Nepal Telecom profit and revenue falls in Q1, FY 2082/83

Nepal Telecom (NTC) profit and revenue have both declined in the first quarter (Q1) of FY 2082/83. The report comes from the unaudited report from the state-run telecom company. The figure gives another negative indicator of the company’s finances, which has become more common in recent times.

Nepal Telecom financial report in Q1, FY 2082/83

Nepal Telecom total operating revenue in Q1, FY 2082/83

Ntc has posted total operating revenue of Rs 8 arba, 67 crore, 95 lakh, and 15 thousand in Q1, 2082/83. The same figure was Rs 8 arba, 68 crore, 1 lakh, 86 thousand in the same period in the last fiscal year. So, this period, the company’s TOR fell by 0.01% or Rs 6 lakh, 71 thousand.

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Total revenue

At the same time, the company also saw its total revenue decline in Q1, FY 2082/83. In Q1, FY 2082/83, Ntc posted revenue of Rs 9 arba, 47 crore, 10 lakh, 51 thousand. In the same period of FY 2081/82, the company had filed a revenue of Rs 10 arba, 6 crore, 37 lakh, and 35 thousand. That means, the company saw its revenue fall by 5.89% or Rs 59 crore, 26 lakh, and 85 thousand.

Total profit

Nepal Telecom said that it earned a profit of Rs 1 arba, 32 crore, 51 lakh, 75 thousand in the first quarter of FY 2082/83. In Q1, FY 2081/82, Ntc made a profit of Rs 1 arba, 73 crore, 95 lakh, and 90 thousand, meaning a loss of over Rs 41 crore or 23.82%

EBITDA

In Q1, FY 2082/83, Nepal Telecom posted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of Rs 4 arba, 75 crore, 4 lakh, and 71 thousand.

In Q1, FY 2081/82, the company generated EBITDA of Rs 5 arba, 41 crore, 59 lakh, and 77 thousand. Therefore, the company witnessed a loss of Rs 66 crore, 55 lakh, and 6 thousand or 12.29%.

According to the company, its per share revenue is Rs 29.45. Ntc is planning to float 30% of its shares to the public. This could also happen in the current fiscal year, FY 2082/83

Ntc states reasons for changes in finances in Q1, FY 2082/83

Ntc has given the following reasons for changes in the finances of Q1, FY 2082/83:

• Increase in use of OTT and its effects on incoming calls from abroad. The period saw about Rs 11 crore decline from Q1, FY 2081/82.
• Decline in interest rate causing a deficit of Rs 50 crore in revenue (49%)
• Employee benefit expenses have increased by Rs 1.95 crore, while retirement expenses have increased by Rs 16.5 crore due to the discount rate used by the company to calculate the liability of the contribution-based pension plan as per Nepal Accounting Standard 19, from 7.5% to 7%. As a result, total employee expenses have increased by Rs 8.8 crore.
• Expansion of services and upgrade works in remote and rural regions despite low to no financial returns.

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Conclusion

Nepal Telecom’s poor financial performance in the first quarter of FY 2082/83 is sadly a continuation of poor earnings in recent years. And worse, the situation doesn’t seem to mark an improvement unless drastic strategies are implemented. The customers’ use of OTTs for voice, instant messaging apps to exchange messages, etc., has dwindled the traditional revenue sources. Maybe telecom’s use of subscription model plans could be one good measure.

The national telecom company’s plight reflects a dim situation for the telecommunications industry. Therefore, the government must scratch its head and draw a roadmap to reverse the industry’s financial situation in the right direction.