Uztelecom, the leading telecommunications provider in Uzbekistan, has announced robust financial results for the first nine months of 2023, showcasing a remarkable 25% increase in revenue compared to the same period in 2022. This growth outpaced the 16% observed from 2021 to 2022, indicating accelerated expansion in the company's operations.
The primary driver behind this impressive revenue surge was a substantial 49% increase in the broadband segment, marked by the addition of 446,000 new subscribers over the period. The mobile segment also contributed significantly, experiencing an 11% growth in revenue, thanks to the addition of 868,000 new subscribers year over year. The Interconnect segment rounded out the positive performance, registering a 25% increase in revenue.
Despite these promising figures, Uztelecom faced challenges on the profitability front, as the net profit for the first nine months of 2023 declined from UZS 474bn ($38mn) to UZS 26bn ($2,1mn). This decline was attributed to several factors, including higher costs of imported services, a weakened local currency, global interest rate hikes, and an increase in the company's payroll.
The costs of imported international communication services played a significant role in the overall cost increase, particularly in the Interconnect segment. Simultaneously, the ongoing modernization of Uztelecom's infrastructure led to a 68% increase in payroll expenses. These factors collectively contributed to a 36% year-over-year rise in the cost of services sold.
Uztelecom also faced higher interest payments due to the global rise in interest rates and increased borrowings. The company, carrying a substantial debt burden for expansion purposes, reported a 74% year-over-year increase in interest expenses. As of 9M 2023, interest expenses stood at UZS 257bn ($21mn) compared to UZS 147bn ($12mn) for the same period in 2022.
The sharp depreciation of the national currency in the third quarter further impacted Uztelecom, resulting in a 68% year-over-year increase in exchange rate losses. Exchange rate losses totaled UZS 763bn ($62mn) in the first nine months of this year, compared to UZS 454bn ($37mn) in the same period of 2022.
Despite these challenges, Uztelecom remains committed to its growth-oriented development strategy. The company is actively investing in broadband and data center initiatives, with a focus on expanding Internet coverage to every household, gaining additional market share, and anticipating further acceleration in revenue growth in the coming years.
Uzbektelecom, a prominent company, stands as a telecommunications giant that spans across every corner of Uzbekistan with its extensive network. Fueled by cutting-edge technologies, the company delivers a comprehensive array of telecommunication services through its state-of-the-art infrastructure. Beyond its national reach, Uzbektelecom actively engages with international communication organizations, partaking in global telecommunication initiatives and fostering collaborative relationships with foreign operators and telecommunications equipment manufacturers.
Earlier, Daryo highlighted that exclusively privileged securities of "Uzbektelecom" are currently being traded on the Tashkent Stock Exchange. As a significant participant in the "People's IPO" program, the telecommunications operator is set to join the ranks of 40 companies whose shares are slated for a widespread public offering. In preparation for this, "Uzbektelecom" has officially registered an additional share issuance from its authorized capital, totaling 5.5mn shares for the forthcoming IPO placement. The subscription campaign is anticipated to conclude by the end of 2023, with the total issuance estimated to fall within the range of UZS 33 to 55bn (2.6mn-4.4mn).
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