Sri Lanka’s Dialog Axiata profits down on forex loss
ECONOMYNEXT – Dialog Axiata, Sri Lanka’s largest mobile operator said group profits fell 60 percent to 679 million rupees in the September 2015 quarter from a year earlier on a forex loss, as the island’s soft-pegged central bank printed money and depreciated the currency.
The group reported earnings of 10 cents per share for the quarter.
In the nine months to September profits were 56 cents per share on total profits of 4.56 billion rupees marginally down from 4.61 billion rupees a year earlier.
In the September quarter group revenues rose 10.5 percent to 18.8 billion rupees from a year earlier, but cost of sales rose at a slower 4.7 percent, allowing gross profits to rise 18.5 percent to 8.84 billion rupees.
At the core mobile firm also revenues rose to 16.0 billion rupees from 14.7 billion rupees.
Dialog also has wireless fixed access and pay TV units.
But finance costs rose sharply to 1.7 billion rupees from 231 million rupees a year earlier as the rupee fell, expanding the cost of forex denominated loans.
Sri Lanka has a soft-pegged central bank which prints money to finance the budget deficit, or delay policy interest rates putting the rupee under pressure and generating balance of payments crises.
Due to conflicting monetary and exchange rate policies the rupee is a still a classic uni-directional downward sliding crawling peg.