Dialog Finance PlcCSELK: CALF.N0000

Quarterly Financial Report as of 30-06-2025

· Issued by Dialog Finance PLC
DIALOG FINANCE PLC CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2025

Financial review for the six months ended 30 June 2025

Dialog Finance PLC (the "Company") announced, Friday 01st August 2025, its financial results for the six months ended 30 June 2025.

The lending book of the Company recorded a healthy growth of 74.4% Year-on-Year ("YoY") to record net loans and advances of Rs. 6.9 Bn as at 30 June 2025. The deposit base also improved significantly by 64.7% YoY, reaching Rs. 5.4 Bn as at 30 June 2025, supported by strong performance in both savings deposits and fixed deposits. Driven by the growth in lending book and increase in fee income from acquiring and issuing businesses, total operating income grew by 143.9% YoY to reach Rs. 961.4 Mn for the quarter ended 30 June 2025.

Supported by this strong income performance, the Company recorded a Profit before Tax of Rs. 74.2 Mn for the first six months of 2025, compared to a Loss before Tax of LKR 67.4 Mn recorded in June 2024. Deferred tax asset reversal of Rs. 51.5 Mn was recognised in YTD June 2025, attributed to the reduction in deferred tax assets arising from the utilisation of carried forward tax losses against taxable profits generated during the period under review. Accordingly, the Company recorded a net profit of Rs. 22.7 Mn for the six months ended 30 June 2025 relative to a net loss of Rs. 67.4 Mn recorded for the corresponding six months in the previous year.

During the period under review, the Company maintained capital and liquidity levels well above the statutory minimum requirements. The Tier I capital adequacy ratio (CAR) and total CAR recorded at 22.68% as at 30 June 2025, which was well above the CBSL's prescribed minimum thresholds of 8.50% for Tier 1 CAR and 12.50% for Total CAR.

Dialog Finance PLC provides a wide range of financial products tailored to meet the needs of diverse customer segments, including consumers, retailers & merchants, and SMEs. The Company is setting itself to be at the forefront of innovation in the finance industry in Sri Lanka and has a vision to propel the nation's finance technology to a level of advancement on par with the developed world. Dialog Finance PLC recognises the need to deliver convenient, accessible, and affordable financial tools to the unbanked and underbanked segments of society and continues steadfast with its unifying mission in introducing cutting edge technology to launch industry-leading financial products and services.

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DIALOG FINANCE PLC

Statement of financial position

(all amounts in Sri Lanka Rupees thousands)

ASSETS

30 June 2025

(Unaudited)

31 Dec 2024

(Audited)

Cash and cash equivalents

730,143

252,167

Placements with banks and financial institutions

174,630

168,488

Securities purchased under repurchase agreements

355,993

509,924

Financial assets at fair value through profit or loss

3,493

257,224

Financial assets at amortised cost - loans and advances

6,889,468

5,171,335

Financial assets at fair value through other comprehensive income

2,358

2,358

Financial investments at amortised cost

385,320

387,959

Olher assets (Note 4)

279,928

249,528

Current tax receivable

6,255

6,255

Right-of-use assets

28,574

36,308

Property, plant and equipment

53,389

53,518

Intangible assets

284,405

197,337

Deferred tax assets

41,170

92,698

Total assets

9,235,126

7,385,099

LIABILITIES

Financial liabilities at amortised cost - due to customers

5,368,882

4,044,853

Financial liabilities at amortised cost - due to banks

654,380

100,296

Lease liabilities

31,267

40,286

Retirement benefit obligations

17,164

11,759

Other liabilities

537,807

584,962

Total liabilities

6,609,500

4,7g2,156

EQUITY

Plated capilal

2,934,582

2.934,582

Statutory reserve fund

16,688

16,688

Fair value through other comprehensive income reserve

3,301

3,301

Accumulated losses

(328,945)

(351,628)

Total equity

2,625,626

2,602,943

Total equity and liabilities

9,235,126

7,385,099

Net assets per share (Rs.)

22.36

22.17

Commitments and contingencies

243,802

458,542

The notes on pages 7 to 9 form an integral part of lhese financial statements.

