Colombo, Sri Lanka, February 23rd 2011 - Sri Lanka Telecom (SLT), the leading National Integrated Telecommunications Service Provider notched exemplary milestones for 2010 including the status of being the First Listed Company in Sri Lanka to post a record Rs 50.25 Bn in revenue in a Financial Year. Releasing the SLT Group and Company financial results for the 12 months ending 31st December 2010, the Group also delivered a Profit Before Tax (PBT) of Rs 5.96 Bn, with a YoY noteworthy growth of 327%, while the Group's Profit After Tax (PAT) hit Rs 3.94 Bn, a remarkable increase of 407%.
The impressive financial results were mainly driven by the improved performance delivered by SLT, the parent Company of the Group and exceptional performance by Mobitel, the Mobile arm of the SLT group.
Group free cash flow showed an increased from a negative Rs. 2.0 Bn in 2009 to Rs. 8.8 Bn in 2010. Comparatively low capital expenditure and better performance overall, saw an improvement in cash flows.
Group EPS increased from Rs. 0.43 in 2009 to Rs. 2.18 in 2010, which is an increase of 407%, which naturally permeated to better shareholder value.
The impressive 147% growth of Rs. 3.97 Bn in PBT achieved by SLT in 2010 is primarily due to the infusion of prudent operational efficiencies and through restructuring. The Company experienced a marginal drop in revenue to Rs. 33.31 Bn in 2010 from Rs. 34.09 Bn in 2009, mainly due to price pressures and alternative solutions available in the market. However, SLT was able to improve its NPAT margin from 4% in 2009 to 7% in 2010, while maintaining an EBITDA margin of 30%. During 2010, SLT achieved Rs. 2.48 Bn NPAT compared to Rs. 1.23 Bn in the prior year, an impressive 101% increase YoY.
Commenting on the positive performance for 2010, Chairman of SLT Group Nimal Welgama affirmed that the Rs 50.25 Bn revenue for the Group is certainly a landmark in the telecommunication and corporate annals of Sri Lanka. "We are firmly positioned now as the first Sri Lankan company to achieve this record which provides considerable boost to our bottom line and is reflective of our prudent cost management initiatives and focus on subsidiary profitability. Given the strategic focus we have instituted in all our areas of business and the emphasis we have constantly infused in ensuring that our end objectives and targets are met or exceeded, it is indeed noteworthy that we have implemented the necessary foundations and strategies to drive substantial growth and profits.
He reiterated that the Group while having established a pragmatic framework to ensure consistent growth in all its KPIs, has been insistent in infusing a more visionary outlook and an attitudinal change which naturally contributed positively, both quantitatively and qualitatively. "Having already commenced our Transformation Programme that has established changes across numerous areas including, customer centricity, innovation and an overarching emphasis on prudent cost management remain very high on our agenda.
"We have already laid the foundations to transform our traditional network to a Next Generation Network, investing considerably in infrastructure, technology, training and development". he said, expanding further on the significant 'on the ground' achievements that SLT has attained through the year. "Our Optical Fibre Connectivity Project is another such accomplishment with over 8,000 kms of optical fibre connecting most of the country. We passed the 200,000 fixed line broad band customer mark achieving a growth of 36% and a customer increase of 57,000 YoY and have amassed a total of 1.4 million fixed lines and over 4.0 million mobile customers." Fixed wired line customers showed growth of 24,000 YoY standing slightly below 900,000, while the fixed wireless (CDMA) customer base declined by 12,000 to reach 550,000 subscribers, a trend that strongly underpins customer preference for fixed broadband ADSL services.
The SLT Group which comprises SLT and seven subsidiaries has created a unique business model that has the ability to leverage on each other's synergies which leads to astute cost management and optimal utilization of technology and resources, prompting highly innovative state of the art telecommunication solutions.
