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Robi Axiata posted a 5.52 per cent year-on-year profit growth to Tk 420 million for January-March, backed by higher revenue.
However, higher costs of revenue generation and foreign exchange loss kept Robi's profit from growing at an expected rate, said the company.
The taka becoming cheaper against the dollar multiplied the company's foreign exchange loss by 7.3 times year-on-year to Tk 756 million during the quarter ended in March.
Despite the loss, overall revenue increased 16 per cent year-on-year to Tk 23.48 billion in the three months, riding on voice and data revenue growth.
Robi Axiata has high foreign currency loan exposure. Hence, the loan burden went up in tandem with the appreciation of the dollar, about 25 per cent since the Russia-Ukraine war began last year.
The huge foreign exchange loss added to the financial expenses.
Higher financial leverage is one of the key reasons for Robi being a lower profit-making company, said Salim Afzal Shaown, head of research at BRAC EPL Stock Brokerage.
Robi Axiata is the second-largest telecom operator in terms of subscribers, revenue and profit and holds 30.2 per cent of the market share as of February.
It joined the stock market with the largest-ever initial public offering (IPO) in December 2020. It raised roughly Tk 5.24 billion from a wide range of investors including its own employees under the fixed-price method.
The company used the IPO proceeds for network expansion.
Asian telecom giant, Axiata Group Berhad, based in Malaysia, holds 61.82 per cent shares of Robi Axiata while Bharti Airtel holds 28.18 per cent stake. It offloaded 10 per cent shares in the stock market.
Robi made Tk 1.83 billion in annual profit in 2022 and declared a 7 per cent cash dividend, the highest since its listing in the stock market.
The company's share price has been languishing at the floor price of Tk 30 on the Dhaka Stock Exchange since August 4 last year.