GP's profit shrinks in Q2, driven by higher costs, foreign exchange loss

Grameenphone's profit dropped almost 28 per cent year-on-year to Tk 8.61 billion in the April-June quarter this year, owing to higher operational costs and foreign exchange loss.

The leading telecom company's revenue, however, grew 5.6 per cent year-on-year to Tk 42.2 billion in the second quarter through June this year, riding on a higher subscriber base, according to its financial statements published on Tuesday.

"We saw good trends on average revenue per unit (ARPU) and subscriber sides and increased our growth rate to 6.4 per cent year-on-year in subscription & traffic revenue, up from 5.2 per cent in the previous quarter," said Otto Risbakk, CFO of GP, in a statement.

Average revenue per unit (ARPU) measures the amount of money that a company earns from each customer.

By deploying new spectrum and new site rollout, the market leader added 2.3 million new subscribers in the latest quarter, expanding the customer base to 85.3 million while 58.3 per cent or 49.7 million subscribers used internet services.

GP, however, has reported a foreign exchange loss of Tk 802 million in the April-June quarter this year, as opposed to a profit of Tk 40 million in the same quarter last year.

The company's half-yearly profit, however, grew more than 11 per cent year-on-year to Tk 21.99 billion in January-June this year. Its revenue registered a 5.6 per cent growth to Tk 81.56 billion in the six months through June this year.

"Through relentless focus on efficiency and automation, we have been able to offset cost pressure and deliver solid earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 60.4 per cent in January-June this year," reads the statement.

EBITDA is a measure of profitability that shows earnings before interest, taxes, depreciation, and amortization.

Based on the profit in January-June this year, the board has declared a 160 per cent interim cash dividend, meaning investors will get Tk 16 per share or Tk 21.60 billion in total in interim dividends.

"The macroeconomic headwinds that have been prevalent since last year exacerbated due to central banks' continued tightening policies, calibration of energy prices while reducing subsidies, increase in supplementary duties and the effects of natural disasters such as cyclones and flood," said Yasir Azman, CEO of GP, in the statement.

Despite these challenges, GP remained focused on growth strategies and showed stability in performance by delivering consistent top-line growth.

"Our MyGP app continues to be the largest local self-service app in Bangladesh with a staggering 20 million monthly active users," said GP CEO.

With the help of AI technologies, GP introduced smart & adaptive strategies, such as an AI-powered dynamic network optimization system that delivers seamless connectivity based on real-time movement.

Meanwhile, the stock surged almost 2 per cent to Tk 249.3 per share on the Dhaka Stock Exchange on Tuesday as investors showed buying appetite in GP shares.

As one of the best performing blue-chip stocks, GP was deemed to have come down to a rational price level after more than 20 per cent correction since the removal of floor price.

Annual performance

GP posted a 10 per cent growth in profit year-on-year to Tk 33.06 billion in 2023, supported by higher revenue generated from increased voice only and data only services.

Despite higher earnings, GP declared a 125 per cent cash dividend, lowest in 13 years while its dividend payout ratio was the lowest in four years as the telecom operator had to spend more on dispute resolutions.

The company disbursed 220 per cent cash dividends for 2022.

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