During the first quarter of 2019 (1Q19), the Sri Lanka Telecom Group (SLT) reported a net profit of Rs.2.20 billion, which is the highest ever during the first quarter of any year, with a remarkable 86.8 percent YoY growth compared to the same quarter in 2018 (1Q18).
The outstanding results were largely driven by healthy revenue growth coupled with cost control initiatives. Profits were further backed by Rs.172 million Forex gain reported during the quarter, in contrast to the profits negated by Rs.294 million Forex losses during the same quarter in the year before.
The group reported a revenue of Rs.21.3 billion during the period under review reflecting a 7.9 percent YoY growth. The growth momentum was significantly contributed to by fixed and mobile broadband services, PEO TV services, national backbone services, digital services, government and enterprise intelligent business solutions.
During the period the group has been able to manage its operational cost escalations at 4.6 percent, well below the revenue growth rate through better cost control initiatives, particularly in the holding company. This has resulted in enhancing the group EBITDA by 15.3 percent YoY to Rs.7.0 billion and EBITDA margin to 33.0 percent during the quarter.
SLT Group Chairman Kumarasinghe Sirisena said: “We, being the national communication service provider in the country, are very pleased to have recorded this impressive performance in 1Q19 despite the strong competition in the industry. Achieving this excellent performance of highest ever profits during quarter one of any year, is not an easy matter and I applaud the decisions made and hard work done by my trusted and able team. The group continues with significant investments for national digital infrastructure developments, facilitating the smart Sri Lanka initiatives and developing the digital economy of the country. We have already rolled out an islandwide national high speed fibre backbone network assuring the digital infrastructure readiness for the entire nation with multiple state of the art technologies I strongly believe that the coming year will display even greater achievements of SLT, as we implement key changes in our strategies and plans.”
The holding company has reported a net profit of Rs.1.15 billion during the quarter with remarkable YoY growth of 248 percent. The year on year company operational cost reduction by 2.7 percent and Forex gain of Rs.20 million in contrast to the Rs.233 million Forex loss of the year before, have significantly improved the profits.
During the quarter, the company reported a revenue of Rs.12.2 billion with a growth of 6.3 percent compared to the same quarter in the year before in line with respective business expansions.
SLT has extensively engaged in investment programmes to provide high quality services to customers through new technologies such as Fibre To The Home (FTTH) and 4G LTE. SLT continues its investments in key national infrastructure solutions in the country propelling economic growth. The company EBIDTA was reported at Rs.4.2 billion with a 34.6 percent EBIDTA margin.
“With our ambitious plan to develop two million FTTH fibre broadband ports by 2022, we will be able to provide the most premium fibre broadband experience to our valued customers across the country. We have also invested in key fibre connectivity infrastructure programmes to connect each and every corner of the country and the entire world from east to west.
Having invested in other infrastructures such as data centre and cloud, which are critical for hosting digital products and services, SLT is determined to become the digital lifestyle provider while more products and solutions are lined up for release in the next few months. We also believe in developing the digital partner-eco-system with a strong strategy and our partners will play a major role in our value chain to create further values to our customers.” said Chief Executive Officer Kiththi Perera.
The business growth momentum has resulted in the entire business segment portfolio - especially the large scale network deployment in fibre roll-out - enabling multiple service capabilities through the fibre line to customers. SLT has intensively invested in deploying an islandwide fibre network and assures fibre presence in each and every divisional secretariat area.
The National Tier III Data Centre has started Phase II of its expansions and is positioned to be a global data centre with the capacity and capability to connect with multiple global submarine cables. The Tier IV is also nearing the completion.
SLT Chief Operating Officer Priyantha Fernandez said: “Our aim is to focus on operational excellence in all segments with the customer at the forefront as always. I think with the progress and improvements that we have made in existing products and services as well as our new partnership ventures, I believes SLT is truly at the brink of the next level.”
The recent implementation of organisational re-alignment in the regional business operation of the holding company has also supported the company’s business transformation towards becoming the digital lifestyle service provider of the country.
Mobitel (Pvt.) Ltd, the mobile arm of the SLT continued to grow its revenue and key profitability indicators, despite intensifying competition in the market. Revenue for the first three months of 2019 increased to Rs.10.1 billion, up by six percent, compared to the corresponding period in 2018. The revenue growth was mainly driven by the increase in broadband services.
Revenue growth has contributed towards growth in all key profitability indicators for the first three months of 2019. EBITDA and EBIT grew by five percent and two percent respectively YoY which was aptly supported by operational efficiencies.
The net profit for the first nine months of 2019 was recorded at Rs.1.11 billion compared to a net profit of Rs.0.84 billion in the first three months of 2018. The increase in profits was enhanced by gains resulting from rupee appreciation during the period under review. Thus it is noteworthy that the company excelled in reporting a net profit growth by 32 percent for the first quarter of 2019.
“We are proud to announce our latest quarterly financial results which shows that our efforts notwithstanding the intense competitive environment, have paid off. During last year we invested in building our network and creating value to our customers. Mobitel was successful in recording strong growth with continued revenue growth while reporting profits in excess of Rs.1.1 billion for the first quarter of 2019 which is an increase by 32 percent compared to first quarter of last year,” said Mobitel Chief Executive Officer Nalin Perera.