Mobitel posted a commendable performance in 2010 recovering from a dip in profits in 2009, with PBT of Rs 1.94Bn and a PAT of Rs 1.51 Bn, compared to Rs. 219 Mn and Rs.395 Mn losses respectively in 2009. PAT was achieved from a combined 30% growth in revenue, which was Rs 20Bn, and the instigation of astute cost management initiatives. It is pertinent to note that this remarkable growth in profit was posted despite having to provide for corporate tax, of Rs 431 Mn for 2010, while in comparison, in 2009 the provision was Rs 176 Mn, a liability that was due only from the 1st of July 2009 due to the expiry of the tax holiday granted to Mobitel.
Key drivers in revenue growth are attributed to a continued increase in prepaid services and mobile broadband gaining momentum, while a carefully executed strategy for value innovation and brand building through service excellence added further impetus to this drive. Consolidating its position further, Mobitel crossed the 4 million customer mark this year despite an intensely competitive market. EBITDA for 2010 reached Rs. 6.66 Bn with a growth rate of 62% YoY. In absolute terms, the revenue of Rs. 20 Bn in 2010 compared to Rs.15.43 bBn in the year 2009, an increase of over Rs.4.58 Bn, almost 30% YoY.
Sky Network unveiled Sri Lanka's first ever WiMax 16e high speed fixed broadband network in November 2010, while Sri Lanka Telecom Mobitel is in the process of expanding its 3.5G network, both of which represent two considerable expansion projects supported by SLT. With the launch of WiMax and both SLT and Mobitel's prowess in fixed and mobile broadband services, the SLT Group reiterates its status as an integrated total telecommunications solutions provider. SLT's fully owned subsidiary SLT Publications, the sole directory publisher in Sri Lanka has aggressively grown its product and service portfolio across numerous avenues and posted a profit of Rs 109 Mn, while Sri Lanka VisionCom, the subsidiary that launched the revolutionary and unique PEOTV entertainment and interactive service recorded a noteworthy 91% customer growth in 2010 YoY.
In conclusion, Chairman Welgama points out that the Group is striving to create a conducive environment for sustained and consistent organizational growth, instituting the principals of best practice, governance, prudent risk management, emphasis on ethics, professionalism, transparency, accountability and sincerity of action into its everyday workings. "At the same time, at a national level we are mandated to shoulder the responsibility of ensuring connectivity throughout, a key driver in the accelerated national development plan. While we have instituted a plethora of initiatives in order to make Sri Lanka the ICT hub it aspires to be, we must continue to develop and build on the foundations we have already constructed."
It is with great appreciation that I commend the entire team of the SLT Group for their immense passion and commitment in taking up numerous challenges with great enthusiasm and perseverance, to ensure that we meet and is some instances exceed our goals and objectives. I have great confidence that our team will continue to excel in creating a world class ICT environment for the country to prosper."
Saturday, February 26, 2011
Wednesday, February 16, 2011
Sony India and airtel digital TV come together to expand the Flat panel TV viewing opportunity this cricket season
Friday, February 11, 2011
Nokia and Microsoft Announce Plans for a Broad Strategic Partnership to Build a New Global Mobile Ecosystem
Nokia and Microsoft today announced plans to form a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem.
Nokia and Microsoft intend to jointly create market-leading mobile products and services designed to offer consumers, operators and developers unrivalled choice and opportunity. As each company would focus on its core competencies, the partnership would create the opportunity for rapid time to market execution. Additionally, Nokia and Microsoft plan to work together to integrate key assets and create completely new service offerings, while extending established products and services to new markets.
Under the proposed partnership:
Nokia would adopt Windows Phone as its principal smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader.
Nokia would help drive the future of Windows Phone. Nokia would contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.
Nokia and Microsoft would closely collaborate on joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.
Bing would power Nokia’s search services across Nokia devices and services, giving customers access to Bing’s next generation search capabilities. Microsoft adCenter would provide search advertising services on Nokia’s line of devices and services.
