DIALOG FINANCE PLC
CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE FOURTH QUARTER ENDED
31 DECEMBER 2024
Financial Review for the Year ended 31 December 2024
Dialog Finance PLC (the "Company") announced, Friday 14th February 2024, its financial results for the year ended 31 December 2024.
The lending book of the Company recorded a healthy growth of 70% Year-on-Year ("YoY") to record net loans and advances of Rs. 5.2Bn as at 31 December 2024. Driven by the growth in lending book and increase in fee income from acquiring and issuing businesses, Total operating income grew by 51.4% YoY to reach Rs. 1,145.5Mn for FY 2024, and by 128.8% YoY to reach Rs. 419.1Mn for Q4 2024.
The Company recorded a strong performance in Q4 2024 with a net profit of Rs. 23.5Mn, driven by the growth in income.
Total operating expenses for FY 2024 increased by 56.2% YoY contributed by increased cost stemming from the acquiring business. The Company introduced its acquiring business proposition, including Genie Business in Q1 2024 subsequent to obtaining the Payment Acquiring license from the Central Bank of Sri Lanka. Furthermore, this increase in cost was contributed by investments made on human capital, technology and customer experience to support business strategies and business growth. However, the Company continued to drive the aggressive cost management and rationalization initiatives along with the streamlining of processes which are expected to deliver both service excellence and cost efficiency.
The Company recorded a Loss before Tax of Rs. 15.9Mn for FY 2024 with the provision for operational risk losses and the increase in operating expenses during the year. Further, the Company recorded a deferred tax asset reversal of Rs. 25.1Mn for FY 2024. Accordingly, the Company recorded a net loss of Rs. 41.1Mn for FY 2024 relative to the net profit of Rs.39.4Mn recorded for the previous financial 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 28.47% as at 31 December 2024, 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.
Page | 1
DIALOG FINANCE PLC
Statement of financial position
(all amounts in Sri Lanka Rupees thousands)
31 Dec 2024 | 31 Dec 2023 | |
(Unaudited) | (Audited) | |
ASSETS | ||
Cash and cash equivalents | 252,167 | 33,917 |
Placements with banks and financial institutions | 168,488 | 54,068 |
Securities purchased under repurchase agreements | 509,924 | - |
Financial assets at fair value through profit or loss | 257,224 | 1,121,790 |
Financial assets at amortised cost - loans and advances | 5,171,335 | 3,042,903 |
Financial assets at fair value through other comprehensive income | 2,358 | 2,185 |
Financial investments at amortised cost | 387,959 | 1,250,021 |
Other assets (Note 4) | 249,528 | 68,125 |
Current tax receivable | 6,255 | 6,255 |
Right-of-use assets | 36,308 | 18,708 |
Property, plant and equipment | 53,518 | 47,189 |
Intangible assets | 197,337 | 190,394 |
Deferred tax assets | 92,698 | 117,493 |
Total assets | 7,385,099 | 5,953,048 |
LIABILITIES | ||
Financial liabilities at amortised cost - due to customers | 4,044,853 | 2,616,766 |
Financial liabilities at amortised cost - due to banks | 100,296 | 502,117 |
Lease liabilities | 40,286 | 20,025 |
Retirement benefit obligations | 11,759 | 9,133 |
Other liabilities | 584,962 | 160,242 |
Total liabilities | 4,782,156 | 3,308,283 |
EQUITY | ||
Stated capital | 2,934,582 | 2,934,582 |
Statutory reserve fund | 16,688 | 16,688 |
Fair value through other comprehensive income reserve | 3,301 | 3,154 |
Accumulated losses | (351,628) | (309,659) |
Total equity | 2,602,943 | 2,644,765 |
Total equity and liabilities | 7,385,099 | 5,953,048 |
Net assets per share (Rs.) | 22.17 | 22.53 |
Commitments and contingencies | 458,542 | 497,339 |
The notes on pages 7 to 9 form an integral part of these 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 31 December 2024 and its profit / (loss) for the period ended 31 December 2024.
