Sri Lanka Telecom PlcCSELK: SLTL.N0000

Interim report Q3 2024

Nov 14, 2024 at 5:53 AM UTC · MarketScreener

Sri Lanka Telecom PLC

Interim Condensed Consolidated Financial Statements

For the Quarter ended

30 September 2024

Sri Lanka Telecom PLC

Company Registration No. PQ 7

Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

(All amounts in LKR Millions )

Group

Jul-Sep

2024	2023
(Reviewed)	(Reviewed)

Company

Jul-Sep

2024	2023
(Reviewed)	(Reviewed)

Group

Jan-Sep

2024	2023
(Reviewed)	(Reviewed)

Company

Jan-Sep

2024	2023
(Reviewed)	(Reviewed)

Revenue

Direct costs

Gross Profit

Sales and marketing costs

Administrative costs

Operating profit

Other income

Dividend Income from subsidiaries - and associates

Interest expenses and finance cost Foreign exchange gain/ (loss) Interest income

Share of profit / (loss) from equity - accounted investee

Profit/(loss) before tax for the period

Income tax (expenses)/reversal

Profit /(loss) for the period

Other comprehensive income

Net change in fair value financial assets Defined benefit plan actuarial gain/ (loss) Tax on other comprehensive income

Other comprehensive income for the period (net of tax)

Total Comprehensive Income for the Period

Profit /(loss) Attributable to :

Owners of the company

Non-controlling interest

Total Comprehensive Income attributable to:

Owners of the company

Non-controlling interest

Earnings per share - Basic (Rs.)

28,543	27,712
(16,233)	(17,851)
12,310	9,861
(2,895)	(3,081)
(5,839)	(6,231)
3,576	549

426 535

95-

(2,271) (2,773)

229 303

44
1,977 (1,048)

(495)

1,093	(1,543)

-	-

57 389

(94)

295
1,029 (1,248)

1,092

(1,544)

1,093 (1,543)

1,028

(1,249)

1,029 (1,248)

0.61 (0.86)

18,093	17,490
(9,702)	(10,657)
8,391	6,833
(1,644)	(1,729)
(4,267)	(4,482)
2,480	622
432	526

95-

(1,723) (2,399)

153 269

44
1,336 (715)

932 (651)

56 389

(117)

837 (379)

932 (651)

837 (379)

0.52 (0.36)

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82,090	80,439
(48,871)	(50,479)
33,219	29,960
(8,602)	(8,678)
(17,423)	(18,391)
7,194	2,891
982	1,605

190-

(6,789)

(8,388)

618 926

719 1,170

144

2,915 (1,752)

(2,145)

(950)

770 (2,702)

281 738

(168)

268 569

1,038

(2,133)

767 (2,706)

(2,702)

1,035

(2,137)

1,038 (2,133)

0.42 (1.50)

53,056	52,135
(29,998)	(30,579)
23,058	21,556
(4,749)	(4,422)
(12,862)	(13,628)
5,447	3,506
1,065	1,673

190-

(5,362) (7,395)

(112)

501 850

144

1,765 (1,434)

1,204	(1,052)

-	-

281 737

(221)

197 516

1,401 (536)

1,204	(1,052)
-	-
1,204	(1,052)
1,401	(536)
-	-
1,401	(536)

0.67 (0.58)

