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SLT net loss tops Rs.2.1bn in 2Q as Mobitel’s subscriber base shrinks by 1mn

14 August 2023 12:17 am - 8     - {{hitsCtrl.values.hits}}

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Sri Lanka Telecom PLC (SLT), the leader in fixed line telephony, reported losses in the June quarter (2Q23) amid weak top line performance, as its mobile arm Mobitel recorded revenue de-

Janaka R. Abeysinghe

growth owing to significant decline in subscriber base.
For the quarter under review, the SLT group reported a net loss of Rs.1.17 per share or Rs.2.1 billion compared to earnings of Rs.1.09 per share or Rs.1.96 billion reported for the corresponding quarter last year.
The group revenue declined to Rs. 26.1 billion from Rs.26.9 billion.


“SLT PLC revenue growth was primarily hindered due to delay in monetisation of fibre network and customer churns. Revenue de-growth in Mobitel was due to significant decline in subscriber base,” SLT said in a press release.
It also said Mobitel subscriber base contracted by 1 million from June 2022 to June 2023. 
During the first half of 2023 (1H23) Mobitel revenue contracted by Rs. 2.2 billion compared to revenue for the same period in 2022 and the loss recorded for the period was Rs. 1.5 billion.
Mobitel recorded Rs.835 million operating loss due to lower revenue and higher operating costs, ending with a net loss of Rs.1.39 billion for the quarter.


SLT said with the recent changes in management, Mobitel has been able to arrest the decline in subscriber base and revenue.  
For the first half of 2023 (1H23), SLT group reported a net loss of 64 cents a share or Rs.1.16 billion compared to earnings of Rs.2.56 per share or Rs.4.6 billion reported for the same period last year on a revenue of Rs.52.7 billion, down from Rs.52.9 billion a year ago.
Sharp rise in interest expenses also contributed negatively to the group’s performance. For 2Q23, interest expenses rose to Rs.3.39 billion from Rs.782 million, while 1H23 interest expenses rose to Rs.5.6 billion from Rs.1.5 billion a year ago.


Despite the lower revenue and profits, the group operating expenditure rose by 15.1 percent year-on-year (YoY) to Rs.2.5 billion in 2Q23. Mobitel’s operating expenses rose 30.4 percent YoY to Rs.1.99 billion in the quarter under review largely due to sales related commission.
SLT’s operating expenses increased 5.5 percent to Rs.619 million owing to AMC/license cost driven by devaluation of the rupee, electricity tariff and fuel price increases.
“Prolonged recovery from the effects of the economic downturn, loss of Mobitel subscriber base, low productivity, and delay in monetisation of fibre network has had a significant impact on the revenue generation of the Group.  

The government’s macroeconomic adjustments will help the country’s economic revival in the long term but may initially affect business growth and the disposable income levels of our customers,” said SLT CEO Janaka R. Abeysinghe.
“Managing the escalating operational costs resulting from fluctuations in exchange rates and inflationary conditions etc. is a huge concern.  In this context, pricing is key but setting the right price has become increasingly challenging. This situation will add pressure to our revenue generation and topline performance.  Under these conditions, the Mobitel turnaround has become an immediate concern. 


Bank lending rates remaining high in the recent past has caused margins to erode and made funding extremely difficult.  However, with the positive changes adopted by Central Bank recently, we believe the lending rates will decline,” he added.
SLT is among one the state-owned enterprises the government has identified for privatisation. SLT trade unions and certain other parties oppose its privatisation on the basis that the company is a profit-making entity.
Secretary to the Treasury has 49.50 percent of the issued shares of SLT while Global Telecommunications Holdings PLC has 44.98 percent as the second largest shareholder of SLT.

 

 

 


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  Comments - 8

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  • Sambo Monday, 14 August 2023 08:17 AM

    These are stats to suite the situation. These stats are to assist the sale of the company.

    VJ Monday, 14 August 2023 08:31 AM

    The opposition in the parliament were opposed to selling SLT which was a profitable entity half owned by the government. Now the government has made the necessary adjustments to make it a loss making business and will try and justify the sale of the shares owned by the treasury.

    ravin Monday, 14 August 2023 08:58 AM

    High time to look into your own work place practices. You may find extra ordinary work practices over the years where the consumers were treated like persona non grata. More revealing results are yet to come.

    Kandiah Balendran Monday, 14 August 2023 09:57 AM

    Path to privatisation is to make losses.

    Morajee Monday, 14 August 2023 12:59 PM

    Is it they(Top Managers) are sailing the Ship without knowing till the last minute that the fuel is empty to generate power to sail the Ship?

    Jayantha Monday, 14 August 2023 01:20 PM

    Should be privatized as most of the packages are higher compared to competitors. Also government should work on a plan to reduce tax on internet plans as internet is the main requirement for digitalization of services and also one major path to gain foreign reserves via digital services.

    Ganapathy Kanam Monday, 14 August 2023 04:47 PM

    What are you doing then? What is your income?

    Mothilal De Silva Monday, 14 August 2023 10:32 PM

    When I joined Telecom Fiji Ltd as the Group CEO, the company was running at a loss for 5 consecutive years and we faced similar issues. By focusing heavily on cost optimisation and arresting sales decline successfully, we turned around Telecom Fiji sustainably, recording year on year high profit growth. During the same period we modernised the network completely, using internally generated funds without taking any bank loans. The only solution for a Fixed Mobile Satellite operator is COST OPTIMIZATION while focusing heavily on Business Corporate customers. Network Expansion and modernising the network is very essential to provide an exceptional service to business and SME segments. Consolidation and Outsourcing were other strategies. Fortunately politicians did not involve in business and Board of Directors and my parent company Fiji Provident Fund supported all the tough decisions taken by me. Turning around a state owned Telecom company is possible though a big challenge.


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