BSCCL earnings zoom 115% in 3 years

Bangladesh Submarine Cable Company Limited (BSCCL), a core telecommunications service provider and international submarine cable operator of Bangladesh, earnings zoom of 155 per cent in the third quarter of the last three years.

As per the last financial statement of BSCCL EPS was Tk3.70 for January-March of 2022, Tk2.93 for January-March of 2021 and Tk1.72 for 2020 for the same period.

Due to increase in revenue there was no significant additional expenditure against the increased revenue. There were no extraordinary transactions during this period, said the company.

The government has decided to open up the submarine cable business to the private firms. Six companies have already applied. 

Private International Terrestrial Cable (ITC) license holders joined the market share of international bandwidth in Bangladesh by lowering tariff which forced BSCCL to revise the tariff of its IPLC and IP transit services downward.

It could hamper BSCCL’s revenue growth potential, said EBL Securities in an equity note.

As of now, BSCCL still holds more than 60 per cent of the international bandwidth market of the country.

BSCCL Company Secretary Abdus Salam Khan declined to comment on the matter.

The Bandwidth consumption in March-22 was 3,440gbps. Out of the total consumption, BSCCL has supplied 650gbps through SMW-4 (South East Asia–Middle East–Western Europe 4) and 1,440gbps through SMW-5 (South East Asia–Middle East–Western Europe 5).

BSCCL net operating cash flow per share (NOCFS) increased by 107 per cent for July 2021-March 2022 from Tk6.59 for July 2020-March 2021, a significant increase in operating cash flow.

BSCCL has emphasized revenue collection and taken some stern steps for realization of the cash received from clients.

BSCCL has reported 30.22 per cent revenue growth and 43.80 per cent net profit for the 9-month FY22.

The company’s profitability margins have soared owing to the company’s increase in its total capacity and capacity utilization as the direct cost of operation for BSCCL is mostly of static nature.

BSCCL’s gross profit margin (GPM) and net profit margin (NPM) was reported at 84.56 per cent and 56.43 per cent respectively which was only 56.39 per cent and 5.21 per cent in the FY-18 respectively.

BSCCL earned the highest revenue from IPLC (International Private Leased Circuits) rent and IP transit services.

Contribution from IP transit services has shown an upward trend and has reached Tk108.16 crore or 25.52 per cent in the FY-22 (9m Ann.) from Tk45.93 crore or 18.64 per cent contribution in the FY-20, according to the statement.

BSCCL has large capacity of unutilized west bound capacity (from Sri Lanka to France/Italy) from its SMW-5 submarine cable.

BSCCL has been trying to lease the unutilized capacity and has already earned Tk1.48 crore in the 9-month FY-22 as export income by leasing its capacity to Saudi Telecom Company and Orange S.A. (France Telecommunication Company).

BSCCL has also agreed to export 200gbps capacity of SMW-5 to Telecom Malaysia for a period of 10 years. BSCCL may continue to increase its IPLC export by leasing its unutilized capacity.

BSCCL has progressively increased its cash dividend per share. The cash dividend per share was 1.60, 2.00 and 3.70 in the FY-19, FY-20 and FY-21 respectively.

However, the dividend payout ratio has declined from 45.0 per cent in the FY-19 to 36.4 per cent in the FY-20 and 32.0 per cent in the FY-21 respectively as BSCCL wanted to retain most of its profits to finance its capital expenditures.

BSCCL is expected to give Tk4 cash dividend per share for FY-22, said an equity note.