Robi clocks 3.3% profit amid pandemic

Covid-19 has walloped businesses of all kinds. The telecoms sector, which served as an emergency service provider during the general holidays, also took a major blow.

However, the country's second-largest operator Robi Axiata showed its strength and resilience amid the crisis, recording a 3.3% profit in the second quarter of this year.

Robi's year-on-year profit of Tk58 crore came as a surprise because its revenue and subscriber base fell.

Meanwhile, the operator's investment in the period was around 45% lower quarter-on-quarter.

Cutting operational costs during the pandemic helped the operator make the profit, sources said.

ICT expert Sumon Ahmed Sabir said promotional expenditures and transport costs impact the profitability of an operator. "Due to following a 'work from home' system, Robi was able to save many resources. It did not have to spend money on transport.

"And less consumption of electricity at the office might have helped the operator to register the profit."

Robi cut around 9.7% operating costs quarter-on-quarter and 4.4% year-on-year, the company's financial statement reads.

The operator did the major cost-cutting at the network management and employee costs levels.

The employee costs were around 5.3% of the total operating costs in the second quarter of 2019 which was lowered to 2.9% in the second quarter of 2020.

Generally, the operators spend money on promotional activities to attract new customers.

As there were no such activities amid the pandemic, it helped Robi register a profit, said sources at Robi. 

In the second quarter of 2019, Robi's network management cost was 12.2% of its total expenses which was lowered to 10.8 % in the second quarter of 2020.

Robi's Chief Corporate and Regulatory Officer Shahed Alam told The Business Standard razor-sharp focus on cost optimisation and less direct cost due to pandemic helped the operator end the quarter with a reasonable profit. 

"Robi's profit was projected from a long time as it started to reap benefits from: its merger with Airtel, its widespread rollout of 4G, investment in its network, allowing over 300 employees to take VRS, and many more," said Shahed. 

Meanwhile, Robi's revenue fell by 5.16% in the second quarter of 2020 year-on-year. 

During April-June 2019, Robi's total revenue was Tk1,858 crore and dropped to Tk1,762 crore in the second quarter of 2020. 

However, the second-largest operator saw remarkable growth in data usage. 

In the second quarter of last year, the company's average data revenue was 28% of its total revenue, which rose to 36% in the first quarter of this year. 

In the last few years, Robi has heavily invested in network expansion, a merger with Airtel and spectrum renewal. 

The investment is paying off now, a source at Robi said.