The Sri Lanka Telecom (SLT) Group's net profit fell sharply by 57% to Rs.1.3 billion for the six months ended 30 June 2009 after financial statements show revenue decreases in wired line, CDMA and international components. Stock brokers also attributed the dip in the stock market indices earlier this week to the 'poor' results from the company.
SLT's financial statements shows revenue increase by 1% for the current period to Rs.23.5 billion from Rs.23.3 billion last year. However, operating costs for the Group increased by 25% to Rs.14 billion. Wired line, CDMA and international all fell by 18%, 12% and 10% respectively for the first half of 2009 to Rs.6.4 billion, Rs.2.4 billion and Rs.4.1 billion compared to the same period in 2008. A SLT press release said the reason behind the revenue drop in the wire-line area is mainly due to 'cost-cutting' measures carried out by all customers, from large corporates to entrepreneurships, a trend also observed in the company's residential customer base. SLT said that due to the present financial situation, the purchasing power of people has reduced, making them very price sensitive.
SLT said that though the Group's top line growth is recorded at only 1% revenue growth, the revenue contribution is aligned with the SLT group long term strategy of growing its Mobile and data businesses which have seen a growth of 40% and 15%, respectively. According to the press release, Group Chairperson Leisha De Silva Chandrasena said market conditions in the region have been carefully analyzed against the performance of the top players in the region. "Results project the same as in our country," she said. "Considering the situation, we are very comfortable in managing SLT Group performance in this level." Mobitel subscribers reached almost 3 million for the period under review, growing by 61% from 1.8 million for the same period last year. Mobitel revenue increased by 40% to Rs.7.2 billion from Rs.5.1 billion in 2008. |
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