Massive expending eats up Robi’s profits

Robi Axiata Limited, the country’s second-largest mobile operator, posted a less-than-expected profit growth in the first nine months (January-September) of the year 2022, thanks to heavily inflated capital expenditures, eating up its profits.

The company logged Tk 56.85 crore in net profit in January-September this year which was 66.03 per cent lower than the profit of Tk 167.38 crore in the same period last year.

The multinational network service provider posted a net profit of Tk 29.2 crore in the third quarter (July-September) this year versus Tk 86.45 crore in the same period last year, according to its Q3 financial statement revealed on Saturday.

The company registered Tk 2,207.4 crore in revenue in July-September this year, totaling the amount to Tk 6,331.7 crore in the first three quarters the same year.

Commenting on the financial progress, M Riyaaz Rasheed, acting chief executive officer of Robi said, “We are very animated with the growth we ensured in recent times. The profitability, however, remained low due to the heavily inflated capital expenditures.”

“High depreciation and amortisation costs fueled by the sustained Capex investment squeezed our profit margin in the last few quarters. But we envision scaling up our business which cannot happen simultaneously with a long-term sustainable growth in profit margin,” he added.

“We are firmly determined to bring an end to this long-haul journey, and we are calling our investors to be a part of our exhilarating journey coming ahead,” Rasheed continued.

The large-cap company’s earnings per share (EPS) stood at Tk 0.06 for the third quarter of 2022 which was Tk 0.17 for Q3 of 2021.

Its EPS stood at Tk 0.11 for January-September of 2022 against Tk 0.32 for the same period last year.

Referring to the competitive positioning in the industry, Robi’s acting CEO said, “When the service quality and network coverage come together, Robi is the undeniably top operator to customers.”

“Customers are leaning towards us at an increasingly accelerated pace, reflecting the thing that about 51 per cent of our total subscribers are 4G users.”

Robi’s subscriber base declined by 0.3 per cent to 5.44 crore in July-September this year compared to the number in the Q2, 2022.

This quality subscriber acquisition drive led to this slight dip in the subscriber base, the company claimed.

The subscriber base, however, grew by 2.5 per cent in July-September this year on a year-on-year basis.

The company’s data subscriber base grew by 1.5 per cent to 4.11 crore in the third quarter of this year against the number in Q2, 2022.

The data subscriber base grew by 4.8 per cent year-on-year in July-September this year.

Robi maintained its leadership in providing the 4G network in this July-September with 50.9 per cent of its total subscribers being 4G users.

At the end of September 2022, the company had 2.76 crores 4G subscribers, which was 4.9 per cent up compared to the same quarter last year.

Robi paid Tk 1,012.2 crore as taxes to the government exchequer in the third quarter of 2022 which was 45.9 per cent of its total revenue for the quarter.

The company made a Capex investment of Tk 555.5 crore in the same quarter.

The company reported a net asset value (NAV) per share of Tk 12.55 for the nine months that ended in September 2022.

Robi made its debut on the Dhaka Stock Exchange (DSE) on December 24, 2020. Its shares were traded at Tk 30 per share on the trading floor of the DSE on Thursday.