PTCL posts 3pc profit in Q2 of 2019

ISLAMABAD: Despite rising inflation and depreciation of rupee against dollar, Pakistan Telecommunication Company Limited (PTCL) earned net profit of 3.0 percent for second quarter ending on June 30, 2019.

However, the revenues of PTCL declined by 0.8 percent during the first half of 2019. The company also benefitted from depreciation as it received some receipts in dollars. The PTCL high-ups did not share exact figures of dollar receipts.

“We are also modernising our 100 exchanges with investment of Rs25 billion in a phased manner and so far 76 exchanges have already modernised, while the remaining will be done within the current year,” PTCL CEO Rashid Khan and Chief Financial Officer Nadeem Khan told reporters while sharing financial results of the second quarter of 2019 after holding meeting of the Board of Directors on Wednesday.

Taxation payment witnessed steep decline and clocked in at 209 percent in the quarter under review. When asked about its reasons, the CFO said the group merged companies and paid up taxes in the same period of last year which increased the tax payment, but now they had come into normal taxation regime and subsequently the tax payment has decreased.

The PTCL stated that despite tough economic conditions, PTCL Group’s revenue for the half-year has grown year-on-year (YoY) by 9.0 percent to Rs66.3 billion as a result of an accelerated growth in the Ufone and Ubank revenues.

Ufone revenue has increased double digit YoY, Ubank, a microfinance banking subsidiary of PTCL, has shown growth of 50 percent in its revenue over last year.

PTCL revenue of Rs35.8 billion for the half-year is marginally lower than last year (0.8 percent). PTCL’s flagship Fixed Broadband services posted revenue growth of 5.0 percent.

The company continues to upgrade top 100 exchanges under Network Transformation Project (NTP) in different parts of Pakistan. For the 76 exchanges fully transformed to date in 12 cities, YoY revenue growth is even higher at 13 percent, with a 30 percent reduction in customer complaints.

The Corporate and Wholesale business continued its growth momentum from a strong 2018 and has achieved double digits revenue growth. PTCL has entered into a strategic partnership with Zong for network expansion, through provision of PTCL’s VSAT services in remote and far-flung areas of Pakistan.

The company’s wireless revenue for the period has declined on YoY basis due to strong competition by the cellular companies providing wireless data services. There is continued decline in domestic and international voice revenues 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, which is 3.0 percent higher than last year. Operating profit for the period remained under pressure compared to last year mainly due to increase in operating cost on account of significant hike in power tariffs and currency devaluation.

However, non-operating income has increased due to higher income on investments as a result of increase in interest rates.