Sri Lanka Telecom has reported a 19% year-on-year decrease in group net profit for the first quarter of 2018, blaming increased depreciation and amortization costs as a result of its large network investments in recent years.
Post-tax profit fell to 1.2 billion rupees ($7.58 million), largely as a result of a 12.8% increase in group depreciation and amortization to 4.5 billion rupees.
SLT has been spending heavily to deploy and expand LTE, FTTH, IPTV, the National Backbone Network, global connectivity and mobile services. This includes SLT's investment in the SEA-ME-WE 5 subsea cable system and the country's first purpose built Tier 3 data center.
This expansion meanwhile led to a 4.7% year-on-year increase in operating expenses for the quarter to 13.7 billion rupees.
Group revenue for the quarter by contrast increased 5.9% to 19.8 billion rupees, while EBITDA increased 8.5% to 6.1 billion rupees.
“Despite the higher depreciation and amortization challenging the profitability, these investments have largely enhanced the company asset base,” SLT chairman Kumarasinghe Sirisena said in a statement.
“Further the company expects robust profitability in the future by sustainable growth in revenues through capacity utilizations and effective cost management.”