Ncell Profit Declines By 10 Billion in the 3 Quarter of FY 2020/21

Ncell’s parent company Axiata has recently released a third-quarter financial report for the year 2020. According to the report, Ncell Axiata, a leading telecommunication company in Nepal, has faced a massive decline in the company’s profit and revenue in the last nine months period (Three quarters of 2020).

Ncell Net Revenue and Profit loss in three quarters of 2020

According to the financial report, the total income for the first nine months of last year was around Rs. 41 billion. However, the company’s revenue declined by around Rs. 10 billion therefore, Ncell secured around Rs. 31 billion in the same period this year. 

Besides, according to the report, the company’s revenue in the third quarter encountered a decrease of about Rs. 3.5 billion compared to the same quarter last year. However, the loss in revenue in the third quarter this year is less compared to the second-quarter revenue in 2020. Ncell suffered a loss of 5 billion in the second quarter due to an extended lockdown. 

The company’s profit has been steadily declining in the three quarters. According to the data, Ncell lost a profit of Rs 1.48 billion in the first-quarter, Rs 4.78 billion in the second quarter, and Rs 3.54 billion in the third quarter of the fiscal year 2020. So, the total decline of the profit in these nine months of this year reaches around 10 billion Rs.

Ncell’s Parent company Axiata reports mention that all other telecom operators (Opco’s) except for Nepal have reached the “pre-lockdown level” revenues by September 2020. It seems that the COVID-19 impact for Ncell is larger than other telcos of Axiata (Celcom, XL, Dialog, Robi, Edotco). This is due to the change in consumer behavior, enforced by the pandemic while significant rise in data subscriber base.

How much is the Ncell revenue from data?

In the last three months, Ncell data revenue is 24% of the total revenues, which is a slight increase from the last year’s same period. Voice service is the primary revenue source of Ncell as with other telecom operators. So, a decrease in voice service is leading to declining in revenue from voice services. Revenue from voice services is declining due to OTT services, and income from data is on the rise but not substantially high to offset the voice revenue loss.

Checkout: Voice call rate (tariff) in all the telcos (Ntc, Ncell, Smart Cell) of Nepal.

Conclusion

Ncell has been suffering a loss in net profit and revenue for the three consecutive quarters of the current fiscal year. In the third quarter of the year 2020, Ncell has lost a net profit of Rs. 10 billion and a revenue of Rs. 3.54 billion in the third quarter. Due to extended lockdown, earlier Ncell suffered a loss of Rs. 5 billion in the second quarter but, as the situation is slowly recovering, the recovery is visible in the financial numbers of Ncell too. Although voice service couldn’t help in gaining income, data service is contributing to income generation to some extent.

Recommended Read: Why Telcos suffered a decline in huge revenue/profit in the Pandemic?

Earlier Nepal Telecom also released a financial statement that showed a 40% Profit Decline in the Q1 FY 2077/78. The telecommunication companies are doing financially low due to the whole pandemic situation but, the Q3 report of Ncell has given us hope that once the situation comes under control, the telecom companies can again revive their financial chart and gain revenues.

Tell us what do you think of the revenue loss of Ncell in this Q3, 2020.