Sri Lanka Telecom Plc (SLT) has posted a consolidated pre-tax profit of Rs. 3.26 billion in the first half up by 51% from the performance achieved in the corresponding period of last year.
The Group consists of parent company Sri Lanka Telecom PLC (SLT) and seven subsidiaries, including the company’s mobile arm Mobitel (Pvt) Ltd. (Mobitel).
During the first six months, SLT group has recorded a net profit after tax of Rs. 2.44 b, which is a growth of 77% over the same period of prior year. The Group’s KPIs such as EBITDA, PBT and PAT margins have improved over the prior year, displaying SLT Group’s quest for continuous improvement in financial returns.
The Group reported revenue of Rs. 24.85 b for the half year ended 30 June 2011 with impressive revenue growth in Broadband and PEO TV.
Meanwhile, the parent company SLT has recorded a profit before tax of Rs. 2.35 b for the first six months, which is a 70% growth, compared to the same period in the prior year. Net profit after tax of the company for the same period has increased by 106% to Rs. 1.76 b. The company net profit margin has improved to 11% from 5% of the corresponding period of the previous year.
Cost optimisation initiatives together with reduction in volume driven costs have resulted in a significant reduction in operating cost by 8% compared with the same period of last year at company level. In terms of revenue, the company is currently engaged in expanding its non-traditional revenue streams such as Broadband, PEO TV and wholesale, while focusing on sustaining traditional revenue streams such as fixed voice.
Strategic initiatives taken to improve the non-traditional revenue by promoting double play and triple play have shown encouraging results. Despite the pricing pressures, the fixed wired line customer base continued to grow by 4% to 918,200 year on year.
Commenting on the company’s financial performance SLT Chairman Nimal Welgama stated that SLT has strengthened its position as the country’s leading integrated telecommunication service provider with strong market positions in fixed, mobile, international, data, wholesale and broadband.
“Sri Lanka is now strongly positioned on a platform of fast-tracked development. The national vision is to make every citizen ICT empowered. Therefore, in line with the Government’s objectives of ensuring that ICT is accessible to all, Sri Lanka Telecom has already taken many initiatives to take ICT in the country to the next level, including playing a proactive role in enabling ICT empowerment in remote villages of the country,” Welgama said.
The favourable macroeconomic climate had a positive impact on interest rates and currency rates also resulting as a contributory factor in significant growth in profit.
Credit ratings of SLT are contained by the sovereign ratings. The recent upgrade of sovereign ratings by Standard and Poors (S&P) and Fitch Ratings (Fitch) credit agencies, have impacted to upgrade SLT ratings too. Accordingly Fitch upgraded SLT’s long-term foreign currency rating to “BB-” from “B+” while affirming its long-term local currency rating at “BB-” and national long-term rating at “AAA (lka)”.
S&P revised the outlook on long-term foreign currency credit rating to positive from stable and affirmed this “B+” rating. It also affirmed the “BB-” long term local currency corporate rating.
source - www.ft.lk
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