Modernisation cost, currency devaluation pulls down Grameenphone’s quarterly profit

Grameenphone, the country's largest mobile network operator, has reported that its first-quarter net profit was badly affected by an increase in the modernisation cost and currency devaluation.

During the January-March quarter of this year, its net profit fell by 9% to Tk809.81 crore, while the revenue increased by 4% to reach Tk3,633 crore.

Jens Becker, the chief financial officer of Grameenphone, said in a presentation on the quarterly financial statement, "The net profit after tax was negatively impacted by modernisation cost and currency devaluation. The net profit margin for the first quarter of 2022 stood at 22.3%, which was 25.6% at the same time a year ago."

A declining profit affected the Grameenphone shares price, where its value fell by 1.96% on Wednesday from the previous session's closing price on the Dhaka Stock Exchange. The shares closed at Tk320.50 each.

According to the Grameenphone financial statement, its amortisation cost increased by 16% and incurred a loss of Tk29 crore from the foreign currency exchange due to a surge in dollar price.

The company said in the presentation the growth in subscribers and traffic revenue was mainly driven by growth in bundle and data, supported by spectrum, site roll-out and enhanced market initiatives. During the first quarter, its bundle revenue increased by 4 times to reach Tk511 crore.

Meanwhile, Grameenphone said in the press release, that in the first three months, the company acquired 0.5 million new subscribers, reaching 83.7 million total subscribers. And 53.2% of Grameenphone's total subscribers, or 44.6 million, are using internet services, growing by 6.8% from the same period last year.

"The first three months of 2022 saw an improving top-line growth coupled with continued growth in EBITDA. Subscription and traffic revenues for the quarter grew by 4.6% from the same period last year. Data revenue grew by 7.5% year-on-year while data usage grew by 76.8%," said Jens Becker.

Yasir Azman, chief executive officer of Grameenphone, said the regulator held the country's largest spectrum auction in March, where Grameenphone participated and bid for the maximum allowable 60 MHz of 2.6 GHz spectrum. Very recently, Grameenphone also launched e-SIM for the first time in the country, allowing customers to opt for mobile connectivity without the need for a physical SIM card in their handsets."

"As we enter the third year of the global Covid-19 pandemic, the situation in Bangladesh remains steady, as the economy regains momentum with very low cases being registered in the country. Throughout the quarter, we continued to prioritise network and spectrum rollout, leading to an improved and enhanced experience for our customers," he added.

He also said, "Our ongoing modernisation and transformation journey is starting to show results, benefiting us in building a future-fit company with the right mix of competency, capabilities, tools and partnerships, and will continue to serve as an enabler for our future growth."

In that quarter, the company invested Tk390 crore to expand the 4G network and coverage.