2012: Moderate business performance in a competitive landscape, improving underlying net profits

 Grameenphone Ltd. reported BDT 91.9 billion revenues for 2012 with 3.2% growth from 2011. Competitive market throughout the year and regulatory tariff directives in the 2nd half of the year led to a slowdown in top line growth compared to previous years. In 2012, revenue growth was driven by higher usage and contributions from non-voice services e.g. SMS, data/internet & VAS. Wholesale business and Grameenphone IT Ltd. also contributed to the revenue growth, demonstrating promising trends for future profitability.

During the year, GP acquired 3.5 million new subscriptions, taking the year-end subscription base to 40.0 million with approximately 41% subscription market share. Regulatory directive on new SIM registration process involving SIM activation after subscriber identification verification has posted a dent in industry subscription growth in the 2nd half of the year, reflected by the mobile market contraction for three consecutive months starting from October 2012.

“It is my immense pleasure to inform our Shareholders that we have obtained our renewed 2G license for the next 15 years. This has paved the way for our relentless effort in providing quality telecommunication services for an inclusive growth of the country”, said Vivek Sood, CEO of Grameenphone Ltd. He added, “During the year, we also managed to retain our leadership position in the competitive landscape through need based innovative market offerings and various operational excellence programs, aimed towards generating healthy profitability for our shareholders”.

The number of active internet users increased by 60% to 6.3 million at the end of 2012 from 3.9 million a year ago. This was mainly driven by small screen mini-pack users. Revenue contribution from this potential segment also increased aided by market offerings through various campaigns and promotions. “Internet Utshab” arranged in collaboration with “The Daily Prothom-Alo” in educational institutes across the country has created a hype among the new internet users.

Superior network strength, being one of the strategic pillars of Grameenphone, was consolidated with further investment in the improvement of its quality and capacity. During the year, 650 sites have been rolled out enhancing both coverage and quality. Voice and data core network of Grameenphone is already equipped for any technological advancement.

Net profit after taxes for 2012 was BDT 17.5 billion with 19.0% margin compared to BDT 18.9 billion with 21.2% margin of 2011. Lower net profit for this period was mainly due to recognition of amortization cost of renewed 2G License, notional interest cost on payments of 2G License renewal fees and interest payments on borrowings. Underlying net profit excluding above impacts, however, shows positive development from last year as a result of continuous cost efficiency measures and top line growth. EBITDA margin for the year 2012 was 53.1%, at the same level of 53.5% for 2011.

As a result, Earnings per share (EPS) for the year 2012 stood at BDT 12.96 compared to BDT 13.99 of 2011. For the fourth quarter of 2012, EPS was BDT 3.42 compared to BDT 4.81 for the same period of 2011.

GP invested BDT 12.6 billion during 2012 for network capacity and quality enhancement in addition to the investment recognized for renewed 2G License. With this, GP's cumulative investment since inception now stands at BDT 213 billion. Meanwhile, GP, the largest taxpayer of the country, paid BDT 63.6 billion to the national exchequer during the year 2012 in the form of taxes, VAT and duties, including BDT 10.8 billion as the second installment of 2G renewal and spectrum fees. This sum up GP's accumulated contribution to the national exchequer to BDT 309 billion since its inception. 

As part of regulatory update for 2012, directives given by Bangladesh Telecommunication Regulatory Commission (BTRC) on tariff structure and SIM registration process had negative impact on both revenue and subscription growth for the entire industry. Regarding VAT on 2G license payment, implementation of the resolution from the intra-ministerial meeting is not yet in place.

The Board of Directors of Grameenphone Ltd. have recommended final dividend for the year 2012 in cash at the rate of 50% of the paid up capital (i.e. BDT 5 per share of BDT 10 each) based on the decision taken at the Board Meeting held on 10 February 2013. With this, the total cash dividend stands at 140% of paid up capital (i.e. BDT 14 per share of BDT 10 each) for the year 2012 (including 90% interim cash dividend i.e. BDT 9 per share that was paid in August 2012). The Shareholders as of the record date of 20th February 2013 will be entitled for this final dividend, which is subject to the Shareholders’ approval at the 16th AGM to be held on 10th April 2013.

Corporate Communications
Grameenphone Ltd.
Phone: 9882990
Detail Financial Statements are available at: http://investor-relations.grameenphone.com