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| Thursday, 25 March 2004 |
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Suntel records 150% increase in net profit to Rs. 505 million Suntel Limited crossed a significant threshold by recording a net profit of Rs. 505 million for the financial year ended December 31, 2003. This reflects a 150% improvement on the result of 200 million recorded for the previous year. As in previous years, 2003 was also an extremely volatile year for the telecommunications sector and for Suntel. International gateway operations were liberalised by the end of February and following this international tariffs dropped by around 65-70% overnight. This resulted in lower international revenue for the last three quarters The company also refrained from effecting a tariff increase during 2003. However, through its successful loyalty program, high service levels and ongoing cost reduction program, the company was successfully able to reach similar levels of EBITDA (Earnings Before Interest, Taxation, Depreciation and Amortisation) as in the previous year. Reductions in interest rates over the year reduced debt servicing costs significantly and increased the company's bottomline to Rs. 505 million - which is an increase of Rs. 305 million over the net profit achieved in 2002. Though the company has completed two successive years of significant profitability, it still requires a further 1-2 years of similar results to recover the accumulated losses carried forward on its Balance Sheet. The company continues to be concerned with the regulatory environment and the manner in which key decisions are handled. Suntel has always spoken in favour of deregulation provided that the deregulation process paves the way for a level playing field for all operators. The company hopes that conditions will improve within the regulatory environment in anticipation of the expansion plans it has for the latter part of 2004. Suntel said that the only way in which high quality telecommunications services will be rolled out throughout the country is if operators who have made significant investments in Sri Lanka are given the possibility and a level playing field to further the telecommunication infrastructure in the country. |
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