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Trade deficit shrinks for third consecutive month

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External Sector Performance – May 2022

The import expenditure declined, while earnings from exports increased in May 2022, year-on-year, extending the contraction in the trade deficit for the third consecutive month. Meanwhile, tourist arrivals slowed in May 2022, compared to the previous month. Workers’ remittances increased in May 2022, compared to April 2022.

Foreign investment in the government securities market and the Colombo Stock Exchange (CSE) recorded marginal net inflows during May 2022. Considering the liquidity pressures witnessed in the domestic foreign exchange market, the Central Bank imposed cash margin requirements in May 2022, while the Government introduced restrictions on open accounts and consignment payments terms, among others. These measures were expected to curtail activity in the informal foreign exchange market and narrow the gap between the official and grey market exchange rates. Meanwhile, the weighted average spot exchange rate in the interbank market remained stable around Rs. 359 per US dollar during the month, helped by the measures introduced to manage pressures in the domestic foreign exchange market, along with the market guidance.

Merchandise Trade Balance and Terms of Trade

Trade Balance: The trade deficit recorded a decline for the fifth consecutive month on month-on-month basis and for the third consecutive month on year-on-year basis in May 2022, supported mainly by the policy induced moderation of imports, along with the notable growth momentum of exports. The trade deficit narrowed to US dollars 404 million in May 2022, compared to the deficit of US dollars 716 million recorded in May 2021. On a cumulative basis, trade deficit narrowed on a year-on-year basis for the first time in May during this year. Accordingly, the trade deficit during January-May 2022 narrowed to US dollars 3,535 million, from US dollars 3,663 million recorded over the same period in 2021. The major contributory factors for this decline in the cumulative trade deficit are shown in Figure 1.

Terms of Trade: Terms of trade, i.e., the ratio of the price of exports to the price of imports, deteriorated notably by 18.5 per cent in May 2022, compared to May 2021, as the increase in import prices surpassed the increase in export prices.

Performance of Merchandise Exports1

Overall exports: Earnings from merchandise exports in May 2022 increased substantially by 17.5 per cent over the corresponding month in 2021, recording at US dollars 1,047 million. An increase in earnings was observed in industrial exports, while a decline was recorded in agricultural exports and mineral exports. The cumulative export earnings during January-May 2022 increased by 12.2 per cent over the same period in the last year, amounting to US dollars 5,266 million.

Industrial exports: Earnings from the export of industrial goods increased in May 2022 by 24.2 per cent, compared to May 2021. A broad-based increase in earnings among industrial goods has been recorded, with the greatest share for the overall increase mainly being contributed by garments. Export of garments to all major markets (such as the United States, the European Union, and the United Kingdom) improved. Further, gems, diamonds and jewellery and petroleum products also contributed to this increase in exports. Earnings from the export of petroleum products improved due to the increase in both average export prices and volumes of bunker fuel exports. Meanwhile, continuing the lower demand for rubber gloves as a personal protective item due to declining spread of Covid-19 worldwide, a decline in earnings was reported in rubber products. Export earnings from animal fodder and plastics and articles also declined during the month.



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Dialog delivers strong growth, stronger national contribution in FY 2025

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Dialog Axiata PLC announced, Friday 6th February 2026, its consolidated financial results (Reviewed) for the year ended 31st December 2025. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

Group Performance

The Group delivered a strong performance across Mobile, Fixed Line and Digital Pay Television businesses recording a positive Core Revenue growth of 16% Year to Date (“YTD”). Group Headline Revenue reached Rs179.6Bn, up 5% YTD, despite the continued strategic scaling down of low-margin international wholesale business. In Q4 2025, Revenue was recorded at Rs46.5Bn up 2% Quarter-on-Quarter (“QoQ”) and 2% Year-on-Year (“YoY”).

The Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) reached Rs86.0Bn up 30% YTD supported by Core Revenue performance and Cost Rescaling Initiatives. On a QoQ basis Group EBITDA demonstrated a modest growth to record at Rs23.0Bn up 2% QoQ with an EBITDA margin of 49.5% in line with the Revenue performance. Group EBITDA margin reached 47.9% for FY 2025, up 9.2pp.

Group Net Profit After Tax (“NPAT”) reached Rs20.8Bn for FY 2025, up 67% YTD mainly resulting from robust EBITDA growth, despite higher tax and net finance costs. Normalized for forex impact, NPAT growth was recorded at +>100% YTD to reach Rs22.1Bn. On a QoQ basis NPAT grew 3% to reach Rs5.9Bn resulting from strong EBITDA performance.

