SLT group 1Q 2016 revenue 10% up, Rs. 1.7 b profits

Sri Lanka Telecom PLC (SLT) yesterday announced first quarter group revenue growth of 10% to Rs. 18.4 billion and an after tax profit of Rs. 1.7 billion, up by 3%.

SLT said the group expects to maintain this revenue trend through recently introduced FTTH (Fiber-to-the-Home) and LTE (Long-Term-Evolution) service packages, which it said was the future of modern telecommunications. The group focuses on providing state-of-the-art services by introducing new technologies and expanding available infrastructure.

Owing to depreciation and the increase of operating costs, the operating profits of the group remained flat at Rs. 2.3 bn. In addition, recent indirect tax changes have resulted in cost increases. 

Before and after tax profits of the group were recorded at Rs. 2.2 bn and Rs. 1.7 bn respectively, with a year-on-year growth of 4% and 3%. Annualised EPS of the group reported at Rs. 3.82.

The holding company SLT was able to earn Rs. 10.8 bn revenue during the quarter under review, reporting a 10% year-on-year growth. The growth was driven by the expansions and introduction of new technology. The operating costs have escalated by 14% year-on-year to Rs. 7.9 bn during the quarter. In line with continuous investments in expansion, the depreciation of the quarter was increased by 7% year-on-year to Rs. 1.9 bn. The operating profit of the quarter reported at Rs. 0.9 bn with a 13% drop from the same period of the previous year. Escalations of operating costs and depreciation have resulted in a drop in profits. The company’s before and after tax profits were flat at Rs. 1 bn and Rs. 0.7 bn respectively during the 1st quarter of 2016. 

“Being the sole provider of FTTH services in Sri Lanka, we are happy about the positive responses received from our customers on our Smartline (FTTX) package which gives a better broadband experience at a reasonable price,” CEO of SLT Group Dileepa Wijesundera  said upon releasing the financials of the group. “We are now geared to provide an even better service to our customers. The recently concluded i-Sri Lanka program migrating the entire subscriber base to modern soft switches and subscriptions to the high capacity international submarine cable SE-ME-WE-5 connecting across the globe will also enrich the customer experience,” he said.

“The SLT group has planned targets of over Rs. 70 bn for the year 2016. By 31 March we were ahead of respective target and have confidence to go even beyond these revenue targets for the year,” Chairman of SLT Group Kumarasinghe Sirisena said, releasing the financials of the group. 

“Meanwhile, we have planned to empower more than 50% of the Sri Lankan population in ICT, embracing the Government’s policy of moving towards a digital era. Several concessionary packages are being introduced to identify consumer segments such as Senior Citizens, Agriculture Officers, Gramasevaka Officers, Social Service Officers, etc. Accordingly, we are serving to the nation while the group is moving towards its goals,” he said.

Mobitel Ltd. (Mobitel), the mobile operator of the group continued to grow its revenue despite industry challenges. Revenue for the first quarter of 2016 grew by 10% to Rs 8.8 bn compared to the same quarter in the previous year. Revenue growth for the first quarter was primarily driven by continued growth in voice, broadband and value added services.  The growth in voice revenue despite high subscriber penetration level is attributed to marketing activities carried out by Mobitel, which involved greater customer engagement with attractive offers and promotional activities. Increased adoption of Value Added Services offered by Mobitel, truly adds value to the lives of users and is reflected in the increasing revenue. 

Backed by the robust growth in revenue, which is an increase of Rs. 787 mn compared to the first quarter of 2015, Mobitel was able to record a growth in all key profitability indicators.  In comparison with the first quarter performance, it is observed that the company’s EBITDA and EBIT has grown by 5% YoY. The Company’s NPAT (Net Profit After Tax) for the first quarter of 2016 was recorded at Rs. 1.05 bn compared to a NPAT of Rs. 1.03 bn seen in the first quarter of 2015.  A growth in net profits is reported, despite tough conditions in the macro environment.