Record revenue for SLT

*First listed company to top Rs 50 billion in revenue

*PAT increases by 407 percent to Rs 3.94 billion

Sri Lanka Telecom (SLT), notched exemplary milestones for 2010 including the status of being the First Listed Company in Sri Lanka to post a record Rs 50.25 billion in revenue in a Financial Year.

SLT Headquarters

Releasing the SLT Group and Company financial results for the 12 months ending December 31, 2010 the Group also delivered a profit before tax (PBT) of Rs 5.96 billion, with a YoY noteworthy growth of 327 percent, while the Group’s Profit After Tax (PAT) hit Rs 3.94 billion, a remarkable increase of 407 percent.

The impressive financial results were mainly driven by the improved performance delivered by SLT, the parent company of the Group and exceptional performance by Mobitel, the Mobile arm of the SLT group. Group free cash flow showed an increased from a negative Rs 2 billion in 2009 to Rs 8.8 billion in 2010. Comparatively low capital expenditure and better performance overall, saw an improvement in cash flows.

The impressive 147 percent growth of Rs 3.97 billion in PBT achieved by SLT in 2010 is primarily due to the infusion of prudent operational efficiencies and through restructuring. The company experienced a marginal drop in revenue to Rs 33.31 billion in 2010 from Rs 34.09 billion in 2009, mainly due to price pressures and alternative solutions available in the market.

However, SLT was able to improve its NPAT margin from four percent in 2009 to seven percent in 2010, while maintaining an EBITDA margin of 30 percent.

During 2010, SLT achieved Rs 2.48 billion NPAT compared to Rs 1.23 billion in the prior year, an impressive 101 percent increase YoY.

SLT Group Chairman Nimal Welgama affirmed that the Rs 50.25 billion revenue for the Group is certainly a landmark in the telecommunication and corporate annals of Sri Lanka.

“We are firmly positioned now as the first Sri Lankan company to achieve this record which provides considerable boost to our bottom line and is reflective of our prudent cost management initiatives and focus on subsidiary profitability. Given the strategic focus we have instituted in all our areas of business and the emphasis we have constantly infused in ensuring that our end objectives and targets are met or exceeded, it is indeed noteworthy that we have implemented the necessary foundations and strategies to drive substantial growth and profits,” he said. He said the Group while having established a pragmatic framework to ensure consistent growth in all its KPIs, has been insistent in infusing a more visionary outlook and an attitudinal change which naturally contributed positively, both quantitatively and qualitatively.

“Having already commenced our Transformation Program that has established changes across numerous areas including, customer centricity, innovation and an overarching emphasis on prudent cost management remain very high on our agenda.

“We have already laid the foundations to transform our traditional network to a Next Generation Network, investing considerably in infrastructure, technology, training and development.” He said, expanding further on the significant ‘on the ground’ achievements that SLT has attained through the year.

“Our Optical Fibre Connectivity Project is another such accomplishment with over 8,000 kms of optical fibre connecting most of the country. We passed the 200,000 fixed line broadband customer mark achieving a growth of 36 percent and a customer increase of 57,000 YoY and have amassed a total of 1.4 million fixed lines and over 4.0 million mobile customers.”

Fixed wired line customers showed growth of 24,000 YoY standing slightly below 900,000, while the fixed wireless (CDMA) customer base declined by 12,000 to reach 550,000 subscribers, a trend that strongly underpins customer preference for fixed broadband ADSL services.

Chairman Nimal Welgama

The SLT Group which comprises SLT and seven subsidiaries has created a unique business model that has the ability to leverage on each other’s synergies which leads to astute cost management and optimal utilization of technology and resources, prompting highly innovative state-of-the-art telecommunication solutions.

Mobitel posted a commendable performance in 2010 recovering from a dip in profits in 2009, with PBT of Rs 1.94 billion and a PAT of Rs 1.51 billion, compared to Rs 219 million and Rs 395 million losses respectively in 2009.

PAT was achieved from a combined 30 percent growth in revenue, which was Rs 20 billion and the instigation of astute cost management initiatives.

This remarkable growth in profit was posted despite having to provide for corporate tax, of Rs 431 million for 2010, while in comparison, in 2009 the provision was Rs 176 million, a liability that was due only from July 1, 2009 due to the expiry of the tax holiday granted to Mobitel.

Key drivers in revenue growth are attributed to a continued increase in prepaid services and mobile broadband gaining momentum, while a carefully executed strategy for value innovation and brand building through service excellence added further impetus to this drive. Consolidating its position further, Mobitel crossed the four million customer mark this year despite an intensely competitive market.

EBITDA for 2010 reached Rs 6.66 billion with a growth rate of 62 percent YoY. In absolute terms, the revenue of Rs 20 billion in 2010 compared to Rs 15.43 billion in 2009, an increase of over Rs 4.58 billion, almost 30 percent YoY. Sky Network unveiled Sri Lanka’s first ever WiMax 16e high speed fixed broadband network in November 2010, while Sri Lanka Telecom Mobitel is in the process of expanding its 3.5G network, both of which represent two considerable expansion projects supported by SLT.

With the launch of WiMax and both SLT and Mobitel’s prowess in fixed and mobile broadband services, the SLT Group reiterates its status as an integrated total telecommunications solutions provider.

SLT’s fully owned subsidiary SLT Publications, the sole directory publisher in Sri Lanka has aggressively grown its product and service portfolio across numerous avenues and posted a profit of Rs 109 million, while Sri Lanka VisionCom, the subsidiary that launched the revolutionary and unique PEOTV entertainment and interactive service recorded a noteworthy 91 percent customer growth in 2010 YoY.