SLT Group revenue decreases in 2nd Quarter 2023

While  SLT PLC showed a 2.4 per cent (Rs.400 million) revenue growth, its subsidiary Mobitel recorded 9.3 per cent (Rs.1,066 million) de-growth (neither increase nor decrease) during Q2’23 compared to Q2’22.

Group revenue, therefore, decreased by 2.8 per cent (Rs.763 million) from Q2’22 to Q2’23. SLT PLC revenue increase was driven by growth in Broadband, IPTV, and Enterprise revenue streams. However, such an increase was slowed down due to an decrease in International Transit revenue (90.3 per cent, Rs.614 million) during Q2’23, though it must be noted that such international transit revenue has virtually no margin, SLT said in a media release.

SLT PLC revenue growth was primarily hindered due to a delay in the monetisation of fibre network and customer churn. Revenue de-growth in Mobitel was due to significant decline in subscriber base. Subscriber base contracted by 1 million from June 2022 to June 2023, it said.

Group Opex (operating expenses or expenditure) increased by 15.1 per cent (Rs.2,513 million) in Q2’23 compared to the corresponding quarter in the previous year. Even though Mobitel revenue has declined YoY, Opex increased by 30.4 per cent (Rs.1,998 million) during Q2’23 due mainly to sales related commissions. SLT PLC Opex increased by 5.5 per cent (Rs.619 million) owing to AMC/license cost driven by devaluation of the Rupee, electricity tariff and fuel price increases.

Group EBITDA dropped by 31.9 per cent (Rs.3,276 million) during Q2’23 due to a decrease in Mobitel EBITDA by 61.9 per cent (Rs.3,064 million). Accordingly, Group Operating Profit, PBT and PAT were also decreased by 92.7 per cent (Rs.3,121 million), 161.3 per cent (Rs.6,039 million) and 208 per cent (Rs.4,076 million) respectively. Mobitel recorded Rs.835 million Operating Loss due to lower revenue and higher Operating Costs, ending with a net loss of Rs.1,390 million for the quarter. SLT PLC net loss for the quarter was Rs.1,027 million due to cost escalations and impairment of LTE assets.

SLT Group’s revenue growth was stagnant for the 1^st half of 2023 to record Rs. 52.7 million, a 0.4 per cent de-growth compared to the same period last year. At a company level, SLT revenues grew by 6.4 per cent to Rs. 34.6 billion for the 1^st half of the 2023.

During the first half of 2023, Mobitel revenue has contracted by Rs. 2.2 billion compared to revenue for the same period in 2022 and the loss recorded for the period was Rs. 1.5 billion. However, with the recent changes in management, Mobitel has been able to arrest the decline in subscriber base and revenue.  

Janaka R. Abeysinghe, SLT Chief Executive Officer, said, “Prolonged recovery from the effects of the economic downturn, loss of Mobitel subscriber base, low productivity, and delay in monetisation of the fibre network have had a significant impact on the revenue generation of the group.  The government’s macroeconomic adjustments will help the country’s economic revival in the long term but may initially affect business growth and the disposable income levels of our customers.  Managing the escalating operational costs, resulting from fluctuations in exchange rates and inflationary conditions etc. is a huge concern.  In this context, pricing is key but setting the right price has become increasingly challenging. This situation will add pressure to our revenue generation and top line performance. Under these conditions, the Mobitel turnaround has become an immediate concern. Bank lending rates remaining high in the recent past has caused margins to erode and made funding extremely difficult. However, with the positive changes adopted by the Central Bank recently, we believe the lending rates will decline. We will continue to forge ahead, with increased productivity and navigate through the current economic uncertainties. Our commitment to providing innovative solutions and exceptional customer service will remain unwavering.”