Financial results of JSC "Uzbektelecom" for 9M2023

Uztelecom's revenue for the first 9 months of 2023 increased by 25% compared to the same period in 2022, showing accelerated growth compared to the 16% growth observed from 2021 to 2022. The growth in revenue was primarily driven by a 49% increase in the broadband segment, attributed to the addition of 446,000 new subscribers over the period. Additionally, revenue in the mobile segment grew by 11%, supported by the addition of 868,000 new subscribers year over year, while revenue in the Interconnect segment grew by 25% over the same period. Despite experiencing strong revenue growth, the net profit declined from 474 billion UZS to 26 billion UZS. This decline was influenced by higher costs of imported services, a weakened local currency, global interest rate hikes, and an increase in the company's payroll. The rising costs of imported international communication services contributed significantly to the overall costs, with service costs in the Interconnect segment. Additionally, as the company continues to modernize its telecoms infrastructure, it faced increased costs for support staff, resulting in a 68% increase in payroll over the period. These factors contributed to the 36% year-over-year increase 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, given the significant debt burden taken on for expansion, recorded a 74% YoY increase in interest expenses: at 9M 2023, interest expenses stood at 257 billion UZS compared to 147 billion UZS for the same period in 2022. The company was negatively impacted by the sharp depreciation of the national currency in the third quarter. Over the year, the Uzbek soum depreciated by 11.04%, resulting in a 68% YoY increase in exchange rate losses. Exchange rate losses totaled 763 billion UZS in 9M this year, compared to 454 billion UZS in the same period of 2022. In line with its growth-oriented development strategy, Uztelecom is actively investing in broadband and data center initiatives, focusing on expanding Internet coverage to every household, gaining additional market share, and anticipating further acceleration in revenue growth in the coming years.13:25