Business Times

SLT hurt badly by rupee depreciation

The Sri Lanka Telecom Group (SLT), like many organizations, has been adversely affected by the depreciation of the rupee. This had a ripple effect on the group's results due to the significant US dollar exposure in the group's mobile subsidiary, Sri Lanka Telecom Mobitel. “The exchange loss of Rs 1.4 billion for first quarter 2012 therefore posed negative for Profit Before Tax (PBT) and Profit After Tax (PAT), although revenue and operating profits have grown significantly year on year (YoY) to Rs 13.53 billion and Rs. 1.86 billion respectively,” the company said in a media statement.

Taking into account the exchange loss, it said PBT at group level fell by 47% to Rs 901 million while PAT sank by 72% to Rs 365 million. “Once normalized however, the group has performed exceptionally well with PBT gaining 34% to Rs 2.33 billion compared to Q1 of 2011's figure of Rs 1.71 billion and PAT also showing a growth of 39% to Rs 1.8 billion from Rs 1.29 billion. These normalized results further underscore the Group as the leader in integrated telecommunications in Sri Lanka,” the statement added.

It said the group is driving a visionary business strategy coupled with a pragmatic transformation plan, which is unequivocally “reflected in these results and on-the-ground initiatives which the group has continued to unwaveringly deliver according to the mandate it has mapped for growth”.

At company level, SLT performed well reporting the highest quarterly revenue since 3Q 2009, at Rs. 8.59 billion with a 7% growth YoY. The company, which maintains a balanced mix of foreign exchange exposure, has been able to record Rs. 1.78 billion PBT, a 37% growth compared to Rs. 1.30 billion in the same quarter of the previous year while achieving a 39% increase in PAT from Rs. 989 million in 1Q 2011 to Rs. 1.37 billion in 1Q 2012.

The increase in operational expenditure was mainly driven by the 100% increase of the regulatory International Telecommunication Levy (ITL) which earlier stood at US$ 0.015 but from January 2012 rose to $0.030 per minute.

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