Sri Lanka Telecom PLC

Company Registration No. PQ 7

Interim Condensed Consolidated Statement of Financial Position

(All amounts in LKR Millions )
	Group			Company

	30 Sep 2024		31 Dec 2023-		30 Sep 2024	31 Dec 2023-
		Restated		Restated

	(Reviewed)		(Audited)		(Reviewed)	(Audited)
Assets


Non-Current Assets
Property,plant and equipment	176,025		174,466		133,832	135,865
Right-of-use assets	4,004		5,761		484	813
Intangible assets	11,094		10,364		3,037	3,200
Investments in subsidiaries	-		-		14,491	14,431
Investments in associates	515		514		515	514
Deferred tax assets	356		365		-	-
Contract assets	1,158		1,091		277	350
Investments In equity Shares	2		2		-	-
Other receivables	4,027		3,496		3,398	3,471
Total Non-current Assets	197,181		196,059		156,034	158,644
Current Assets
Inventories	3,379		4,078		2,507	3,240
Trade and other receivables	33,040		32,015		22,666	21,650
Current tax receivables	212		181		212	142
Contract assets	1,282		1,511		153	146
Other investments	751		117		711	-
Cash and cash equivalents	9,480		12,377		3,654	5,330
Total Current Assets	48,144		50,279		29,903	30,508
Total Assets	245,325		246,338		185,937	189,152
Equity and Liabilities
Equity
Stated capital	18,049		18,049		18,049	18,049
Insurance reserve	300		300		300	300
Retained earnings	70,954		69,916		50,956	49,555
Equity attributable to equity share -
holders of the company	89,303		88,265		69,305	67,904
Non controlling Interest	123		120		-	-
Total Equity	89,426		88,385		69,305	67,904
Non Current Liabilities
Borrowings	47,526		36,318		41,085	34,851
Vendor financing	11,775		12,770		11,775	12,770
Lease liability	3,189		3,617		93	267
Contract liabilities	1,883		1,776		1,883	1,776
Deferred income	1,079		1,250		1,079	1,250
Deferred tax liabilities	11,119		9,501		8,227	7,582
Employee benefits	6,085		6,117		5,182	5,221
Trade and other payables	3,735		5,225		2,761	3,399
Total Non Current Liabilities	86,391		76,574		72,085	67,116
Current Liabilities
Borrowings	23,111		27,456		14,061	19,778
Vendor financing	9,872		7,278		3,407	4,178
Lease liability	1,550		2,619		469	617
Contract liabilities	1,304		1,236		1,054	956
Deferred income	3,295		3,677		276	325
Current tax liabilities	133		411		-	-
Trade and other payables	30,243		38,702		25,280	28,278
Total Current Liabilities	69,508		81,379		44,547	54,132
Total Liabilities	155,899		157,953		116,632	121,248
Total Equity and Liabilities	245,325		246,338		185,937	189,152

I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act No.07 of 2007.

Signed

Sanjeewa Samaranayake

Chief Financial Officer

The Board of Directors is responsible for these financial statements.These financial statements were approved by the Board of Directors on 13 November 2024.

Signed for and behalf of the Board.

Signed	Signed
Dr.Mothilal de Silva	Mr.M.M.C.P. Mohottigedara

Chairman

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Director

Sri Lanka Telecom PLC

Company Registration No. PQ 7

Interim Condensed Consolidated Statement of Changes In Equity

For the nine months ended 30 September 2024

(All amounts in LKR Millions )
Group		Attributable to owners of the Company
					Non
	Stated	Insurance	Retained	Total	controlling	Total
	capital	reserve	earnings		interest	equity
Balance as at 1 January 2023	18,049	300	74,024	92,373	115	92,488
Subsidiary liquidation impact	-	-	157	157	-	157
Non Controlling interest	-	-	-	-	5	5
Total comprehensive income for the year
Net loss for the year	-	-	(3,921)	(3,921)	-	(3,921)
Other comprehensive income
Defined benefit plan actuarial gain,net of tax	-	-	343	343	-	343
Total other comprehensive income for the year	-	-	343	343	-	343

Total comprehensive income for the year	-	-	(3,578)	(3,578)	-	(3,578)
Transactions with owners, recorded directly in equity
Contribution by and distribution to owners
Dividends to equity share holders	-	-	(451)	(451)	-	(451)

Balance as at 31 December 2023	18,049	300	70,152	88,501	120	88,621
Prior year depreciation adjustment net of tax	-	-	(236)	(236)	-	(236)
Adjusted balance as at 31 December 2023	18,049	300	69,916	88,265	120	88,385
Balance as at 1 January 2024	18,049	300	69,916	88,265	120	88,385
Non controlling interest	-	-	-	-	3	3
Total comprehensive income for period
Net profit for the period	-	-	770	770	-	770
Other comprehensive income
Defined benefit plan actuarial gain,net of tax	-	-	268	268	-	268
Total other comprehensive income for period	-	-	268	268	-	268

