SLT Group records moderate growth for 3Q; Mobitel’s performance improves

The SLTGroup this week released its financial results for the third quarter ending September 30, 2023, presenting moderate growth.

SLT PLC reported revenue of Rs.17, 490 million with a growth of 3.7 percent, while Mobitel recorded 2.7 percent de-growth during in the quarter compared to a year ago.

The Group’s consolidated revenue for the quarter increased by 3.9 percent to Rs.27.7 billion, compared to Rs. 26.7 billionin 3Q22. SLT PLC revenue growth was driven mainly by growth in broadband, PEOTV and enterprise revenue streams.

Mobitel regained its growth after several quarters of decline and revenue has begun to increase in 3Q with a 3 percent growth over 2Q.

Compared to 3Q22, SLT Group’s operational expenditure (opex) increased by 13.3 percent in 3Q23 to Rs. 19.7 billion. Major causes of SLT’s rising opex are increased costs related to electricity, repair and maintenance. Despite the growth in revenue that was recorded, SLT was unable to match the increase in costs which has impacted SLT’s profitability.

For the 9 months ending September 2023, SLT Group’s opex was Rs. 57 billion, a 14.9 percent increase from Rs.49.6 billion in the same period last year. Cost surges are attributed to economic conditions such as higher electricity tariffs, rupee devaluation against US$, and import restrictions.

The SLT Group’s financial performance in 3Q23 was significantly impacted by a steep decline in profitability of its subsidiary, Mobitel. Group EBITDA decreased by 13.7 percent compared to the corresponding quarter in previous year, primarily due to decrease in Mobitel EBITDA. 
The drop in revenue and increase in Opex, have led the Mobitel EBITDA to decrease during 3Q23. Accordingly, Group operating profit also dropped by 81 percent during the quarter. Group PAT decreased by 208 percent mainly due to operating loss in Mobitel as well as increase in finance cost of SLT PLC.

However, Mobitel profitability has improved notably in 3Q23 compared to a year ago as Mobitel records an increase in EBITDA by 36 percent, EBIT by 93 percent and NPAT by 44 percent due to the growth in revenue and optimisation of business parameters. 

Tighter cost controls and revenue growth initiatives at Mobitel, along with lower finance costs, will be critical to restoring the Group’s profit trajectory going forward.

“The third quarter of2023 continued to be challenging for SLT Group due to the country’s economic conditions. However, through concerted efforts to optimise operations and carefully managed costs, SLT and Mobitel have been able to arrest further deterioration of the situation compared to the previous quarters, which appears to be stabilising,” Sri Lanka Telecom CEO Janaka R. Abeysinghe said.