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Tk devaluation, high inflation hit Robi hard in 2022

Staff Correspondent
20 Feb 2023 00:00:00 | Update: 20 Feb 2023 01:20:30
Tk devaluation, high inflation hit Robi hard in 2022

Robi Axiata, the second-largest telecom operator in Bangladesh, reported a flat financial performance in 2022 with registering a 1.66 per cent paltry growth in net profit against that in the previous year.

Meanwhile, the listed multinational’s revenue stood at Tk 8,586 last year which was only 5.4 per cent higher than the figure of Tk 8,142 crore in the previous year.

The company could secure paltry growth despite facing numerous hurdles in the year, according to the company’s annual financial statement revealed yesterday.

The company suffered a significant blow to its financials due mainly to a massive forex loss, knocking off nearly half of its net profit in 2022, the report says.

The network operator had expected to achieve a profit of around Tk 361 crore in the just concluded year, but it could fetch only Tk 182.7 crore, resulting in a potential loss of approximately Tk 179 crore.

A steep devaluation of the taka against the mighty dollar played a pivotal role to cause a massive forex loss for the company last year.

Owing to an unstable foreign currency exchange rate, as per its annual financial report, the company found it difficult to manage its financial operations efficiently.

Moreover, a slowdown in imports caused by the restriction on the LC openings also posed a major challenge for the telecom operator to stay afloat.

Rajeev Sethi, chief executive officer (CEO) of Robi, at a media brief, said that they had a disappointing year in 2022 due to a significant loss in foreign exchange and the enforcement of a 2 per cent of minimum tax by the country’s exchequer.

“Our profits almost halved in the last year due to these headwinds,” he claimed.

The company, however, was able to make gains by optimising its cost structure. It was still continuing to focus on cost optimisation to improve its bottom line, according to Rajeev Sethi.

Another significant setback that Robi faced during 2022 was the rising inflation in the country, Rajeev Sethi said adding that the soaring inflation rate made it difficult for the company to control its expenses, which also impacted its financial performance.

Additionally, the country’s industrial energy crisis also hampered its operations last year, the company’s financial report read.

While speaking, Rajeev Sethi expressed his concern about the data industry’s viability, saying, “Despite a 45 per cent increase in data traffic, our data revenue in 2022 increased only about 2 per cent compared to that in 2021.”

This happened due mainly to ever-sliding data prices induced by an aggressive price war in the industry, he stated.

“In absence of a data floor price, such a price war is rendering the data business unsustainable.”

The multinational’s consolidated net profit reached Tk 183.3 crore last year which was Tk 180.3 crore in the previous year.

But defying this slim growth, the company declared a 7 per cent cash dividend to its shareholders for 2022, the highest since its incorporation.

The publicly traded company’s earnings per share (EPS) stood at Tk 0.35 for the year ended in December 2022 from Tk 0.34 for the year ended in December 2021.

The telecom operator reported a net asset value (NAV) per share of Tk 12.82 for the year ended on December 31, 2022.

Its net asset value (NAV) per share was Tk 12.64 till December 2021.

The company’s net operating cash flow per share (NOCFPS) reached Tk 7.12 for 2022 which was Tk 6.22 for the year that ended on December 31, 2021.

Robi Axiata is a joint venture between Axiata Group Berhad of Malaysia and Bharti Airtel of India. Axiata holds a 68.7 per cent stake in the entity, while Bharti owns the remnant 31.3 per cent.

The company commenced operations in 1997 as Telekom Malaysia International (Bangladesh) with the brand name ‘Aktel’.

It was later rebranded as Robi in 2010.

Robi was the first operator to roll out 3.5G services in Bangladesh. It introduced 4.5G services across all 64 districts in 2018.