Dialog Axiata PLC, the market leader in mobile telephony space of Sri Lanka posted higher earnings for the quarter ended March 31, 2023 (1Q23), helped by exchange gains, but profits at the operating level took a dive.
The Group reported revenue of Rs. 50 billion for the quarter under review, up from Rs.38.2 billion a year ago. But direct costs rose sharply to Rs.34.5 billion from Rs.22.6 billion, resulting in a gross profit of Rs.15.4 billion, slightly down from Rs.15.6 billion a year ago. However, the operating profit of the group took a dive amid higher distribution and administrative costs to Rs.2.7 billion from Rs.5.4 billion a year ago.
Yet the group was able to record earnings of Rs.1.05 per share or Rs.8.6 billion for the March 2023 quarter compared to a loss of Rs.1.93 a share or Rs.15.8 billion reported for the corresponding period last year. This was made possible by a net foreign exchange gain to the tune of Rs.8.8 billion during the quarter under review thanks to the recent appreciation of the rupee against the dollar, compared to an exchange loss of Rs.15.8 billion a year ago.
The group’s mobile operation recorded revenue of Rs.27 billion during the quarter under review, up from Rs.26.5 billion. But the segment’s operating profit fell to Rs.1.6 billion from Rs.4.1 billion a year ago.
The fixed telephony and broadband operations of the group reported revenue of Rs.20 billion in 1Q23, up from Rs.1.5 billion a year ago. However, the operating profit of the segment fell to Rs.1 billion from Rs.1.2 billion a year ago.
The group’s pay TV operation generated revenue of Rs.3 billion during 1Q23 and reported an operating loss of Rs.317.8 million compared to an operating profit of Rs.224.7 million a year ago.
Axiata Investments (Labuan) Limited in Malaysia owns 82.27 percent of shares of Dialog Axiata PLC.
Dialog and Airtel recently announced merger plans and said the parties had entered into a binding agreement to combine their Sri Lankan operations. Dialog is expected to issue new shares to Airtel upon completion of the deal.