PTCL full-year net profit falls 74 percent to Rs3.96 billion

KARACHI: Pakistan Telecommunications Company Ltd on Tuesday reported a sharp 74 percent fall in its full-year net profit as one-time employees’ layoff cost and higher services expenses have bitten.
In a statement to the Karachi Stock Exchange, the company reported a net profit of Rs3.96 billion for the year ended December 31, down from Rs15.75 billion the previous year.
The company also announced a final dividend of Rs1.5 a share, taking the total payout to Rs2.5/share during the year. Earnings per share came in at Rs0.78/share, compared with Rs3.09/share last year.
The company said its revenue for the year fell to Rs129.92 billion, compared with Rs131.22 billion a year earlier. Cost of service also increased to Rs88.72 billion, compared with Rs84.02 billion.
Analysts said the fall in profitability resulted from one-time hit taken by the company on voluntary separation scheme and losses due to a fire that broke out at the company’s Lahore facility.
Analyst Zeeshan Afzal at Topline Securities said the company’s profit declined due to lower revenue from international call traffic, higher administrative and financial costs and increased marketing expenses.
“Last year the company has taken several one-time charges, which hopefully it will not book in 2015,” Azfal said.
The voluntary separation scheme of Rs8.1 billion and losses of Rs.907 million caused by the fire were the major heads of expenses during the last year, he said.
Afzal, however, said the company is expected to regain its bottom line growth during the current financial year on growing fixed and wireless broadband business.
In 2005, the United Arab Emirates-based Emirates Telecommunication Corp took over management control of PTCL, after reaching a deal to buy a 26 percent stake in the company for $2.6 billion. The company’s market share in the fixed and wireless broadband and specialised telecom solutions segments increased significantly during FY2014.
The company, in a statement, said its broadband revenues significantly increased by 34 percent during the last financial year.
“The company’s profitability remained stable in spite of extraordinary expenses on account of a successfully completed voluntary separation scheme as well as losses due to fire and floods,” the statement said.
“PTCL cash flows remain healthy and stable due to the consistent growth in the subscriber base and strong market position.”
Walid Irshaid, President & CEO PTCL said the PTCL’s revenue growth during the past year was an indicator of the company’s dynamic corporate direction as well as its customers’ continued satisfaction and trust of its shareholders.
“PTCL is in a strong position to lead the telecom industry towards a brighter future, our broadband and corporate services portfolio performed exceptionally well in 2014,” Irshaid said.
“To cater to the increasing data needs of Pakistan, PTCL also introduced the next generation wireless broadband in Pakistan.”