Nokia Maps would be a core part of Microsoft’s mapping services. For example, Maps would be integrated with Microsoft’s Bing search engine and adCenter advertising platform to form a unique local search and advertising experience
Nokia’s extensive operator billing agreements would make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.
Microsoft development tools would be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem’s global reach.
Nokia’s content and application store would be integrated with Microsoft Marketplace for a more compelling consumer experience.
“Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience,” Stephen Elop, Nokia President and CEO, said at a joint news conference in London. “Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It’s now a three-horse race.”
“I am excited about this partnership with Nokia,” said Steven A. Ballmer, Microsoft CEO. “Ecosystems thrive when fueled by speed, innovation and scale.The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute.”
Dialog Axiata PLC announced, Friday 11th February 2011, its financial results for the year ended 31 December 2010. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”) post consolidation with subsidiaries Dialog Broadband Networks (Pvt.) Ltd (“DBN”) and Dialog Television (Pvt.) Ltd (“DTV”).
The Group delivered strong performance in terms of profitability, recording NPAT of Rs. 5.05Bn for FY 2010 a 141% increase year on year (YoY). The Group NPAT was driven by strong performance at the Company level, with Dialog Axiata PLC featuring the Group’s mobile business, posted a profit of Rs. 1.56Bn for Q4 and taking the full year profit to Rs. 6.55Bn, an increase of 171% relative to 2009. Performance during 2010 was underpinned by a healthy momentum in revenue growth, positive outcomes of strategic cost rescaling, balance sheet restructuring initiatives and consistent financial discipline across all aspects of the business.
Subsidiaries DTV and DBN registered gains YoY at both EBITDA and NPAT levels, demonstrating traction in terms of the Group’s Fixed Line, Broadband and Television businesses. Relative to 2009, EBITDA (positive) and NPAT (negative) improved by 243% and 80% for DTV and 169% and 50% for DBN respectively.
Dialog Group revenues were recorded at Rs. 41.42Bn for the year 2010, up 14% YoY and 2% Quarter on Quarter (QoQ). The Group EBITDA was recorded at Rs. 15.08Bn, up 55% YoY, and down by a marginal 2% on QoQ basis. The Group EBITDA margin improved by 9 percentage points YoY, to reach 36%. Underpinned by the positive EBITDA growth trajectory, the Group NPAT recorded a strong growth of 141% YoY. The Group NPAT for the 4th Quarter however displayed a 25% reduction when compared to Q3 2010, driven largely by higher depreciation and lower foreign exchange gain in Q4 2010.
Strong Growth in Mobile Business
The Company continued to leverage its market leading position within Sri Lanka’s mobile market to deliver strong growth in revenue and profitability. The Company recorded revenues of Rs. 9.89Bn and Rs. 37.95Bn for Q4 and FY 2010 respectively. The Company revenue grew by 14% compared to 2009 and 2% relative to the previous quarter. The Company’s revenue trajectory was driven by the growth in Mobile Voice/VAS, mobile broadband, Global and Tele-Infrastructure businesses.
The Company continued to extract positive outcomes from strategic cost rescaling initiatives. Operating costs (excluding depreciation and non-recurring charges for 2009) reduced by 8% in FY 2010, while remaining flat on QoQ basis. Operating cost improvements YoY were driven primarily by reductions in operational overheads and manpower related expenses.
Direct cost (excluding depreciation) grew by 9% YoY (6% when normalised for interconnect costs introduced in 2010) and 11% QoQ. Increase in direct cost was driven in the main by international origination costs and outbound roaming costs in tandem with revenue growth accruing from the corresponding lines of business.
