Business

Dialog grows 16% in Q1, forex flips NPAT to negative Rs.15.8Bn

Published

3 years ago

2022/05/18

• Q1 22 Revenue and EBITDA record YoY growth of 16% and 8% respectively • YTD Q1 22 NPAT Negative at Rs15.8Bn, impacted by Forex Loss of Rs.20.2Bn. Normalised NPAT Rs.4.3Bn • Total Taxes Paid to GoSL Rs5.9Bn which included Rs2.1Bn in Direct and Rs3.8Bn in Indirect Taxes • Capex Investments of Rs7.5Bn during the Quarter; OFCF reached Rs6.2Bn for Q1 2022

Dialog Axiata PLC announced,Friday 13th May 2022, its consolidated financial results for the three monthsended 31st March 2022. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”). Sri Lanka is engulfed in an economic and political crisis resulting from the impacts of COVID-19, significant tax cuts and large sovereign debt repayments collectively depleting the limited foreign reserves of the country. As a result, the Sri Lankan Rupee (“LKR”) depreciated by 46% against the USD during Q1 2022.

Despite the challenging environment, all business segments, namely, Mobile, Fixed Line, Digital Pay Television, International and Tele-infrastructure businesses positively contributed to record a consolidated Revenue of Rs38.3Bn for Q1 2022, demonstrating a strong growth of 16% Year-on-Year (“YoY”) and 3% Quarter-on-Quarter (“QoQ”). Underpinned by Revenue growth, Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) grew 8% YoY albeit declining 4% QoQ to record at Rs14.7Bn for Q1 2022. The QoQ decline in EBITDA was driven by higher spend on network and direct costs due to escalation of dollar denominated expenses and increase in energy costs due to power cuts.

The Group Net Profit After Tax (“NPAT”) was negative for Q1 2022 at Rs15.8Bn, impacted by the steep depreciation of the LKR against the United States Dollar (“USD”) by 46% for Q1 2022 versus a depreciation of 7.1% for Q1 2021 and a stable movement in Q4 2021. The forex loss of Rs.20.2Bn recorded by Dialog Group was due to outstanding USD denominated debt obligations and foreign vendor liabilities. The USD debt obligation for the Group totalled USD145Mn by end Q1 2022. Normalised for the said foreign exchanges loss Group NPAT was recorded at Rs4.3Bn for Q1 2022 declining 4% YoY and 11% QoQ.

Public Dialog Group continued to be a significant contributor to state Revenues, remitting a total of Rs5.9Bn to the Government of Sri Lanka (“GoSL”) during Q1 2022. Total remittances included Direct Taxes and Levies amounting to Rs2.1Bn as well as Rs3.8Bn in Consumption Taxes collected on behalf of the GoSL.

The Group remains committed to provide seamless and consistent connectivity to all Sri Lankans during these unprecedented times and accordingly spent Rs7.5Bn in capital expenditure for the quarter ended 31st March 2022, resulting in a Capex to Revenue ratio of 20% for Q1 2022. Capital expenditure was directed towards investments in High-Speed Broadband infrastructure to further expand Dialog’s leadership in Sri Lanka’s Broadband sector. The Group recorded Operating Free Cash Flow (“OFCF”) of Rs6.2Bn for Q1 2022.

The Group balance sheet continued to be low geared, despite new USD borrowings during the quarter, to record the Net Debt to EBITDA ratio at 0.49x by end Q1 2022. The Return on Invested Capital (“ROIC”) remained at healthy levels to recorded at 16.5% for Q1 2022 albeit declining 0.6pp YoY and 1.4pp QoQ In a mission to provide emergency relief to the worst impacted families and communities in the country due to the ongoing economic crisis, Dialog Group joined hands with like-minded corporates and partners including its execution partner Sarvodaya and accountability partner PwC Sri Lanka to launch the

‘Manudam Mehewara’ relief initiative. Emergency relief will be provided to more than 200,000 affected families across all 25 districts and this relief effort will continue for 60 – 90 days, until a sustainable benefit transfer system is established in the country through an effective economic recovery plan At an entity level, Dialog Axiata PLC (the “Company”) continued to contribute a major share of Group Revenue (63%) and Group EBITDA (68%). Company recorded a 10% YoY growth in Revenue to reach

Rs24.0Bn for Q1 2022 amid increased contribution from Data revenue. On a QoQ basis Revenue recorded a growth of 3%. EBITDA for Q1 2022 was recorded at Rs10.1Bn representing a moderate growth of 1% YoY on the back of escalations in Sales & Marketing, Network and Staff costs. On a QoQ basis EBITDA recorded a growth of 4%. The depreciation of the LKR against the USD impacted company NPAT resulting in a loss of Rs15.2Bn as the foreign exchange loss amounted to Rs18.3Bn for Q1 2022. Normalised for same, company NPAT was recorded at Rs3.1Bn for Q1 2022, declining 21% YoY albeit increasing 16% QoQ.

