Monday, September 16, 2019

GAMTEL, GAMCEL Raise Concerns over Decline in Financial Performance

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By Momodou Jarju

The Gambia’s two telecommunications companies have raised concerns over the decline in their financial performance for the year ended 2017.

Officials of Gamcel and Gamtel disclosed that appropriate measures ought to be taken to put both institutions into a sound and sustainable financial footing.

The General Manager of Gamcel, Elizabeth Johnson, has already indicated that the national cellular company needs a bail out or else, risks halting its operations.

Mr. Shola Mahoney, chairman of the board of directors of Gamcel/ Gamtel, said both companies’ financial performances in terms of internal growth as well as profit declined. 

Mahoney said Gamcel’s situation is more precarious because it does not enjoy any form of monopoly but subjected to the competitive pressure of the private sector.

“It’s important for us to point out, there is need for us to point out at this stage, Government with the assistance from world bank has already conducted a number of consultancies into the repositioning and restructuring of Gamtel and Gamcel so that we can take a decision on how to make the two companies more efficient and viable,” he however said.

The officials made these statements at the National Assembly on Tuesday while presenting their activity reports and financial statements before the Public Enterprise Committee (PEC). 

GAMTEL’s Financial Performance

Gamtel, whch continues to be the highest employer in the telecommunication sector with a total employee base of 1,156 according to PURA as of 2018, financial performances decreased significantly in 2017, reporting a total of revenue of D685 million compared to D939 million in 2016, a decrease of 27%. 

The main reason for the reduction in revenue was attributed to non-accounting of the revenue earned from the international gateway, a revenue stream which was taken over by the Government in 2013.

The officials said the gateway is managed by Gamtel but the revenues earned are controlled by the Government.  

“The total cost of sales for 2017 was D275 million compared to D474 million in 2016, representing a 42% decrease or D200 million due primarily to the non-accounting of the international gateway out-payments. The gross profit for the year decreased by 12% from D465 million in 2016 to D410 million in 2017 culminating to a net profit after tax of D29 million compared to D63 million in 2016,” Gamtel stated.

GAMCEL’s Financial Performance

Gamcel’s turnover in 2017 was D387 million compared to D407 million in the previous year, showing a drop of D20 million or 4.9%. Officials of the national cellular company said the reduction in revenue was mainly due to constraints in network, challenges posed by the political impasse, a month shutdown of the billing system and the fierce competition in the market.

“Cost of sales for the year was D193 million compared to D256 million in 2016, a decline of D63 million representing 24.6%. The decline in cost of sales was as a result of significant drop in interconnection costs between Gamcel and other operators. The gross profit reported in 2017 was D194 million with a margin of 50% compared to gross profit of D151 million and a margin of 37% in the previous year,” Gamcel officials said.

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