GreenPower Motor Co., Inc. Q3 FY2023 earnings call

Key Business Highlights - Continuous efforts to simplify data portfolio led to 8.5% year-on-year ARPU growth. - Leveraged AI/ML for personalization, resulting in 2 days additional revenue per customer per month and 13% higher ARPU on MyGP. - Network investment boosted 4G subscribers by 16.5% year-on-year. - Diversified B2B portfolio focusing on IoT platform and ICT products. - MyGP has 16.4 million customers, with total self-care app users at 18.3 million. - Expanded payment options and enhanced MyGP features, including operator-agnostic login. - Social impact initiatives: AI-powered youth upskill platform, GP Academy training 400,750 students (39% female), participation in climate summit, and flood relief support in Chittogram division.

Grameenphone continued its solid financial performance in Q3 2023. Total revenue grew 6.3% year-on-year, with EBITDA growing 5.7% year-on-year, maintaining an EBITDA margin of 61.9%. The subscriber base grew by 0.8 million to reach 82 million at the end of the quarter. Data subscribers increased by 1.4 million, with 4G data subscribers reaching 37.2 million, a year-on-year growth of 16.5%. Data revenue grew 26.2% year-on-year. Service ARPU increased 8.5% year-on-year and 1.4% quarter-on-quarter. CapEx to sales ratio (excluding licenses and leases) was 14% for the quarter. Net profit stood at BDT 7.5 billion with an 18.2% margin.

Risks - Macroeconomic challenges including inflation above 9.5%, foreign exchange reserves declining by nearly BDT 1 billion per month, and IMF lowering GDP growth projection for 2023 by 0.5% points to 6%. - Regulatory dialogue with BTRC regarding payment reconciliation for dispute settlement.

Q: Sub base has finally returned to growth. Have you recovered from the SIM ban?

A: Yes, it's indeed that sub base has finally returned to the growth as far as the Q3 exit last year concerns. However, as you understand, that SIM ban started at the end of Q2 last year, which means we have a higher base. We have not reached that base of 84.6 million yet. However, considering the Q3 last year, we are now having growth in subscriber base.

Q: Why is a bundle revenue falling?

A: I think I have briefly touched it in my speech as well, but rather focusing on the specific revenue streams, always focus is on customer evolving needs and products are designed based on those needs. Consequently, the revenue is generated from that stream. During the quarter, Grameenphone introduced personalized bundle offers in both the physical and as well as the digital channels, which were only focusing on the specific customer bundle offer demands.

Q: We have seen data usage significantly grow over the quarters, in Q1. Now in Q3, it seems to be stagnant over Q2. What is the reason?

A: Yes, let me take this, Aleef. So the 7 gigabyte data usage per user, we consider a milestone for the industry and GP had achieved this in the last quarter. And this is the highest data usage as per usage in the industry, as I mentioned, based on Q2 published information. In Q3, GP's data users are still maintaining this usage at 7 gigabyte, which is supported by our continuous efforts to improve data network experience.

Q: After 3 quarters of high CapEx, why is it so low this quarter? I believe it must be 2 quarters, but why is it low so this quarter? Is this related to ForEx?

A: I think this is basically a timing variance. In 2022, GP invested BDT 17.3 billion for CapEx, whereas we already invested BDT 16.8 billion for CapEx as of Q3. In 2023, there was higher CapEx spending in the first half to improve the network performance through coverage expansion and deployment of new spectrum.

Q: Could you please explain the reasons that caused the difference between Q2 and Q3 earnings?

A: Q2 and Q3 earnings? Yes. I think it probably refers to the growth rates, I assume. And this is basically driven, as I mentioned in the presentation. We have on the earnings for this Quarter 2 impacts. One is the higher depreciation, which comes from the -- especially from the spectrum that we started in Q4 last year. This is, one, for the higher depreciation. And then we have taken some tax provisions as there is some -- in some areas, a lack of clarity on the new Income Tax Act 2023. And here we are waiting for clarification from NBR in this regard and have taken tax provisions for this so far. I think that's the basic difference when it comes to earnings.