Dialog’s LKR2.1bn forex expense causes net loss

11 May 2012

Sri Lanka’s largest cellco by users, Dialog Axiata, has reported its consolidated financial results for the three months ended 31 March 2012, including its fixed line/internet and TV subsidiaries Dialog Broadband Networks (DBN) and Dialog Television (DTV), as well as fixed line operator Suntel, the acquisition of which Dialog completed on 21 March 2012. The group recorded a net loss of LKR531 million (USD4.15 million) in the first quarter of the year, which it blamed on the depreciation of local currency relative to the USD by 12.4% quarter-on-quarter, resulting in a foreign exchange loss of LKR2.1 billion, while the absorption of LKR343 million acquisition expenses relating to Suntel also contributed to the losses. The group recorded 18% year-on-year growth in revenues during Q1 2012, registering total sales of LKR12.9 billion, while EBITDA climbed 27% y-o-y to LKR4.5 billion, although the figure was down by 4% quarter-on-quarter due to significant inflation with respect to ‘energy-related costs and foreign currency denominated inputs.’ Mobile operations accounted for 91% of group revenues in January-March 2012, and 92% of EBITDA. Mobile subscribers reached 7.4 million at the end of 1Q12, up by around 400,000 year-on-year.

The Malaysian-backed group’s capital expenditure for Q1 2012 amounted to LKR1.7 billion, mainly spent on fixed broadband and optical fibre network expansion projects, and the expansion of mobile voice and broadband services to meet growth in subscriber demand.

DTV posted revenues of LKR677 million for the quarter, up 22% y-o-y, and showed net profit of LKR37 million. Revenues at DBN grew by 4% to LKR609 million but the unit posted a net loss of LKR147 million, although Dialog said that this was a 25% improvement on a year earlier.

Sri Lanka, Dialog Axiata, Suntel (now part of Dialog)