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Grameenphone’s profit decline by 22% amid pandemic

  • Published at 01:54 pm July 15th, 2020
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File photo of Telenor's logo is seen in central Belgrade, Serbia, March 21, 2018 Reuters

Meanwhile, the company has declared 130% interim cash dividend for the first half of year 2020

The largest market-cap company of the country’s prime bourse, Grameenphone (GP) Limited’s net profit after taxes has fallen by 22% in the second quarter (April to June) of 2020 compared to the same period of 2019, possibly due to the Covid-19 pandemic.

The mobile operator reported total revenues of Tk33.1 billion for the period, registering an 8.2% de-growth from the same period last year.

The company made the official disclosure on the Dhaka Stock Exchange (DSE) website on Wednesday, much to the frustration of both retail and institutional investors alike.

Meanwhile, the company has declared 130% interim cash dividend for the first half of year 2020.

Grameenphone CEO Yasir Azman said in an official statement about the significant fall of earnings: “For the past four months, we have been experiencing the impact of an unprecedented global pandemic which has driven us to drastically change our way of work and how we serve our customers.  In addition to Covid-19, we have experienced impact from challenging weather and regulatory scenarios, all of which combined has driven us to a de-growth in our performance compared to last year.”

“While we have had our fair share of struggles, as an essential service, we prioritized ensuring uninterrupted services for our customers across the country,” he said.

Yasir Azman also said: “We worked relentlessly with our partners, stakeholders, law enforcement and local communities during severe weather conditions, resulting in fast recovery from network outage post Cyclone Amphan.”

GP reported total revenues of Tk 33.1 billion for the second quarter of 2020, registering an 8.2% de-growth from the same period last year. Net profit after taxes for the second quarter was Tk7.3 billion, with 22% margin. Earnings per share (EPS) for the period stood at Tk5.38. The operator reported 74.5 million total customers, of which 54.8%, or 40.8 million, are internet customers.

“The second quarter of 2020 has been challenging for Grameenphone as we experienced an overall slow-down of economy due to the general holidays which started to gradually recover from May,” said Jens Becker, CFO of Grameenphone.

During the second quarter, the company invested Tk2.5 billion for network coverage, adding 132 new 4G sites to their network. The total number of sites stands at 16,557. The company has paid Tk46.4 billion, equaling 67% of its total revenues, to the national exchequer in the form of taxes, VAT, duties, fees, 4G license and spectrum assignment.

GP was listed on the Dhaka bourse in 2009. The company’s paid-up capital is Tk1,350 crore. The sponsor-directors own 90% stake in the company, while institutional investors own 4.2%, foreign investors 3.92% and the general public 2.6% as of December 31, 2019.