Forex loss drives down Dialog Axiata Q3 net income

13 Nov 2018

Sri Lanka’s Dialog Axiata said that its net profits in the three months ending 30 September 2018 fell 53.8% year-on-year to LKR1.7 billion (USD9.75 million), as a forex loss impacted on its bottom line despite a rise in revenues. In an earnings release, Dialog Axiata said that 3Q18 revenue climbed 15.4% to LKR28 billion and gross profit was up 8.7% at LKR12.5 billion, but noted that operating costs also climbed 21.5% to LKR15.5 billion and admin costs increased by 12% to LKR4.4 billion. In addition, Dialog said that net finance costs rose 809.6% – reflecting its heavy reliance on its dollar borrowings. ‘The Group was significantly impacted by non-cash, translational foreign exchange losses to the value of LKR1.8 billion during the quarter, accruing from the depreciation of the rupee relative to the dollar,’ the telco confirmed in the filing. Long-term borrowings increased to LKR39.8 billion at 30 September 2018, up 55.3% from the start of the year, while short-term borrowings dropped by 39.3% to LKR6.7 billion.

In terms of its operating segment, Dialog reported that operating profits from mobile services for 9M18 grew 24.2% y-o-y to LKR12 billion on a 13.2% rise in revenue to LKR64.9 billion. Fixed broadband and telephony operating profits inched up 0.5% to LKR1.5 billion, while revenue grew 33.5% to LKR10.2 billion rupees. Meanwhile, operating losses at its Dialog Television (DTV) unit fell 30.2% to LKR275 million on revenue that increased 25% to LKR5.5 billion.

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