Business Times

SLT 2Q12 group revenue flat, group net profit up

Sri Lanka Telecom (SLT) recently released the interim results for the second quarter, period to end-June 2011, of its financial year ending June 30, 2012, in which it showed virtually flat, 1% year-on-year (YoY) group revenue increases, for both Q2 (second quarter, April to June 2011), to Rs. 12,443 million, and H1 (first half, January to June 2011), to Rs. 24,853 million. This was despite significant YoY climbs, 387%, to Rs. 219 million, in Q2, and 162%. to Rs. 286 million, in H1, in other income for the group in 2011.
At the same time, SLT also indicated YoY group net profit for the period jumped 49% in Q2, to Rs. 1,142 million, and 77% in H1, to Rs. 2,437 million.

Financials also showed line items for a receipt of a refund pertaining to the Telecommuication Development Charge (TDC), amounting to Rs. 151 million in 2010's Q2, and a Voluntary Retirement Scheme (VRS) payment of Rs. 188 million in 2010's Q1. Additionally shown, 2011 H1 line items including: "Acquisition of property, plant and equipment," at Rs. 6,773 million (up from 2010's Rs. 2,716 million), "Acquisition of intangible assets," at Rs. 271 million (up from 2010's Rs. 71 million), and "Purchase of short term investments," at Rs. 770 million (down from 2010's Rs. 1,756 million).

Further, according to the segmental analysis included, 2011 H1 revenues for SLT's fixed line (including CDMA) and external gateway operations business segments fell to Rs. 7,924 million (from 2010's Rs. 8,265 million) and Rs. 3,911 million (from 2010's R. 5,400 million), respectively, while mobile revenue rose to Rs. 8,375 million (from 2010's Rs. 7,522 million). However, also shown, operating profits for all segments in 2011 H1 went up compared to the corresponding period in 2010, with a significant increase (Rs. 201 million) also attributable to SLT's fixed line business.

Meanwhile, a SLT statement noted: "Cost optimisation initiatives together with reduction in volume driven costs have resulted in a significant reduction in operating cost by 8% compared with the same period of last year at company level. In terms of revenue, the company is currently engaged in expanding its non–traditional revenue streams such as Broadband, PEO TV and wholesale, while focusing on sustaining traditional revenue streams such as fixed voice. Strategic initiatives taken to improve the non-traditional revenue by promoting double play and triple play have shown encouraging results. Despite the pricing pressures, the fixed wired line customer base continued to grow by 4% to 918,200 year on year."

Also revealed, "Mobitel recorded revenue growth of 12%, mainly contributed by the increase in subscriber base by 650,000 to exceed 4.4 million" and "Mobile Broadband has also grown rapidly and its contribution to overall revenue is increasing steadily."

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