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Sri Lanka Telecom profits double in June 2020 quarter

ECONOMYNEXT – Profits at Sri Lanka Telecom Plc, which also has a mobile unit doubled to 2.8 billion rupees in the June 2020 quarter from a year earlier, amid a Coronavirus pandemic and slower growth in costs, interim accounts show.

The group reported earnings of 1.50 rupees per share. For the six months to June profits earnings of 2.54 rupees per share was reported.

Revenues grew 3 percent to 21.9 billion rupees and cost of sales fell 6.9 percent to 11.3 billion rupees, helping gross profits grow 17 percent to 10.6 billion rupees.

In the six month to June revenues grew from 42.5 billion rupees to 44.1 billion rupees with stronger growth in mobile operations.

SLT and its subsidiary Mobitel, had offered new packages at discounted rates, amid the Coronavirus pandemic, the firm said.

“In the short run, the Company experienced positive impact in areas such as Broadband, IPTV and Career Business services due to the surge in utilization in the residential sector, as well as in the business sector with the shift towards work from home arrangements in continuing the businesses,” SLT told shareholders.

“In addition, future opportunities are emerging with novel digital products and services.”

“SLT with its mobile arm, Mobitel (Pvt) Ltd has provided a multitude of bundled telecom packages at
concessionary rates and free offers of data to certain customer segments to comfort the customers
during the pandemic.”

SLT said collections had fallen in the early stages of the pandemic.

“However, the effective collection strategies of the Company has subsequently improved collections, normalizing the cash flows from collections for the period,” SLT said.

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“Regulatory instructions to refrain from disconnecting the unpaid subscribers, resulted in challenges in
collecting the billed revenue.

“Nevertheless, the Government’s decision on extending the due dates for the payment of some taxes and levies has eased off the situation in the short term. In order to mitigate the cash flow related challenges, the company has decided to limit capital expenditure only for the critical areas and to utilize procurement models with deferred payment plans.”

Group trade and other receivables rose to 36 billion rupees by end June 2020 from 27.3 billion rupees a year earlier.