Total comprehensive income for the period	-	-	1,038	1,038	-	1,038

Balance as at 30 September 2024	18,049	300	70,954	89,303	123	89,426

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Sri Lanka Telecom PLC

Company Registration No. PQ 7

Interim Condensed Consolidated Statement of Changes In Equity

For the nine months ended 30 September 2024

(All amounts in LKR Millions )
Company	Attributable to owners of the Company
	Stated	Insurance	Retained	Total
	capital	reserve	earnings
Balance as at 1 January 2023	18,049	300	51,197	69,546
Total comprehensive income for the year
Net loss for the year	-	-	(1,132)	(1,132)
Other comprehensive income
Defined benefit plan actuarial loss,net of tax	-	-	177	177
Total other comprehensive income for the year	-	-	177	177

Total comprehensive income for the year	-	-	(955)	(955)
Transactions with owners,recorded directly in equity
Contribution by and distribution to owners
Dividends to equity share holders	-	-	(451)	(451)

Balance as at 31 December 2023	18,049	300	49,791	68,140
Prior year depreciation adjustment net of tax			(236)	(236)

Adjusted balance as at 31 December 2023	18,049	300	49,555	67,904
Balance as at 1 January 2024	18,049	300	49,555	67,904
Total comprehensive income for period
Net profit for the period	-	-	1,204	1,204
Other comprehensive income
Defined benefit plan actuarial gain,net of tax	-	-	197	197
Total other comprehensive income for period	-	-	197	197

Total comprehensive income for the period	-	-	1,401	1,401

Balance as at 30 September 2024	18,049	300	50,956	69,305

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Sri Lanka Telecom PLC

Company Registration No. PQ 7

Interim Condensed Consolidated Statement of Cash Flows

For the nine months ended 30 September 2024

(All amounts in LKR Millions)

GROUPCOMPANY

Operating activities

Cash generated from operations

Interest received

Interest paid

Tax paid

Gratuity paid

Net cash generated from operating activities

Cash flows from Investing activities

Acquisition of property,plant and equipment Acquisition of intangible assets Investment in subsidiary

Proceeds from disposal of property, plant and equipment

Proceeds / (Purchase) of short term investments

Net cash used in investing activities

Cash flows from Financing activities

Proceeds from borrowings

Cash payment for the principle portion of lease liability Finance lease principal re-payments

Re-payment on borrowings

(Decrese) / Increase in vendor financing and other non current liabilities

Dividend paid to equity share holders

Net cash generated from / (used) financing activities

(Decrease) / Increase in cash and cash equivalents

Movement in Cash and cash equivalents

Cash and cash equivalents at beginning of the year

Effect on exchange fluctuation on cash and cash equivalents

Increase/(Decrease) in cash and cash equivalents

Cash and cash equivalents at 30 September (Note)

Note

Cash and cash equivalents

Bank overdraft

2024	2023	2024	2023
21,326	25,957	18,994	18,803
730	1,176	512	856
(8,197)	(12,433)	(7,261)	(11,233)
(836)	(1,356)	-	(455)
(595)	(485)	(465)	(355)
12,428	12,859	11,780	7,616
(18,981)	(25,798)	(10,504)	(21,616)
(2,464)	(4,375)	(595)	(202)
-	-	(60)	-
317	316	153	209
(645)	2,489	(722)	2,516
(21,773)	(27,368)	(11,728)	(19,093)
49,085	20,250	27,085	12,750
(1,911)	(1,791)	(699)	(411)
-	(12)	-	(12)
(42,722)	(7,854)	(26,711)	(2,899)
1,207	(1,701)	(2,172)	(151)
	(451)	-	(451)
5,659	8,441	(2,497)	8,826
(3,686)	(6,068)	(2,445)	(2,651)
5,058	8,587	(211)	873
(574)	(520)	(245)	(538)
(3,686)	(6,068)	(2,445)	(2,651)
798	1,999	(2,901)	(2,316)
9,480	10,502	3,654	4,107
(8,682)	(8,503)	(6,555)	(6,423)
798	1,999	(2,901)	(2,316)

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Sri Lanka Telecom PLC

Notes to the Interim Condensed Consolidated Financial Statements

For the quarter ended 30 September 2024.

