Dialog caps strong 2025 with higher margins

Dialog Axiata capped a strong year with steady fourth-quarter growth, as Sri Lanka’s largest telecom operator benefited from the rising core revenues and tighter cost discipline while continuing to scale back the lower-margin wholesale operations.

The revenue in the October-December quarter rose 2 percent from both the previous quarter and a year earlier to Rs.46.5 billion. The earnings before interest, tax, depreciation and amortisation (EBITDA) increased 2 percent sequentially to Rs.23.0 billion, keeping the margins close to 50 percent, a sign that efficiency gains are offsetting the pressure from a shifting business mix. 

The net profit after tax climbed 3 percent quarter-on-quarter to Rs.5.9 billion, supported by a stronger operating performance, despite the higher tax and finance costs. At parent-company level, the results were softer. Dialog Axiata’s quarterly revenue slipped one percent to Rs.34.8 billion, partly due to a reclassification of the hubbing revenue. The EBITDA declined one percent to Rs.17.0 billion, weighed down by the network restoration costs and cyclone-related relief donations. The net profit fell 6 percent from the prior quarter to Rs.4.5 billion.

Across the subsidiaries, Dialog Television saw the revenue drop 4 percent in the quarter to Rs.3.2 billion, after a seasonal advertising uplift in the third quarter, while Dialog Broadband Networks continued to shrink its low-margin international wholesale business.

For the full year, Dialog reported a 16 percent growth in core revenue, with the headline revenue rising 5 percent to Rs.179.6 billion. The EBITDA jumped 30 percent to Rs.86.0 billion and the net profit surged 67 percent to Rs.20.8 billion, underscoring the operating leverage from the cost rescaling initiatives. The operating free cash flow more than doubled to Rs.49.3 billion.

The board proposed a dividend of Rs.1.50 per share, implying a 5 percent yield based on the year-end closing price. The capital expenditure totalled Rs.20.2 billion, directed largely toward high-speed broadband expansion, as the group positions itself for the rising demand in digital services.

Dialog also remitted Rs.54.7 billion to the Sri Lankan government in taxes and levies during the year.