GreenPower Motor Co., Inc. Q2 FY2023 earnings call

• Network investment: Significant investment in spectrum rollout, increased sites and capacity enhancement. Fiber connectivity increased from 17% to 40% over the last 6 quarters and over 21,000 total sites rolled out.
• Distribution: Introduced tax-free distribution model partnering with Mutual Trust Bank to simplify operation.
• Experience center: Launched state-of-the-art Grameenphone Experience Center in Dhaka.
• Digital adoption: Almost 32% of year-to-date recharge transaction were digital. MyGP had 15.7 million customers, and total self-care app users reached 17.5 million.
• Tax dispute resolution: Settled all income tax dispute for assessment year from 2007-2008 to 2019-2020 with LTU and paid BDT 9.9 billion to BTRC.

In Q2 2023, Grameenphone continued its growth. Total revenue grew by 5.6% year-on-year. EBITDA increased by 5.7% year-on-year. There was a net addition of 1.1 million subscribers during the quarter, with the subscriber base reaching 81.3 million. Data users saw an increase of 2.6 million during the quarter. Data revenue grew by 17.1% year-on-year. Average data usage per user reached 7 gigabytes, a record high. Service ARPU grew by 10.6% year-on-year.

Grameenphone will continue to maintain growth momentum amidst challenging macroeconomic situation. It will keep investing in network and digital innovation to drive sustainable growth in revenue and EBITDA, having achieved 9 consecutive quarters of revenue and EBITDA growth.

• Macroeconomic pressure: Inflation in Bangladesh at highest level in 11 years impacting customer spending capabilities. Depleting ForEx reserve with LC openings in June 2023 being the lowest in 2023 with year-on-year fall of 27%.
• Uncertainty in tax disputes: Final settlement of tax disputes with BTRC has uncertainties which may affect cash position.

Q: Where did such a big tax addition come from?

A: This amount includes amounts arising from the settlement of disputes and completion of assessment, for more details see disclosure note 29.1 Q: What was the total settled amount for 2 litigations and how was it incorporated in financial reporting?

A: Settled all income tax dispute until 2018 through alternative dispute solution and paid BDT 7.8 billion to NBR. Paid BDT 9.9 billion with regards to the written judgment for 2G. For accounting, see note 20.1 and 35b Q: What is causing active data users degrowth?

A: Subscriber losses during the same period have not been fully recouped yet, but data users returned to growth momentum with 2.6 million added during the quarter Q: What are the updates on other legal issues?

A: Except as disclosed in note 35 of the interim financials, there has been no significant development of the events disclosed in the financial statements for the year ended 31st December 2022 Q: Why no declaration of interim dividend?

A: Positive developments on legacy dispute resolution led to large payments straining cash position and uncertainties around final settlements, so interim dividend not recommended Q: What is the current total amount of contingent liabilities net of all these payments?

A: Can be found in the annual financial statements of the year 2022 and as well in the interim financials of the year for the first half of this year Q: Could you please explain the BDT 4 billion provision under finance expenses and BDT 6.4 billion provision reversal under income taxes? What are their sources?

A: GP has taken the provision for regulatory disputes based on the available information of the outcome of court proceedings mentioned in disclosure note 28.1. The tax includes amounts arising from the settlement of disputes and completion of assessment, with more details in disclosure note 29.1