SLT group profits grow 53% in 1 Q, 2007

Sri Lanka Telecom (SLT) has reported a 53% increase in its group profits, for the first quarter 2007, quarter on quarter basis. After providing Rs. 986 million to the Government as taxes the company recorded a profit of Rs. 1,980 million compared to Rs. 1,292 million of the corresponding quarter of the previous year.

The revenue of the group has increased from Rs. 9,646 million in the first quarter 2006 to Rs. 10,965 million, a 14% increase in the first quarter 2007. All major revenue sources have increased. However, the operating cost has grown only by 9% or Rs. 396 million to Rs. 4,567 million.

The group has been able to improve both EBITDA and Net Profit margins. The EBITDA margin has grown from 56.8% to 58.3% while the Net Profit margin increased from 13.4% to 18.0%.

The annualised Earnings Per Shares (EPS) of the group has grown to Rs. 4.39 from Rs. 2.86 in the first Quarter 2006.

Sri Lanka Telecom excluding its subsidiaries has made an after tax profit of Rs. 1,950 million, recording a 29% increase quarter on quarter basis.

The remarkable achievement came after recording a 13% growth in its revenue to Rs. 9,634 million from Rs. 8,563 million in the same quarter of the previous year. During the first quarter of 2007, more than 42,000 new CDMA connections have been given, reaching the total CDMA customer base to 311,400 by the end of the first quarter 2007.

Despite the revenue from new connections dipping to Rs. 694 million, the company gained results through the connections given during the past.

The rental charge has increased by 448% to Rs. 508 million compared to Rs. 93 million in the corresponding quarter of 2006. The increase of CDMA revenue was further attributed by call charges of Rs. 413 million which increased by 489% compared to Rs. 70 million in the first quarter 2006.

Data oriented services revenue comprising ADSL, Internet and Leased circuits have grown by 43% to Rs. 823 million in the first Quarter 2007 compared to Rs. 576 million in the corresponding quarter of 2006.

The major impact was from ADSL revenue. By the end of the first quarter 2007 the total ADSL customer base increased to over 30,000. SLT is the sole provider of ADSL services in Sri Lanka. During the quarter the company introduced a new ADSL tariff package with 1GB download and upload limit at a lower rental charge of Rs. 1,000.

This package attracts home users who download and upload in fewer volumes. The Company expects to increase the ADSL customer base to 100,000 during the year 2007.