(Commonwealth_ SLT-Mobitel has reported flat growth for the first quarter of 2024, which ended on March 31, amidst a challenging business environment. Despite these challenges, the company’s proactive cost management initiatives have resulted in significant operational cost savings, enabling it to maintain profitability, according to a company statement.
For the quarter, the SLT Group recorded consolidated revenue of Rs. 26.93 billion, reflecting a marginal year-on-year increase of 1.4%. When compared to the fourth quarter of the previous year, Q4 2023, there was a modest increase of 3.7% in revenue, driven primarily by gains in enterprise and broadband revenues.
SLT-Mobitel successfully implemented a range of cost-saving measures, resulting in a 0.6% decrease in operational expenditure (excluding depreciation and amortisation) compared to Q1 2023. This reduction was partly due to a decrease in dollar-denominated expenses such as annual maintenance costs (AMC), international settlement charges, and internet backbone charges, which benefited from the rupee’s appreciation.
The first quarter of 2024 presented a volatile business landscape, with macroeconomic factors impacting top-line performance. However, SLT-Mobitel swiftly implemented strategic cost optimization measures, enabling the company to realize significant operational cost savings of 2.7% at the Group level.
The company’s cost-saving efforts comprised various initiatives, including rationalizing annual maintenance costs, vehicle hiring charges, international settlement charges, and repair and maintenance expenses. These measures contributed to a 10.3% year-on-year increase in EBITDA, showcasing the company’s commitment to operational efficiency.
Despite the increase in EBITDA, the Group’s operating profit declined by 1.9% due to higher depreciation expenses resulting from substantial investments in capital expenditure programs. The company’s net profit after tax also experienced a year-on-year decrease, influenced primarily by lower operating profit and reduced interest income due to declining interest rates.
On a positive note, SLT-Mobitel witnessed an increase in net profit after tax compared to the previous quarter (Q4 2023), driven by improved EBITDA and operating profit, as well as forex gains and reduced interest costs.
During the quarter, SLT-Mobitel also made substantial contributions to the government through taxes, levies, and dividends, demonstrating its commitment to supporting the nation’s economic development. Looking ahead, SLT-Mobitel expressed confidence in the long-term growth prospects of the Sri Lankan economy and its business. This optimism is underpinned by significant investments, particularly in the SEA-ME-WE 6 (South East Asia-Middle East-Western Europe) undersea cable system. The SEA-ME-WE 6 is expected to provide SLT-Mobitel with increased international bandwidth capacity and improved connectivity, further strengthening the company’s position in the telecommunications industry.
The company stated, “As SLT-Mobitel navigates the evolving business landscape, it remains focused on operational excellence, strategic investments, and delivering innovative solutions to meet the ever-growing demands of its customers.” This strategic focus is aimed at capitalizing on emerging opportunities and delivering enhanced value to all stakeholders. SLT-Mobitel’s commitment to operational excellence involves continuously improving its processes and systems to achieve higher efficiency and effectiveness. Strategic investments, particularly in advanced technologies and infrastructure like the SEA-ME-WE 6 undersea cable, are designed to bolster the company’s capacity and service quality. By innovating its product offerings and services, SLT-Mobitel aims to stay ahead of market trends, ensuring it can meet customer needs and expectations in a dynamic market environment.
Despite facing a challenging business environment in Q1 2024, SLT-Mobitel’s proactive cost management and strategic investments have enabled the company to maintain profitability and position itself for future growth. The company’s dedication to operational efficiency is evident from the significant cost savings achieved and the substantial contributions made to the government’s revenue. As SLT-Mobitel continues to invest in advanced infrastructure like the SEA-ME-WE 6 undersea cable system, it is well-prepared to enhance its service offerings and support the long-term economic development of Sri Lanka.