On the back of strong operational performance, the Group recorded Operating Free Cash Flow (“OFCF”)

of Rs49.3Bn for FY 2025 up >100% YTD.

Dividend Payment to Shareholders

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 Board of Directors of Dialog Axiata PLC at its meeting held on 6th February 2026, resolved to propose for consideration by the Shareholders of the Company, a dividend to ordinary shareholders amounting to Rs1.50 per share. The said dividend, if approved by shareholders, would translate to a Dividend Yield of 5.0% based on share closing price for FY 2025. 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.

Company and Subsidiary Performance

At an entity level, Dialog Axiata PLC (the “Company”) continued to be the primary contributor to Group Revenue (76%) and Group EBITDA (74%). Aided by sustained growth in the Data segment and cost-rescaling initiatives, Company revenue was recorded at Rs135.8Bn for FY 2025, up 18% YTD, EBITDA rose 32% YTD to reach Rs63.6Bn. On a QoQ basis, Q4 2025 Revenue was recorded at Rs34.8Bn, down 1% QoQ due to a reclassification of Hubbing Revenue, while EBITDA decline 1% QoQ to record Rs17.0Bn, largely attributable to network restoration costs and donations made in relation to the Cyclone Ditwah relief efforts. Furthermore, NPAT was recorded at Rs15.6Bn for FY 2025, up 41% YTD. Normalised for forex impacts, the company NPAT was up +>100% YTD to reach Rs17.0Bn. On a QoQ basis, Company NPAT was recorded at Rs4.5Bn, down 6% QoQ.

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Ceylinco Life’s Pranama Scholarships reach 25-year milestone

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Ceylinco Life has announced the launch of the 25th consecutive edition of its flagship Pranama Scholarships programme, marking a significant milestone in the company’s long-standing commitment to recognising and rewarding excellence among the children of its policyholders.

Under the 2026 programme, the life insurance market leader will present scholarships with a total cumulative value of Rs. 22.7 million, continuing a rewards initiative that has now been conducted without interruption for a quarter of a century. Since its inception, the Ceylinco Life Pranama Scholarships programme has benefitted 3,466 students across the country, representing a total investment of Rs. 240 million in nurturing academic achievement and outstanding performance in sports, arts and other extracurricular pursuits.

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Sri Lankans’ artistic genius glowingly manifests at Kala Pola ‘26

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The spirit of Sri Lanka as it was ably captured by an artist.

The artistic genius of Sri Lankans was amply manifest all over again at ‘Kala Pola ‘26’ which was held on February 8th at Ananda Coomaraswamy Mawatha Colombo 7; the usual, teeming and colourful venue for this annual grand exhibition and celebration of the work of local visual artists.

If there is one thing that has flourished memorably and resplendently in Sri Lanka over the centuries it is the artistic capability or genius of its people. It is something that all Sri Lankans could feel a sense of elation over because from the viewpoint of the arts, Sri Lanka is second to no other nation. With regard to the visual arts a veritable dazzling radiance of this inborn and persisting capability is seen at the annual open air ‘Kala Pola’.

A bird of Sri Lanka created from scraps of iron waste.

All capable visual artists, wherever they hail from in Sri Lanka, enjoy the opportunity of exhibiting their work at the ‘Kala Pola’ and this is a distinctive ‘positive’ of this annual event that draws numberless artists and viewers. There was an abundance of paintings, sketches and sculptures, for instance, and one work was as good as the other. Ample and equal space was afforded each artist. Its widely participatory and open nature enables one to describe the exhibition as exuding a profoundly democratic ethos.

Accordingly, this time around at ‘Kala Pola ‘26’ too Sri Lankans’ creative efforts were there to be viewed, studied and enjoyed in the customary carnival atmosphere where connoisseurs, local and foreign, met in a sprit of camaraderie and good cheer. Many thanks are owed once again to the George Keyt Foundation for the presentation of the event in association with the John Keells Group and the John Keells Foundation, not forgetting the Nations Trust Bank, which was the event’s Official Banking Partner. The exhibition was officially declared open by Chief Guest Marc-Andre Franche, UN Resident Coordinator in Sri Lanka.

By Lynn Ockersz

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