After weathering the worst of peak Covid last year, Pakistan’s leading carrier has been posting healthy financial results of late. For the three-month period ended June 30, 2021, the Pakistan Telecommunications Co. Limited (PSX: PTC) Group managed to have a threefold increase in its bottomline, thanks to significant topline growth and non-core gains via “other income”.
This group performance comes after the management achieving a six-fold increase in net profits in the first quarter of 2021. Back then, it was due to strong gains in operating profitability of the PTCL Company and the two subsidiaries (Ufone and UBank). There is a similar pattern at work this time around, too, with the difference that the topline growth at the flagship company and the subsidiaries has been stronger.
Breaking down group results, the PTCL Company – which accounted for 57 percent of group revenues – scored Rs19.25 billion in revenues during 2QCY21, resulting in a growth of 9 percent year-on-year. As per information shared by the management, the fixed/wire-line broadband segment sales grew by 15 percent year-on-year and wireless broadband sales expanded by 13 percent due to increase in subscribers. Support also came from corporate and wholesale business, which increased by 13 percent over 2QCY20, as demand grew for IP bandwidth, data center and cloud services.
While the PTCL Company’s administrative expenses grew in double digits, checked growth in selling expenses and reduction in impairment losses helped operating profit to grow by 10 percent year-on-year to Rs1.25 billion in the quarter. However, it was the 58 percent yearly hike in ‘other income’ (income from financial and non-financial assets) to Rs1.69 billion (an increase of Rs623 mn) that mostly lifted up the bottomline by 35 percent year-on-year to Rs2.01 billion.
Revenues at UBank grew by 8 percent over 2QCY20, whereas Ufone, which is the last-ranked mobile network operator, managed to grow its topline by 9 percent amidst stiff competition in the sector characterized by low ARPU. Collectively, the subsidiaries achieved revenues of Rs14.63 billion in the quarter, an increase of 9 percent over 2QCY20.
The topline growth at the subsidiaries, along with managed growth in core costs and operational expenses, helped the two subsidiaries to post an operating profit of Rs363 million in the quarter, compared to Rs101 million operating loss in 2QCY20. The combined net loss has reduced by 35 percent year-on-year to Rs684 million.
At the end of the half-year ended June 30, 2021, the PTCL Group stood in a much stronger position compared to the same period last year. Revenues during 1HCY21 were up 8 percent year-on-year to Rs67 billion, while net profits had surged to Rs2.9 billion, as opposed to mere Rs33 million in 1HCY20. At this pace, the group is poised to record significant yearly growth in revenues and profits by year end.