For the first time ever, Grameenphone Ltd – Bangladesh’s largest mobile phone operator – is not offering interim cash dividend for its shareholders in the first half of 2023.
The company, as a reason behind the move, is citing payment to Large Taxpayer Unit (LTU-Tax) related to tax dispute through ADR and payments to BTRC as per the written judgment of the case relating to VAT mechanism and spectrum assignment fee during 2G license renewal, insiders say.
Since its listing with the Dhaka and Chittagong stock exchanges in 2009, the mobile phone operator had been offering interim cash dividends for its shareholders.
Mega-cap multinational Grameenphone Ltd posted a 29.7 per cent higher profit in the June quarter of 2023 on a year-on-year basis, driven by strong market execution and a strategic focus on network investment.
The country’s largest telecommunications service provider logged Tk 1,193 crore in net profit in the April-June period this year, up from Tk 920 crore reported in the same period one year ago.
Meanwhile, the listed multinational’s net profit rose by 14 per cent to Tk 1,973 crore in the first six months of 2023, compared year-on-year, as per the company’s audited financial statement unveiled Monday.
GP’s earnings per share (EPS) for the second quarter of 2023 stood at Tk 8.84, which was Tk 6.82 for the same quarter last year. On a six-month basis, its EPS was Tk 14.62 in the January-June this year, which was Tk 12.82 in the January-June period last year.
Grameenphone’s Chief Financial Officer (CFO) Jens Becker said, “Our top-line growth continued as we wrap up the first half of 2023, supported by growth in data amidst rising inflation and other macroeconomic challenges, which continued as a key driver behind our performance, delivering double digit growth.
“The company introduced appealing bundle packs throughout the second quarter in both physical and digital channels, which led to a 9.4 per cent increase in bundle revenue from the past quarter.”
Grameenphone introduced appealing bundle packs throughout the quarter in both physical and digital channels which led to a 9.4 per cent increase in bundle revenue from the prior quarter, he added.
Grameenphone registered 5.7 per cent EBITDA growth, which doubled from the previous quarter while maintaining a strong EBITDA margin of 61.1 per cent. Net Profit after tax in H1 of 2023 stood at Tk 1,973.5 crore with a margin of 25.5 per cent.
During the quarter, Grameenphone and Large Taxpayer Unit (LTU-Tax) have signed agreements settling Income Tax disputes for the assessment years from 2007-2008 to 2019-2020 through Alternative Dispute Resolution (ADR) process.
Providing more details, Becker said, “Grameenphone has also made payments to BTRC as per the written judgment of the case relating to VAT mechanism and spectrum assignment fee during 2G license renewals without prejudice to its rights.
“Despite positive developments on dispute resolutions, total payment amounting to Tk 1,769 Crore strains GPs cash position as it comes on top of regular payments. In light of these settlements and continued constructive dialogues with BTRC with uncertain outcomes, GP is not recommending interim dividend.”
With a positive approach towards resolving disputes, in H1 of 2023, GP paid Tk 7,030 crore, equaling 91 per cent of its total revenues, to the national exchequer in the form of taxes, VAT, duties, license and spectrum assignment fees, compared to 73 per cent in H1 of last year.
GP will continue constructive dialogues with relevant stakeholders for enabling digital lives and thereby ensuring sustainable economic growth, Becker added.
Yasir Azman, chief executive officer at GP said, “Building on the growth momentum from the first quarter, the second quarter of 2023 demonstrates a sustained growth in both revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA), driven by higher average revenue per user (ARPU), strong market execution, and a strategic focus on network investment.
“GP achieved positive developments in dispute resolutions and constructive dialogues, while strengthening core services to create value amidst external challenges.”
He added, “With a continued focus on network expansion and spectrum rollout, we prioritised meeting our customers’ needs through digital-centric innovation and services.
“This approach establishes the foundation for a future-ready data network, enhancing customer value and solidifying our position as the number one network in the country.”
The billion-dollar-cap heavyweight multinational accounts for over 8 per cent of the total market cap of the Dhaka bourse, the highest single-company holding in the bourse.
It also reported total revenues of Tk 7,735 crore in the first six months this year, registering a 4.2 per cent year-on-year growth.
The telecom operator, in the current year’s second quarter, acquired 11.39 lakh new subscribers, reaching 8.13 crore total subscribers till June 2023. Out of total GP subscribers, 56.7 per cent or 4.61 crore are internet users.