By: WE Financial Services Limited
Pakistan Telecommunication Company Limited (PTCL) recently announced corporate results for the period ended September 30, 2015 where owing to reduced international incoming rates and lower penetration of fixed line segment, the bottom-line of the company posted a decline of 9% YoY in 9MCY15. The profit after taxation (PAT) of the company totaled Rs 7,944 million (EPS: Rs 1.56) in 9MCY15 versus a PAT of Rs 8,742 million (EPS: Rs 1.71) in 9MCY14. However, higher other income and reduced finance cost did provided support to the bottom-line. The other income grew by 9% YoY mainly on back of gain on disposal of available for sale investments and on disposal of property.
More severe QoQ decline: Primarily due to decline in revenues and higher costs, the bottom-line of the company posted a 48% negative growth on QoQ basis as its PAT totaled Rs 1,867 million (EPS: Rs 0.37) in 3QCY15 as against a PAT of Rs 3,603 million (EPS: Rs 0.71) in 2QCY15. The surge in finance cost and lower other income were some of the other factors that had a negative impact on the bottom-line.
Major dent by lower revenue: The net revenue of the company totaled Rs 58,123 million in 9MCY15 which is 7% YoY less when compared to a net revenue of Rs 62,567 million in the identical period in CY14 being the foremost reason due to which the bottom-line of the company witnessed negative growth. The decline in net revenue was attributed to drop in revenue from wireless segment and lower international incoming rates. The international incoming rates were dropped due to deregulation of International Clearing House (ICH). The cost of sales of the company too remained lower reducing by 3% YoY in 9MCY15. Therefore gross profit fell by 15% YoY in 9MCY15 to Rs 17,755 million. The gross profit margin reduced to 30.5% in 9MCY15 versus 33.4% in 9MCY14.