CERTIFICATION



We certify that the above Interim Financial Statements are in compliance with the requirements of the Companies Act No: 7 of 2007 and give true and fair view of the state of affairs of Dialog Finance PLC as at 30 June 2025 and its profit / (loss) for lhe period ended 30 June 2025.

Head Corporate Finance Date: 01/08/2025

The Boa of Directors is responsible for the preparation and presentation of these financial statements. Signed fo nd on behalf of the Board of Directors by,





Direct /CEO Date: 01 8/202

Director

Date: 01/08/202



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DIALOG FINANCE PLC Statement of profit or loss and other comprehensive income (all amounts in Sri Lanka Rupees thousands) Six months ended 30 June Three months ended 30 June

2025

(Unaudited)

2024

(Unaudited)

Change

%

2025

(Unaudited)

2024

(Unaudited)

Change

%

Interest income

737,562

461,028

60

392,610

224,060

75

Less: Interest expense

(174,305)

(138,694)

26

(94,351)

(62,443)

51

Net interest income

563,257

322,334

75

298,259

161,617

85

Fee and commission income

379,208

65,686

477

209,261

52,766

297

Net gain / (loss) from trading

268

(77)

(448)

285

(104)

(374)

Other operating income

18,669

6,271

198

6,450

3,384

91

Total operating income

961,402

394,214

144

514,255

217,663

136

Less: Impairment charges and other losses

(103,871)

(39,637)

162

(58,782)

(20,955)

181

Net operating income

857,531

354,577

142

455,473

196,708

132

Less: Operating expenses

Personnel expenses

(230,356)

(147,919)

56

(118,693)

(85,639)

39

Depreciation and amortization

(34,746)

(30,013)

16

(17,390)

(15,277)

14

Other expenses

(455,992)

(229,415)

99

(237,059)

(121,286)

95

Operating Profit / (Loss) before taxes on financial services

136,437

(52,770)

(359)

82,331

(25,494)

(423)

Taxes on financial services

(62,227)

(14,637)

325

(34,786)

(9,311)

274

Profit / (Loss) before tax for the period

74,210

(67,407)

(210)

47,545

(34,805)

(237)

(51,527)

-

-

(30,923)

-

-

22,683

(67,407)

(134)

16,622

(34,805)

(148)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

22,683

(67,407)

(134)

16,622

(34,805)

(148)

0.19

(0.57)

0.14

(0.30)

Income tax expense

Profit / (Loss) for the period Other comprehensive income items that will not be reclassified to profit or loss:

Changes in the fair value of equity investments at fair value through other comprehensive income:

Remeasurement of defined benefit obligations:

Deferred tax effect on other comprehensive income:

Other comprehensive income, net of tax Total comprehensive income for the period, net of tax Profit / (Loss) per share (Rs.) DIALOG FINANCE PLC Statement of changes in equity

Stated capital

Retained earnings / accumulated

losses

Statutory reserve

fund

Fair value through

other comprehensive

income reserve

Total

2,934,582

(351,628)

16,688

3,301

2,602,943

-

22,683

-

-

22,683

-

-

-

-

-

-

-

-

-

-

-

22,683

-

-

22,683

2,934,582

(328,945)

16,688

3,301

2,625,626

(all amounts in Sri Lanka Rupees thousands) Balance at 1 January 2025

Profit for the period

Other comprehensive income, net of tax

Transfer to statutory reserve fund

Total comprehensive income for the period Balance at 30 June 2025

2,934,582

(309,659)

16,688

3,154

2,644,765

-

(67,407)

-

-

(67,407)

-

-

-

-

-

-

-

-

-

-

-

(67,407)

-

-

(67,407)

2,934,582

(377,066)

16,688

3,154

2,577,358

Balance at 1 January 2024

Loss for the period

Other comprehensive income, net of tax

Transfer to statutory reserve fund Total comprehensive income for the period

Balance at 30 June 2024

Balance at 1 July 2024

2,934,582

(377,066)

16,688

3,154

2,577,358

Profit for the period

-

26,324

-

-

26,324

Other comprehensive income, net of tax

-

(886)

-

147

(739)

Transfer to statutory reserve fund

-

-

-

-

-

Total comprehensive income for the period

-

25,438

-

147

25,585

Balance at 31 December 2024

2,934,582

(351,628)