Reporting Entity

Sri Lanka Telecom PLC (the 'Company') is a company domiciled in Sri Lanka. The address of the Company's registered office is Lotus Road, Colombo 1. The interim condensed separate financial statements relate to Sri Lanka Telecom PLC. These interim condensed consolidated financial statements ('interim financial statements') as of 30 September 2024 and for the nine months ended 30 September 2024 comprise the Company and its subsidiaries (together referred to as the 'Group').

The Group is primarily involved in providing a broad portfolio of telecommunication services across Sri Lanka. In addition, the range of services provided by the Group include, inter-alia, internet services, data services, domestic and international leased circuits, broadband, satellite uplink, maritime transmission, IPTV service and directory publishing service. The Company is listed on the Colombo Stock Exchange.

Basis of accounting

These interim condensed consolidated financial statements have been prepared in accordance with Sri Lanka Accounting Standard - LKAS 34, 'Interim Financial Reporting' and do not include all the information required for a complete set of SLFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Group's financial position and performance since the last audited financial statements as of 31 December 2023 and for the year ended 31 December 2023.

These interim financial statements were authorized for issue by the Company's Board of Directors on 13 November 2024.

Significant accounting policies

The accounting policies applied in these interim financial statements are the same as those applied in the audited financial statement as of 31 December 2023 and for the year ended 31 December 2023.

IV. Use of Judgments and estimates

The management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense when preparing these interim financial statements. Actual results may differ from these estimates.

The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation were the same as those applied to the audited financial statements as of 31 December 2023 and for the year ended 31 December 2023.

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Sri Lanka Telecom PLC

Notes to the Interim Condensed Consolidated Financial Statements

For the quarter ended 30 September 2024.

Operating segments

Information relevant to the operating segments are presented in a method consistent with the management reporting provided to those charged with governance.

Information about reportable segments (All amounts in Rs.Mn)

	Fixed ICT	Mobile	IPTV	Other Segments	Total
	Operations	Operations	operation *	Operations**
	Jan - Sep	Jan - Sep	Jan - Sep	Jan - Sep	Jan - Sep

	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023

External revenues	48,354	47,608	32,411	30,764	199	127	1,126	1,940	82,090	80,439

Inter- segment revenue	4,702	4,527	1,025	1,075	2,870	2,930	1,715	711	10,312	9,243

Reportable segment
revenue	53,056	52,135	33,436	31,839	3,069	3,057	2,841	2,651	92,402	89,682
Reportable segment
profit /(loss) - before tax	1,765	(1,434)	439	(1,013)	888	615	(119)	(122)	2,973	(1,954)

Interest expenses &	(5,362)	(7,395)	(1,515)	(1,081)	-	-	(37)	(43)	(6,914)	(8,519)
Finance costs
Foreign exchange gain /	(77)	(112)	513	618	182	420	-	-	618	926
(loss)
Interest income	501	850	210	312	6	2	10	6	727	1,170

Depreciation and	(14,140)	(13,506)	(7,970)	(7,842)	(116)	(41)	(24)	(22)	(22,250)	(21,411)
amortization

IPTV operation is identified as a reportable segment in accordance with quantitative thresholds as per SLFRS 8 -Operating Segments.

	Jan - Sep	Jan -Sep
Revenues	2024	2023

Total revenue for reportable segments	89,561	87,031

Revenue for other segments	2,841	2,651
Reportable segment revenue	92,402	89,682

Elimination of inter- segment revenue	(10,312)	(9,243)
Consolidated revenue	82,090	80,439

Profit or loss


Total profit for reportable segments	3,092	(1,832)
Profit or (loss) for other segments	(119)	(122)
Reportable segment profit before tax before elimination	2.973	(1,954)

Inter- segment profits adjustment	(58)	202
Consolidated profit or (loss) before tax	2,915	(1,752)
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Sri Lanka Telecom PLC

Notes to the Interim Condensed Consolidated Financial Statements

For the quarter ended 30 September 2024.

