PTCL records 97% increase in profits

LDI business spurs earnings.

KARACHI: Supported by higher revenues from its Long Distance and International (LDI) business, Pakistan Telecommunication Company Limited (PTCL) almost doubled its profits during financial year 2013 in line with market expectations according to analysts.

PTCL’s after-tax profit increased to a staggering Rs15.7 billion or Rs3 per share for the year ending December 2013, according to an official notification sent to the Karachi Stock Exchange on Monday. This translates to an increase of 97% compared with Rs8 billion or Rs0.23 per share it earned during financial year 2012.



The broadband giant grossed Rs131 billion in sales during 2013, up 11% from its 2012 revenues that stood at Rs118 billion.

The country’s largest integrated telecommunications services provider also declared a final cash dividend of Rs1 per share, taking the collective dividend for 2013 to Rs2 per share.

“The result is largely in line with our earnings per share (EPS) expectation of Rs3.14,” JS Research said in its report following the results. The key reasons for the strong growth this year include an 11% year-on-year jump in the revenues largely due to higher rates on international incoming calls and 31% YoY decline in the financial charges.

Topline Securities also stated the result was in line with their expectations. “We attribute the significant rise in earnings to the absence of the Voluntary Separation Scheme (VSS) charge in 2013 and higher revenues from LDI business,” Topline said in its report. The company had booked Rs9.5bn VSS expenses in 2012, which was not the case in 2013.

“The positive growth of PTCL’s revenue streams and net profits points to our dynamic corporate strategy and our enhanced customer base,” PTCL’s CEO and President Walid Irshaid said in a statement following the board of directors’ meeting held on February 2 in Abu Dhabi.

The company’s market share in the broadband, wireless and specialised telecom solutions segments has increased significantly during 2013 through introduction of state-of-the-art products and unmatched affordable services, Irshaid said.

Despite impressive results, the analysts mentioned that there was heightened uncertainty on the sustainability of the international clearing house (ICH).

It may be added that Telenor LDI Communications Ltd. already exited from (ICH) with effect from January 25, stating that grey traffic – as opposed to the purpose of ICH formation – increased significantly and the company had to suffer losses to the tune of Rs2.2 billion since the establishment of the telecom gateway.

In 4Q2013, Company’s topline dropped by 8.3% to Rs30.7bn YoY while gross margins declined by 4pps to 39.6%. The decline is primarily attributable to gradual fall in incoming international calls.

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Published in The Express Tribune, February 4^th, 2014.

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