Mobitel makes Rs 336 m profit in Q2

Mobitel has recorded a profit before tax (PBT) of Rs 440 million, compared to the loss of Rs 34 million in the second quarter of the previous year in the second quarter. Profit after tax for the second quarter 2010 is Rs 336 million as against Rs 36 million loss in the second quarter of 2009, making an impressive turnaround.

The reported profit for the previous quarter of 2010 was Rs 204 million making the profit after tax figure for the first half Rs 540 million.

Despite having to provide for corporate tax of over Rs 200 million in the first half of 2010, Mobitel was able to record this profit after tax figure achieving a growth of 152 percent compared to the same period in the previous year.

The profit growth in the 2010 first half is a result of impressive 30 percent improvement in the revenue of the company against the first half of 2009.

In absolute terms Mobitel recorded a sales turnover of Rs 9.4 billion in the first half of 2010 compared to Rs 7.3 billion in the first half of 2009, an increase of over Rs 2 billion.

This significant feat was possible due to a growth in the customer base by 720,000 over the last 12 months despite the intensified competition in the mobile telephony sector.

By the end of the second quarter of 2010, Mobitel customer base has exceeded 3.7 million.

It is creditable that the 2010 first half profit was achieved after incurring an incremental depreciation charge of Rs 637 million, 44 percent higher when compared to the first half 2009. Higher depreciation is attributed to the new investments in technology and network expansion during 2009.

The heightened competition with the entry of the fifth mobile operator during the 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.