16,688

3,301

2,602,943

DIALOG FINANCE PLC Statement of cash flows (all amounts in Sri Lanka Rupees thousands)

Six months ended 30 June

Cash flows from operating activities

2025

(Unaudited)

2024

(Unaudited)

Profit / (loss) before income tax

74,210

(67,407)

Adjustments for

Interest expenses

174,305

138,694

Impairment charges and other losses

103,871

39,637

Provision for retirement benefits obligation

5,405

3,496

Depreciation and amortization

34,746

30,013

Interest on lease liability

1,860

1,129

Net losses / (gains) on financial assets at fair value through profit or loss

(268)

77

Cash generated from operations before changes in operating assets and liabilities

394,129

145,639

Decrease in loans and advances

(1,822,003)

(947,710)

Decrease in other assets

(24,498)

(107,492)

Increase in amounts due to customers

1,324,029

642,295

Increase / (decrease) in amounts due to banks

554,084

(502,117)

(Decrease) / increase in other liabilities

(67,053)

198,802

Cash generated from / (used in) operations

358,688

(570,583)

Interest paid

(174,305)

(138,694)

Retirement benefits paid

-

-

Net cash generated from / (used in) operating activities

184,383

(709,277)

Cash flows from investing activities

Acquisition of property plant and equipment

(32,758)

(28,893)

Acquisition of intangible assets

(87,068)

7,137

Net investment in treasury bills

2,639

478,920

Net investment in securities purchased under repurchased agreement

153,931

(20,001)

Net investment in unit trust

253,998

763,156

Net placements with banks and financial institutions

(3,911)

(104,808)

Net cash flows from investing activities

286,831

1,095,511

Cash flows from financing activities

Principle element of lease payment

9,019

8,073

Net cash (used in)/ from financing activities

9,019

8,073

Net increase in cash and cash equivalents

480,233

394,307

Cash and cash equivalents at the beginning of the period

311,570

88,003

Cash and cash equivalents at the end of the period

791,803

482,310

Analysis of cash and cash equivalents at the end of the period

Cash and bank balances

730,245

425,493

Add: Placements with financial Institutions (less than 90 days)

61,558

56,817

791,803

482,310

Less: Impairment provision

(142)

(167)

791,661

482,143

DIALOG FINANCE PLC Financial reporting by segment (all amounts in Sri Lanka Rupees thousands)

For the six months ended 30 Consumer Segment MSME Segment Treasury/investments Unallocated Total

June

2025

2024

2025

2024

2025

2024

2025

2024

2025

2024

Interest Income

377,903

178,018

302,051

156,233

57,608

126,777

-

-

737,562

461,028

Interest Expenses

(61,517)

(42,011)

(60,578)

(38,292)

(52,210)

(58,391)

-

-

(174,305)

(138,694)

Net interest income

316,386

136,007

241,473

117,941

5,398

68,386

-

-

563,257

322,334

Net fees and commission income

241,635

76,951

137,573

(11,265)

-

-

-

-

379,208

65,686

Other income

16,632

3,950

2,305

1,884

-

360

-

-

18,937

6,194

Operating income by segment

574,653

216,908

381,351

108,560

5,398

68,746

-

-

961,402

394,214

Impairment (expense) / reversal

(73,756)

(13,040)

(30,291)

(26,806)

176

209

-

-

(103,871)

(39,637)

Net operating income

500,897

203,868

351,060

81,754

5,574

68,955

-

-

857,531

354,577

Operating expenses

(119,705)

(61,885)

(125,186)

(128,084)

-

-

(211,101)

(39,446)

(455,992)

(229,415)

Segment result

381,192

141,983

225,874

(46,330)

5,574

68,955

(211,101)

(39,446)

401,539

125,162

Personnel expenses

(230,356)

(147,919)

Depreciation and amortization

(34,746)

(30,013)

Profit / (loss) from operations

136,437

(52,770)

VAT on financial services

(62,227)

(14,637)

Income tax expense (51,527) -

Profit / (loss) for the period 22,683 (67,407)

