Pakistan’s largest telecom company, PTCL, reported massive decline of its profits for 2014. Compared to 2013, profits plunged by 74.8 percent due to huge expenses under the head of Volunteer Separation Scheme (VSS).
The telecom group made a profit of Rs 3.966 billion in 2014 as against profit of Rs 15.752 billion that it made in 2013, the financial announcement of the company reflecting group income numbers stated. The group Earning Per Share (EPS) declined to 78 paisas against previously good position in which it stood at 3.09 EPS due to the blessings of controversial International Clearing House (ICH).
The Volunteer Separation Scheme cost PTCL over PKR 8.174 billion
Whereas the company without its subsidiaries also showed a drop of 58.9 percent in profits which stood at Rs 5.207 billion in 2014 versus Rs 12.696 billion reported in 2013.
The decline in the profitability was seen due to VSS scheme that cost Rs 8.174 billion to the entire group. This expense also eroded group’s earning revenues which also showed decline of 1 percent after many years in the history of the company.
The company revenues in the outgoing year stood at Rs 129 billion as compared with Rs 131 billion in 2013, the balance sheet reported. It is because of the fact that the cost of services increased to Rs 88.72 billion in 2014 higher 5.5 percent than of 2013.
The company without its subsidiaries showed a drop of 58.9 percent in profits
But the huge drop of 74 percent in operating profit is worrisome for the company which decreased to Rs 6.201 billion in 2014 from Rs23.793 billion in 2013. The loss in operating cost is likely to be a huge investment of the company on the launch of 3G for its subsidiary Ufone.
The detail expenses and investment of the company however will be revealed later on as the company discloses its information later on.
Khurram Shehzad, Director Investment Strategy of Arif Habib Group said:
“Decline in PTCL’s profitability was due to VSS expenses, which aren’t a regular process in the company.
The company will recover its profits in the coming years as it is now more efficient after retrenchment of redundant staff member which showed up in the operating cost previously.
The company will hire fewer more efficient people to promote and expand its advance technology business which will be more productive to the company compared to old employees”.
On the other hand, the expense under the head of development and cost services may increase in years to come due to the expansion of 3G network for its subsidiary Ufone, he added.
Well, snatching extra charges from customers and yet i can say PTCL is the best company who serves users with mentuoned speed. On other hand, Telecom company advertise 3G, and we are availing 2G speed and even if this better there is fluctuation in speed Kbps not KBPS.
W3LL, we can give statement against ptcl but cant get rid of it.
PTCL is like WAPDA… (Monopoly).
Enjoy and dont cry.
By all accounts Ufone’s 3G speeds are the worst of all the telcos. It seems to be by design. With PTCL holding 80% of the broadband market Ufone does not want to compete with it’s parent company. The bad news for both is that there is no reason at all for a consumer to opt for a PTCL broadband connection now when 3G from other companies is so much more value for money. PTCL’s profits will continue to go down in coming years even after the end of the VSS.
I could guarantee PTCL can be a successful player if they make the packages same as the Telenor 3G or Mobilink 3G packages. Now they have time to do something but when the water will have crossed the limit then there will be a not option for them. They have the best quality dongle of 3G and 4G which has a prowess to become a best one. I’m really feel pity for PTCL.
me too planning to switch to Mobilink 3G but its coverage is a bit limited in Quetta. waiting for it to expand.
PTCL was skimming profits from its broadband and wireless evo services, now is the right time for PTCL to implement competitive pricing in order to remain on the top position. Else 3G / 4G – LTE will rule in days to come, and will poison PTCL gradually…
my father works at ptcl.he is always worried about losing his job whenever they launch vss.he tells that the ceo and the management of the company isnt nice with its employees at all.some people are even forced to take vss.je once told me that someone was beaten up when he refused to take vss.
ptcl ke policy maker be pagal hen last year 3g launch hua sath he in pagl ke bacho ne sabhi rates revised ker diye,, wo din door nhi jab ptcl shutdown ho jaye ga wateen ki trh
Wateen kab shut down hoa hai bhai? I am using it for the last 5 years and very happy with their performance.