Corporate

Ceylinco Life's investment income up by 40%

Ceylinco Life has achieved a 40 per cent growth in investment income during the nine months ending September 30, 2009, following strong growth in income from government securities and bank deposits.

Releasing details of performance at the end of the third quarter, the company said Investment Income had exceeded to Rs. 2,372 million, with the two largest components, Bank Deposits and Government Securities growing nearly 42 per cent and 71 per cent respectively over the corresponding nine months of last year.

Ceylinco Life's Life Fund stood at Rs. 24.7 billion as at September 30, reflecting a healthy growth of more than 16 per cent since December 31, 2008, the company said. Net transfers to the Life Fund in the period reviewed exceeded Rs. 3,446 million.

Investments pertaining to the Life Fund are made in conformity with the investment guidelines stipulated under the Regulation of the Insurance Industry Act No 43. of 2000. These investments are subject to regular monitoring by the Insurance Board of Sri Lanka (IBSL).

Ceylinco Life's total investments at the end of the 3rd quarter totalled Rs. 22.4 billion. Total Assets grew 14.5 per cent to Rs. 28.7 billion.

"These figures demonstrate the quality of the company's investment portfolio in these times of volatility," Ceylinco Life Deputy Chairman R. Renganathan said. "They also show that Ceylinco Life continues to maintain its business momentum despite the tough environment."

He disclosed that the company had sold nearly 119,000 new policies in the nine months reviewed, at an average of more than 13,204 per month. Gross Written Premium for the nine months topped Rs. 5,536 million.

Net Customer Benefit Claims had also grown by more than 32 per cent to Rs. 2,073 million as at September 30, 2009, Renganathan added. In early November, Ceylinco Life was honoured on the global stage for brand excellence when the company was presented with the Overall Brand Leadership Award at the 2009 Global Awards of the World Brand Congress. The company also won the Bronze award in the Service Brand of the Year category at the Brand Excellence Awards of the Sri Lanka Institute of Marketing (SLIM).

Ceylinco Life has more than 750,000 lives covered by active policies and ended 2008 with premium income of Rs 8.2 billion.

According to the latest annual report of the Insurance Board of Sri Lanka, the company's share of the local life insurance market is nearly 35 per cent.

SLT Group maintains revenue growth

Sri Lanka Telecom, the incumbent telecommunications service provider released its financial results for the 9 months ending Sep. 30, 2009. The Group remains positive about the results that have been delivered under challenging economic conditions that continue to prevail and the ongoing intense competition in the Sri Lankan Telecommunications industry, which impacted the overall results of the Group. Group Chairperson Mrs. Leisha De Silva Chandrasena is of the view that these challenging and adverse conditions prevailing in the marketplace are common to all. However, the Sri Lanka Telecom group with its highly valued brand and national footprint that delivers a full suite of Telecommunications and Information products and services remains strongly positioned to face these all current and future obstacles.

a revenue

The group revenue for the 1st nine months of 2009 has grown by 2% to Rs. 35,890 mn. from Rs. 35,049 mn during the same period in 2008. Mobile and other revenue segments have positively contributed to this growth, a demonstration that our diverse portfolio of services across the group serves us well. The recent introduction of new flexible and innovative price packages for PSTN and CDMA fixed customers has positioned these sectors against the competitive pressure, however the revenues from PSTN and CDMA segments have dipped, as the Company expected.

SLT, the only wire-line broadband service provider in Sri Lanka, continues to focus on its broadband strategy of driving and capturing growth in this important sector, which positions us well to deliver additional information and entertainment services now and into the future.

During the period under review the broadband segment revenue has grown by 12% as the ADSL customer base continues to grow.

The company has taken several measures including the introduction of new price packages to increase the customer base. Introduction of the SLT PeoTV (IPTV) service further leverages and drives the demand for broadband ADSL service. Furthermore through its subsidiary Sky Networks, SLT is moving to introduce wireless broadband service also, a further expansion of our diverse access network strategy.

Through the introduction of the new fixed telephone packages and a focus on customer service and retention through new value added services, SLT has focused on our existing fixed line telephone customers.

Operating expenditure

During the 1st nine months of 2009, the group operating expenditure has increased, by 25% to Rs. 22,233 mn compared to Rs. 17,842 mn of the same period of previous year owing to high inflationary factors and increase of advertising and sales commissions of Mobitel in line with the increase of their sales. The Company has been able to maintain the operating expenditure at Rs. 15,101 mn. during the 1st nine months of 2009, when compared to the same period of 2008. This is a 13% increase.

Depreciation

During the 1st nine month of 2009, the group depreciation has grown by 9% to Rs. 8,234 mn from Rs. 7,546 mn of the same period of 2008, due to the impact large investment of Mobitel for their Service expansions. There has been a dip in depreciation of the Company during the period under review by 1% to Rs. 6,128 mn. compared to Rs. 6,182 mn. of the same period of 2008.

Voluntary Retirement Scheme (VRS)

Aiming at cost reductions, opportunities to bring-in high skilled and active labour the Company continues to invest in Voluntary Retirement Schemes (VRS).

Compared to Rs.370 mn. of the year 2008, Rs. 480 mn. has been distributed among about 300 employees who opted to enjoy the benefits of the VRS during the year 2009.

Net profit after tax

Despite the revenue increase, as a result of increase of depreciation, operational costs, finance costs and Mobitel income tax liability arises due to expiry of the BOI tax holiday, the group after tax net profit for the 1st nine months of the year 2009 has dipped by 74% to Rs. 1,157 mn when compared to Rs. 4,399 mn. of the same period of 2008. Net profit after tax of the Company has dipped by 60% to Rs. 1,446 mn from Rs. 3,609 mn. of the 1st nine months of 2008.

Company transformation

Sri Lanka Telecom has recognized that the company should be changed in line with the various changes that have taken place in the market place.

Technologies are constantly changing, competition is high, the customer needs and desires are changing and costs are pushed by inflation, while the company is driving through technology focused strategies rather than customer driven strategies. Therefore, the Company has already started a process of transformation to drive the company through customer focused strategies while improving the efficiencies of the Company.

The Company expects medium to long term benefits from this transformation.