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Management Discussion and Analysis

Investor capital

SLT’s investors are the individuals and institutions that provide the financial capital that is essential to the Company’s investments and development. Investors expect reciprocal return on their investment in the short, medium, and long-term, which SLT provides through value adding processes that create value for the Company and its customers, and in turn delivers value to key stakeholders. SLT works to nurture relationships with its investors through mutual trust and accountability.

Shareholder profile

The two major shareholders of Sri Lanka Telecom PLC (SLT) as at 31 December 2019 were the Government of Sri Lanka holding a 49.50% stake through the Secretary to the Treasury, and Global Telecommunications Holdings N.V. (GTH) holding a 44.98% stake. The remaining 5.52% of shares are publicly traded on the Colombo Stock Exchange.

Government of Sri Lanka

The Government of Sri Lanka (GoSL) is the primary shareholder of SLT, which offers many consumers a feeling of reassurance and confidence in the quality of our products and the level of service we offer.

Global Telecommunication Holdings N.V.

Global Telecommunications Holdings N.V. is the holding company of Maxis, the Malaysia-based telecommunication company. Maxis provides technical and telecommunication expertise and assistance to SLT.

Stability

SLT plays a key role in the development of the country. In view of this, the stability and long-term viability of the Company is of great importance to stakeholders and the country.

Fitch Ratings

SLT’s ratings are constrained by the sovereign rating as per Fitch’s Parent and Subsidiary Rating Linkage criteria. Fitch Ratings revised their outlook on SLT's National Long-Term Rating to Negative from Stable, following the downgrade of Sri Lanka's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs), with the rating affirmed at "AA+(lka)". The National Rating on SLT's outstanding senior unsecured debentures was also reaffirmed at "AA+(lka)".

Investor relations

SLT engages with its shareholders and associated parties via various means including press releases, interim financial results, the Annual General Meeting, our website, and announcements on the Colombo Stock Exchange. SLT’s Annual Report offers comprehensive details on all relevant financial and non-financial information.

Distribution of shares

Resident Non-resident Total
Shareholdings No. of
shareholders
No. of
shares
(%) No. of
shareholders
No. of
shares
(%) No. of
shareholders
No. of
shares
(%)
1 – 1,000 shares 9,835 2,891,093 0.16 12 4,447 0.00 9,847 2,895,540 0.16
1,001 – 10,000 shares 2,251 8,824,000 0.49 22 109,575 0.01 2,273 8,933,575 0.50
10,001 – 100,000 shares 214 4,551,425 0.25 8 331,734 0.02 222 4,883,159 0.27
100,001 – 1,000,000 shares 6 1,140,375 0.06 0 0 0.00 6 1,140,375 0.06
Over 1,000,000 shares 8 975,249,482 54.03 1 811,757,869 44.98 9 1,787,007,351 99.01
12,314 992,656,375 54.99 43 812,203,625 45.01 12,357 1,804,860,000 100.00

Categories of shareholders

Category Number of
shareholders
Number of
shares
Individual 12,212 15,716,173
Institution 145 1,789,143,827
12,357 1,804,860,000

List of 20 major shareholders as at 31 December 2019

Name Shareholding %
1. Secretary to the Treasury 893,405,709 49.50
2. Global Telecommunications Holdings NV 811,757,869 44.98
3. Employees Provident Fund 25,324,104 1.40
4. Bank of Ceylon A/C Ceybank Unit Trust 18,697,853 1.04
5. Sri Lanka Insurance Corporation Ltd – Life Fund 17,713,735 0.98
6. National Savings Bank 13,158,700 0.73
7. Employees Trust Fund 3,302,188 0.18
8. Sri Lanka Insurance Corporation Ltd – General Fund 2,041,538 0.11
9. Bank of Ceylon A/C Ceybank Century Growth Fund 1,605,655 0.09
10. Sampath Bank PLC/Mr D K L Chandrasena 249,485 0.01
11. The Incorporated Trustees of the Church of Ceylon 223,590 0.01
12. Bank of Ceylon No. 1 Account 214,000 0.01
13. Pinnacle Trust (Pvt) Limited 183,984 0.01
14. Ceylon Biscuits Limited 161,825 0.01
15. Sinharaja Hills Plantation Pvt Limited 107,491 0.01
16. Mr Deraniyagala 100,000 0.01
17. Mrs Edirisinghe 100,000 0.01
18. Mr Tanaka 100,000 0.01
19. Mr Weerasinghe 70,000 0.00
20. Mr Munasinghe 69,400 0.00
1,788,587,126 99.10

Float adjusted Market Capitalisation as at 31 December 2019 – LKR 3,178,141,876

Percentage of public holding as at 31 December 2019 – 5.52%

Number of shareholders representing the public holding as at 31 December 2019 – 12,353

The Company does not comply with the minimum public holding requirements of the CSE. However, the Board of Directors of the Company has agreed in principle to carry out a private placement in order to comply with the minimum public shareholding as per CSE Rule No. 7.13.1 (a)

Ratios and market price information

Share price trend

2019 2018 2017 2016 2015 2014 2013 2012 2011
Highest value (LKR) 34.50 30.00 36.70 46.40 54.90 57.30 50.00 50.00 64.50
Lowest value (LKR) 19.60 18.90 27.00 31.20 43.00 33.33 36.10 34.00 44.00
Last traded price (LKR) 31.90 23.40 28.50 36.00 47.00 49.90 37.00 44.50 48.00
Market capitalisation (LKR Bn.) 57.57 42.23 51.43 64.97 84.83 90.00 66.78 80.32 86.63

Trading activity

2019 2018 2017
No. of transactions 5,576 3,195 3,149
No. of shares traded 2,718,416 1,113,157 1,463,787
Value of shares traded (LKR) 76,016,539 26,852,883 46,137,965

Equity – Group

2019 2018 2017
Earnings per share (LKR) 3.50 2.74 2.18
Net assets per share (LKR) 43.25 40.82 39.56
Debt/Equity Ratio (No. of times) 0.93 0.76 0.59
Quick asset ratio (No. of times current liabilities) 0.77 0.82 0.48
Interest cover
(Earnings before interest and taxes divided by interest expense)
1.47 1.77 2.02
Dividend pay-out ratio (%) 30.26 38.66 40.77
Dividend per share (LKR) 1.06 1.06 0.89

Debt information – Company

Interest rate of comparable Government security (%) 10.16
Debt/Equity ratio – (No. of times) 0.88
Interest cover – (No. of times) 0.99
Quick Asset Ratio – (No. of times) current liabilities 0.74
Market prices and yield during the year (Ex-interest)
Highest Debenture Price Debentures were not traded during the year 2019.
Lowest price
Last traded price
Any changes in credit rating (for the entity for any other instruments issued by the entity) if applicable Fitch Rating – See page 46

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