Other information

Balance at 30 June

Segment assets

3,443,568

2,127,458

3,445,900

1,823,518

1,651,937

1,738,795

693,721

547,548

9,235,126

6,237,319

Total assets

3,443,568

2,127,458

3,445,900

1,823,518

1,651,937

1,738,795

693,721

547,548

9,235,126

6,237,319

Segment liabilities

3,328,303

1,941,666

3,281,197

1,718,295

-

-

-

-

6,609,500

3,659,961

Total liabilities

3,328,303

1,941,666

3,281,197

1,718,295

-

-

-

-

6,609,500

3,659,961

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DIALOG FINANCE PLC Notes to the condensed interim financial statements (all amounts in the notes are in Sri Lanka Rupees thousands unless otherwise stated)
  1. Basis of preparation

    The condensed interim financial statements for the six months ended 30 June 2025 of the Company have been prepared in accordance with Sri Lanka Accounting Standard LKAS 34, 'Interim Financial Reporting'. The condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended 31 December 2024.

    There were no changes to the accounting policies since the publication of the audited financial statements for the year ended 31 December 2024.

  2. Events after the reporting period

    No circumstances have arisen since the statement of financial position date which requires adjustments to or disclosures in the financial statements.

  3. Contingent liabilities

    There were no material contingent liabilities as at the reporting date which require adjustments to / or disclosures in the financial statements.

  4. Other Assets

    The Company has identified a case of external financial fraud in June 2024 and steps were taken to immediately recover a portion of funds. As at the reporting date, the gross outstanding amount to be recovered was LKR

    41.4Mn and based on an assessment of recoverability, the Company has recognized a provision for loss of LKR 30.9Mn in the statement of profit or loss. Consequently, the net amount outstanding to be recovered as of the reporting date is LKR 10.5Mn, which is reported under "other assets" in the statement of financial position.

    The Company has initiated legal action as per the advice of external legal counsel and currently working with law enforcement authorities to recover the remaining funds. In response to this incident, the Company has enhanced its transaction monitoring processes and has implemented measures to educate customers on safeguarding their accounts against unauthorized third-party access.

    As of the reporting date, the investigation and recovery efforts are ongoing. The Company will continue to monitor the progress of these actions and will assess the recoverability of the outstanding receivables recognised at each reporting date.

  5. Fair value of financial instruments

    The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

    All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

    Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

    For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

    Measurement criteria and the fair value Level 1 Level 3 Total

    Financial assets

    30 June

    2025

    30 June

    2024

    30 June

    2025

    30 June

    2024

    30 June

    2025

    30 June

    2024

    Financial assets at fair value through profit or loss

    3,493

    358,557

    -

    -

    3,493

    358,557

    Financial assets at fair value through other comprehensive income

    -

    -

    2,358

    2,185

    2,358

    2,185

    DIALOG FINANCE PLC Notes to the condensed interim financial statements (Continued)
  6. Market price per share For the six months ended 30 June 2025 2024

    - Highest

    53.90

    56.00

    - Lowest

    39.00

    42.50

    - Last traded

    43.90

    44.00

    Rs. Rs.

