SLT the leading fixed line blue chip giant has recorded a Group profit before tax of Rs.2.1b during the first quarter of 2006 which is a 70% increase compared to the same quarter of the last year. The after tax group profit for the quarter was Rs.1.3b. This is a 42% increase quarter on quarter basis compared to 2005. SLT has reached this level after achieving a group turnover of Rs.9.65b, which is a 28% or Rs.2.13b increase compared to the same quarter of 2005.

Sri Lanka Telecom Ltd. has recorded a turnover of Rs.8.6b, which is a 25% or Rs.1.7b increase compared to the same quarter of 2005. This increase has been contributed from local revenue increase by Rs.1.4b or 31%, International Revenue by Rs.193m or 11% and other operating revenue by Rs.131m or 27%. Increase of local revenue is mainly attributed to Rs.1.2b CDMA new connections. CDMA business came into operations during the last quarter of 2005.  All main revenue streams have increased.

The group operating expenditure of the quarter was Rs.4.2b, which is 21% or Rs.735m higher than the same quarter of previous year. The operating expenditure of Sri Lanka Telecom Ltd. was Rs.3.5b which is an increase of 15% or Rs.466m compared to the same quarter of 2005. The main reason for the increase was CDMA cost of sales.

SLT’s fully owned subsidiary Mobitel has been able to increase its turnover by 56% compared to the first quarter of 2005. The revenue items other than the revenue from sale of hand sets have increased. The increase of operating expenditure was 60% and it was mainly derived from sales and distribution expenses and currency devaluation. Depreciation of the subsidiary has increased by 43% due to additions to GSM assets base and aggressive depreciation of AMPS (Advanced Mobile Phone Service) and TDMA (Time Division Multiple Access) technologies. However AMPS and TDMA technologies have been fully depreciated by this quarter and will not be a recurring expenditure.  The interest cost of the subsidiary has increased by 95% due to increase of borrowings for the GSM roll out. Due to high depreciation and interest cost the subsidiary has made a net loss of Rs.202m.

During the quarter the Group and the company have shown EBITDA margins of 57% and 59% respectively, compared to 54% and 56% respective figures of 2005. The group’s annualized Earnings Per Share (EPS) has increased from Rs.2.01 in 2005 to Rs.2.86 in 2006.

The fixed line telecom giant has been able to reach the mile stone of one million fixed lines recently together with over 125,000 CDMA lines. The group expects to increase its customer bases both in Mobile and CDMA fixed lines aggressively during this year and to expand the global connectivity.