PTCL’s Profit Suffers on Account of Ufone Debts

PTCL profitability continued to show lackluster trend as it made a profit of Rs 716.4 million in the first quarter of 2015, down from Rs. 4.4 Billion that it made during same duration last year, showing a challenging financial situation due to heavy expenses of license fees of its subsidiary, Ufone and deployment of biometric verification machines.

Group revenues declined to Rs 30.17 billion in the said period as compared to Rs 33.37 billion from the corresponding period of 2014.

PTCL’s financial cost, however, surged to Rs 1.4 billion primarily due to heavy debt taken by its subsidiary Ufone for the acquisition of 3G license and renewal of 2G license which expired last year.

The company spent Rs 2.4 billion on different marketing and advertisement activities on the media whereas its general expenses grew to Rs 4.2 billion.

Waleed Irshaid, President & CEO PTCL said, “PTCL’s strategy of continuous investment in next generation communications infrastructure has translated in a robust first quarter performance and enabled us to deliver for our shareholders. This impetus continued across all of our business segments, especially in our wireless and fixed broadband and enterprise solutions.”

Besides expenses, the operating income of the company squeezed which actually made significant impact on the balance sheet. The company earnings under this head dropped to Rs 1.745 billion in the first quarter of 2015 as compared with Rs 5.92 billion during the same duration last year.

In outgoing year of 2014, 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, which shows a decline in profitability by 74 percent.

Struggling results were felt by shareholders as well since no dividends were announced and a decrease in EPS to 0.14 from 0.48.

Below is company’s official pr on the results:

Pakistan Telecommunication Company Limited (PTCL), the largest Information Communications Technology (ICT) services provider in Pakistan, declared financial results for the first quarter of FY 2015.

PTCL group revenues were Rs. 30.2 billion for the period ended March 31, 2015, while gross and net profit of the group stood at Rs. 8.5 billion and Rs. 0.716 billion respectively.

PTCL cash flows remained strong owing to the steady growth in the subscriber base and strong market position backed by the company’s growing fixed and wireless broadband business.

PTCL earned revenue of Rs. 19.2 billion during the reported period. Net profit was recorded at Rs. 2.5 billion, while gross profit remained Rs. 6.1 billion.