Uztelecom net profit drops by nearly a quarter due to foreign exchange losses

The drop in the telecom operator's bottom line occurred despite a solid performance in top-line revenue, which grew by 19.5% to reach UZS 10.6 trillion. Because the cost of services rose at a slower pace than revenue, the company's gross profit expanded from UZS 3.1 trillion in 2024 to UZS 4.2 trillion in 2025. Operating profit also edged up by 5.3%, surpassing UZS 1.6 trillion.

However, adverse foreign exchange movements heavily impacted the final financial result. While Uztelecom recorded a foreign exchange gain of UZS 113.8 billion in 2024, it suffered a currency-related loss of UZS 85.6 billion in 2025. Earnings were further dragged down by a UZS 92.1 billion loss stemming from the disposal of an associated company.

By the end of 2025, Uztelecom’s total borrowings stood virtually unchanged year-on-year at approximately UZS 8.3 trillion, though the cost of servicing this debt increased noticeably. The weighted average effective interest rate on fixed-rate loans, which account for UZS 3.3 trillion of the debt, rose to 11.4% from 8.1% the year before. For the remaining UZS 5 trillion in floating-rate loans, the rate grew to 8.3% from 5.3%.

Deutsche Bank AG remains the company's largest creditor, providing a euro-denominated loan equivalent to approximately UZS 2.8 trillion, which matures in May 2029. The Japan Bank for International Cooperation is the second-largest lender with a yen-denominated facility exceeding UZS 1 trillion, due in January 2035. Additionally, Uztelecom holds another euro-denominated loan from Deutsche Bank AG totaling UZS 965.9 billion, set for maturity in October 2027.

Shareholders are scheduled to review the company's 2025 profit distribution at the annual general meeting on June 29. The supervisory board has recommended a dividend payout of UZS 372.57 per ordinary share and UZS 288.5 per preferred share.

Unlike the net earnings reported under IFRS, dividend distributions will be determined based on National Accounting Standards (NAS). Under local accounting rules, Uztelecom’s net profit actually surged to UZS 590.9 billion in 2025, up significantly from the UZS 41.7 billion reported in 2024.

The Uzbekistan National Investment Fund (UzNIF), which holds a 30% stake in Uztelecom, requires its portfolio companies to allocate at least 50% of their net profit toward dividend payments. To qualify for the upcoming payouts, investors must hold the shares by June 19. Although the official registry closure date is set for June 23, the Uzbekistan stock market operates on a T+2 settlement cycle, meaning trades take two working days to fully finalize.