Yasoda Sewwandi
Head of Finance
Date: 14/02/2025
The Board of Directors is responsible for the preparation and presentation of these financial statements. Signed for and on behalf of the Board of Directors by,
Renuka Fernando | Nazeem Mohamed |
Director | Director |
Date: 14/02/2025 | Date: 14/02/2025 |
Page | 2
DIALOG FINANCE PLC
Statement of profit or loss and other comprehensive income (all amounts in Sri Lanka Rupees thousands)
Year ended 31 December | Three months ended 31 December | |||||
2024 | 2023 | Change | 2024 | 2023 | Change | |
(Unaudited) | (Audited) | % | (Unaudited) | (Unaudited) | % | |
Interest income | 1,038,173 | 1,093,157 | (5) | 320,855 | 252,566 | 27 |
Less: Interest expense | (259,932) | (394,228) | (34) | (62,382) | (88,108) | (29) |
Net interest income | 778,241 | 698,929 | 11 | 258,473 | 164,458 | 57 |
Net fee and commission income | 350,809 | 50,554 | 594 | 154,428 | 17,051 | 806 |
Net gains / (losses) from trading | 759 | (399) | (290) | 748 | (447) | (267) |
Other operating income | 15,658 | 7,590 | 106 | 5,433 | 2,099 | 159 |
Total operating income | 1,145,467 | 756,674 | 51 | 419,082 | 183,161 | 129 |
Less: Impairment charges and | ||||||
other losses | (114,248) | (21,816) | 424 | (44,357) | (4,872) | 810 |
Net operating income | 1,031,219 | 734,858 | 40 | 374,725 | 178,289 | 110 |
Less: Operating expenses | ||||||
Personnel expenses | (337,319) | (251,231) | 34 | (91,278) | (61,489) | 48 |
Depreciation and amortization | (62,890) | (52,042) | 21 | (17,143) | (13,787) | 24 |
Other expenses | (586,961) | (328,696) | 79 | (191,446) | (87,709) | 118 |
Operating profit/ (loss) before | 44,049 | 102,889 | (57) | 74,858 | 15,304 | 389 |
taxes on financial services | ||||||
Taxes on financial services | (59,984) | (58,147) | 3 | (26,213) | (12,193) | 115 |
Profit/ (loss) before tax for the | (15,935) | 44,742 | (136) | 48,645 | 3,111 | 1464 |
period | ||||||
Income tax expense/ Deferred tax | (25,148) | (5,304) | 374 | (25,148) | (5,304) | 374 |
asset reversal | ||||||
Profit/ (loss) for the period | (41,083) | 39,438 | (204) | 23,497 | (2,193) | 1171 |
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
173 | 65 | 166 | 173 | 65 | 166 |
(1,265) | 2,146 | (159) | (1,265) | 2,146 | (159) |
353 | (653) | 154 | 353 | (653) | 154 |
(739) | 1,558 | (147) | (739) | 1,558 | (147) |
(41,822) | 40,996 | (202) | 22,758 | (635) | 3684 |
Profit/ (loss) per share (Rs.) | (0.35) | 0.34 | 0.19 | (0.01) |
Page | 3
DIALOG FINANCE PLC
Statement of changes in equity
(all amounts in Sri Lanka Rupees thousands)
Retained | Fair value through | |||
earnings / | Statutory | other | ||
Stated | accumulated | reserve | comprehensive | |
capital | losses | fund | income reserve | Total |
Balance at 1 January 2024
Loss for the year
Other comprehensive income, net of tax
Transfer to statutory reserve fund
Total comprehensive income for the year
Balance at 31 December 2024
2,934,582 | (309,659) | 16,688 | 3,154 | 2,644,765 |
- | (41,083) | - | - | (41,083) |
- | (886) | - | 147 | (739) |
- | - | - | - | - |
- | (41,969) | - | 147 | (41,822) |
2,934,582 | (351,628) | 16,688 | 3,301 | 2,602,943 |
Balance at 1 January 2023
Profit for the year
Other comprehensive income, net of tax
Transfer to statutory reserve fund
Total comprehensive income for the year
Balance at 31 December 2023
2,934,582 | (347,125) | 14,716 | 1,596 | 2,603,769 |
