Dialog Axiata 4th quarter in the red amid cost escalation, forex losses

Dialog Axiata PLC, Sri Lanka’s largest mobile telecom services provider, saw its earnings hitting the negative territory in the December quarter of 2022 (4Q22) amid cost escalations and steep exchange losses stemming from sharp depreciation of the rupee.
In 4Q22, the group reported a loss per share of Rs.1.01 or a net loss of Rs.8.3 billion compared to  earnings of 56 cents a share or Rs.4.5 billion a year ago.

Despite the negative bottom line, the group’s revenue rose Rs.50.9 billion during 4Q22, up from Rs.37.1 billion a year ago.
However, the direct costs rose sharply to Rs.35 billion from Rs.20.5 billion a year ago. Administrative costs rose to Rs.19.9 billion from Rs.5.9 billion.
As a result, the group reported an operating loss of Rs.8.8 billion compared to an operating profit of Rs.5.8 billion a year ago.

The group reported a net foreign exchange loss of Rs.2.27 billion for the quarter under review, sharply up from Rs.709.2 million a year ago.
The group has sizeable exposure to loans taken in US dollars.
For the full financial year, the net foreign exchange losses topped Rs.30 billion.
For FY22, the group reported a net loss of Rs.33.4 billion compared to a net profit of Rs.17 billion in FY21, on revenue of Rs.178.1 billion, up from Rs.141.9 billion a year ago.

A press release from Dialog Axiata said all the business segments, namely Mobile, Fixed, Digital Pay Television, International, Digital Platforms and Tele- infrastructure businesses, contributed positively to the revenue performance.
The group also said it made investments in high-speed broadband and other infrastructure to the tune of Rs.52 billion in FY22.

The group continued to be a significant contributor to State revenues, remitting a total of Rs35.7 billion to the government during FY22 and Rs9.7 billion in 4Q22, which represent a 54 percent increase YTD. 
Total remittances included direct taxes and levies amounting to Rs13.3 billion and Rs.22.4 billion in consumption taxes collected on behalf of the government.