Robi Axiata Ltd (Robi) announced its financial results for the third quarter ended 30 September 2014. The first nine months of 2014, Robi added another 2.6 million new subscribers to reach 25.0 million, which represents 21% subscriber market share whilst consolidating as the second largest operator in terms of revenue market share in Bangladesh.
During the same period (YTD), the company recorded revenue growth of 6% compared to the same period of last year, with remarkable data revenue growth of >100%. Data revenue growth was propelled by the significant investment in network to drive 3.5G and 2.5G data usage. YTD Earnings before interest, tax, depreciation and amortization (EBITDA) grew by 10% whilst EBITDA margin improved by 2 percentage points to 40% through continued focus on operational excellence. However, PAT dropped by 4.9%, largely due to additional operating expenses and depreciation resulting from investment in spectrum and CAPEX (Capital Expenditure) to support the rollout of 3.5G network.
QoQ PERFORMANCE (Q3 2014 vs Q2 2014)
Robi subscriber base grew from 24 million to 25 million recording a 4% growth through aggressive market promotions and customer centric acquisition offerings.
Despite strong growth in subscribers, QoQ revenue decreased marginally by 1.0% to BDT 12.1billion mainly due to lower voice revenue from falling usages amid seasonality whilst data revenues recorded a growth of 31% driven by increased adoption of Robi data services.
On QoQ basis EBITDA remained flat, at BDT4.9billion in Q3 2014 though network cost increased to support 3.5G operations. PAT for the quarter saw a robust growth of 14.6% from Q2 2014 to record BDT 1.3billion in Q3 2014.
YoY PERFORMANCE (Q3 2014 vs Q3 2013)
On YoY basis, the company delivered a strong 12.0% growth in subscriber base over Q3, 2013 to reach 25.0 million. Customer centric product and service offerings and better data network experience helped Robi to deliver a strong growth in subscriber base.
Robi also delivered a moderate revenue growth of 3.5% YoY to reach BDT 12.1billion in Q3 2014 from BDT 11.7billion in Q3 2013. Due to significant price based competition in the market, the company has experienced slower growth in voice revenues. In contrast data revenue has witnessed an unprecedented growth of >100% during the same period in line with deployment 3.5G services across the country.
EBITDA registered a low single digit growth of 3% YoY to reach BDT 4.9billion in Q3 2014 from BDT 4.7billion in Q3 2013. EBITDA growth was slowed down primarily by the incremental network expenses and increased marketing costs.
In Q3 2014, Robi recorded PAT of BDT 1.3billion, an adverse growth of 9% from Q3, 2013. Negative trend in PAT was primarily due to the amortization charge arising from large CAPEX investment to support the 3.5G business, in the form of 3G license acquisition fee and the country wide rapid network rollout. During the last 12 month period, Robi invested BDT 21.0billion which includes BDT 3.4billion on account of 3G license acquisition fees.
INVESTMENT IN MOBILE NETWORK INFRASTRUCTURE
Robi continued to invest heavily to fast-track its 3.5G network and also to improve 2.5G customer experience both in voice and data services. The company has deployed about 2,200 3.5G sites providing a best in class data experience in Bangladesh. The total CAPEX investments made in Q3 2014 amounted to BDT 4.5billion, representing cumulative investment of BDT 14.5billion during the first nine months of 2014. The company has now deployed 3.5G network coverage in all the 64 districts in Bangladesh.
COMMENTARY
Robi Managing Director and CEO, Supun Weerasinghe said “We are seeing good growth in data services since start of the year as we expand our 3.5G network across the country. We are investing significantly towards expanding our 3.5G network across the country and to support growth in data usage. However, given the slow growth in voice revenues, imposition of an additional surcharge on customer talk time may further hinder voice revenue growth.”
Robi Chief Operating Officer, Mahtab Uddin Ahmed, said that Robi had introduced “most affordable data pricing across the country, which has made adoption of data services easier and cost effective. On voice services, Robi launched several offerings including Shokal Bikal, an attractive flat rate talk time package, enhancing simplicity and customer experience.
Commenting on the 3.5G network expansion, the COO added that “Robi has already covered all 64 districts of Bangladesh in November 2014 with nearly 2,200 sites.”
PAYMENT TO STAKEHOLDERS
In YTD Q3 2014, the company has paid out more than BDT 16.5bn to the government exchequer representing 45.9% of company revenue. Since inception in 1997, Robi has paid out more than BDT 135bn to the government exchequer while, between 1997 and 2005, only paying BDT 1.4bn in the form of dividends to its shareholders. There has been no further dividend paid since 2006.
ABOUT ROBI:
Robi Axiata Limited is a joint venture between Axiata Group Berhad, of Malaysia and NTT DoCoMo Inc, of Japan. Robi is the second largest mobile phone operator in Bangladesh in terms of revenue, with over 25 million subscribers, as of September 2014. Robi network provides nationwide coverage to nearly 99% of the population with more than 11,000 BTS and nearly 2,200 3.5G sites. Robi proudly claims to have the widest international roaming service in the market, connecting over 400 operators across 207 countries. It is also the first operator to introduce GPRS and 3.5G services in Bangladesh. The Company has introduced many first of its kind digital services in the country and has invested heavily in taking mobile financial services to the underserved communities in the rural and semi-urban areas.