  7. Twenty largest shareholders of the company Name of Shareholders No. of shares % Holding

    1 Dialog Axiata PLC

    116,290,376

    99.05%

    2 Mr. P.S. Goonewardene JNR

    127,913

    0.11%

    3 Mr. R. Gukenthiran

    53,384

    0.05%

    4 Mr. A.P.Dhammika

    30,000

    0.03%

    5 Dialog Finance PLC / D.M.H.B. Dasanayake

    30,000

    0.03%

    6 Mr. C.R. Narangoda

    28,000

    0.02%

    7 Mr. P. Poongunaseelan

    26,531

    0.02%

    8 Mr. W.C. Madhushanka

    22,795

    0.02%

    9 Mr. R.C.J. Goonewardene

    22,073

    0.02%

    10 Senkadagala Finance PLC / G.B.R.P. Gunawardana

    21,191

    0.02%

    11 Mr. R.J.K.I. Ranathunga

    21,007

    0.02%

    12 People's Leasing & Finance PLC/ C.D.Kohombanwickramage

    18,152

    0.02%

    13 Senkadagala Finance PLC / C.R. Narangoda

    17,846

    0.02%

    14 Mr. M.A.T. Raaymakers

    16,566

    0.01%

    15 Mr. M.K. Gunawardena/ M.K. Gunawardena (Joint)

    16,190

    0.01%

    16 Mr. P.S.M. Fernando

    16,000

    0.01%

    17 Citizens Development Business Finance PLC/ K.D.C. Somalatha and K. Nandasiri

    15,980

    0.01%

    18 Mr. G.D.M. Ranasinghe/ Mrs. O.R.K. Ranasinghe (Joint)

    14,029

    0.01%

    19 Mrs. S. Suwandaratne

    13,346

    0.01%

    20 Mrs. C.H.M.S. Wanduragala

    11,917

    0.01%

    116,813,296

    99.50%

    Others

    586,570

    0.50%

    Total

    117,399,866

    100.00%

  8. Directors' shareholdings

    None of the Directors and their close family members held any shares in the company as at 30 June 2025.

  9. Public shareholdings

Information pertaining to public shareholding is as follows:

30 June 2025 30 June 2024

Public holding percentage

0.95%

0.95%

Number of public shareholders

951

842

Float adjusted market capitalization (Rs.)

48,961,614

49,073,144

(a) The Company is not compliant with the Minimum Public Holding requirement under option 2 of Rule 7.13.1(b) of the Listing Rules of the Colombo Stock Exchange ('CSE'). Accordingly, the Company was transferred to the Second Board on 10 February 2020. DIALOG FINANCE PLC Notes to the condensed interim financial statements (Continued) Selected performance indicators As at 30 June As at 30 June

Item

2025 2024

Regulatory capital adequacy

Tier I capital base, Rs. '000

2,366,114

2,282,167

Total capital base, Rs. '000

2,366,114

2,351,001

Risk weighted assets, Rs. '000

10,431,206

6,286,499

Tier I capital adequacy ratio

(As a % of risk weighted assets - Minimum requirement - 8.5%)

22.68%

36.30%

Total capital adequacy ratio

(As a % of risk weighted assets - Minimum requirement - 12.5%)

22.68%

37.40%

Capital funds to deposit liabilities ratio

43.59%

79.08%

(Minimum requirement, 10%)

Assets quality (quality of loan portfolio)

Gross non-performing accommodations, Rs. '000

400,166

239,351

Gross non-performing accommodations ratio, %

5.49%

5.75%

Net-non-performing accommodations ratio, %

1.20%

1.95%

Profitability

Net Interest margin, %

14.49%

11.28%

Return on assets (before taxes), %

3.28%

-2.23%

Return on equity (after taxes), %

3.56%

-5.19%

Regulatory liquidity (Rs. '000)

Required minimum amount of liquid assets

704,539

380,802

Available amount of liquid assets

1,642,932

1,455,474

Required minimum amount of government securities

253,784

241,244

Available amount of government securities 741,992 791,507

Memorandum information

Number of employees 153 139

Number of branches 1 2

Corporate Information Name of the Company Bankers

Dialog Finance PLC Seylan Bank PLC

Commercial Bank of Ceylon PLC

Legal Form and Stock Exchange Listing Nations Trust Bank PLC

A Public Quoted Company with Limited Liability which was quoted on the Diri Savi Board of the Colombo Stock Exchange on 4th October 2011 and subsequently transferred to the Second Board on 10 February 2020.

Bank of Ceylon Cargills Bank Ltd People's Bank

Hatton National Bank PLC

Date of Incorporation National Development Bank PLC DFCC Bank PLC

25 November 1981 Sampath Bank

Auditors Company Registration No. Messrs. Deloitte partners

PB 765 PQ Chartered Accountants

Board of Directors 100, Braybrooke Place,

Colombo 02, Sri Lanka.

Ms. Renuka Fernando (Chairperson) Mr. Supun Weerasinghe

Ms. Lim Li San

Mr. Alexander Lowback

Mr. Shivaan Kanag-Isvaran Mr. Uditha Jayasinghe

Mr. Nazeem Mohamed

Credit Rating

AA (lka), stable outlook was affirmed by Fitch Ratings Lanka Ltd

Taxpayer Identification Number (TIN)

104079687

Registered Office

No. 475, Union Place, Colombo 2

Principal Office

1st Floor, 57, Srimath Anagarika Dharmapala Mawatha, Colombo 03.

Tel : + 94 11 4317317

Fax :+ 94 11 4317335

E-mail: financialservice@dialog.lk

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