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Friday Nov 08, 2024
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Dialog Axiata Group CEO
Supun Weerasinghe
Dialog Axiata PLC yesterday announced a strong rebound in third quarter of FY24 delivering growth in core revenue and profitability.
In a statement Dialog said the Group delivered a strong performance across Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses recording a positive core revenue growth of 6% Year-to-Date (“YTD”). Excluding revenue from Airtel Lanka, YTD core revenue growth was at 3%. Group revenue reached Rs. 125.4 billion down 10% mainly resulting from the scaling down of low margin international wholesale business. The Q3 2024 revenue was recorded at Rs. 42.8 billion up 5% Quarter-on-Quarter (“QoQ”). Excluding Airtel Lanka, Q3 2024 revenue was down 3% QoQ albeit up 6% QoQ on core revenue basis. The Group earnings before interest, tax, depreciation and amortisation (“EBITDA”) reached Rs. 45.1 billion up 1% YTD supported by top line performance.
On a QoQ basis Group EBITDA demonstrated a strong recovery to record at Rs. 18.1 billion up 33% QoQ with an EBITDA margin of 42.0% as cost rescaling initiatives yielded positive results. Group EBITDA margin reached 35.9% for first nine months of 2024, up 4.4pp.
Group Net Profit After Tax (“NPAT”) reached Rs. 4.5 billion for Q3 2024 up >+100% QoQ and 45% Year on Year (“YoY”), while the NPAT was recorded at Rs. 5.7 billion for first nine months of 2024, down 62% YTD which predominantly resulted from significantly higher favourable forex movement in 2023. Normalised for forex, PAT was down 54% YTD to record at Rs. 1.9 billion for the first nine months of 2024, owing to higher depreciation, dilution from Airtel consolidation and taxation.
Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs. 35.1 billion to the Government of Sri Lanka (GoSL) during the first nine months of 2024. Total remittances included direct taxes and levies amounting to Rs. 8.6 billion and Rs. 26.5 billion in consumption taxes collected on behalf of the GoSL.
The Group continued to support infrastructure investments to ensure seamless customer experience and leadership in Sri Lanka’s Broadband and ICT sectors. During the quarter, the company completed the consolidation of Airtel’s 2G/4G radio networks thereby improving network experience to over 20 million Dialog and Airtel subscribers. The YTD capital expenditure reached Rs. 14.5 billion for the nine months ended 30 September 2024 down 32% YTD. Dialog Axiata Group recorded positive Operating Free Cash Flow (“OFCF”) of Rs. 18.3 billion for the first nine months of 2024, up over 35% YTD.
Reinforcing the Group’s commitment to Sustainable Development Goals, Dialog introduced DeafTawk interpreter services at its customer care centres island wide, a move poised to enhance the accessibility and user-friendliness of its services to the deaf community. Highlighting the company’s unwavering dedication to enhancing outreach for Persons with Disabilities (PWDs), this initiative aligns with the GSMA Assistive Tech Programme, which drives inclusivity by improving access and use of mobile technologies and related services for PWDs.
At an entity level, Dialog Axiata PLC continued to contribute a major share of Group Revenue (66%) and Group EBITDA (67%). Company revenue was recorded at Rs. 82.7 billion for the first nine months of 2024 up 8% YTD and Rs. 31.1 billion for Q3 2024 up 19% QoQ, resulting from growth in data segment. On the back of revenue uplift and positive realisations from cost rescaling initiatives, profitability improved as company EBITDA was recorded at Rs. 30.3 billion, up 9% for the nine months ended 30 September 2024 and Rs. 12.8 billion for Q3 2024, up 44%. However, PAT was recorded at Rs. 3.2 billion for the first nine months of 2024, down 67% YTD, amid higher depreciation and significantly higher favourable forex impact in 2023. PAT recorded strong improvement for Q3 2024 to reach Rs. 3.6 billion, up >+100% QoQ underpinned by lower depreciation, lower net finance cost and favourable forex impact.
Dialog Television (DTV), continued to consolidate its leadership position in the Digital Pay Television as the subscriber base being maintained at over 1.6 million as of end Q3 2024. DTV revenue remained flat at Rs. 9.1 billion for nine months ended 30 September 2024, while on a QoQ basis revenue was up 2% to reach Rs. 3.0 billion for Q3 2024. DTV EBITDA was down 22% to reach Rs. 1.5 billion for the first nine months of 2024, due to escalation in transponder cost. Consequently, DTV PAT was recorded at a negative Rs. 706 million for the nine months ended 30 September 2024 amid higher depreciation and net finance costs.
Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded revenue of Rs. 38.2 billion and Rs. 10.1 billion for nine months ended 30 September 2024 and Q3 2024 respectively, down 35% YTD and 25% QoQ. The headline revenue decline was due to the scaling down of low margin international wholesale business. DBN EBITDA recorded a marginal decline of 2% YTD to reach Rs. 12.5 billion for nine months ended 30th September 2024 while NPAT reached Rs. 2.8 billion for the same period, down 21% YTD.
The Group completed the amalgamation with Bharti Airtel Lanka Ltd., during the third quarter under the applicable provisions of the Companies Act, with Dialog remaining as the surviving entity. This marks the official cessation of Airtel as a corporate entity, effective 30 August 2024, with its operational performance fully subsumed and consolidated within Dialog’s financial statements.