SLT Group records resilient for Q3 overcoming external impacts
Sri Lanka Telecom Group (SLT Group), the national ICT solutions provider, has reported positive overall revenues of Rs. 79.6 billion, a consolidated growth of 3.9% for the first nine months of 2022 compared to the same period last year, driven largely by prudent and proactive measures undertaken in financial and operational management.
Demonstrating resilience in its business model, at company level, SLT Q3 revenues grew to Rs. 16.9 billion, an increase of 7.4% when compared to the same period last year, also reflected in optimistic year-to-date growth of 10.6% at Rs. 49.4 billion.
SLT Group’s contribution to the Government of Sri Lanka during the first nine months of 2022 amounted to Rs. 21 billion in direct and indirect taxes including levies and dividends.
Sri Lanka Telecom PLC (SLT) saw its profits declining in the three months ended September 30, 2022 (3Q22) due to sharply rising costs stemming from a bevy of factors including the sharp fall in the value of the rupee against the dollar and the soaring inflation amid the decline in revenues at its mobile services subsidiary, Mobitel Private Limited.
The group reported a consolidated revenue of Rs.26.7 billion for the July – September quarter, barely moved from the same period last year.
While SLT on a standalone basis maintained its top line at Rs.16.9 billion, up 7.4 percent from a year ago period driven by its carrier domestic, broadband and carrier international revenue streams, Mobitel has suffered some setback due to, “macro-economic challenges, tax changes and reduction of domestic interconnect charges”, the company said in a public relations statement.
But the company has sustained international business revenue growth.The domestic interconnection revenues affected both SLT and Mobitel after the regulator, Telecommunications Regulatory Commission of Sri Lanka directed to reduce the charges from April onwards.
As the government reversed course on its tax policy, the telecommunication services industry has seen a slew of tax increases and new taxes on their services since June including the Value Added Tax, Telecommunication Levy and more recently the Social Security Contribution (SSC) Levy which together have sent up what the customers pay for their ICT consumption.
With the new tax rates, Sri Lankans are now paying 35 percent combined tax for telecommunication services they consume other than internet services and 17.3 percent for internet services effective from September 1 before the new SSC Levy of 2.5 percent which came into effect from October 1 onwards.
Meanwhile, the group reported an operating profit of Rs.2.89 billion for the quarter, which was down by 28 percent, reflecting the challenges in the top-line and the costs front. At the company level, SLT however reported an operating profit of Rs.1.43 billion, up 27.8 percent from a year ago.
“The year-on-year electricity cost has decreased due to power outage whereas generator fuel cost has increased significantly due to power outage as well as fuel price”, the company said.