Sri Lanka Telecom, the national telecom services provider released its company and group financial performance, for the 3rd quarter 2015.
The group comprises of Sri Lanka Telecom and its eight subsidiaries including mobile arm Mobitel (Pvt) Ltd., (Mobitel).
The group reported Rs. 50.8 billion revenue during the nine months ending in September 2015 with 6 percent year-on-year growth with both fixed and mobile telephone segments contributing to the success. The group has reported a healthy EBITDA margin of 32.3 percent during the period under review against the 30.9 percent of the same period of last year due to maintenance of higher revenue growth than the rate of operating cost escalation.
The operating cost of the group was reported at Rs. 34.4 billion with a year on year growth of 4 percent, while the EBITDA grew by 11 percent to Rs. 16.4 billion during the 1st nine months of 2015, when compared to the same period of the previous year. Depreciation and amortizations remains at the same level of Rs. 9.8 billion, compared to the previous year.
Bottom-line of financials of the group was largely negated by provisions for foreign currency translation losses relating to foreign currency denominated borrowing due to the sudden depreciation of the LKR against the US$. Most of the borrowings of the group are dollar denominated as to gain low interest costs. Since, the repayments are going through the internally generated foreign denominated revenues, provisions for translation losses are generally not impacting the group cash-flows.
Owing largely to the above mentioned provisions for translations losses, the group profit before tax and profit after tax have dipped by 18 percent and 19 percent to Rs. 5.4 billion and Rs. 4.1 billion respectively.
Holding Company Sri Lanka Telecom alone has reported Rs. 30.2 billion revenue during the 1st nine months of 2015, with a year-on- year growth of 5 percent.
As explained above the impact of losses from foreign currency translations have largely impacted dipped the bottom lines of the Company financial performance. Group Chief Executive officer Dileepa Wijesundera looking at the group future through present performance stated that the initiatives taken across the group to accelerate the capacity building projects while minimizing the time taken for market offerings will boost the group performance in every aspect. Results for the 1st nine months of 2015 is evident of this phenomenon, he said.
Kumarasinhe Sirisena the Group Chairman stated that the investment friendly economic climate evolving in the country is benefitting to the SLT group too. Company performance and economic development of the country are interdependent.
According to him all the arrangements have been made within the group to embrace opportunities arising through the economic development of the country.
The mobile arm Mobitel continued to grow despite intensifying competition in the market. Revenue for the first nine months of 2015 increased to Rs. 24.4 billion, up by 8 percent compared to corresponding period in 2014. The revenue growth was mainly driven by the increase in broadband and value-added services.