SLT-Mobitel reports moderate revenue growth in 1H 2024

SLT-Mobitel has reported moderate revenue growth for the first half of 2024, while demonstrating savings through cost management initiatives.

The 1H2024 performance establishes SLT- Mobitel’s resilience and adaptability in a challenging market environment. The moderate revenue growth, coupled with successful cost-saving initiatives, has led to notable improvements.

The group’s revenue for 1H2024 reached Rs.53.5 billion, marking a 1.6 percent increase compared to the same period last year. Gross profit at group level has also increased by 4.0 percent to Rs.20.9 billion, with the gross profit margin expanding to 39.0 percent, from 38.1 percent in the previous year. The moderate growth was achieved despite the challenges in the market such as customer churn and less demand for new connections. 

The group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for the first half showed an increase of 17.1 percent, reaching Rs.18.0 billion, while the operating profit surged by 54.5 percent to Rs.3.6 billion. The EBITDA margin improved significantly to 33.6 percent, from 29.2 percent in 1H2023, reflecting the group’s ability to enhance operational efficiency while maintaining service quality.

SLT-Mobitel also benefited from reduced finance costs, with interest expenses decreasing by 19.5 percent at group level, primarily due to lower interest rates. This contributed to an improvement in the group’s bottom line, with the net loss narrowing to Rs.323 million, compared to a loss of Rs.1,159 million in 1H2023.

At Sri Lanka Telecom PLC, the company-level revenue growth was a marginal increase of 0.9 percent for 1H2024 at Rs.35.0 billion. The operating profit reported a growth of 2.9 percent and strategic cost-saving initiatives such as annual maintenance cost, hiring cost, repair and maintenance costs contributed to reduced operational expenses, enhancing overall profitability. The company experienced a 27.2 percent degrowth in finance costs mainly due to the interest rate reduction. As a result, the company posted a net profit of Rs.272 million, compared to a loss of Rs.401 million in 1H2023.

The company remains focused on leveraging its strategic initiatives to drive future growth and sustainability. With the ongoing efforts to enhance operational efficiency and cost management, SLT-Mobitel is well-positioned to navigate the evolving market landscape and deliver long-term value to its stakeholders.  Mobitel showed modest revenue growth of 3.6 percent year-on-year for 1H2024 compared to 1H2023, despite a 3 percent increase in Value Added Tax. Revenue growth was mainly driven by growing demand for broadband services and the efforts aimed at streamlining the product offerings. Steady revenue growth combined with reduction of cost led to a significant improvement in profitability, with a growth in EBITDA by 26 percent in 1H2024.  Overall, Mobitel showed significant improvement in operational efficiency and profitability. Operating profit turned positive in 1H2024 to Rs.182 million, from a loss of Rs.895 million in 1H2023. Net loss reduced by 28.9 percent in 1H2024 compared to the same period in 2023. In addition to the ongoing investment in network infrastructure, Mobitel’s newly acquired spectrum portfolio of 25 megahertz of 2.3 gigahertz band and 5 megahertz of 850-megahertz band in 2Q will significantly boost the capacity and coverage of the network, leading to an enhanced customer experience.