Sri Lanka Telecom records Rs.3.9bn loss in FY23

State-run Sri Lanka Telecom (SLT) saw its performance dampen for the financial year ended on December 31, 2023.

The interim financial statements filed to the Colombo Stock Exchange showed that the group recorded a loss of Rs.3.9 billion, contrasting sharply with the profit of Rs.4.8 billion recorded in 2022, which is a staggering decline of 182.3 percent.

SLT and Mobitel individually reported losses of Rs.1.1 billion and Rs.3.6 billion for the year, respectively. Additionally, the group’s revenue experienced a marginal dip of 1.2 percent, amounting to Rs.106.4 billion, compared to the revenue of Rs.107.7 billion in the financial year of 2022.

Commenting on the performance, Slt-mobitel CEO Janaka Abeysinghe said that despite the yearon-year (YOY) decline in profitability, the entity is optimistic and sees encouraging signs for 2024.

“Our cost base is under continuous review and adjusted to match market conditions. Given these fundamental strengths, we believe we will overcome negatives in these challenging markets and are confident in driving the long-term profitability of the group,” he said.

For 4Q23, the SLT group reported a YOY consolidated revenue contraction of 7.5 percent, amounting to Rs.26 billion, compared to Rs.28 billion in 2022.

SLT said its group profits decline was due to reduced revenue, despite the efforts of cost optimisation measures that resulted in a 5.9 percent reduction in operating expenses (Opex). Consequently, the group saw a corresponding decline in operating profit, with both profit before tax and profit after tax experiencing decreases in the quarter.

At SLT level, a 3.6 percent Opex reduction was posted for 4Q 2023, compared to 4Q 2022. For the quarter under review, the entity cut down its advertising and activation costs, along with repair and maintenance costs.

Overall, in the financial year of 2023, the group’s operational costs rose by 9.4 percent to Rs.74 billion, compared to Rs.68 billion in 2022, mainly due to the increased electricity tariffs. Additionally, other costs, including, annual maintenance contract costs, vehicle hiring, fuel and repair costs, contributed to the overall cost increase YOY.