Sri Lanka Telecom’s net profit rose 114 percent to Rs.1.29 billion in the first quarter of the financial year 2011 compare with corresponding period a year before, according to the interim financials released to the Stock Exchange yesterday.
A statement by the SLT said that this substantial increase in profits can be attributed to revenue increase, coupled with cost optimization initiatives which have delivered encouraging results in terms of reducing operating expenses.
Earnings per Share for the quarter also increased from 114 percent to Rs.2.87.
Mobitel, the Mobile arm of SLT, recorded a Profit after Tax of Rs. 384 mn in 2011 as compared to Rs. 204 mn in the corresponding 1st quarter of 2010. This growth in earnings reflects an 88% YoY growth despite formidable challenges faced in a fiercely competitive industry during the period under review. The growth achieved in overall revenue, which increased by over Rs, 600 mn continues to be reflected across profitability indicators, with EBITDA and NPAT growing by 8% and 88% respectively. This was a result of continuous efforts to minimize costs while striving for optimum asset utilization.
The growth in Mobitel profitability was achieved notwithstanding the substantial net outflow for 1st Quarter 2011 due to the interconnection regime imposed from June 2010. Mobitel was able to report a healthy performance, recording a growth in both subscribers and revenue by 13% each during this period as compared to the corresponding period last year. In a voice market that is fast reaching maturity, Mobitel was able to capture a significant share of mobile subscribers and thus increase its base by almost 500,000 within 12 months, ending 31st March 2011.
SLT, which is a key contributor in taking ICT to the next level in the country, embarked on a multi billion investment drive in first quarter 2011 for Network Modernization, Technology Upgrades, and Capacity Coverage Expansions. In spite of heavy investments in capital expenditure, the SLT Group recorded a positive free cash follow of Rs. 1.03 bn, which reflects the group’s enviable financial fundamentals.
Nimal Welgama, Chairman Sri Lanka Telecom (SLT), commented on the group’s favourable performance: “SLT has powered the economy by boosting the telecommunications sector over the last few decades and SLT is further poised to stimulate and support the momentous economic growth in the journey towards making Sri Lanka, the miracle of Asia. SLT has closely aligned its group vision to the national vision for an IT-enabled country that stands at the zenith of ICT technology.
The group’s rapid diversification, increased capacity and adoption of the latest ICT advances have empowered us to record an impressive performance in 1st quarter of this year. I am confident that the group will consolidate these early financial gains in the months ahead to render 2011 another strong financial year!”
At the company level, SLT has recorded significant gains during the 1st Quarter of 2011 due to the wide array of strategic measures taken by the company to add value to its services through innovation and enhanced efficiency. SLT’s Profit Before Tax (PBT) of Rs. 1.29 bn and Profit After Tax of Rs. 989mn were 105% and 141% respectively increased when compared to the corresponding quarter of the previous year.
These increases were mainly driven by reduction in expenses due to cost optimization initiatives and reduction in volume driven direct costs. Meanwhile, non-traditional revenue lines such as broadband and data have shown impressive growth.
source - www.dailymirror.lk
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