SLT December earnings stung by large increase in finance cost, Fx losses 

• Full year revenue crosses Rs.100bn

Sri Lanka Telecom PLC (SLT) reported higher revenues for the quarter ended December 2022 along with operating profits, but the earnings took a hit from the higher borrowing cost and foreign exchange losses.
The country’s largest fixed telephone operator reported revenues of Rs.28.09 billion for the fourth fiscal quarter ended in December 2022, an increase of 9.13 percent from the same period a year ago. 

The group which also has mobile telephone operations through Mobitel Private Limited reported an operating profit of Rs.3.03 billion, up 16 percent. 
For the full year (FY22), the group surpassed Rs.100 billion mark in revenue, to record Rs.108 billion.
However, the hefty finance cost and exchange losses weighed on the bottom line in the quarter. 
The group recognised a finance cost of Rs.2.06 billion for the quarter compared to Rs.674 million in the year earlier period as it made some short-term borrowings to the tune of Rs.12.3 billion consisting of term borrowings, slight portion of leases and bank overdraft. 

Meanwhile, the group booked a foreign currency loss of Rs.1.07 billion against a gain of Rs.47 million in the year earlier period. The company said the depreciation of the rupee adversely impacted the cash flows. 
“Although, the foreign currency liquidity improved slightly, the domestic foreign exchange market poses challenges to project payments in foreign currency. Further, the liquidity shortage in LKR market and the high inflation has pushed market interest rates higher increasing financing costs of the group,” SLT said as part of its interim results for the quarter. 
The group also utilised what it referred to as vendor financing quite substantially underscoring the challenge in liquidity management as the non-current share of its vendor financing increased by Rs. 7.1 billion last year while the current portion of vendor financing rose by Rs.4.3 billion. 

This is besides the trade and other payables, which rose by Rs.7.9 billion under current liabilities of the group. 
The soaring interest rates last year was seeing reverberating through the group’s income statements as it had shaved a larger chunk of earnings before interest and taxes, a measure of operating results. 
While the companies with substantial portion of foreign currency debt suffered the most due to steeper fall in the rupee which caused a jump in finance cost in rupee terms,  others which piled more debt and became highly geared during when the rates were very low have been pushed into the brink. 

Full year results of the SLT group showed that its mobile telephone service arm, Mobitel had suffered a large setback in its before tax profits from Rs. 9.4 billion in 2021 to Rs.1.5 billion in 2022. 

On behalf of the government, the Secretary to the Treasury holds 49.50 percent in SLT and at least another couple of percentage points by the ELP and other entities controlled by the State. Global Telecommunications Holdings NV holds 44.98 percent stake. 
SLT Group Chairman, Rohan Fernando said, “2022 was a year of economic and social distress never witnessed before in the recent past in the country. Despite the tough operating environment and the many challenges unique to our industry, I’m proud to note that we have been able to stabilise the Group performance by infusing innovations into our core business and prudent cost saving measures.” 

“At the same time, learning to navigate through this volatile market conditions have placed the group in a strong position. Like any progressive business, transformation is critical to evolve and navigate challenging market conditions, to secure business sustainability and enable a future-ready workforce. We are firm in our resolve to realise our single-minded vision of transforming from a Telco company into a Techco (technology and communication) organisation to provide state-of-the-art solutions to individual customers, corporates, investors whilst supporting the growth of the country’s vital IT sector and enable socioeconomic progress. 
With business resilience, strategic management decisions and the capabilities of our 10,000 strong staff, we are confident we can leverage the opportunities, that are also presenting itself in this tough operating environment,” he added. 

First in SL to obtain VMware Cloud Verified Certification with VCF cloud deployment 

SLT-Mobitel has announced that it has become the first service provider in the country to obtain VMware Cloud Verified Certification with VCF deployment. 
This global programme identifies the most trusted cloud providers delivering services running on VMware technology.
The certification provides a secure and compatible private cloud infrastructure, allowing enterprises to move their workloads seamlessly to the cloud without worrying about interoperability issues. The program assures the enterprise-level security, performance, and cost optimisation of cloud services.

“SLT-Mobitel Enterprise is proud to be the first service provider in Sri Lanka to obtain VMware Cloud Verified Certification with VCF deployment. This achievement is a testament to our commitment to providing our customers with the highest level of technical expertise, reliability, and security. 

This double cloud deployment ensures the business continuity while hosting total workloads in SLT-Mobitel Akaza Multi Cloud. We are confident that this will lead to increased customer satisfaction and loyalty, leading to long-term customer relationships,” said Janaka Abeysinghe, CEO, SLT.

Acquiring this certification means that SLT-Mobitel Enterprise has met the rigorous standards and requirements of VMware, indicating the ICT Solutions Provider’s high level of technical expertise. SLT-Mobitel Enterprise will now have access to the latest technologies, including VMware’s cutting-edge software-defined data centre and multi-cloud solutions. These technologies can help SLT-Mobitel Enterprise to optimise its cloud services, improve operational efficiency, and reduce costs.
In addition to the benefits listed above, VMware Cloud Verified Certification ensures that SLT-Mobitel Enterprise is compliant with industry standards and best practices, further cementing SLT-Mobitel Enterprise’s reputation as a trusted provider of cloud services.

With this new certification, SLT-Mobitel Enterprise has broken new ground in the cloud services market, positioning itself as a leader in the field. The deployment milestones are supporting SLT-Mobitel Enterprise’s Cloud program in accelerating digital transformation, amidst the changing dynamics of today’s businesses. 
SLT-Mobitel Enterprise premium cloud was launched in 2018, and this development will elevate and transform the premium cloud through VMware Cloud Foundation deployed in 2023. In the past, SLT-Mobitel Enterprise was the first local organisation to partner VMware as a Business Continuity Certified Planner (BCCP) and initiate VMware Cloud Foundation in Sri Lanka.