SLT Group records Rs 5b PAT

Sri Lanka Telecom PLC (SLT) released its company and group financial results for the nine months ending September 2014 recently. The group comprises holding company SLT and its subsidiaries including the mobile arm Mobitel (Pvt) Ltd.

Maintaining the growth momentum, the group recorded Rs. 48.0 billion in revenue during the nine months ending September 2014 with 8% year-on-year growth.

All revenue segments comprising fixed, mobile and others contributed to this growth. The operating cost has increased by 8% to Rs. 33.2 billion during the nine months to 2014.

A Rs. 673 million one time charge on the operating expenses of the SLT resulting from an out of court settlement on civil litigation in relation to the import of the IPTV system in 2007-2008 has largely driven this increase in cost.

The group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) was up by 7% year-on-year to Rs. 14.9 billion despite pressures on profitability and the EBITDA margin has been maintained at the range of 31%.

The group reported Rs. 6.6 billion profit before tax with a year-on-year growth of 25%. The profit after tax increased by 29% from the corresponding period of the previous year to Rs. 5.0 billion.

The group annualised earnings per share had increased from Rs. 2.88 to Rs. 3.73 during the corresponding period of the previous year.

The holding company reported Rs. 28.9 billion revenue during the nine months to September 2014, which compared to the corresponding period of the previous year shows an increase of 7%. This increase was driven by non-traditional revenue streams such as internet, wholesale, global, international and IPTV.

The company introduced a new state–of-the-art IPTV system with high capacity and this novel feature will address the increasing demand for this service.

Operating expenses of the company increased year-on-year by 9% to Rs. 21.6 billion during the nine months to September 2014.

The Rs. 673 million one time charge for an out of court settlement to civil litigation has contributed to this increase.

Accordingly, the company EBITDA margin marginally dropped from 26.7% to 25.3% during the first nine months of 2014, compared to the corresponding period of the previous year but, however, under normal circumstances the margin is over 27%.

The profit before tax and after tax dipped by 3% and 8% compared to year-on-year, to Rs. 3.1 billion and Rs. 2.0 billion.

Mobitel (Pvt) Ltd, the mobile arm of the SLT Group continued its consistent growth despite a intensifying competitive environment in the industry.

Revenue for the first nine months of 2014 increased to Rs. 22.7 billion, up 11% compared to the corresponding period in 2013.

This growth was mainly driven by the increase in Mobitel subscribers in voice and in data reporting a 7% increase in the overall subscriber base. It is a testimony of the continuous investments made in the latest technology, capacity enhancement and expansion in coverage providing the customer a better experience with Mobitel.

Backed by the robust growth in revenue, Mobitel recorded growth in all key profitability indicators. In comparing the first nine months performance it is observed that company EBITDA and EBIT has grown by 9% and 8% YoY.

The company’s profit after tax for the first nine months of 2014 was Rs. 2.6 billion compared to a profit after tax of Rs. 1.6 billion in the first nine months of 2013.

Thus growth in profit after tax is appreciable compared to the corresponding period of the past year. This is attributable to the growth in EBITDA and EBIT.