Nepal Telecom has posted its unaudited financial report for the second quarter (Q2) of FY 2082/83. According to the report, the company generated over 17 arba in total operating revenue and earned a profit of over Rs 9.77 arba. The reports show a mix of gains and loss which is consistent with the financial reports in recent years. Find out more details below.
Table of contents
Nepal Telecom posts mixed financial reports for Q2 FY 2082/83
Total operating revenue
Until Q2 FY 2082/83, NT drew Rs 17 arba, 29 crore, 97 lakh, and 30 thousand. It’s an increase of Rs 29 crore, 48 lakh, and 5 thousand. To compare, at the end of Q2 in FY 2081/82, the company brought in a total revenue of Rs 17 arba, 49 lakh, and 25 thousand.
| Period | NTC Total Operating Revenue | Difference |
| Q2, FY 2082/83 | Rs 17 arba 29 crore 97 lakh 30 thousand | Rs 29 crore 48 lakh 5 thousand ↓ |
| Q2, FY 2081/82 | Rs 17 arba 49 lakh 25 thousand | — |
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Total revenue
Likewise, till the end of Q2 FY 2082/83, the company’s total revenue fell to Rs 19 arba, 22 crore, 72 lakh, and 66 thousand. It’s a decline of Rs 29 crore, and 20 lakh or 1.5%. In Q2 FY 2081/82, the company generated Rs 19 arba, 51 crore, 92 lakh, and 66 thousand.
| Period | NTC Total Revenue | Difference |
| Q2, FY 2082/83 | Rs 19 arba 22 crore 72 lakh 66 thousand | Rs 29 crore 20 lakh (1.5%) ↓ |
| Q2, FY 2081/82 | Rs 19 arba 51 crore 92 lakh 66 thousand | — |
EBITDA
The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell to Rs 9 arba, 77 crore, 70 lakh, and 62 thousand from Rs 10 arba, 3 crore, 75 lakh, and 89 thousand in the period till Q2 FY 2082/83. It’s a decline of Rs 26 crore, 5 lakh, and 26 thousand or 2.60%.
Profit
Till Q2 FY 2082/83, the company’s profit before tax stood at Rs 5 arba, 91 crore, 43 lakh. It’s a decline from Rs 6 arba, 19 crore, 90 lakh, and 38 thousand from Q2 FY 2081/82. To illustrate, a decline of Rs 28 crore, 47 lakh, and 38 thousand or 4.59%.
Ntc made a profit of Rs 4 arba, 16 crore, 45 lakh, and 9 thousand until Q2 FY 2082/83. This is a decline of Rs 62 crore, 14 lakh, and 15 thousand or 12.98%. In Q2 FY 2081/82, the company posted a total profit of Rs 4 arba, 78 crore, 59 lakh, and 25 thousand.
| Period | NTC Total Profit | Difference |
| Q2, FY 2082/83 | Rs 4 arba 16 crore 45 lakh 9 thousand | Rs 62 crore 14 lakh 15 thousand (12.98%) |
| Q2, FY 2081/82 | Rs 4 arba 78 crore 59 lakh 25 thousand | — |
The company says that its per share earning stands Rs 46.27, at the time of writing this article.
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Reasons for change in Nepal Telecom (NTC)’s financial report in Q2 FY 2082/83:
The company has outlined the following reasons for change in its financial report in Q2, FY 2082/83:
- Increase in OTT use. It cost the company Rs 8 crore, 5 lakh, and 98 thousand or 6.14% till Q2 FY 2082/83. The OTT services have financially affected the overall voice and SMS services of the company.
- Change in investment amount and a gradual decline in interest rate. It has cost the company a revenue of Rs 74 crore, 63 lakh, and 83 thousand from interest, or by 32%.
- Expansion and network improvement works in rural and remote regions, which also raised the company’s expenses. To illustrate, Ntc 4G has reached 98% local levels to date, while NTC FTTH fiber is available in 77 districts.
- Changes in policies and regulations related to service rate determination have resulted in reduced service rates, and revenue has not increased significantly.
- Employee insurance expenses increased due to the increase in the insurance amount of the employee’s maximum insurance and the discount rate used by the company to calculate the liability of the contribution-based pension plan, as per Nepal Accounting Standard 19, which was increased from 7.5% to 7%, which increased employee pension and gratuity expenses. Overall, employee expenses increased by 11.5% compared to the second quarter of the previous fiscal year.
- Due to the change in foreign exchange rates. Foreign exchange profit increased by 150% compared to the second quarter of the previous fiscal year.
- As per the company’s accounting policy, the necessary expense provision was added to the inventory. This resulted in an increase in impairment expense of Rs. 18.35 crore compared to the second quarter of the previous fiscal year.
- Current tax up to the second quarter of this fiscal year has increased by 55.56% compared to the current tax up to the second quarter of the previous fiscal year. The decrease was seen because the current tax of the previous fiscal year was calculated by adjusting for past taxable losses.
Did you know? Ntc is increasing the public share to 30%
What to gather from this report?
NT’s financial report for Q2 FY 2082/83 provides another insight into its own and the industry’s current financial condition. And it’s not encouraging. The company has posted another decrease in profit, albeit not by a huge margin. Anyway, the falling trajectory hasn’t been reversed. Nepal’s telco faces challenges from the growing use of OTT, a limited market, and perhaps less diversification of services!
The discouraging financial state is another one of the key reason that 5G in Nepal continues to be distant. Therefore, the report gives another reason screaming for policy-level dialogues, necessary amendments, and multilateral dialogue among all the stakeholders.
