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Grameenphone Posts Sharp Jump in Profits on Higher Margins

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Bangladesh based Grameenphone has reported a 12.3% rise in its first quarter revenues of BDT 2,322 crore (USD279 million). The growth was mainly from voice as well as interconnection revenues driven by subscription growth, revenues from non voice services, roaming and infrastructure sharing.

­Net profit jumped to BDT 520 crores (USD62.5 million) compared to BDT 287 crores a year ago. The profit margin rose from 13.9% to 22.4%.

Higher profit for this period was mainly due to revenue growth, efficient cost management and reduced depreciation expenses. EBITDA margin for the first quarter of 2012 was 55.1%, which also has increased by 7.3 percentage points compared to 47.8% of the same period last year.

Grameenphone acquired 1.1 million new subscribers during the quarter and conclude with 37.6 million subscribers with approximately 42% market share.

On 13 February 2012, the High Court has directed Grameenphone to add 15% VAT amount to the Bangladesh Telecom Regulatory Commission (BTRC) receivables and pay an additional 15% VAT to the National Board of Revenue (NBR). The Court has allowed Grameenphone to obtain rebate on this VAT thereby, limiting Grameenphone's total license renewal cost to 100%.

As the proposed rebate mechanism does not seem workable under present VAT scheme, Grameenphone has filed a petition with the Appellate Division seeking clarification on VAT deduction mechanism related to 2G License renewal fees, particularly for the rebate on the 15% VAT amount payable to the NBR. The hearing before the Court is yet to be scheduled.

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Tags: grameenphone  Bangladesh