GP Q1 profit drops 53pc on higher finance costs, tax expenses

Grameenphone's net profit for the first quarter of 2025 plunged 53 per cent year on year to Tk 6.34 billion, owing to sharp declines in data pricing amid lingering macroeconomic pressures.

The leading telecom operator's earnings per share stood at Tk 4.69 for the January-March quarter as against Tk 9.91 in the same quarter a year earlier, according to its quarterly financial statements published on Thursday.

The GP reported Tk 38.34 billion in revenue for the March quarter, registering 2.5 per cent year-on-year de-growth, primarily driven by cautious consumer spending, particularly on data, amid a challenging macroeconomic environment.

The company attributed the decline to weaker pricing in the data segment, which saw a 17 per cent fall in rates.

"Although we're still navigating through the challenges of this difficult macro environment, with the strategic measures we've put in place, our financial performance is improving," said Yasir Azman, chief executive officer of Grameenphone, in a statement.

The market leader's total subscriber base increased by 0.50 million in three months to 84.8 million at the end of March this year and 57 per cent of them are using internet services.

GP said it is continuing to invest in network and IT transformation as part of its shift towards a more digital-centric model.

"Each quarter, we're driving significant IT transformation initiatives that are boosting service reliability and delivering highly personalized experiences," said Mr Azman.

Otto Magne Risbakk, chief financial officer of GP, said the drop in profit was partly due to a one-off tax reversal in the previous year. Excluding that, net profit fell 24.9 per cent.

GP's income tax expenses soared 256 per cent year-on-year to Tk 4.67 billion in January-March quarter this year.

"The decline mainly reflects lower revenue, higher costs and depreciation from continued network modernisation, and higher finance costs due to balanced sheet restatements from a weaker BDT," said the CFO.

Despite the fall in net earnings, Grameenphone maintained earnings before interest, taxes, depreciation, and amortization (EBITDA) of Tk 22 billion, with a margin above 57 per cent.

Average revenue per user (ARPU) rose during the quarter after two consecutive quarters of decline, indicating a potential stabilisation in consumer spending, said Mr Risbakk.

"We are stepping into a new era of innovation through the transformation of our IT and network infrastructure, laying the foundation for a data- and digital-centric economy in the country," said Mr Azman.

Grameenphone also reported progress on its digital inclusion initiative, saying it had trained over 220,000 individuals in the quarter, most of them women from marginalised communities.

Despite macroeconomic headwinds continuing to challenge, the company remained focused on strategy and forged ahead with investment plans to support growth opportunities, he added.

GP invested more than Tk 4.8 billion in the January-March quarter for better network coverage and expansion, focusing mainly towards the 4G network to ensure enhanced network experience for customers.

Annual performance

Despite the challenging macroeconomic environment, GP secured a 10 per cent year-on-year growth in profit to Tk 36.4 billion in 2024, the highest profit in three years, supported by strong balance sheet and operational efficiency.

Based on profit growth, the telecom operator paid 330 per cent cash dividend in total for the year, the highest-ever dividend since listing, after paying 13-year lowest cash dividend in 2023.

GP stock closed at Tk 320.5 on Thursday, losing 0.25 per cent over the previous day on the Dhaka Stock Exchange.

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