Earnings Report /
Bangladesh

Bangladesh Submarine Cable Co: Q1 FY23: c35% yoy earnings growth driven by c37% revenue growth

  • The earnings growth is driven by the c37% growth in revenue. Gross margin and opex to sales ratio improved this quarter.

  • 37% yoy growth in top-line revenue in Q1 FY23 and the main revenue contributor, IPLC rent increased by c40% YoY.

  • Gross margin improved by 40bps while opex to sales ratio dropped by 44bps.

Shopnil Paul
Shopnil Paul

Research Associate

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IDLC Securities
15 November 2022
Published byIDLC Securities
  • 35% yoy earnings growth in Q1 FY23. Diluted EPS in Q1 FY23 stood at BDT 3.97 against BDT 2.95 in Q1 FY22. The earnings growth is mainly driven by the c37% growth in revenue. Both the gross margin and the opex to sales ratio improved yoy in the quarter.

  • 37% yoy growth in top-line revenue in Q1 FY23. The main revenue contributor, IPLC rent increased by c40% YoY. We think this is due to the increasing consumption of bandwidth in the country. According to the latest data from BTRC, the subscribers of ISP and PSTN increased by c11% yoy to 11.14mn in August 2022. The rising user base and their increasing demand have both led to higher consumption of bandwidth.

  • Gross margin improved by 40bps while opex to sales ratio dropped by 44bps. Please note that the direct expenses of BSCCL more than doubled in Q1 FY23 yoy since the company now has to share 3% of its revenue under the new licensing agreement with BTRC. Nonetheless BSCC’s gross margin slightly improved as it enjoys the high degree of operating leverage.

  • Effective tax rate increased by 65bps in Q1 FY23.