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 |
