EconomyNext – Sri Lanka Telecom said December 2014 net profit fell 37 percent to 958 million rupees from a year ago with a firm suffering a foreign exchange loss for the period which also saw higher finance costs.
Group sales in the quarter rose nine percent to 17 billion rupees, interim results filed with the stock exchange showed. Basic earnings per share were 53 cents.
SLT’s mobile unit, Mobitel, reported sales rose 13 percent to 7.92 billion rupees in the fourth quarter compared with 2013.
The SLT accounts showed a refund of the Telecommunication Development Charge of 302 million rupees during the quarter.
Interest expenses and finance costs were 332 million rupees. The group made a foreign exchange loss of 130 million rupees in the December 2014 quarter compared with a gain of 188 million rupees the year before.
In the financial year ending 31 December 2014, SLT group EPS was up 11 percent to 3.32 rupees with net profit at six billion rupees and revenue up eight percent to 65 billion rupees.
A statement said SLT has not provided for a 25 percent ‘super gain’ tax imposed in the recent government budget on firms with profits of over two billion rupees as it was waiting clarity on the proposal.
It said annual profit was eroded by the cost of an out-of-court settlement amounting to 673 million rupees to settle civil litigation on the import of an IPTV system in 2007/2008.
During the year, the group whose subsidiaries include the mobile arm, Mobitel (Pvt) Ltd., invested 20.2 billion rupees in infrastructure.
The statement said that despite the threats on voice related revenue, whole sale, enterprise, data and IPTV related revenues increased.
"Continuous investments in new technologies and infrastructure have largely contributed to revenue growth."
Mobitel’s net profit in 2014 rose 15 percent to 2.8 billion rupees from the year before, with revenue up 11 percent to 30.60 billion rupees.
"Although voice market in Sri Lanka has almost reached saturation, growth in voice revenue segment continued in 2014 as well," the statement said.
"Considerable investment in latest and timely upgrades in broadband technologies such as 3G and 4G paid off during the year with a notable increase in broadband revenues compared to 2013."