Bangladesh Submarine Cables (BSCCL) Sees Revenue Decline After 8 Years

Bangladesh Submarine Cables Company Ltd. sees its first revenue drop in eight years, due to reduced ISP demand and deactivated circuits.By The Business Standard
October 6, 2024

After consistent growth since the fiscal 2014-15, Bangladesh Submarine Cable Company (BSCCL), a submarine cable-based internet bandwidth provider, witnessed a decline in revenue in the last fiscal year due to a significant decrease in income from its core business.

As a result, the state-owned firm reduced its dividend payment for shareholders, recommending a 40% cash dividend for fiscal 2023-24, down from 51% in the previous fiscal year.

Following the announcement at the Dhaka Stock Exchange (DSE) today, the company's share price dropped by 4.96% to Tk130.40 each.

According to its financials, revenue decreased by 22.68% to Tk398.54 crore, and net profit fell by 34.41% to Tk182.99 crore compared to the same period of the previous fiscal year.

Previously, it had posted a remarkable 38-fold growth in profits to Tk279 crore in FY23, up from only Tk7 crore in FY18. Additionally, its revenue had quadrupled to Tk515.49 crore.

The profit and revenue for FY24 were the highest in its history. Company sources attributed this massive jump in profit growth to the government's efforts to strengthen digital connectivity across the country and increase 4G-based internet usage.

However, the growth momentum in revenue and profit of Bangladesh Submarine Cable failed to sustain in FY24 due to a reduction in IPLC rent and IP transit service revenues in the ordinary course of business, along with an unexpected cable cut of SMW5 (the Indonesian seashore end route to Singapore), according to its disclosures.

The disclosures also noted that the decline in profit was due to reduced revenue from IPLC rent and IP transit service, as well as increased operation and maintenance expenses and provisions for bad and doubtful debts.

An official of Bangladesh Submarine Cables, who requested anonymity, told The Business Standard that the management has reduced IPLC rent due to tough competition from International Terrestrial Cable (ITC) operators.

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