SLT revenue growth slows in 2017; Mobitel lifts group performance

Sri Lanka Telecom PLC (STL) revenue grew slower while the direct costs and depreciation charges weighed on profits as Sri Lanka’s only wireline telecom provider was found struggling to compete in a world where people are taking fast on to mobile and mobile data for their day-to-day communication needs.   

Sri Lanka Telecom PLC grew its revenue by just under 4.0 percent during the October-December quarter (4Q17) to Rs.11.2 billion and reported an operating loss of Rs.249 million, down from Rs.604 million loss reported for the corresponding quarter of the previous year. 

However, the group results, which include Mobitel Private Limited—STL’s fully owned mobile operator—helped the group revenue  grow to Rs.19.4 billion from Rs.18.1 billion. 

The group operating profit for the period rose to Rs.508 million from Rs.248 million. 

The results demonstrated that mobile and mobile data business was a key contributor to an otherwise sagging fixed telephone market and perhaps the fixed broadband was also languishing. 

Since January 1, 2018, SLT has been aggressively promoting its fixed broadband and Pay TV businesses with the former offering 75 percent additional data on top of existing data entitlement to woo the customers to SLT from its competitors and also to retain the existing ones. 

Meanwhile, for the quarter under review, the group reported earnings of 39 cents a share or Rs.707 million in total profit after tax against 7 cents a share or Rs.124 million in total earnings reported for the corresponding quarter in 2016. 

The bottom line performance was largely supported by the Rs.23 million gain reported in foreign exchange translations, against a Rs.455 million loss reported for the corresponding period last year.  

Higher other incomes and interest incomes also helped the group record higher after-tax profits. 

Meanwhile, for the year ended in December 2017, SLT reported Rs.2.18 a share or Rs.3.94 billion in total earnings, down from Rs.2.65 a share or Rs.4.79 billion in 2016. 

The total group revenue was Rs.75.7 billion compared to Rs.73.8 billion. 

Segmental information showed pre-tax profits at both fixed and mobile segments declining significantly. 

As at December 31, 2017, Secretary to the Treasury held 49.50 percent stake in SLT while Netherlands-based Global Telecommunications Holdings NV held 44.98 percent stake. 

The Employees’ Provident Fund had 1.40 percent stake of SLT being the third largest shareholder.