Rising costs drag ADN Telecom profit despite strong revenue growth

Despite posting double-digit revenue growth, listed telecommunications company ADN Telecom saw its net profit fall sharply in the first half of the current fiscal year, weighed down by rising costs and narrowing margins.

According to the company's quarterly financial statements, ADN Telecom's consolidated revenue rose 12.73% year-on-year to Tk100.74 crore during the July–December period. However, its net profit declined 21% year-on-year to Tk8.10 crore over the same period.

The company attributed the profit drop mainly to higher costs. Quarterly reports show that the cost of services and goods sold increased by around 4%, while the gross profit margin declined despite revenue growth. The cost of sales accounted for 63.62% of total revenue in the first half of the fiscal year, up from 59.67% in the corresponding period of the previous year.

In addition, administrative and distribution expenses rose significantly compared to the same period last year, further pressuring profitability.

As a result, earnings per share (EPS) fell to Tk1.26 for the July–December period, down from Tk1.58 a year earlier.

Commenting on its performance, ADN Telecom said it maintained positive growth momentum, achieving nearly 13% year-on-year revenue growth during the period. The company said the increase was driven primarily by effective sales execution, particularly revenue from several projects.

However, the company acknowledged that multiple cost and margin pressures affected earnings. These included inflationary impacts across various expense categories, higher employee-related costs, changes in depreciation rates, and price erosion in certain services, all of which had an adverse impact on EPS.

Despite the challenges, ADN Telecom said it remains focused on improving operational efficiency, diversifying its business portfolio, and accelerating growth across multiple revenue streams to ensure sustainable long-term profitability.