Agni Systems posts 59% decline in profit

Publicly listed Agni Systems Limited, a pioneer in providing internet services in Bangladesh, suffered a 59% decline in profit in the last fiscal year despite a significant increase in the internet usage during the Covid-19 pandemic.

Moreover, the company's profit, compared to that in the first nine months of 2019-20, dropped substantially during the last quarter (April-June) – a period that saw an increased internet use.

Since the outbreak of Covid-19 in the country, internet use rose by up to 30%, according to industry insiders.

Agni Systems has announced a 2% cash dividend for shareholders as its profits declined. The company had paid a 9% cash dividend last year.

The company's annual general meeting will be held on 31 December. It has set 21 December as the record date.

Regarding the profit fall, the company said although the operating profit was the same as in other years, there was a loss from the investment made in the associate company.

During the first quarter (July-September) of the current fiscal year, Agni Systems saw a 29% growth in profits year-on-year to Tk1.59 crore from Tk1.23 crore.

During the same period, the company's earnings per share (EPS) was Tk0.22, up from Tk0.17 year-on-year.

In the last fiscal year, it earned Tk2.21 crore in profits, with the EPS being Tk0.31. In 2018-19, its profit was Tk5.40 crore and EPS Tk0.75.

"At the end of the year, the company's profits were adjusted. There were investments in the form of capital in the associate company which incurred losses. As a result of the adjustments, the overall profit has declined," said Agni Systems Company Secretary Muhammed Shariful Islam.

As per the financial account, the firm's revenue and net operating profit decreased in fiscal year 2019-20 as compared to that in the previous year. However, the company's administrative and general expenses rose by Tk55 lakh.

The company had a revenue of Tk35.53 crore and a net operating profit of Tk2.98 crore in the last financial year. In the previous year (2018-19), the revenue was Tk37.98 crore and net operating profit Tk6.72 crore. Agni Systems' associate company incurred a loss of slightly over Tk2 crore.

In the first nine months of 2019-20, Agni Systems made a profit of Tk5.42 crore with an EPS of Tk0.75.

But Muhammed Shariful Islam said the company's operating income and profits were alright. However, due to the adjustment of investment losses, profits have declined. It seems the company incurred losses in the last quarter (of 2019-20), but it did not happen so.

Agni Systems Limited has been providing internet services since 1995. It was listed on the capital market in the Information and Communication Technology sector in 2003.

The main activities of the company are to render services of electronic mail, internet access, electronic data communication, computer networking, electronic data processing, electronic data entry and software development.

It also works to provide service of consultancy, buy, set up, install, produce, rent and deal otherwise in all types of computer, computer peripherals, fax/data modem, computer networking equipment, related accessories, archiving contentment, access network, web listing, IT support & software maintenance service, domestic and international gateways for all type of communication & computer software.

The company has also invested in setting up a dairy farm in Gazipur. It has spent over Tk1.58 crore for shed construction for the farm.

About this investment, the company auditor said the investment has been made by the firm during the year under audit which is not supported by objectives/clauses of the Memorandum of Association of the Company.