- | 39,438 | - | - | 39,438 |
- | - | - | 1,558 | 1,558 |
- | (1,972) | 1,972 | - | - |
- | 37,466 | 1,972 | 1,558 | 40,996 |
2,934,582 | (309,659) | 16,688 | 3,154 | 2,644,765 |
Page | 4
DIALOG FINANCE PLC
Statement of cash flows
(all amounts in Sri Lanka Rupees thousands)
Cash flows from operating activities
Profit/ (loss) before income tax
Adjustments for Interest expenses
Impairment charges and other losses Provision for retirement benefits obligation Depreciation of property plant and equipment Depreciation of right-of-use assets Amortisation of intangible assets
Interest on lease liabilities
Net (gains) / losses on financial assets at fair value through profit or loss
Cash generated from operations before changes in operating assets and liabilities
Increase in loans and advances Increase in other assets
Increase / (decrease) in amounts due to customers (Decrease) / increase in amounts due to banks Increase in other liabilities
Cash used in operations
Interest paid
Retirement benefits paid
Net cash used in operating activities
Cash flows from investing activities
Acquisition of property plant and equipment and intangible assets Net investment in treasury bills
Net placements with financial institutions Net investment in unit trust
Net cash flows from securities purchased under repurchased agreement
Net cash flows from / (used in) investing activities
Cash flows from financing activities
Principle element of lease payment
Net cash (used in) financing activities
Net increase/ (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
Analysis of cash and cash equivalents at the end of the year
Cash and bank balances
Add: Placements with financial Institutions (less than 90 days)
Less: Impairment provision
Year ended 31 Dec
20242023
(Unaudited) (Audited)
(15,935)44,742
259,932 394,228
114,24821,816
3,9694,207
14,09717,477
14,4727,781
34,32126,784
2,6091,425
- 399
426,954 518,859
(2,242,813) (28,496)
(181,404) (21,395)
1,428,087 (1,170,156)
(401,821) 502,117
456,7924,516
(514,205) (194,555)
(346,106) (409,615)
(2,607) (1,917)
(862,918) (606,087)
(61,690) (54,693)
862,062 (1,016,192)
(55,099)-
865,746 (1,119,839)
(510,114) 296,315
1,100,905 (1,894,409)
(14,420) (10,620)
(14,420) (10,620)
223,567 (2,511,116)
88,003 2,599,119
311,570 88,003
252,24933,922
59,32154,081
311,570 88,003
-
(18)
311,454 87,985
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DIALOG FINANCE PLC
Financial reporting by segment
(all amounts in Sri Lanka Rupees thousands)
For the year ended 31 | Consumer Segment | MSME Segment | Treasury/investments | Unallocated | Total | ||||||||||
December | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||
Interest Income | 488,414 | 334,547 | 361,888 | 323,815 | 187,871 | 434,795 | - | - | 1,038,173 | 1,093,157 | |||||
Interest Expenses | (91,769) | (101,460) | (81,604) | (88,698) | (86,559) | (204,070) | - | - | (259,932) | (394,228) | |||||
Net interest income | 396,645 | 233,087 | 280,284 | 235,117 | 101,312 | 230,725 | - | - | 778,241 | 698,929 | |||||
Net fees and commission income | 258,675 | 41,779 | 92,134 | 8,775 | - | - | - | - | 350,809 | 50,554 | |||||
Other income | 11,003 | 5,176 | 4,705 | 1,175 | 709 | 840 | - | - | 16,417 | 7,191 | |||||
Operating income by segment | 666,323 | 280,042 | 377,123 | 245,067 | 102,021 | 231,565 | - | - | 1,145,467 | 756,674 | |||||
