PTCL posts wider loss in 2023 despite higher revenue

KARACHI: Pakistan Telecommunication Company Limited (PTCL), the country's largest telecom operator, reported a net loss of Rs14.15 billion for the year ended Dec. 31, 2023, compared with a loss of Rs10.49 billion a year earlier.

The company said its revenue increased by 25.75 percent year-on-year to Rs190.61 billion. However, its cost of sales also rose by 26.50 percent to Rs151.97 billion. The company's gross profit margin declined slightly to 20.27 percent from 20.74 percent in 2022.

PTCL said its other income, which includes interest income, dividend income, and gains on investments, jumped by 96.70 percent to Rs30.61 billion. On the other hand, its administrative and general expenses increased by 26.27 percent to Rs25.84 billion, while its finance costs and other expenses surged by 73.98 percent to Rs51.72 billion The company also paid a higher tax of Rs6.47 billion, up by 5.56 percent from Rs6.13 billion

The company's earnings per share (EPS) stood at a negative Rs2.79, compared with a negative Rs2.07 in 2022.

The company said it has achieved a double-digit revenue growth of 25.8 percent during the financial year 2023. "PTCL Group has maintained its strong performance, strengthening its status as Pakistan’s top integrated telecom service provider," PTCL said in a statement.

The PTCL posted 15.4 percent growth in its revenues, owing to its strong performance in both retail and business segments, whereas Ufone achieved 25.6 percent growth in its revenues. The group’s subsidiary, U Microfinance Bank, kept a strong momentum and posted 76.5 percent revenue growth during 2023.

"The group’s profitability was, among other factors, particularly affected by significant rupee devaluation and high interest rates during the year," the statement added.

The statement said the biggest highlight for PTCL during 2023 has been the signing of a Share Purchase Agreement with Telenor Pakistan to acquire a 100 percent stake based on an Enterprise Value of Rs108 billion on a cash-free, debt-free basis.

It added that Flash Fiber, PTCL’s premium Fiber-To-The-Home (FTTH) service, showed tremendous growth with highest Net adds share within FTTH market in 2023. This phenomenal growth has been possible through the aggressive expansion of PTCL Flash Fiber and dedicated customer experience throughout the country.

"The company reported net profit of Rs9.4 billion, highest since 2013, which is 3.7 percent higher as compared to last year. Prompt deployment of FTTH and strong performance in Corporate and Wholesale segments are the cornerstones in PTCL’s topline growth."

The statement said PTCL fixed broadband business has shown 17.4 percent year-on-year growth propelled by the aggressive FTTH expansion. Flash Fiber showed unprecedented growth of 106.8 percent, taking lion’s share of the market’s net adds, whereas PTCL IPTV segment also grew by 2.5 percent year-on-year. Voice and Charji revenue streams continued the declining trajectory impacted by OTT services and competition from cellular operators.

In 2023, Ufone 4G emerged as the standout performer in the telecom industry, reporting exceptional revenue growth of 25.6 percent, surpassing all other operators, the statement added.

Ubank, microfinance and branchless banking subsidiary of PTCL, continued its growth trajectory and has achieved a remarkable 76.5 percent growth in revenue over the corresponding period of last year, while maintaining a strong balance sheet position as the bank continued to diversify its asset classes and funding streams while ensuring positive bottom-line impact.