SLT reports higher earnings for first half despite 2Q slowdown
Sri Lanka Telecom PLC (SLT), the leader in fixed line services and number two player in mobile services in the country, saw its June quarter (2Q19) earnings declining amid higher finance cost. However, the group was able to report higher profits for the first half (1H19) ended June 30, 2019 amid improved performance of its key business segments.
SLT group reported earnings of 71 cents a share or Rs.1.3 billion for 2Q19 compared to earnings of 92 cents or Rs.1.6 billion reported for the same quarter last year.
For the 1H19, the group reported earnings of Rs.1.93 per share or Rs.3.5 billion against Rs.1.57 per share or Rs.2.8 billion reported for the same period last year.
The revenue for the quarter under review rose to Rs.21.2 billion from Rs.19.7 billion a year ago and the gross profit rose to Rs.9 billion from Rs.8.2 billion.
The operating profit of the group also rose to almost Rs.2 billion from Rs.1.6 billion a year ago.
However, top line gains were hampered by the group’s higher finance cost, which rose to Rs.397 million during the quarter from Rs.51 million a year ago.
For 1H19, the group reported revenue of Rs.42.6 billion, up from Rs.39.4 billion reported for the same period last year, and the operating profit rose to Rs.4.4 billion from Rs.3.1 billion. The fixed ICT operations of the group contributed Rs.22.9 billion to the revenue in 1H19, up from Rs.21.2 billion a year ago. The posttax profit of the segment also rose to R.2.5 billion from Rs.1.3 billion. The mobile operations of the group under Mobitel recorded revenue of Rs.18.9 billion for 1H19, up from Rs.17.7 billion a year ago. The post-tax profit of the segment also improved to Rs.2.2 billion from Rs.2.1 billion a year ago.
SLT in a statement said broadband revenue growth has mainly contributed to revenue growth despite adverse externalities and increased competition prevailing during the period.
The group comprises of nine subsidiaries including its mobile arm Mobitel (Pvt) Ltd.
SLT said rupee stabilization, effective hedging strategies and reduction of foreign currency denominated loans have positively contributed to earnings.
The group also said that it paid a total of Rs.13.9 billion of direct and indirect taxes and other contributions to the Government of Sri Lanka during the six months ended 30 June 2019.
As at June 30, 2019 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 1.40 percent stake, being the third largest shareholder.