Impairment (expense) / reversal | (58,410) | (31,992) | (55,971) | (10,048) | 133 | 20,224 | - | - | (114,248) | (21,816) | |||||
Net operating income | 607,913 | 248,050 | 321,152 | 235,019 | 102,154 | 251,789 | - | - | 1,031,219 | 734,858 | |||||
Operating expenses | (138,408) | (74,702) | (113,053) | (2,539) | - | - | (335,500) | (251,455) | (586,961) | (328,696) | |||||
Segment result | 469,505 | 173,348 | 208,099 | 232,480 | 102,154 | 251,789 | (335,500) | (251,455) | 444,258 | 406,162 | |||||
Personnel expenses | (337,319) | (251,231) | |||||||||||||
Depreciation and amortization | (62,890) | (52,042) | |||||||||||||
Profit / (loss) from operations | 44,049 | 102,889 | |||||||||||||
VAT on financial services | (59,984) | (58,147) | |||||||||||||
Income tax expense | (25,148) | (5,304) | |||||||||||||
Profit / (loss) for the year | (41,083) | 39,438 | |||||||||||||
Other information | |||||||||||||||
Balance at 31 December | |||||||||||||||
Segment assets | 2,631,468 | 1,653,040 | 2,539,867 | 1,389,862 | 1,578,120 | 2,461,982 | 635,644 | 448,164 | 7,385,099 | 5,953,048 | |||||
Total assets | 2,631,468 | 1,653,040 | 2,539,867 | 1,389,862 | 1,578,120 | 2,461,982 | 635,644 | 448,164 | 7,385,099 | 5,953,048 | |||||
Segment liabilities | 2,540,591 | 1,765,298 | 2,241,565 | 1,542,985 | - | - | - | - | 4,782,156 | 3,308,283 | |||||
Total liabilities | 2,540,591 | 1,765,298 | 2,241,565 | 1,542,985 | - | - | - | - | 4,782,156 | 3,308,283 |
Page | 6
DIALOG FINANCE PLC
Notes to the condensed interim financial statements
(all amounts in the notes are in Sri Lanka Rupees thousands unless otherwise stated)
-
Basis of preparation
The condensed interim financial statements for the year ended 31 December 2024 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 2023.
There were no changes to the accounting policies since the publication of the audited financial statements for the year ended 31 December 2023. - 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. - Contingent liabilities
There were no material contingent liabilities as at the reporting date which require adjustments to / or disclosures in the financial statements. - 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 25.7Mn in the statement of profit or loss. Consequently, the net amount outstanding to be recovered as of the reporting date is LKR 15.7Mn, 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. - 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.
Financial assets
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Measurement criteria and the fair value
Level 1 | Level 3 | Total | |||
31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec |
2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
257,224 | 1,121,790 | - | - | 257,224 | 1,121,790 |
- | - | 2,358 | 2,185 | 2,358 | 2,185 |
Page | 7
DIALOG FINANCE PLC
Notes to the condensed interim financial statements (Continued) | |||||
5 Market price per share | |||||
For the three months ended 31 December | 2024 | 2023 | |||
Rs. | Rs. | ||||
- | Highest | 53.90 | 69.90 | ||
- | Lowest | 37.00 | 50.00 | ||
- | Last traded | 47.80 | 53.20 | ||
6 Twenty largest shareholders of the Company | |||||
Name of Shareholders | No. of shares | % Holding | |||
1 | Dialog Axiata PLC | 116,290,376 | 99.05% | ||
2 | Mr. R.C.J. Goonewardene | 129,630 | 0.11% | ||
3 | Mr. P.S. Goonewardene JNR | 127,913 | 0.11% | ||
4 | Mr. D.M.H.B. Dasanayake | 30,000 | 0.03% | ||
