By: WE Financial Services Limited
Pakistan Telecommunication Company Limited (PTCL) began the New Year with 26% YoY decline in its bottom-line in 1QCY15 owing to multiple reasons which include; decline in international incoming minutes, lower incoming rates, and reduction in other income. The profit after taxation (PAT) of the company totaled Rs 2,474 million (EPS: Rs 0.49) in 1QCY15 which is 26% YoY down from Rs 3,363 million (EPS: Rs 0.66) in 1QCY14. On QoQ basis however the performance of the company stood better as the company suffered from a loss after taxation of Rs 3,535 million (EPS: Rs 0.69) in 4QCY14.
Revenue drops around 9% YoY: Owing to decline in international incoming minutes and lower termination rates for income calls, the net revenue of the company fell by 8.8% YoY in 1QCY15 to Rs 19,251 million as against Rs 21,113 million in 1QCY14. The performance of the broadband segment of the company however remained impressive on back of growing customer base. The revenue of the broadband segment including DSL and EVO grew by 8% YoY in 1QCY15 to Rs1.47 million. On the other side due to lower salaries expense, the cost of sales of the company declined by 3.1% YoY in 1QCY15 to Rs 13,117 million versus Rs 13,533 million in 1QCY14. Therefore the gross profit fell by 19.1% YoY in 1QCY15 to Rs 6,134 million as against Rs 7,580 million in the identical period in CY14.
Disappointment from other income: The bottom-line of the company saw disappointment from the other income segment which dropped by 26.5% YoY in 1QCY15 to Rs 803 million versus Rs 1,091 million in 1QCY14. This decline in other income was mainly owing to absence of dividend income from Ufone, reduced profit on deposits, and lower cash balance.