SLT Group Q1 operating profit up by 14% to Rs 1.86 b
Sri Lanka Telecom (SLT), the leading National Integrated
Telecommunications Service Provider continued its financial trajectory,
complemented with pragmatic operational initiatives, to deliver Q1, 2012
results with a growth of 9% in revenue and 14% in operating profit.
The Group is driving a visionary business strategy coupled with a
pragmatic transformation plan, which is unequivocally reflected in these
results and on-the-ground initiatives which the Group has continued to
unwaveringly deliver according to the mandate it has mapped for growth.
|
Chairman
SLT,
Nimal Welgama |
Depreciation of the rupee had a ripple effect on the Group's results
due to the significant US dollar exposure in the Group's mobile
subsidiary, Sri Lanka Telecom Mobitel.
The exchange loss of Rs 1.4 billion for Q1 therefore posed
negativities for profit before tax (PBT) and profit after tax (PAT),
although revenue and operating profits have grown significantly year on
year (YoY) to Rs 13.53 billion and Rs. 1.86 billion respectively.
Taking into account the exchange loss, PBT at Group level saw a
decline of 47% posted at Rs 901 million, while PAT, decreasing by 72% is
posted at Rs 365 million. Once normalized however, the Group has
performed exceptionally well with PBT gaining 34% to Rs 2.33 billion
compared to Q1 of 2011's figure of Rs 1.71 billion and PAT also showing
a growth of 39% to Rs 1.8 billion from Rs 1.29 billion. These normalized
results further underscore the Group as the leader in integrated
telecommunications in Sri Lanka.
At company level,Sri Lanka Telecom has performed well reporting the
highest quarterly revenue since 3Q, 2009, at Rs. 8.59 billion with a 7%
growth YoY.
The company, which maintains a balanced mix of foreign exchange
exposure, has been able to record Rs. 1.78 billion PBT, a 37% growth
compared to Rs. 1.30 billion in the same quarter of the previous year,
while achieving a 39% increase in PAT from Rs. 989 million in 1Q, 2011
to Rs. 1.37 Billion in 1Q, 2012.
Despite the increase in operational expenses by 11% to Rs. 5.6
billion during the quarter under review, the company has been able to
marginally increase EBITDA to Rs. 2.93 billion from Rs. 2.91 billion.
Nontraditional revenue streams including fixed broadband, PEO TV,
Wholesale, and Enterprise sales were all key drivers in contributing to
revenue growth and driving profitability upwards.
The increase in operational expenditure was mainly driven by the 100%
increase of the regulatory International Telecommunication Levy (ITL),
which earlier stood at US $ .015 but from January 2012, increased to US
$ .030 per minute
Sri Lanka Telecom Mobitel, the Group's flagship subsidiary, though
feeling the after effects of the depreciating Rupee, saw its revenue
grow by 12% to Rs. 5.84 billion and EBITDA of Rs. 2.03 billion, an
increase of 22%.
The Loss Before Tax posted by Sri Lanka Telecom Mobitel for the
quarter is Rs. 816 million, driven by the foreign exchange loss with a
Loss After Tax of Rs. 948 million. Without the Exchange Loss, Mobitel
recorded an impressive profit before tax of Rs. 707 million and Profit
After Tax of Rs. 575 miilion recording YoY growth of 42% and 50%
respectively.
Commenting on the first quarter results, Group Chairman Nimal Welgama
said, “The strong underlying growth in operating profits demonstrates
our sound growth strategy balancing profitable growth coupled with
significantly increased capital investment in network modernization and
capacity expansion.
Our i-Sri Lanka project is delivering high speed island wide
broadband enhancement for fixed line customers, whilst our fibre based
optical backbone network expands its footprint to serve not only the SLT
group but other operators also.
Meanwhile, at Mobitel, we are rapidly expanding network capacity to
keep pace with growth in voice and mobile 3G broadband customer demand."
Repudiating the global trend of declines in fixed line subscribers,
Sri Lanka Telecom's impressive product range and the demand for high
speed uninterrupted broadband and entertainment through PEO TV has seen
fixed PSTN line customers increase by 6% YOY.
The reinvigoration of SLT Megaline and double/triple play packages
last year coupled with an aggressive marketing campaign has buoyed the
increase in fixed customers.
Opining that the Group is extremely cognizant that financial and
organizational growth can only be fueled by best practices in
governance, ethics, professionalism and instituting transparency,
accountability and prudent risk management, he said, “We are focused on
ensuring absolute connectivity across the country, and while we have
displayed consistent and strong growth in our financials, we are mindful
that we must create a sustainable foundation for future growth as
evidenced by our aggressive capital investment in network modernization
and expansion programme”.
|