NTC reports weak financial performance, net profit drops by 410 million

 Nepal Telecom has reported comparatively weak financial performance for the first quarter of the fiscal year, 2082/83. Net operational income has stood at Rs 8.67 billion, a drop of over Rs 6 lakh during the same period of FY 2081/82. Similarly, company's net income dropped to Rs 9.4 billion, a decrease of Rs 590 million during the same period of FY 2081/82.

Company's income reduced to Rs 4.7 billion excluding taxes, a drop of 12.29 percent. Profit decreased 18.9 percent to Rs 2.8 billion. Net profit remained at Rs 1.32 billion, a decrease of Rs 410 million as compared to the same perio of FY 2081/82. Company's earning per share reduced to Rs 29.45.

It is believed that the decline in revenue and profit has stemmed from a significant decrease in calls from abroad following the increasing use of OTT services worldwide. Inter-contract revenue alone has decreased by about Rs 109.7 million. Similarly, the telecom has stated that interest income from fixed deposits has decreased by Rs 500 million due to the decline in interest rates in the banking market.

Employee expenses also appear to have increased. Additionally, employee insurance expenses have increased, the company has mentioned that pension and retirement liabilities have increased after the discount rate has decreased from 7.5 percent last year to 7 percent. This alone has led to an additional increase of about Rs 88 million in employee expenses.

The company has been expanding services and investment in rural areas. Its objective of prioritizing service access and improvement amid low income and high costs has resulted in an increase in expenses, affecting its net profits, according to a company's statement.