Dialog’s 2Q performance boosted by pandemic-related restrictions

Dialog Axiata PLC reported some robust financial performance for the three months ended in June (2Q21), as the virus-related restrictions forced people and businesses to rely heavily on data, voice and other digital services offered by the company to ensure they remain connected with their workplaces, customers, schools and others, with minimum interruptions to their routines. 

The leader in mobile telephone services reported consolidated revenues of Rs.35.1 billion during the April-June quarter, up 24.5 percent from the same period last year, as the fresh restrictions caused a “surge in data demand, owing to partial lockdowns that prevailed during the period, that led to higher instances of work and learn from home,” the company said in a statement.  

The June quarter revenue also marked an increase from the revenue reported during its first fiscal quarter ended in March, which was Rs.32.9 billion, reflecting how the virus resurgence and its related restrictions and the prospects of telcos are interrelated.  

Despite some early challenges on its working capital caused by the difficulties in collection of dues and bandwidth, the telecommunication industry became one of the early winners of the pandemic, as the industry offered a viable platform for those who can still operate from a distant, although it wasn’t an aid for activities that require close proximity to people and also does not offer a complete substitute for school learning. 

To brace this surge in demand for data, the company said it invested a Rs.6.5 billion during the six months to June to build broadband capacity, bringing the total investments to a mammoth Rs.35 billion since the onset of the pandemic in March last year.  

Dialog reported earnings of 56 cents a share or Rs.4.62 billion for the June quarter, doubling from the earnings of 28 cents or Rs.2.31 billion in the corresponding period in 2020. 

The translational losses of its foreign currency-denominated loans, which became a drag on earnings during the March quarter, had only a little impact during its fiscal second quarter ended in June, as the rupee weakening contained to only 0.1 percent, compared to 7.1 percent depreciation recorded in the earlier quarter.

As the segmental data was available for the six months, the group’s mobile operations, which include voice and data revenues, reported revenues of Rs.44.3 billion during the first half of the year, logging a 14 percent increase from a year ago. Meanwhile, the revenues at its fixed telephony and broadband segment rose by 32.3 percent to Rs.18.8 billion, as home broadband became much wanted for those who work from home and have school going age children to facilitate remote learning. Its digital television unit, which crossed 1.6 million subscribers in June, reported revenues of Rs.4.8 billion, up from Rs.4.2 billion in the year earlier period. This business narrowed its operating losses to Rs.212.3 million, from Rs.558.8 million a year ago. 

Dialog parent Axiata Investments (Labuan) Limited in Malaysia holds a 82.74 percent stake in the company while the Employees’ Provident Fund has a 2.90 percent stake as of June 30, being its second largest shareholder.