More revenue, yet Grameenphone sees lower profit in March quarter

Infographic: TBS

Grameenphone, the country's leading telecom operator, has reported a 3.7% year-on-year decline in its net profit after taxes in the January to March quarter of the fiscal 2022-23, despite posting a higher revenue. 

In the quarter, the company's revenue grew by 2.8% year-on-year and stood at Tk3,735 crore, net profit stood at Tk780 crore, and earnings per share at Tk5.77, according to a disclosure by the company on the Dhaka Stock Exchange (DSE) website on Wednesday. 

The company's Chief Financial Officer (CFO) Jens Becker said in a press statement that the net profit declined because of increase in depreciation from spectrum acquisition, rollout of new sites, and higher finance costs. 

Spectrum relates to the radio frequencies allocated to the mobile industry for communication over the airwaves.

"Grameenphone has maintained growth for eight consecutive quarters even amid increasing economic challenges like inflation, hikes in energy prices, and dwindling foreign exchange reserve," said the CFO. 

The company's total revenue increased, riding on growth in mobile communications. Out of the Tk3,735 crore, 98.5% or Tk3,678 crore was from mobile communications which includes both data and voice revenue. 

Data revenue alone grew by 14.2% year-on-year driven by higher usage and it was the key factor that helped the revenue grow, he added. 

Also, Grameenphone's earnings before adjusting interests, taxes, depreciations, and amortisations increased by 2.7% in March quarter, maintaining a strong margin of 61%. 

During the quarter, the company invested Tk690 crore in developing its 4G network, expanding its coverage, and deploying spectrum. The company paid around Tk2,400 crore, which is 64.1% of its total revenue, to the national exchequer in the form of taxes, VAT, duties, fees, 4G licence, and spectrum assignment during the first three months of 2023, he added. 

Yasir Azman, the company's CEO said in the press statement "In January this year, the regulatory ban on the sale of SIM cards was removed after the regulator's repeated evaluation of Grameenphone's network strength. With the resumption of SIM sales, our subscriber base has returned to growth, crossing the 80 million milestone."

"Our focus on continuous network investment has resulted in significant progress through spectrum and site rollout. We have doubled fibre connectivity and rolled out over 20,000 total sites."

He further said, "We have undertaken significant efforts to revamp our product portfolio, streamlining it to make it simpler and more effective for our customers. However, this was necessary to ensure our offerings are focused and effective, meeting our customers' evolving needs."

Grameenphone shares, having a face value of Tk10 apiece, have been stuck on the floor price of Tk286.6 for more than seven months on the DSE.