Grameenphone Ltd (DHA:GP) reported strong financial performance for 2024, with an underlying profit margin of 20% and an EBITDA margin of 60%. The company slightly increased its revenue market share to 50.2%, thanks to significant investments in operational CapEx amounting to 18.3 billion to support growth and improve customer experience.
Digitalization played a significant role, contributing 27% to the business, with 36% of reload sales coming through digital channels. The B2B segment experienced a positive growth of 7.6%, driven by increased traction in ICT and IoT products.
However, the company faced some challenges, including a 5.1 million decrease in subscribers, which impacted revenue. Economic factors such as rising inflation, decreasing GDP, and an increase in supplementary duties on telecom services added pressure to the business. These factors, combined with tax hikes, affected consumer purchasing power and strained the market environment. The second half of the year saw pressure on both top-line and bottom-line growth due to these economic headwinds.
Key Insights from the Earnings Call Q&A:
- Financial Performance in Q4 2024: The CFO highlighted that Q4 is typically slower due to seasonal effects but emphasized maintaining a strong EBITDA margin of 60% and an underlying profit margin of 20%. Revenue market share slightly increased to 50.2%.
- Economic Impact: The CEO discussed how rising inflation and decreasing GDP have challenged Grameenphone’s operations. However, the company is focusing on maintaining network quality, offering value to customers, and investing in operational CapEx to support growth.
- Digital Transformation: The CEO also discussed the progress in digitalization, mentioning that 27% of the company’s contributions came through digital channels, with 36% of reload sales through these channels. The company is utilizing IoT and AI to enhance customer experience and open new revenue streams.
- Sustainability Initiatives: Sustainability efforts are an essential part of Grameenphone’s strategy. The CEO shared that the company has secured over 250,000 megawatt hours of renewable energy and is collaborating with suppliers to reduce carbon footprints and promote digital inclusion.