On the backdrop of strong revenue growth and cost improvements, the Company EBITDA for 2010 grew by 43% YoY to reach Rs. 14.46Bn. The EBITDA margin expanded from 30% in 2009 to 38% in 2010 – an increase of 8 percentage points compared to 2009. EBITDA for Q4 2010 however reduced by 4% to Rs. 3.60Bn, in line with the increase in direct costs alluded to above. The Company NPAT for 2010 was recorded at Rs. 6.55Bn a 306% improvement relative to the normalised (excluding one-off network modernisation charge in 2009) NPAT of negative Rs. 3.2Bn in 2009. In addition to strong EBITDA performance, the improvement in NPAT was underpinned by a 65% YoY decrease in finance costs following the deployment of surplus operating cash for the repayment of borrowings. The year 2010 also posted foreign exchange gains of Rs. 686Mn against an exchange gain of Rs. 8Mn in 2009. The Company NPAT however displayed negative growth of 18% on a QoQ basis, in line with the reduction in EBITDA, higher depreciation and lower foreign exchange gain during the same period.
DBN and DTV Consolidate Performance Improvements
DBN featuring the Fixed Telephony, Fixed Broadband and Data Transmission businesses of the Dialog Group continued to consolidate its positive performance trend recording its third successive quarter of positive EBITDA. DBN EBITDA was recorded at Rs. 285Mn, for 2010 a significant 169% improvement compared to 2009. EBITDA improvement was driven in the main by substantial reductions in operating and direct costs accruing from cost rescaling programmes implemented over the past quarters. DBN EBITDA in Q4 2010 show a reduction of 32% on a QoQ basis, due to an exceptional provision of Rs. 100Mn with respect to VAT recovery in the context of the emergent VAT exempt environment in the Telecommunications sector. On the backdrop of lower EBITDA and the ongoing acceleration of depreciation pertaining to DBN’s CDMA and Wimax networks, NPAT was recorded at negative Rs. 348Mn and negative Rs. 1.3Bn in Q4 2010 and FY 2010 respectively. Accordingly, NPAT for FY 2010 recorded an improvement of 50% compared to 2009.
DTV demonstrated similar consolidation of Performance improvements, recording an EBITDA of Rs. 343Mn for 2010, an improvement of 159% and 243% on QoQ and YoY basis respectively. EBITDA growth YoY was underpinned by a strong increase in usage revenues on the backdrop of reductions in operating and direct costs accruing from a continued focus on strategic cost rescaling initiatives. Accordingly, DTV reported a NPAT for FY 2010 of negative Rs. 154Mn a strong improvement in profitability of 80% relative to 2009.
Healthy Free Cash Flows Bolster Group Balance Sheet
Group Operating cash flows totalled Rs. 14.28Bn for the year of 2010, up 32% relative to 2009. Strong operating cash flows combined with a prudent and strategic approach to capital expenditure, have underpinned the generation of free cash flow of Rs. 8.2Bn for the year of 2010 relative to the negative free cash flow of Rs. 133Mn in the previous year. Positive free cash flows were directed towards de-leveraging the Company’s balance sheet, resulting in a reduction of the Group’s total debt outstanding by 17% YoY. Accordingly, the Dialog Group continued to maintain a structurally strong balance sheet with the Gross Debt to EBITDA ratio improving from 2.6x in 2009 to 1.8x in 2010.
On the back drop of a strong balance sheet, free cash position and improved profitability Dialog Axiata effected a repayment of USD 10Mn against advances due to principal shareholder Axiata Group BhD. Subsequent to the aforesaid repayment, the USD and SLR advances outstanding to Axiata Group amount to USD 37.5Mn and Rs. 3,724Mn respectively.
Proposed Dividend FY2010
In the light of the Company’s strong turnaround in performance, the Board of Directors of Dialog Axiata, resolved, to propose for consideration by the Shareholders of the Company, a cash dividend to ordinary shareholders of twenty cents (Rs. 0.20) per share totalling to Rs. 1.6Bn. The said dividend would be exempt from tax in the hands of the shareholders. The dividend so proposed is subject to the approval of the shareholders at the Annual General Meeting (AGM) of the Company, the date pertaining to which would be notified in due course.