SLT profits up 15 percent to Rs. 3.36 billion

Sri Lanka Telecom (SLT), released its Group and Company financial results for the six months ended June 30, 2012, recording a Rs. 3.36b group operating profit, a growth of 15 percent Year on Year (YoY).

Group revenue increased to Rs 27.50b, an increase of 11 percent YoY. Depreciation of the Sri Lankan rupee continued to have a significant adverse impact on Group Profit before Tax (PBT) and PAT due to US $ exposure in the Group's Mobile subsidiary Mobitel.

With the inclusion of the translation impact of the exchange loss, PBT at Group level declined by 37 percent to Rs. 2.05b while Profit after Tax (PAT) declined by 56 percent to Rs.1.06b. However, once normalised (without exchange loss on translation) the group reported an impressive PBT of Rs. 3.95b, an increase of 24 percent and PAT of Rs. 2.97b, a growth of 26 percent YoY.

During the first half 2012, the SLT group had invested Rs 7.9b in strategically important areas including fixed and mobile broadband, IPTV, Mobile network expansion and in particular the i-Sri Lanka program to ensure high speed broadband connectivity for Mega Line fixed customers.

"These investments enhance the Group footprint and capabilities in the telecommunication market both locally and internationally," a spokesman for the company said.

Chairman, Sri Lanka Telecom, Nimal Welgama said, "As the country's national telecommunications service provider with an unmatched service portfolio, SLT continues to take the lead role in advancing the telecommunication industry in Sri Lanka to the next level," adding "the SLT has powered the economy by boosting the telecommunication sector over the past few decades and is poised to do so in the future with the group's vision aligned with the national vision for an IT enabled country."

"At operating level, the SLT Group has delivered solid financial performance for the first half 2012 and I am confident that the group will deliver strong operating results for the financial year 2012," he said.

The parent company SLT has recorded a revenue growth of 7.3 percent to reach Rs. 17.15b, the highest 1H revenue growth since 2006. This revenue growth has been driven by non-traditional revenue streams such as Fixed Broadband, PEOTV, Wholesale, Enterprise and International.

The PBT of SLT increased by 16 percent to Rs.2.73b while the PAT increased by 16 percent to Rs. 2.04b. The EBITDA margin reduced to 32 percent from 35 percent in the corresponding period in 2011, mainly driven by increases in international telecommunication levy, energy costs, forex impact on direct and operating costs and domestic expense increases.

Mobitel, the Group's flagship subsidiary, saw its 1H revenue grow by 12 percent to Rs.11.75 bn. The EBITDA margin increased to 33 percent from 31 percent in the corresponding period in 2011, driven by the revenue growth and cost optimisation initiatives. Operating profits increased to Rs. 1.42b, an impressive growth of 27 percent. However, the exchange loss of Rs. 1.99b on translation triggered a loss after tax of Rs. 987m for 1H 2012. Normalised to exclude exchange loss, Mobitels profit before tax of Rs. 1.27b and profit after tax of Rs. 1b increased by 45 percent and 55 percent YoY.