1HCY14: PTCL reaps high profits

PTCL’s after-tax profit increased to Rs8.2 billion or Rs1.62 per share for six months ending June 2014. PHOTO: FILE

KARACHI: 

Supported by higher revenues from its broadband and cellular business, the Pakistan Telecommunication Company Limited (PTCL) has managed to earn profits of more than Rs1 billion every month in the first half of 2014, according to its financial results, released on Tuesday.

PTCL’s after-tax profit increased to Rs8.2 billion or Rs1.62 per share for six months ending June 2014. This translates to an increase of 4.7% compared with Rs7.8 billion or Rs1.51 per share it earned in the corresponding period of 2013.

The financial results were accompanied with an interim cash dividend of Rs10 per share, according to a notification sent to the Karachi Stock Exchange.

The broadband giant grossed Rs68.5 billion in sales during the review period, up 4.7% when compared with Rs65.4 billion it grossed in the same period last year.

“We attribute an increase in revenues to the surge in cellular and broadband subscribers with major increase in EVO wireless segment,” Topline Securities said in a statement. “Moreover, other income increased 3.4% to Rs2.5 billion while financial charges decreased to Rs1.2 billion in the first half of 2014, down 30%,” it said, adding the company’s cost of sales surged to Rs42.5 billion. Resultantly, gross margins improved by 1% point to 37.3%

On a quarterly basis, the company’s revenues increased by 5.6% to Rs35.1 billion compared with Rs33.2 billion of April-June quarter of 2013, the Topline report said. “Although, a monthly average of long distance international (LDI) minutes witnessed a decline of around 11%, improvement in revenues is linked to surge in cellular and broadband subscribers.”

The report said that 8.6% higher cost of sales offset incremental benefit of revenue growth for the quarter. “As a result, gross profits remained stagnant at Rs12.6 billion while gross margins declined by 2% points to 35.8%.”

Higher admin, selling and distribution costs further dented revenue, according to the Topline’s report – admin cost increased by 17% to Rs5 billion while selling and distribution cost increased by 25% to Rs2.4 billion.

The report further stated that on a quarter-on-quarter basis, higher cost of sales resulted in 3% fall in gross profits despite a 5.3% increase in revenues. During the quarter, financial charges increased by 119% to Rs854 million.

In the second quarter of 2014, the company posted consolidated earnings of Rs3.9 billion or Rs0.76 per share as compared to Rs4.5 billion or Rs0.89 per share in the same quarter last year, the report said.