SLT Group 4Q15 operating profits up 19%; revenue grows 5%

All segments of the Sri Lanka Telecom PLC (SLT) group contributed a 5 percent year-on-year 4Q15 revenue growth for the group with a healthy position reporting Rs 68 billion in total. Effective cost control measures of the group capped costs at Rs. 48 billion for the year reflecting an increase of 4 percent year on year.

The significant revenue growth in the year resulted in Group Operating Profit Before Depreciation and Amortization of Rs. 20 billion with a 7 percent year on year growth. This has also resulted in sustaining EBITDA margin at a healthy level of 29 percent. Depreciation and Amortization of the group increased marginally to Rs. 13.2 billion in line with group investment in infrastructure expansions. Yet the group reported a Rs.6.7 billion Operating Profit during the year under review with a strong year on year growth of 19 percent. During the year appreciation of US Dollar against the Sri Lankan Rupee caused SLT group to incur Rs. 2.1 billion, in translation losses as the group opted for more foreign currency denominated loans, thus taking advantage of low interest costs by utilizing its capability to repay borrowings through internally generated foreign currency in-flows.

It is worth noting that TDC refund was not received in the year opposed to Rs 1.3 billion in 2014 thus reflected in profit before tax and profit for the year being Rs5.5 billion and 3.7 billion respectively. The holding Company SLT reached the revenue milestone of Rs. 40 billion in the year 2015 increasing 4 percent from the previous year.

The increase was largely driven by investments to enhance capacities and introducing new technologies while focusing on customer services. Company expects a continued growth through accelerated i-Sri-Lanka program enabling Island wide high speed broadband, voice and IPTV connectivity augmented with technologies such as LTE and Fibre to home. Operating cost increased by 3 percent to Rs. 30.4 billion during the year compared to the year before.

Operating Profit Before Depreciation and Amortization of the company increased by 8 percent from the previous year to Rs. 10.1 billion. EBITDA margin improved to 25 percent. Depreciation and Amortization of the company rose by 9 percent to Rs. 7.8 billion, reflecting the continued investments of the company. The Company operating profit rose by 6 percent to Rs. 2.4 billion during the year 2015 compared to the year before.

The holding company was also impacted with foreign exchange losses of Rs. 0.91 billion and zero level TDC refund against Rs. 0.94 billion of the previous year, resulting in Profit Before Tax and Profit for the Year to Rs. 2.8 billion and Rs. 1.7 billion respectively. Year 2015 was a challenging year for SLT and to the entire group, the Group Chief Executive Officer, Dileepa Wijesundera stated in commenting on 2015 achievements.

The group has been able to respond effectively to the changes taking place in the economic and market conditions while investing over Rs.20 v in capacity building, introducing new technologies, improving the automation of internal processes etc. We are now focusing to enrich our products more and more with superior quality and latest technologies enriching our customers. Therefore, the growth potential of the group is promising, he said.

Kumarasinhe Sirisena, the Group Chairman was upbeat about the investment friendly conditions that prevail in the country. At SLT we are moving forward very positively discharging our duties to the nation being a corporate citizen having a very rare record of over 150 years of service. Mobitel (Pvt) Ltd. continued its growth momentum recording 6.4 percent growth in revenues for the financial year 2015. In absolute terms, Mobitel recorded a sales turnover of Rs. 32.5 billion in 2015 compared to Rs.30.6 billion in 2014, an increase of Rs.1.9 billion.

The increase in revenue was mainly driven by Broadband, the largest contributor to the incremental growth. It was followed by Value Added Services and Voice Revenue which continues to grow despite high subscriber penetration levels in the Sri Lankan Mobile Market.

The notable increase in broadband revenue is a result of continuous investment in latest and timely upgrades in technology in both 3G and 4G as well as marketing initiatives undertaken to drive smartphone adoption and pricing Innovations. Overall 2016 remains an exciting year for the SLT Group with high expected growth contributed by demand on Data, PEO TV, Broadband with Fibre, LTE and Mobile services.