Revenue increases to Rs 12.23 billion
Telecom in improved half year performance

Sri Lanka Telecom has recorded a revenue of Rs.12.23 billion in the first half of this year compared to Rs.12.08 billion in the corresponding period last year

An SLT spokesman said that the company’s performance has dispelled the expectation that revenue would suffer on account of the liberalization.

"The financial results for the half year ended June 30, 2003 amply demonstrate the company’s ability to maintain its profitability in a highly competitive market following major strides in the process of liberalizing the telecom industry".

Profitability has significantly improved with profits before exceptional items increasing to Rs.1.71 billion compared to Rs.1.39 billion last year.

However, post-tax profits after the exceptional non-recurrent cost of a Voluntary Retirement Scheme (VRS) implemented during this period, amounted to Rs.1.0 billion.

" SLT’s financial performance must be viewed in the context of the reduction in international call charges in

March but more importantly in the absence of any domestic tariff revision during the period. The company’s

profitability would have been very significantly higher had the long over-due revision of tariffs taken place as

expected during this period. These revisions are now due to be implemented with effect from 1st September 2003".

The spokesman said that VRS has cost the company Rs.710 million but it is expected that this outlay would be recovered within a period of two years through reduced employee costs. The VRS would also enable SLT to achieve higher operating efficiencies in terms of a more productive staff.

"The other noteworthy feature of SLT’s performance was its international business. While international call charges were reduced substantially during this period, this has spurred a rapidly increasing trend in the volume of international call traffic. The revenues generated from the increasing volume are expected to negate the drop in unit charges".

The spokesman said that SLT’s policy is to use its healthy cash generation capability to prematurely repay its foreign currency debt.

"While the company has incurred some foreign exchange loss in doing so, the repayment of the more costly

loans on its books has resulted in a stronger balance sheet as well as improved profitability" he added..