SLT March quarter profits up on higher demand for data

Sri Lanka Telecom PLC (SLT) delivered strong financial performance for the quarter ended in March (1Q21), sustaining the pandemic-fuelled demand for data and other telecommunication services from a year ago, as the company reported double-digit growth in its top and bottom lines. 

The country’s largest fixed telephone operator reported Rs.24.7 billion in revenues in the period from January through March 2021, up 11.4 percent or Rs.2.5 billion from the same period in 2020. 

The group reported earnings of Rs.1.19 a share or Rs.2.1 billion compared to earnings of Rs.1.04 a share or Rs.1.8 billion reported in the year ago period, logging 14.2 percent growth between the same quarters in the two years. 

“With the shift towards work from home arrangements and study from home arrangements, the group experienced a positive impact in revenue in areas such as Broadband, IPTV and Career Business services due to surge in utilisation in both residential and business sectors. Further, future opportunities are emerging with novel digital products and services,” SLT said in its interim results released last week.

As people took to data powered devices since the onset of the pandemic last year, the telecommunication companies, both fixed and mobile offered innovative,

 affordable and dedicated data packages aimed at working and student population. 

The group’s fixed ICT operations segment generated revenues of Rs.14.2 billion in the three months to March 2021, up 13.5 percent from a year ago, while its mobile operations segment represented by its fully owned subsidiary, Mobitel (Pvt) Limited, reported revenues of Rs.11.6 billion, up 8.4 percent. 

Meanwhile, the group booked Rs.331 million in foreign exchange losses in the three months, less than half of Rs.683 million booked in the same period a year ago. 

SLT earlier said it fully settled all the foreign currency denominated loans as at the end of 2020. Further, the group entered into forward exchange contracts for imports to mitigate foreign exchange risks arising due to currency fluctuations.

However, the group’s interest expenses and finance cost rose to Rs.846 million from Rs.526 million in the year ago quarter. 

By March 31, 20201 the National Treasury on behalf of the Sri Lankan government directly held 49.50 percent stake in SLT while Global Telecommunications Holdings NV, the wholly owned subsidiary of Malaysian investment holding company, Usaha Tegas Sdn Bhd, held 44.98 percent stake. 

Employees’ Provident Fund held another 1.40 percent stake being the third largest shareholder.