Sri Lanka Telecom Group posts over Rs. 52 billion revenue in first half of 2022.
The Morning: Sri Lanka Telecom Group (SLT Group), the national ICT solutions provider, stated that it posted stable growth for the first half of 2022 (1H22), with revenue increasing by 6% to Rs. 52.9 billion, and a 19.8% year-on-year (YoY) increase in profit before tax (PBT), which stood at Rs. 7.2 billion, showcasing resilience in its business model amidst complex socio economic challenges facing the country.
SLT Group Chairman Rohan Fernando said: “The period under review has been one of the most challenging periods that SLT-MOBITEL has faced in recent times, exacerbated by a tough operating environment. However, due to the agility in our business model to deliver growth and a motivated team effort, we have been able to successfully generate positive results.
“We are determined to continue the incredible transformation we have been experiencing in 2021 across our markets, and believe our major drivers of growth remain our technologically advanced portfolio and efforts in the digital space, will fuel future growth and drive our revenues in the coming quarters.”
SLT Group’s EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) went up to Rs. 20.9 billion for the first half of 2022, recording a growth of 7.8% compared to the corresponding period of the previous year. The EBITDA margin stood at 39.7% for the period under review. SLT Group was able to maintain a positive momentum for Q2 2022 recording gains of 4% in operating profit when compared to the previous quarter. The group recorded a foreign exchange gain of Rs. 135 million during the quarter due to the prudent foreign exchange strategies of the Group. However, profit after tax (PAT) declined by 26.5% in Q2 compared to the previous quarter, mainly owing to the increase in income tax expenses during the period.
The group stated that it continued its strategic plan implemented at the beginning of the year, consolidating its performance throughout Q2 as well.
The operating cash flows of the group grew to Rs. 23.5 billion, up by 21.2% YoY. The group recorded a favourable cash and cash equivalents position of Rs. 27 billion as at the end of the reporting period. SLT Group’s contribution to the Government of Sri Lanka during the first half of 2022 amounted to Rs. 14 billion in direct and indirect taxes, including levies and dividends.
SLT Group CEO Lalith Seneviratne noted: “This quarter’s results reflect the strong execution in our strategic plans, taking bold measures to shape and sustain our business and the market. Despite the various macroeconomic factors that are reshaping the business environment, we look at the future confidently with a positive outlook. We aim to accelerate investments in the next half of 2022 expanding our local and global footprint, networks, and systems, channelling our efforts towards enabling a digital transformation journey for the nation.”
The holding company of the group, Sri Lanka Telecom PLC (SLT) recorded an impressive 12.4% revenue growth for the first of half 2022, compared to the same period of the previous year. The EBITDA of the company grew to Rs. 11.8 billion, up by 10.2% year-on-year.
SLT CEO Janaka Abeysinghe commented: “Our Q2 results reflect our ability to mitigate the financial impact of challenging operating conditions. Our continued efficiency drives have ensured that we have been able to increase our margins and overall maintain a steady performance. As market headwinds begin to ease, we aim to enter the remainder of the year with confidence targeting growth despite inflationary pressures, continuing our strategic focus leveraging capabilities to deliver greater returns.”
The mobile services arm of the group, Mobitel, recorded a flat revenue of Rs. 23 billion for the first half of the year, compared to the same period last year. EBITDA growth witnessed a marginal increase of 1% for the first half at Rs. 9.5 billion, while EBIT saw a decline of 3% at Rs. 4.9 billion.
Despite challenging macroeconomic conditions, Mobitel Q2 results are encouraging; recording Rs. 0.7 billion profit for the quarter, demonstrating fortitude in being able to maintain its performance levels for the first half of the year. Mobitel stated it aims to increase its growth in international business revenues, enhance productivity and efficiency in all areas, including power and energy.
Mobitel CEO Chandika Vitharena stated: “During the period under review, we have continued to deliver a steady performance, demonstrating agility, as we address the growing and ever-changing customer needs and market dynamics across our operations. We remain focused on achieving key strategic priorities that would enable a smarter digital tomorrow while striving to deliver a great customer experience with innovative products and plans.”
Sri Lanka’s telecommunication industry is one of the fastest growing sectors in the country in line with the overall development and economic expansion. The government of Sri Lanka is also committed to transforming the country into an e-economy with the overall development of the country’s digital platforms. Therefore, Sri Lanka’s ICT and digital infrastructure development sectors have become hotspots for business/investment opportunities. Local businesses engaged in these two sectors have recorded a steady growth and posted impressive profits indicating the increasing business potential in the country’s ICT and digital infrastructure development sectors. In the post Covid scenario, there has been a sharp increase in the development of ICT and digital infrastructure development sectors. With Sri Lanka working towards becoming an emerging business destination in the South Asian region, foreign businesses/investors could explore the growing opportunities in the local ICT and digital infrastructure development sectors.
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