Robi, the second largest telecom service provider in Bangladesh has posted 203.1% YoY profit growth in the first nine months of 2023. It is an outstanding growth performance by the company as three-digit growth is not easy to attain for a well-established company.
Let’s dive into how the company has been able to achieve the feat.
Double Digit Top Line Growth
In the first nine months of 2023, Robi posted revenue growth of 17.4% YoY to Tk 74,310.8 million. It has been driven mainly by mobile service revenue growth. Mobile service revenue grew by 15.6% YoY to 66,975.0 million in 9M’23.
Data usage has been the biggest driver of the mobile service revenue growing by 33.2% YoY in Q3’23. About 45% of the total revenue now comes from the data business. The data shows that the growth in data is a result of their strategic move into the business segment. Robi with its two brands – Robi and Airtel has been actively targeting users who have high data consumption needs.
Hence as of Q3’23, about 75% of the total subscribers of Robi are now Internet subscribers.
Moreover, Robi now has over 34.2 million 4G subscribers which is about 59% of the total subscriber base of the company. However the company is not only focusing on the increase of subscriber base, the management has also shared its focus on increasing the data consumption per user which allowed the company to grow this segment.
Data consumption per user increased by 16.8% YoY in Q3’23 to 6,833 MB.
Low Growth in Selling and Distribution Expenses
Selling and Distribution Expenses consist of Advertisement expense, Dealers commissions, and subsidy on SIM. Expenses in this segment only increased by 7.5% in the first nine months of 2023 to Tk 10,704.3 million.
Read more: Difficult Q3 Lead To Modest Profit Growth For BAT Bangladesh In 9M’23
Since it is the second largest operating expense item after cost of revenue, profit from operations increased by 27.2% YoY to Tk 11,567.1 million. Robi’s double-digit revenue growth despite its cost management approach in the selling and distribution segment is commendable.
Lower Foreign Exchange Loss
Foreign exchange loss was the biggest driver of lower profit in 2022. 2022 was a volatile year for Bangladesh’s currency against USD. USD relative to BDT was very stable over the last decade due to different measures taken by the respective regulator. However, due to global macroeconomic volatility, the value of the Taka sharply decreased compared to the USD.
According to a report by Bangladesh Bank, the Taka’s value fell by 13.3% in 2022. It impacted many companies as LC liabilities in terms of Taka increased sharply. As a result, Robi had to take a foreign exchange loss of Tk 3,118.5 million in 9M’22. The loss has been lowered significantly to Tk 1,205.4 million in 9M’23.
All the mentioned factors played an important part in the staggering profit growth of the company. Robi posted consolidated profit growth of 203.1% YoY to Tk 1,723.6 million in 9M’23. 61% of the profit came during the Q3’23 period.
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