SLT Group Q1 profit Rs 609 m
Price war erodes margins:
* Operating revenue for Q1 Rs 12 billion
* Net profit after tax for Q1 Rs 609m
* Operating costs for Q1 Rs 7,359m
SLT released its Group and Company financial results for the quarter
ending March 31, 2010, with a substantial increase in the Group net
profit after taxation compared to the previous quarter. The Company and
the Group have recorded Rs 415m and Rs 609m net profit after tax profit
respectively, even after provisioning Rs 188m for VRS costs of the
company. This is mainly due to the impressive performance of the
subsidiary Mobitel, the mobile arm of SLT.
Leisha De Silva Chandrasena
Group Chairperson, Leisha De Silva Chandrasena said due to the
strategic initiatives taken by SLT to face the effects of turbulent
market conditions in the industry and the strong resilience shown by SLT
in the face of challenges, the Group has been able to achieve good
Mobitel, our mobile arm has contributed significantly to increase SLT
Group profit through good performance in the face of strong
competitionĒ, she said. During the first quarter, the Company and the
Group have achieved operating revenue of Rs 8,168 million and Rs 12,048
million respectively. This shows a marginal increase compared to the
previous quarter, with some improvements on a corresponding quarterly
basis in the Group, the company said.
With continued efforts the Company and the Group have been able to
keep its operating costs significantly below the previous quarter at Rs
5,061m and Rs 7,359m respectively.
Meanwhile the interest expense has dropped due to the repayment of
the US$100m bond in November 2009. Correspondingly the interest income
dropped due to the utilization of the sinking fund established for the
repayment of bond. During the quarter the Company introduced another VRS
(Voluntary Retirement Scheme) spending about Rs 188m, as a part of itís
strategy to improve the productivity and control the expenses of the
Company. SLT continues to swell its fixed broadband customer base, with
an increase of 57 percent during the past 12 months, with more attention
paid to these services, as they are strategically important for the
growth of the Group while fulfilling emerging customer needs.
The intense competition with the entry of the fifth mobile operator
during first quarter of 2009 saw an escalating price war that eroded
margins of all operators and a pattern of customer switching between
SLT Group too was not insulated from the industry shocks and was
forced to re-adjust to the market realities. SLTís subsidiary, SLT
Publications has continued to contribute to the Group achievements.
Therefore, despite all the adverse conditions the SLT Group continued
to perform significantly well thereby improving stakeholder values.