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SLT eyes India and China after posting record results in 2006
Sunday, 11 March 2007 - 8:04 AM SL Time
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Sri Lanka Telecom which has in the words of its chairman, Asoka Weerasinghe de Silva ``bettered its best performance since privatization`` in 2006 sees strong opportunities of crossing national borders into India and China.
SLT`s CEO, Shoji Takahashi has said in the company`s just-released annual report that ``India and China are two countries who hold booming opportunities for SLT to tap into.``
He noted that as Sri Lanka is sited in the gateway position to India, SLT ``has a golden opportunity to pursue business in terms of offering main data center services with backup or the reverse`` exploiting China`s eagerness to create a new business model based on outsourcing.
``Sri Lanka, China and India can join hands offering large multinationals these services,`` Takahashi said.
De Silva reported that SLT group revenue last year was up 25% to reach Rs. 40.7 billion with local telephone services contributing 69% of this revenue while international services accounted for 20% and data and other services 11%. However, mobile services had lagged some way behind fixed telephony and Internet where the company is clear market leader, the report indicated.
``One of our goals therefore is to develop our fully-owned subsidiary, Mobitel, to achieve leadership in mobile business in the near future,`` Takahashi said.
De Silva said that apart from SLT`s role as main player in communications in the country, it also contributed to Sri Lanka`s economic wealth contributing Rs. 3.8 billion last year in taxes and Rs. 2.7 billion in other levies helping to swell the government exchequer.
The company`s record earnings after tax last year topped its previous best in 2005 by over Rs. 2.3 billion.
The CEO who identified the company`s three main business areas as fixed telephony, mobile telephony and Internet pointed out that Internet had opened up vistas of opportunity far beyond traditional concepts of communication and entertainment services.
``Thus the cornerstone of our strategy is the convergence of our three key business areas. And in this converged business scenario, mobile telephony, the Internet and fixed telephony would play significant roles, in that order``. he said.
``Thus growing our mobile business will be sine qua non to the success of convergence ? convergence itself will offer a greater fillip for the growth of the mobile business ? a cycle of gain.``
The SLT share gained sharply in the recent stock market bull run but lost slightly in the downturn that followed. There has been speculation that NTT, the Japanese partner in the company exercising management control may sell part of its stake to a Malaysian firm, Maxis, but SLT refused to confirm any such move at a recent meeting with its investors.
The share which traded at a high Rs. 29.75 in 2006 and a low of Rs. 14.75 hit Rs. 42 in the recent bull run and closed at Rs. 38.50 last week.
The Sri Lanka government with a 49.5% holding of SLT through the Secretary to the Treasury is the company`s biggest shareholder followed by NTT with 35.19%. All other shareholders individually hold less than 2% of the company. Among the big minor shareholders are the Galleon Funds of Mr. Raj Rajaratnam, the EPF, Sri Lanka Insurance, S.V. Somasunderam , MAS Holdings and Cargo Boat Development.
SLT with an issued capital of Rs. 18.05 billion carried retained earnings of Rs. 19.87 billion in its books at the end of last year. Group earnings per share had grown to Rs. 3.01 from Rs. 1.71 in 2005 while net assets per share were up Rs. 20.98 from Rs. 18,72 the previous year.
SLT`s dividend payments however have been modest with shareholders getting a 7.5% return for 2005, up from 5% the previous year.
The directors of the company are Messrs. Asoka Weerasinghe de Silva (chairman), Shoji Takahashi (CEO), Shuhei Anan, S.B. Divaratne, Mrs. Leisha Chandrasena, S.N. Kumar and Sumith Wijesinghe.
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