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Business

Government ready to provide necessary support to protect and develop businesses – Prime Minister

Published

11 hours ago

2025/02/23

Priyan

Prime Minister Dr. Harini Amarasuriya stated that the government is committed to safeguarding businesses and providing the necessary support for their development.

She made these remarks while addressing the “National Industrial Excellence Awards 2024,” organized by the Industrial Development Board, held on February 21 at the Eagle Lakeside Hotel, Colombo.

During the ceremony, Prime Minister Dr. Harini Amarasuriya presented awards to the three best national industry brands of 2024:

• JBRICKS PVT LTD – Small-scale category
• SINGHE Furniture Manufacturer PVT LTD – Medium-scale category
• EARTHFOAM PVT LTD – Large-scale category

In her address, Prime Minister Amarasuriya commended the resilience and dedication of Sri Lankan entrepreneurs, especially amid challenging economic times. “It is a pleasure to join you at this occasion. Witnessing your commitment to industry during these difficult times is a source of strength for us. The government is dedicated to protecting businesses and providing the necessary support for their development. Your involvement in these industries is crucial for our economic recovery,” she stated.

She further emphasized the importance of inclusive industrial growth, highlighting the significance of women’s entrepreneurship in building economic resilience. “Industries not only strengthen the economy but also generate vital employment opportunities. Despite challenges such as resource constraints, cultural barriers, and gender disparities, you continue to drive progress. We must amplify Sri Lanka’s brand globally. To the award-winning entrepreneurs: this is not the end of your journey but the beginning. Let us work together to rebuild our economy through industry,” the Prime Minister concluded.

Minister of Industries and Entrepreneurship Development, Mr. Sunil Handunnetti, also addressed the gathering, underscoring the importance of promoting Sri Lankan products globally. “Having a brand is vital, but it is even more valuable when it is recognized as Sri Lankan-made. Our goal should be to elevate the rupee to the strength of a dollar,”he remarked. The Minister highlighted initiatives in the recently presented 2025 budget that favor industrial growth, announcing plans for a national tax policy by the end of the year. “We aim to foster an industrial culture from the school level, enhance export revenue, and develop all sectors of industry. We call upon you to join us in this national endeavor,”he urged.

The event was attended by a distinguished gathering, including Deputy Minister of Industries and Entrepreneurship Development Chathuranga Abeysinghe, Secretary of the Ministry Ms. Thilaka Jayasundara, and numerous entrepreneurs from diverse sectors, all united in their commitment to drive Sri Lanka’s industrial advancement.

[Prime Minister’s media Division]

Business

HNB Assurance Group achieves strong financial performance in 2024

Published

16 hours ago

2025/02/23

Thilina Walpola

HNB Assurance Group (HNBA and HNBGI) has once again delivered impressive financial results for the year 2024, continuing its remarkable growth trajectory. The Group reported a 21% increase in Gross Written Premium (GWP), rising from Rs. 18.8 billion to Rs. 22.7 billion. Additionally, the Group recorded a consolidated Profit After Tax (PAT) exceeding Rs. 1.8 billion, marking a 7% growth compared to the previous year.

HNBA’s strong financial position was further highlighted by its upgraded Fitch rating, making it the only life insurer in Sri Lanka with an ‘A’ rating. HNBGI also earned an ‘A’ rating, positioning it among Sri Lanka’s leading general insurers.

Commenting on the achievements, Chairman Stuart Chapman expressed pride in the Group’s consistent growth, with a 22% average annual increase in GWP over the past four years. He also noted the 42% growth in share price by the end of 2024, reflecting market trust in HNBA’s stability.

CEO of HNBA, Lasitha Wimalaratne, highlighted significant milestones, including a 7.5% market share and a 27% growth in New Business Premiums. CEO of HNBGI, Sithumina Jayasundara, praised the company’s resilience, reporting a 59% increase in Profit After Tax and exceptional growth in non-motor insurance segments.

Overall, HNBA Group’s performance underscores its strong market presence and commitment to sustainable growth.

Business

Chinese Dragon Café marks first anniversary in Dubai

Published

16 hours ago

2025/02/23

Thilina Walpola

Chinese Dragon Café (CDC), Sri Lanka’s iconic Chinese restaurant chain, celebrates the first anniversary of its Dubai outlet. Established in 1942, CDC has become known for blending Sri Lankan spices with Chinese culinary techniques, creating a unique dining experience. The Dubai outlet, which opened in October 2023, is the first international expansion for the brand, representing Sri Lankan Chinese cuisine on the global stage.

CDC’s Managing Director, Udeshi, expressed pride in the warm reception the restaurant has received in Dubai, highlighting the universal appeal of its fusion dishes. The Hot Butter Cuttlefish, Nasi Goreng, and Seafood Fried Rice are some customer favorites. CDC’s Dubai outlet is also available on major delivery platforms, allowing diners to enjoy authentic Sri Lankan Chinese cuisine at home.