Corporate results: Broadband business drives PTCL on the road to continuous growth

Despite declining revenue from ICH, telecom giant posts profit of Rs7.68b, and announces payout.

KARACHI:

On Tuesday, Pakistan Telecommunication Company (PTCL) announced its earnings for the quarterly and the six-month period ended June 30, 2013, showing steady revenues at Rs65.56 billion for the six-month period, compared to Rs62.58 billion in the previous period from July 1, 2013 to December 31, 2013.

The telecom giant continued to maintain its performance, announcing earnings per share of Rs1.54, beating market expectations as its wireless internet and broadband business expand balancing a decline in long distance international (LDI) minutes.



According to estimates provided by Global Securities, LDI revenues constitute 38% of PTCL total standalone revenues, while the rest is coming from fixed line, wireless local loop and broadband segments.

However, charging higher rates under the international clearing house arrangement also supported the telecom giant’s earnings.

The ICH gateway converges all international calls to a single technical gateway led by PTCL against the past practice of being handled by 14 long distance international operators.

Operating profits jumped to Rs13.88 billion in the semi-annual period from Rs4.14 billion in the previous six-month period, mainly due to the successful wrap-up of the voluntary separation scheme for its employees, which accounted for a colossal expense of Rs9.46 billion in the last period.

Taxes for the six-month period jumped from Rs1 billion in the previous period to Rs4.2 billion, however, after-tax profits still ended up higher, clocking in at Rs7.86 billion against Rs1.18 billion in the last semi-annual period.



According to investors, the Supreme Court hearing on the ICH case – a major source of revenue for PTCL – which has been scheduled in August may not contain a substantial decision, allowing PTCL to continue bolstering revenue through the gateway to outweigh losses in LDI minutes.

Ufone, PTCL’s wholly-owned subsidiary, is also looking into a potential deal to buy out rival Warid Telecom, which can significantly improve the cellular services provider’s average revenue per user.

Published in The Express Tribune, July 17^th, 2013.

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