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Bangladesh Submarine Cables' profit grew 18 per cent year-on-year to Tk 478 million in the third quarter (Q3) through March this year, mainly due to higher revenue and lower operating expenses.
The state-run entity's diluted earnings per share (EPS) stood at Tk 2.33 for January-March, up from Tk 1.99 for the same quarter a year ago.
The country's lone submarine cable-based internet bandwidth provider's overall revenue rose 2.26 percent year-on-year in the quarter while operating expenses were reduced by 16 per cent in January-March, compared to the same period last year, impacting the bottom line growth.
Following the earning's disclosure, the stock rose 1.47 per cent to Tk 123.9 per share on Tuesday on the Dhaka Stock Exchange.
However, the company's nine-month profit fell 17 per cent year-on-year to Tk 1.40 billion through March this year for a year-on-year decline in income in the previous two quarters (first quarter and second quarter).
The profits in Q1 and Q2 of FY25 were lower than in the same quarters a year ago, owing to a drop in revenue and an increase in operating and maintenance costs along with a jump in the number of shares, said the company in its earnings note.
The company's overall revenue slid 13 per cent year-on-year to Tk 2.94 billion in the nine months through March this year as its revenue from international private leased circuit (IPLC) rent fell 11 per cent and revenue from IP Transit service plunged 26 per cent compared to the same period of the previous year.
The revenue declined for a reduction in IPLC rent and IP transit service coupled with market competition and disconnection of default parties, said the company in its earnings note.
The management cut IPLC rent amid tough competition from International Terrestrial Cable (ITC) operators. Generally, more than 80 per cent of the revenue comes from this segment.
At the same time, the company issued more than 22.13 million new shares to the government in September last year against share money deposits, causing a dilution of the earnings, said the company.
The submarine cable disbursed shares at Tk 75 each, including a premium of Tk 65, against share money deposits worth Tk 1.66 billion, received between FY16 and FY17.
The EPS was further diluted as 18.09 million shares, yet to be issued against government funds worth Tk 1.35 billion received between FY22 and FY25, were taken into consideration in its calculation for the July-March period of FY25.
Hence, the diluted earnings per share slid to Tk 6.83 for July-March of FY25 from Tk 8.29 in the same period of the previous financial year.
The latest funds were given for the implementation of the project named "Installation of 3rd Submarine Cable for expansion of the International Telecommunications System of Bangladesh".
The new shares will be issued at Tk 75 each based on an earlier consent of the Ministry of Finance, Posts and Telecommunications Division and the Bangladesh Securities and Exchange Commission (BSEC).
A share money deposit is the money paid in exchange for shares that have not been acquired yet. The government has injected funds into the company for implementation of various projects since its 2008 inception.
The net operating cash flow per share, a measure of a company's ability to generate cash from its operations, came down to Tk 7.83 in the nine months through March this year from Tk 14.06 a year ago, mainly due to less collection of revenue and payment against expenses and new shares issued to the government.
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