in the comparable period, last year. 

Dialog’s net finance cost fell sharply from Rs.1.8 billion to Rs.237.5 million, as the company settled debt worth of Rs.7.2 billion and made a foreign exchange gain of Rs.188 million, instead of a loss of Rs.968 million, as the rupee appreciated in September against the United States dollar. 

The company’s distributions costs fell from Rs.3.6 billion to Rs.2.8 billion, making a saving of about Rs.800 million between the two periods. 

Dialog’s Malaysian parent Axiata Investments (Labuan) Limited has 83.01 percent in the company while Sri Lanka’s Employees’ Provident Fund has a 2.90 percent stake, being its second largest shareholder.