SLT Group revenue up 9%

Sri Lanka Telecom PLC, released its Company and Group financial performance, for the first quarter 2015, last week.

The group comprises of the holding Company, Sri Lanka Telecom (SLT) and its seven subsidiaries including the mobile arm, Mobitel (Pvt) Ltd. (Mobitel).

During the first quarter 2015 the group reported impressive financial performance resulting from good growth in revenue generation coupled with cost management initiatives.

Strategic initiatives taken across the group such as capacity expansion, new product offerings and reaching new market segments, the revenue of all major segments of the group have grown, with an overall group revenue growth of 9% year-on-year to Rs. 16.7 billion during the first quarter 2015.

The outstanding performance of Mobitel made a significant impact on growth.

The group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) was up by 34% to Rs. 5.6 billion while EBITDA margin has improved to 33.3% compared to 27.2% of same quarter of the year before. In contrast to increase of revenue, operating cost remaining at the same level of the previous year, at Rs. 11.1 billion, was reflected in EBITDA improvements.

The Group Net Profit increased to Rs. 1.68 billion with remarkable year-on-year growth of 207%. The increase was mainly driven by improvements in EBITDA, surpassing a negative impact of finance related cost increase by about Rs. 391 million in absolute terms.

Despite the constant challenges on fixed line voice service, the holding company SLT has recorded Rs. 9.87 billion revenue with a 5% growth during the first quarter, 2015, compared to corresponding period of the previous year.

The growth was driven by local non-voice revenue streams such as data and broadband, enterprise, SME, wholesale sectors and IPTV.

Introduction of a high capacity IPTV system, expansion in Broadband and data services, investments in infrastructure development have largely contributed to revenue growth.

The operating cost of the company remained 6% below the same quarter of the previous year resulting from effective cost control apart from the impact on the operating cost of the previous year by a one-time charge resulting from an out of Court settlement of a civil litigation.

Company EBITDA grew by 45% year-on-year to Rs. 2.9 billion while EBITDA margin moved up to 30% from 21.4% a year earlier.

Company Net Profit for the first quarter 2015 increased to Rs. 700 million from Rs. 36 million in the corresponding period of the previous year with exceptional growth, owing to improvements to the EBITDA.

SLT Group Chairman P. G. Kumarasinghe Sirisena assured all stakeholders of driving the group towards a sustainable growth aligning to the national agenda. SLT is committed to serve as a catalyst in setting up the national communication backbone and future IT infrastructure which will serve as the foundation of nearly all other sectors.

Mobitel continued to grow its revenue despite industry challenges. Revenue for the first quarter of 2014 grew by 12% to Rs. 8.1 billion compared to the same quarter in the previous year. Revenue growth was mainly due to continued growth in voice services not withstanding industry slowdown.

It was supported by the continuous growth in data services which is the future of the mobile industry. This encouraging growth is a result of the continuous investments made in the latest technology, capacity enhancement and coverage expansion providing the customer a better experience with Mobitel.

Backed by the robust growth in revenue which is an increase by Rs. 838 million compared to first quarter of 2014, Mobitel recorded growth in all key profitability indicators.

When comparing the first quarter performance, company EBITDA and EBIT has grown by 20% and 81% YoY.

The Company's net profit for the first quarter of 2015 was Rs. 1.0 billion compared to a net profit of Rs. 0.6 billion in the first quarter of 2014.