SLT June net up 58% amid strong top line performance

The State-controlled telecommunication behemoth, Sri Lanka Telecom PLC (SLT) reported strong growth during quarter ended June 30, 2018 (2Q18), as the group witnessed pick up in revenues in its fixed telephony and data operations.

The quarterly performance was further bolstered by the strong top line performance of the group’s mobile telephone services subsidiary.

SLT reported earnings of 92 cents a share or Rs.1.7 billion for the quarter under review compared to earnings of 58 cents a share or Rs.1.09 billion reported for the same quarter, last year, which is a strong 58 percent increase year-on-year (YOY)

SLT operates with eight subsidiary companies, including Mobitel Private Limited.

But over Rs.700 million of the group profit came from the holding company—slt— and its revenue was just under Rs.12 billion.

The group revenue for the quarter under review stood at Rs.19.7 billion, up a billion rupees from the same quarter, last year.

SLT group saw its bottom line falling 19 percent year-on-year (YOY) to Rs.1.18 billion for the quarter ended March 31, 2018 (1Q18) due to loss of revenue and business from its fixed ICT services amid heightened competition.

The modern phenomenon of people spending majority of their time on their smart phones appears to have propelled SLT’S performance during the quarter under review and the operating efficiencies as claimed by the company.

The group reported operating profit of Rs.1.6 billion, up from Rs.1.2 billion reported for the same period, last year.

SLT’S the top line performance was supported by the group’s fixed ICT operations and mobile services which offers voice, broadband, enterprise solutions, wholesale and pay TV services.

Meanwhile, for the first six months of the year, SLT reported a net profit of Rs.2.8 billion or per share earnings of Rs.1.57, up from Rs.2.5 billion or Rs.1.39 a share reported for the same period, last year.

The group revenues were up by about two billion rupees to Rs.39.5 billion. Operating profit stood at Rs.3.1 billion, up from Rs.2.8 billion.

“During the period under review the group invested Rs.10.8 billion for the acquisition of property, plant and equipment as well as intangible assets aimed at technology upgrades, infrastructure expansions, new connections, IT and system upgrades etc.

In line with increasing investments the group depreciation increased by 10.2 percent to Rs. 9.1 billion”, the company said in a statement.

The group raised a staggering Rs.18.9 billion in fresh borrowings but settled Rs.10.2 billion in existing loans.

A segmental breakdown of business operations showed Mobitel Private Limited increasing revenues from Rs.16.6 billion to Rs.17.8 billion for the six months. But the pre-tax profit of the segment fell to Rs.2.12 billion from Rs.2.22 billion reported for the same period, last year.

As at June 30, 2018 the government through the National Treasury held 49.50 percent stake in SLT while Global Telecommunications Holdings NV, a unit of Malaysia’s Maxis group backed by billionaire Ananda Krishnan held 44.98 percent stake.

The Employees’ Provident Fund (EPF) had a 1.40 percent stake, being the third largest shareholder.