5 | Mr. M.A.T. Raaymakers | 27,307 | 0.02% | ||
6 | Mr. S.R.S. De Saram/ Mrs. S.T.T. Jayasundera (Joint) | 25,000 | 0.02% | ||
7 | Hatton National Bank PLC / Dawi Investment Trust (Pvt) Ltd | 24,719 | 0.02% | ||
8 | Mr. P. Poongunaseelan | 24,419 | 0.02% | ||
9 | Mr. P.S.M. Fernando | 24,282 | 0.02% | ||
10 | Mr. M.F. Cader | 24,221 | 0.02% | ||
11 | Mr. W.C. Madhushanka | 22,795 | 0.02% | ||
12 | People's Leasing & Finance PLC/ C.D.Kohombanwickramage | 18,152 | 0.02% | ||
13 | Mrs. R. Ameen UR Rahman/ Mr. K.R. Ameen UR Rahman (Joint) | 17,875 | 0.02% | ||
14 | Mr. V. Rajakulasekaran | 17,500 | 0.01% | ||
15 | Mr. M.K. Gunawardena/ Mr. M.K. Gunawardena (Joint) | 16,190 | 0.01% | ||
16 | Mr. G.D.M. Ranasinghe/ Mrs. O.R.K. Ranasinghe (Joint) | 14,029 | 0.01% | ||
17 | Mrs. S. Suwandaratne | 13,346 | 0.01% | ||
18 | Miss. T.K. Hulugalle | 12,865 | 0.01% | ||
19 | Mr. D.W.K. David | 12,643 | 0.01% | ||
20 | Senkadagala Finance PLC / G.B.R.P. Gunawardana | 11,191 | 0.01% | ||
116,884,453 | 99.55% | ||||
Others | 515,413 | 0.45% | |||
Total | 117,399,866 | 100.00% | |||
7 Directors' shareholdings
None of the Directors and their close family members held any shares in the Company as at 31 December 2024.
8 Public shareholdings | ||
Information pertaining to public shareholding is as follows: | ||
31 Dec 2024 | 31 Dec 2023 | |
Public holding percentage | 0.95% | 0.95% |
Number of public shareholders | 848 | 747 |
Float adjusted market capitalization (Rs.) | 53,311,279 | 59,333,892 |
- The Company is not compliant with the Minimum Public Holding requirement under option 2 of Rule 7.14.1(b) of the Listing Rules of the Colombo Stock Exchange ('CSE'). Accordingly, the Company was transferred to the Second Board on 10 February 2020.
Page | 8
DIALOG FINANCE PLC
Notes to the condensed interim financial statements (Continued) | |||
Selected performance indicators | |||
As at 31 Dec | As at 31 Dec | ||
Item | 2024 | 2023 | |
Regulatory capital adequacy | |||
Tier I capital base, Rs. '000 | 2,321,634 | 2,318,139 | |
Total capital base, Rs. '000 | 2,321,634 | 2,318,139 | |
Risk weighted assets, Rs. '000 | 8,154,268 | 5,752,194 | |
Tier I capital adequacy ratio | |||
(As a % of risk weighted assets - Minimum requirement - 8.5%) | 28.47% | 40.30% | |
Total capital adequacy ratio | |||
(As a % of risk weighted assets - Minimum requirement - 12.5%) | 28.47% | 40.30% | |
Capital funds to deposit liabilities ratio | 62.79% | 101.07% | |
(Minimum requirement, 10%) | |||
Assets quality (quality of loan portfolio) | |||
Gross non-performing accommodations, Rs. '000 | 283,910 | 172,372 | |
Gross non-performing accommodations ratio, % | 5.21% | 5.37% | |
Net-non-performing accommodations ratio, % | 1.43% | 1.61% | |
Profitability | |||
Net Interest margin, % | 12.90% | 12.68% | |
Return on assets (before taxes), % | -0.65% | 0.78% | |
Return on equity (after taxes), % | -1.58% | 1.49% | |
Regulatory liquidity (Rs. '000) | |||
Required minimum amount of liquid assets | 496,487 | 346,142 | |
Available amount of liquid assets | 1,263,426 | 1,444,062 | |
Required minimum amount of government securities | 253,784 | 242,515 | |
Available amount of government securities | 898,649 | 1,254,388 | |
Memorandum information | |||
Number of employees | 169 | 97 | |
Number of branches | 1 | 2 |
Page | 9
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