Dialog Axiata Q1 operating results broadly stable, but forex losses drag down earnings

Sri Lankan telecommunications carrier Dialog Axiata reported top line revenue of LKR29.2 billion (USD156.9 million) in January-March 2020, compared with LKR28.9 billion in the corresponding period of 2019, but on a quarter-on-quarter basis, turnover fell by 1% due to the disruption to business arising from the COVID-19 pandemic. Going forward, Dialog Axiata is warning that future revenues and profits could be lower as it extends credit and puts off ‘deferred payment due dates’ to keep its customers connected for the duration of the lockdown conditions. Despite heavy usage of its services during the lockdowns, Dialog Axiata said the pandemic is having an adverse bearing on its financial performance: consolidated profit in 1Q20 stood at LKR4.2 billion, down from LKR4.7 billion in 1Q19. Meanwhile, the carrier’s mobile business, which generates around 70% of group revenue and three-quarters of its EBITDA, saw its sales fall 2% year-on-year to LKR20.2 billion, attributed ‘to ongoing shift in consumption behaviour from voice to data’.