In Bangladesh, IT cos benefit from more Internet users but lose revenue to poor networks in FY23
Source：The Financial Express
From：Taiwan Trade Center, Dhaka
Update Time：2023/12/23
The IT companies’ performance was mixed in FY23, but the features that made some businesses deserving of profits in the economically stressful year than others were less reliance on imports and services tied to Internet usage.
Of the 10 listed firms that disclosed financial statements, six registered a year-on-year growth in profit, while the rest earned less in FY23 compared to the previous fiscal year.
The organisations, which provide Internet services, saw a revenue growth year-on-year, as the usage of Internet by individuals has been on the rise even in the prevailing economic crisis.
According to the Bangladesh Bureau of Statistics, the number of individual users of the Internet rose to 45 from 39 out of every 100 Bangladeshis from 2022 up until now this year.
The growth in individual users supported a revenue growth of Aamra Networks, AND Telecom, and IT Consultants in FY23, compared to the previous year.
Among the profit-making entities, Aamra Networks has reported the highest year-on-year profit growth of 107 per cent for FY23, followed by eGeneration, ADN Telecom, IT Consultants, Agni Systems, and Genex Infosys.
The revenue of Aamra Networks jumped as it catered to a higher demand for IT support and Internet and software services.
Though an associate of Aamra Networks, Aamra Technologies witnessed a steep year-on-year decline in profit in FY23.
The main reason was a slowdown in Internet bandwidth by Bangladesh Telecommunication Regulatory Commission (BTRC) in March-April of FY23. Many of the corporate clients that Aamra Technologies serves did not require Internet services of substandard quality.
Hence, the company's sales to corporate clients declined, leading to a loss of revenue worth around Tk 700 million for FY23, said the chief financial officer of Aamra Technologies, Md. Zahangir Alam.
Moreover, the IT firm's revenue earnings from equipment sales dropped due to currency devaluation.
Other companies, which have to import software and technology to run their businesses, also saw their income dry up in FY23, as the taka became cheaper against the dollar.
ADN Telecom has reported the second highest year-on-year jump in profit -- 54 per cent -- for FY23, backed by higher revenue earnings. Its revenue escalated 16 per cent year-on-year to Tk 1.34 billion for the year ended in June this year.
In its disclosure, the company said effective cost-management strategies had contributed to the business growth too in the reporting period.
IT Consultants gained a 31 per cent higher profit in FY23, compared to a year ago, with income from Q-Cash transaction processing charge and service & maintenance charge. The Q Cash is an electronic payment and transaction processing system used by a consortium of banks.
Agini Systems reined in operating expenses, which, coupled with a decrease in the cost of goods sold, drove up profit by 12 per cent year-on-year for FY23.
On the other hand, Information Services Network observed a 28 per cent plunge in profit in FY23, compared to the previous fiscal year, while revenue was only 1.81 per cent up year-on-year.
The company's profit plummeted due to an adjustment of deferred tax during the reporting period, said Chief Financial Officer Abul Kalam Azad.
Daffodil Computers experienced a 19 per cent year-on-year dip in profit in FY23 due to new investments made at home and abroad.
Alongside purchasing a building in the capital, the company invested to set up an assembling factory of Daffodil computers and laptops, said company secretary Md. Monir Hossain.
Moreover, the company is working to establish a company namely Daffodil Global Dubai to conduct marketing of their products.
Source: https://thefinancialexpress.com.bd/stock/bangladesh/it-cos-benefit-from-more-internet-users-but-lose-revenue-to-poor-networks-in-fy23