Mobitel profit exceeds Rs 200 million in Q1
For the first quarter of 2010 Mobitel reported an after tax profit of
Rs 204 million as against Rs 113 million losses in the fourth quarter of
2009, recording a 280 percent improvement, a company media release said.
The reported profit for the corresponding quarter of 2009 was Rs 250
million, but during that quarter the company enjoyed an exemption from
corporate tax. The profit of Rs 204 million for the first quarter of
2010 has been reported after providing Rs 98 million against taxes.
The profit growth in the 2010 first quarter is a result of an
impressive growth in revenue of the company since mid 2009. In absolute
terms Mobitel recorded a sales turnover of Rs 4.6 billion in the first
quarter of 2010 compared to Rs 3.6 billion in the corresponding quarter
of 2009, an increase of Rs 1 billion.
This significant feat was possible due to a growth in the subscriber
base by 766,000 since the first quarter of year 2009, despite the
stepped up intensity in competition in the mobile telephony sector. By
the end of the first quarter of 2010 Mobitel reported a subscriber base
of 3.58 million.
It is creditable that the 2010 first quarter profit was achieved
after incurring an incremental depreciation charge of Rs 353 million, 51
percent higher when compared to the first quarter 2009. Higher
depreciation are attributed to the new investments in technology
supporting high speed broadband and network expansion during the second
and third quarters of 2009.
Mobitel Chairperson, Leisha De Silva Chandrasena said, company
efforts notwithstanding the challenges faced by the industry in the year
2009 have paid off.
“During a trying past year in which most others chose to defer
investing in new capacity, we invested in building our network and in
our customers. Having so done, we are well placed to harness the full
potential of our investments of the past and now capitalise on the new
market opportunities that are unfolding.
“We are pleased to have recovered from challenges we faced during the
year 2009, save the first quarter of that year, and are confident of a
performance that our stakeholders can be proud of in the current
financial year,” Chandrasena said.
The heightened competition with the entry of the fifth mobile
operator during first quarter of 2009 saw an escalating price war that
eroded margins of all existing mobile operators and a pattern of
customer switching between operators. Mobitel too was not insulated from
the industry developments and was forced to adjust to the market