INCREASED CORPORATE TAX
GP profit plunges by 87pc in Q2
The profit of leading mobile operator Grameenphone nosedived by 87 per cent in the second quarter of this year following adjustment of the increased corporate tax that the government imposed in the budget for the financial year 2013-14.
The GP reported Tk 58.51crore net profit after tax in the Q2 (April-June) whereas its profit was Tk 446.37 crore during the same period last year, according to a company announcement posted on the Dhaka Stock Exchange web site.
The lower profit in the Q2 also pushed down the company’s profit in the first half (H1) of 2013 to Tk 510 crore from Tk 970 crore during the same period of last year.
Commenting on the dip in profit, GP chief financial officer Fridtjof Rusten at a press conference said, ‘We had to adjust the 5 per cent increase in corporate tax for the last 18 months which was the main reason for this dramatic impact.’
The government in the budget for the current financial year increased the corporate tax for publicly-listed telecom companies to 40 per cent from 35 per cent.
Rusten said the impact of the increase in the tax was huge because of gross adjustment in a quarter but in the coming quarters the impact would be minimised.
He said that issues like political instability and frequent power cut also affected the Q2 result.
‘There were more than 20 days of general strikes in national and regional levels during the period which hampered the businesses,’ he said at the press conference at Sonargaon Hotel in Dhaka.
Although the company announced 90 per cent interim cash dividend for the shareholders on the day, GP’s shares prices plunged by 16.94 per cent to Tk 293 on the news of its profit dip.
The earning per share of the company declined to Tk 0.43 in the Q2 from that of 3.31 in the same period last year.
The company’s revenue in Q2, however, increased by 3.2 per cent year-on-year to Tk 2,390 crore. It added 2.2 million subscribers in April-June.
The revenue of GP in H1 also increased by 3.8 per cent to Tk 4,740 crore.
‘We have a number of achievements in the quarter but there was intense competition during the period,’ said GP chief executive officer Vivek Sood.
He said the company was concerned about the settlement of a number of issues including VAT rebate for 2G licence and SIM tax before the 3G auction which is scheduled on September 2.
‘The National Board of Revenue offered us to settle some issues through alternative dispute resolution but as it is a industry matter, all the companies will jointly decide on the matter,’ he said.
‘We are also concerned about the Grameen Bank Commission’s final report which will come out shortly. But we hope that it will not be a problem for GP as the finance minister repeatedly assured us that he would not cancel our licence,’ he said.
Earlier, the government-sponsored Grameen Bank Commission in its interim report recommended immediate suspension of the GP licence as the operator was not a party to the 1996 licence agreement.
-With New Age input
