Pakistan Telecommunication Company Limited (PTCL) has announced its financial results for the nine months’ period, ending on September 30, 2019.
PTCL Group’s revenue for the period has grown year-on-year (YoY) by 4.5% to Rs. 98 billion. Ufone’s revenue has increased 6% YoY, UBank, a microfinance banking subsidiary of PTCL, has shown significant growth of 50% in its revenue over last year.
However, PTCL Group’s operating profit and net profit for the nine months has decreased by 15% and 32% respectively as a result of high inflation, significant devaluation of PKR against USD and higher power tariffs.
PTCL’s revenue of Rs. 53.8 billion for the nine months is slightly higher than last year by 0.4%. PTCL’s flagship Fixed Broadband services posted revenue growth of 5%. The company is focusing on upgrading its top revenue-generating exchanges under the Network Transformation Project (NTP) in different parts of Pakistan.
For the 95 exchanges fully transformed to date in 12 cities, YoY revenue growth is higher at 12% and there is a 35% reduction in customer complaints. Fiber-To-The-Home (FTTH), deployed in major cities with more than 100,000 lines, has received a positive response from the customers as well.
Corporate, Wholesale and International businesses continued their growth momentum from 2018 and have achieved 7% overall revenue growth. PTCL has also entered into a strategic partnership with a local telecom operator for its network expansion, with edotco to enhance Pakistan’s connectivity capabilities and Irdeto for Wi-Fi management and parental control functionalities.
Wireless revenue for the period has declined on a YoY basis due to strong competition from cellular companies providing wireless data services. There is a continued decline in voice revenue due to continued conversion of subscribers to OTT, cellular services and illegal/grey traffic termination resulting in declining voice traffic volumes.
PTCL has posted a Net Profit after Tax of Rs. 5.5 billion for the nine months which is 14% higher than the same period of last year. Operating profit for the period remained under pressure compared to last year mainly due to an increase in operating cost on account of a significant hike in power tariffs and currency devaluation.
The company’s non-operating income has increased due to higher income on investments as a result of an increase in interest rates and translation gain on forex based assets.
VIS Credit Rating Company Limited (VIS) has reaffirmed entity rating of PTCL of “AAA” (Triple A) and short term rating of “A-1+” (A-One Plus). The medium to long-term rating of ‘AAA’ denotes the highest credit quality, with negligible risk factors, being only slightly higher than the risk-free debt of the Government of Pakistan.
The assigned ratings reflect PTCL’s leading market position, extensive network infrastructure, strong financial risk profile, and adequate business risk profile. Ratings also incorporate strong sponsor profile with a majority shareholding of 62% vested with the Government of Pakistan and 26% stake along with management control held by Etisalat International Pakistan, a 90% owned subsidiary of Etisalat Group.