Holding licenses for all three telecom segments, it is almost unfathomable that PTCL would witness declines in its financial performance. Yet the companys financial results for the first quarter of the current fiscal year failed to impress analysts and investors alike. The companys revenue jumped by 4.2 percent in 1QFY12, over the same period last year, but this increase did not translate into a fatter bottom line for PTCL because the companys cost of services also increased by 6.5 percent. As a result, PTCLs gross profits slid down by roughly one percent, over the same period. The Companys administrative, general, selling and marketing expenses; all expanded during the period. However, the biggest hit came under the head of other operating income. The significance of other operating income can be seen from the fact that in the 1QFY11 almost 60 percent of the profit before tax came from this head. In the 1QFY12 other operating income fell by approximately 48 percent; taking the companys profit after tax down by a whopping 32.6 percent as compared to the same period in FY11. Consequently, the earnings per share fell from Rs.0.41 in 1QFY11 to Rs.0.28 in 1QFY12. Sources reveal that this decrease in other operating income was brought on mainly because of the fact that Ufone; a subsidiary of PTCL, did not give a dividend in the 1QFY12. On the other hand, Ufone had announced a handsome dividend in 1QFY11. This time around, Ufone did not treat its major stakeholder with a payout since it had also handed out a handsome dividend in the previous quarter. PTCL will likely perform better in the upcoming quarter, due in part to expectations of a sizeable dividend announcement by the companys cellular services provider subsidiary. The companys broadband service has also displayed appreciable growth and will likely add some sunshine to the presently gloomy performance.
====================================================== Pakistan Telecommunication Company Limited ====================================================== (Rs mn) 1QFY11 1QFY12 chg ====================================================== Revenue 13,856 14,483 5% ====================================================== Cost of services 10,185 10,852 7% Gross Profit 3,671 3,631 -1% Gross margin 26% 25% -5% Admin & general exp 1,763 1,819 3% Other operating income 1,894 979 -48% Profit for the period 2,081 1,402 -33% EPS (Rs) 0.41 0.28 ======================================================
Source: KSE notice
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