PTCL reports 188% profit increase in Q1 of 2023

Pakistan Telecommunication Company Limited (PTCL), the country’s leading provider of telecom and ICT services, has released its financial results for the quarter ending March 31, 2023. The announcement was made during a Board of Directors meeting on April 17, 2023 in Islamabad.

PTCL’s profits increased by 188 percent on a standalone basis during the period. According to a notification to the Pakistan Stock Exchange (PSX), the company earned Rs. 5.47 billion in the first quarter of 2023, up from Rs. 1.90 billion the previous year.

PTCL Group maintained its momentum and strengthened its position as Pakistan’s leading integrated telecom service provider in the first quarter of 2023.

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Despite the Group’s continued difficult macroeconomic conditions, revenue increased by 23.2% compared to the same period last year.

This significant revenue increase is primarily due to strong performance in fixed broadband, mobile data, business solutions, and banking services.

The negative effects of macroeconomic challenges that emerged in 2022 continued to impact businesses in 2023. With rising energy and fuel prices, telecom operators face significant challenges in providing quality services to their customers at an affordable price.

Pakistan’s balance of payment issues, as well as restrictions imposed by the State Bank of Pakistan on LC opening, have impacted network roll-out timelines and resulted in a significant devaluation of the Pakistani rupee (PKR) against foreign currencies.

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The deterioration of the rupee-dollar parity, rising interest rates, and additional taxes on telecom operators, in addition to the standard corporate tax, have all had a significant impact on profitability.

To mitigate the effects of these difficult issues, the government must intervene with policy to provide much-needed relief to the sector.

PTCL Group Highlights

• PTCL Group’s revenue of Rs 43.2 billion in Q1, 2023 is 23.2% higher as compared to the same period of last year.
• The Group’s profitability was, among other factors, particularly affected by the significant bout of devaluation as the Group has unhedged FOREX liabilities. The Group has posted a net loss of Rs 5.7 billion.
• PTCL continued its growth by posting 17.1% YoY revenue growth in Q1, 2023.
• PTML’s (Ufone) revenue grew by 20.0% YoY as compared to Q1, 2022.
• U Bank continued its growth momentum and has achieved a 73.0% growth in its quarterly revenue over the same period of last year.

PTCL Highlights

• PTCL’s revenue of Rs 22.95 billion for the quarter is 17.1% higher than Q1 2022, mainly driven by growth in carrier & wholesale and broadband segments.
• The company has posted an operating profit of Rs 1.5 billion with a 54.7% growth over last year and a net profit of Rs 5.5 billion for the quarter. Increase in non-operating income, due to translation gain on the Company’s forex denominated receivables, dividend income from a subsidiary and gain on disposal of obsolete assets due to upgrade and fiberization of network, played a significant role in achieving 187.2% increase in the company’s net profit as compared to same period of last year.

PTCL strengthened its flagship FTTH brand, ‘Flash Fibre,’ by acquiring the highest net adds in the industry, which was made possible by exceptional customer service and aggressive fibre network expansion across the country. PTCL’s topline growth was ensured by the rapid rollout of FTTH and strong performance in the carrier and wholesale segments.

The recently launched OTT streaming platform ‘SHOQ’ by PTCL, which provides premium entertainment, sports, and news content to all data users, is bridging the need for high-quality content at an affordable price. Furthermore, through its gaming platform ‘GameKey,’ PTCL Group collaborated with PUBG Mobile to launch the largest E-Sports gaming competition.

In addition, the Group collaborated with DE-CIX to establish an Internet Exchange, and with Vodafone to introduce end-to-end IoT solutions in Pakistan. PTCL commemorated International Women’s Day 2023 by launching SheTalks, a dedicated voice package for female customers.

PTCL Consumer Business: Steady Performance

The company’s fixed broadband business achieved 17.4% growth in revenue YoY which is primarily attributable to a two-fold increase in Flash Fiber’s revenue and subscribers over comparative quarter. IPTV segment also showed a 6.2% revenue growth YoY. Voice and wireless revenue streams have seen a decline due to continued conversion of customers to OTT services and tough competition from cellular operators.

PTCL Business Services

Business services segment continued its momentum sustaining market leadership in IP bandwidth, cloud, data center, and other ICT services segments. PTCL’s enterprise business grew by 12.1% as compared to last year, while carrier and wholesale business continued its growth momentum and achieved 36.9% overall revenue growth.

International voice revenue has increased by 22.7% as compared to last year. Despite the slowdown of economic activity, overall Business Solutions revenue has shown a remarkable growth of 27.2% on year-on-year basis.

Being the national telecom carrier and connectivity backbone in Pakistan, PTCL Group strives to provide innovative solutions to accelerate growth for a ‘Digital Pakistan’ through robust telecommunication infrastructure and a diverse portfolio of services with enhanced customer experience. PTCL collaborated with the Ministry of Federal Education to develop an app called Teleschool Pakistan, which aims to provide free digital learning for students. The launch of this app by the Prime Minister of Pakistan in March attracted widespread attention across Pakistan.

PTML – Ufone Highlights

Continuing its growth trajectory, Ufone recorded an impressive 20.0% YoY increase in its revenue. Ufone has recently gained a momentous milestone of achieving 24 million subscribers resulting in a 0.4 percentage point increase in market share. Network modernization activities, carried out in the first quarter of 2023, resulted in better customer experience for Ufone subscribers.

With this improved customer experience, growth in engagement acquisition numbers and better data speeds, Ufone has achieved the 2nd highest customer net adds in the industry during the first quarter. Ufone 4G recently launched a WhatsApp service for a hassle-free customer experience, collaborated with Nestlé Pakistan Limited to establish an advanced customer service solution for Ufone’s BPO operations and partnered with Islamabad United for PSL8.

U Bank Highlights

Despite an extremely tough macroeconomic environment, U Bank, the microfinance and branchless banking subsidiary of PTCL, continued its growth trajectory and has achieved a remarkable 73.0% growth in revenue and an impressive 64.5% growth in net profit over the comparative quarter of last year, while maintaining a strong balance sheet position.

The bank stands resolute in its commitment towards financial and social inclusion, utilizing its extensive outreach to provide exceptional services to a diverse clientele across the length and breadth of the country through its rural retail banking, corporate finance & investment banking, Islamic banking, urban retail banking, corporate banking, and digital banking canvases.

Corporate Social Responsibility

During the first quarter of 2023, PTCL Group undertook various CSR initiatives to strengthen its position as a national carrier. Amongst these initiatives, Ufone 4G proudly collaborated with ConnectHear to facilitate communication and socialization for the deaf community. The initiative perfectly resonates with Ufone 4G’s brand philosophy of inclusivity, under which we strive to foster equality and shared growth.