Dialog returns to profitability; NPAT soars by over 100% in FY 2023

• Positive YTD growth in all key financial lines: YTD Revenue Rs. 187.8 b, EBITDA Rs. 61.5 b and NPAT Rs. 20.1 b; YTD revenue growth at +5%, EBITDA Growth at +19% and NPAT at over 100%
• Declares highest ever  final dividend of Rs. 1.34 per share; dividend amounts to 55% of earnings
• Total taxes paid to GoSL Rs. 40.8 b for FY 2023 which included Rs. 9.5 b in direct and Rs. 31.3 b in indirect taxes
• FY 2023 investments in high-speed broadband and other infrastructure tops Rs. 25.5 b

Dialog Axiata PLC yesterday positive topline performance across all business segments, namely, mobile, fixed, digital pay television, international, digital platforms and tele-infrastructure in FY2023.

Group consolidated revenue was recorded at Rs. 187.8 billion for FY 2023 demonstrating a growth of 5% Year-to-Date (YTD). Group revenue for Q4 2023 was recorded at Rs. 43.4 billion down 7% Quarter-on-Quarter (QoQ). 

Downstream of topline performance Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) recorded strong double-digit growth of 19% YTD to reach Rs. 61.5 billion for FY 2023 whilst Group EBITDA decline moderated to 2% QoQ to reach Rs. 17.0 billion for Q4 2023. 

Dialog in a statement said the positive outcome from cost rescaling and resilience actions taken by the Group helped achieve an EBITDA growth that exceeded revenue growth on both YTD and QoQ basis.

The EBITDA margin improved 3.8pp to reach 32.8% for FY2023. The Group Net Profit After Tax (NPAT) turned positive for the year to cross Rs. 20 billion mark for FY 2023 up 100% underpinned by strong EBITDA performance, lower depreciation, forex gains and lower finance cost. Group NPAT for Q4 2023 was recorded at Rs. 5.3 billion up 72% QoQ. The YTD NPAT performance was strongly supported by a forex gain of Rs. 10.2 billion for FY 2023 as the Sri Lankan Rupee (LKR) appreciated 11.5% against the United States Dollar (USD). Normalised for the forex gain, the Group NPAT was recorded at Rs. 9.9 billion for FY 2023, up over 100% YTD. 

In line with the dividend policy and financial performance of the Group and taking into account the forward investment requirements to serve the nation’s demand for broadband and digital services, the Public Dialog – Internal, Board of Directors of Dialog Axiata PLC at its meeting held on 16 February 2024, resolved to propose for consideration by the shareholders of the company, a dividend to ordinary shareholders amounting to Rs. 1.34 per share, highest ever beating the previous best of Rs. 1.24 per share in FY21.

The said dividend, if approved by shareholders, would translate to a dividend yield of 14.9% based on share closing price for FY 2023. The dividend so proposed will be considered for approval by the shareholders at the Annual General Meeting (AGM) of the company, the date pertaining to which would be notified in due course.

Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs. 40.8 billion to the GoSL during the financial year ended 31 December 2023 and Rs. 10.0 billion for Q4 2023, which represent a 14% increase YTD. Total remittances included Direct Taxes and Levies amounting to Rs. 9.5 billion and Rs. 31.3 billion in consumption taxes collected on behalf of the GoSL. 

The Group capital expenditure for the year ended 31st December 2023 reached Rs. 25.5 billion, resulting in a capex to revenue ratio of 14%. Capital expenditure was directed towards investments in high-speed broadband infrastructure to further expand the Group’s leadership in Sri Lanka’s broadband sector. 

The Group recorded Operating Free Cash Flow (OFCF) of Rs. 25.1 billion for FY 2023 up over 100% 

YTD.

Dialog Group said being the first telecommunications service provider in the South Asian region to demonstrate 5G capabilities in 2018, reached a milestone of enabling over 200,000 Sri Lankans to experience the power of 5G on Dialog’s 5G Trial network. Dialog’s 5G trial network, recognised as Sri 

Lanka’s largest 5G trial network, spans over 70 locations across the country, including Colombo and several key cities.

At an entity level, Dialog Axiata PLC continued to contribute a major share of Group Revenue (55%) and Group EBITDA (62%). Company revenue was recorded at Rs. 102.9 billion for FY 2023 up 1% YTD driven mainly by data and voice segments. On a QoQ basis revenue grew 0.5% to record at Rs. 26.3 billion for Q4 2023. The company profitability improved on YTD basis owing cost efficiencies as EBTIDA reached Rs. 38.4 billion up 8% YTD. EBITDA remained stable on QoQ basis to reach Rs. 10.6 billion for Q4 2023. Company NPAT, with the support of forex gains of Rs. 10.0 billion, was recorded at Rs. 12.0 billion for FY 2023 up over 100% YTD. NPAT reached Rs. 2.3 billion for Q4 2023 up over 100% QoQ.

Dialog Television (DTV), continued to consolidate its leadership position in the digital pay television space maintaining a strong subscriber base of over 1.6 million for the year ended 31 December 2023. Accordingly, DTV revenue recorded a strong growth of 3% YTD to reach at Rs. 12.40 billion for FY 2023. Supported by favourable forex movement during the year, DTV EBITDA recorded growth of 86% YTD to reach Rs. 2.9 billion for FY 2023. Consequently, DTV NPAT turned positive to record at Rs. 0.6 billion for FY 2023.

Dialog Broadband Networks (DBN) featuring the Group’s fixed telecommunications, broadband and international businesses recorded revenue of Rs. 73.6 billion for FY 2023 up 7% YTD resulting from increase in international wholesale and fixed broadband revenue. DBN EBITDA recorded a growth of 19% YTD to reach Rs. 17.7 billion for FY 2023. Accordingly, NPAT was recorded at Rs. 5.8 billion for FY 2023 up 75% YTD.