GP’s profit down despite higher revenue

Grameenphone's net profit dropped 8.2 per cent year-on-year to Tk 3,413 crore in 2021 despite an uptick in overall revenue, owing to higher finance costs and tax expenses.

The largest mobile phone operator in Bangladesh took home Tk 14,306 crore in revenue, against Tk 13,960 crore in 2020, up 2.5 per cent, according to its financial statement for 2021.

Yasir Azman, chief executive officer of Grameenphone, said the ongoing pandemic brought about several hurdles in 2021, as Bangladesh faced its highest wave of Covid-19, followed by lockdowns.

"The resilience of our employees, partners, stakeholders and local communities has enabled us to continue providing seamless connectivity to our customers," he said in a press release.

The board has recommended a 125 per cent interim cash dividend for 2021, taking the total to 250 per cent for the entire year. GP shares closed 1.13 per cent lower at Tk 351.40 on the Dhaka Stock Exchange yesterday.

Throughout the year, the operator prioritised network rollout and spectrum deployment, leading to an improved and enhanced experience for customers.

Additionally, with operational execution, customer-centric product propositions, digitalisation of services and digital enablement, more subscribers opted to choose Grameenphone as their preferred digital and telecommunications service provider, Azman said in a press release.

In the fourth quarter of 2021, it invested Tk 654 crore for network coverage and expansion. The net profit margin for 2021 stood at 23.9 per cent.

Grameenphone has reported an improved financial performance in 2021, driven by higher users and usage due to network and experience enhancement, said Jens Becker, chief financial officer of the operator.

In the fourth quarter, subscription and traffic revenues grew by 3.6 per cent while data usage rose 49 per cent from the same period last year.

Due to the favourable one-off adjustments in finance cost and tax expenses in the fourth quarter of last year, the profit declined, he added.

Net finance costs rose to Tk 251 crore in 2021, which was Tk 63 crore in the previous year. Income tax expenses rose 4 per cent to Tk 2,669 crore, the report showed. The operator acquired 42 lakh new subscribers in 2021, up 5.3 per cent, year-on-year. It had 8.33 crore subscribers in December.

Around 54 per cent of the subscribers, or 4.46 crore, use internet services. Its internet users are growing at 8 per cent annually.

As a part of its strategic ambition, GP has stepped up the transformation initiatives to respond to the changing demands of advanced mobile services from customers, Azman said.

Modernisation was a key focus in 2021, focusing on operating models, integration of automation, up-skilling of skills and building capabilities.