Operating segments (Continued) Assets & Liabilities

			30 Sep	31 Dec
			2024	2023

		Assets

		Total assets for reportable segments	270,957	270,126
		Assets for other segments	2,753	1,806
			273,710	271,932
		Elimination of inter - segment assets	(28,385)	(25,594)
		Consolidated total assets	245,325	246,338


		Liabilities

		Total liabilities for reportable segments	167,668	168,090
		Liabilities for other segments	2,180	1,138
			169,848	169,228
		Elimination of inter- segment liabilities	(13,949)	(11,275)
		Consolidated total liabilities	155,899	157,953

VI.	Seasonal or cyclical factors

The operations of the Group were not significantly affected by any seasonal or cyclical factors.

Impact on Property, Plant and Equipment
The Group has assessed the impact on property, plant and equipment and spectrum assigned to the Group. The Group will continue to take proactive measures to mitigate any potential impact and will continue its contingency plans and risk management measures as the situation evolves.

VII.	Property Plant and equipment

Acquisitions and Disposals
1. During the nine months ended 30 September 2024, the Group acquired assets at a cost of Rs 18,526 Mn (nine months ended 30 September 2023- Rs.22,069 Mn).
2. Assets with a written down value of Rs.13 Mn were disposed during the nine months ended 30 September 2024 (nine months ended 30 September 2023 written down value of Rs 48 Mn), resulting in a gain on disposal of Rs.302 Mn (nine months ended 30 September 2023 gain of Rs.268 Mn), which was included in 'Other Income' in the Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Impairment of Property, plant and equipment
During the nine months ended 30 September 2024 Company has recognized a reversal of impairment of Rs.91 Mn on IPTV. (Nine months ended 30th September 2023 impairment loss of Rs. 91 Mn and Rs. 320 Mn has been recognized on IPTV assets and LTE assets respectively)

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Sri Lanka Telecom PLC

Notes to the Interim Condensed Consolidated Financial Statements

For the quarter ended 30 September 2024.

Capital commitments.

		Group (Rs. Mn)	Company (Rs. Mn)
		30 Sep 2024	31 Dec 2023	30 Sep 2024	31 Dec 2023

	Property plant and equipment

	Approved but not contracted	6,892	15,188	4,455	7,960
	Approved and contracted	13,995	19,009	9,048	14,218

VIII.	Capital and Reserves
(a)	Stated Capital
Stated capital of the Company consists of 1,804,860,000 ordinary shares.
IX.	Loans and Borrowings

Material additions to loans and borrowings at Group level for the year under review:

Additions	Currency	Amount (Rs. Mn.)
Bank loan - 30 Sep 2024	LKR	49,085

Material repayment of loans and borrowings at Group level for the period under review:

Repayments	Currency	Amount (Rs. Mn.)
Bank loan - 30 Sep 2024	LKR	42,722

X.	Contingencies

There were no significant changes to the list of contingencies disclosed in the latest annual report of 2023 and interim condensed consolidated financial statements for the quarter ended 30 September 2024.

XI.	Related Parties

Material related party transactions during the period under review:

Company	Nature of Transaction	Transaction Value (Rs. Mn)	Amount due from/(to) related
					parties (Rs. Mn)
			30 Sep 2024	30 Sep 2023	30 Sep 2024	31 Dec 2023

	Mobitel	Sale of goods and	4,600	4,413	1,886	1,941
	(Private)	services
	Limited	Purchase of goods and	1,154	1,174	(6,444)	(3,072)
		services
XII.	Restatement of prior year balances

Prior year Depreciation amounting to Rs.337 Mn and related deferred tax impact of Rs.101 Mn adjusted in the retained earnings, Property, plant and equipment (PPE) and deferred tax liability of the company and group.

XIII.

Disposal of Talentfort (Pvt) Ltd

On 30 August 2024, the Company sold 100% of its investment in Talentfort (Pvt) Ltd for Rs.80 Mn and net assets at disposal was Rs.35 Mn. The Group reported a disposal gain of Rs.45 Mn.

XIV.	Events after the Reporting date

No material events have arisen since the date of the statement of financial position up to the date of this report which require changes to, or disclosure in the financial statements.

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