By: Azee Securities Private Limited
We would forecast the performance of Pakistan Telecommunication Company Limited (PTCL) during 1QCY15 in our today’s morning report as the meeting of the board of directors is scheduled on to be take place on April 15, 2015.
Earnings likely massively down: On unconsolidated basis, PTC is expected to post bottom line of Rs 1.96 billion (EPS: Rs 0.39) in 1QCY15 compared to Rs 3.36 billion (EPS: Rs 0.66) in 1QCY14, depicting drop of 42% likely driven by lower termination rates for incoming calls. Furthermore, higher operating expenses and lower other income would drag profitability. However comparing QoQ, earnings to surge on account of no major one time voluntary separation scheme cost which was recorded in 4QCY14.
Revenue to decline: Topline likely to decrease by 9% YoY to Rs 19.28 billion against Rs 21.11 billion in 1QCY14 due to lower incoming calls and reduction in termination rate. Incoming calls likely to massively decline to average 320mn mins/month in 1QCY15 owing to users shifting towards other software. The cost of services likely to higher by 5.2% to Rs 14.23 billion in 1QCY15 from Rs 13.53 billion during 1QCY14. As a result of higher cost of services, gross profit likely to drop by 33% to Rs 5.05 billion in 1QCY15 against Rs 7.58 billion in 1QCY14. The gross margin likely to fall at 26.2% in 1QCY15 against 35.9% in 1QCY14. Other income likely to decrease by 12% to Rs 966 million against Rs 1,091 million due to lower return on bank deposits.