PTCL corporate briefing – profitability during CY20 witnessed a surge of 38% YoY,

Pakistan Telecommunication Company Ltd held its corporate briefing session in which the management discussed the CY20 financial performance.

Highlights

· The consolidated profitability during CY20 witnessed a surge of 38% YoY, arriving at PKR 3,272mn against PKR 2,377mn in CY19, which came on the back of higher revenues from Ufone and Ubank. On a quarterly basis, the company’s bottom-line settled at PKR 1,711mn compared to a loss of PKR 301mn in SPLY. This stellar jump in earnings was contributed by PTCL, Ufone and Ubank, showcasing an outstanding earnings growth of 123%, 59% and 15x YoY, respectively.

· Topline of the company during CY20 remained stable at PKR 129,422mn. Meanwhile in 4QCY20, net sales clocked-in at PKR 33,774mn vis-à-vis PKR 31,574mn in 4QCY19, portraying a growth of 6% YoY amid growth in Ufone, PTCL and Ubank’s revenues by 1%, 4% and 58% YoY, respectively.

· In CY20, Ufone’s 4G subscriber base witnessed a massive jump of 89% YoY. As a result there was a surge in data traffic. Furthermore, the company added more subscribers, generating more sales for the company. The company also focused more on digitalization which gave boost to online recharge ratio.

· The Ubank business of PTC witnessed a healthy growth of 50% YoY in CY20, which was led by improvement in deposit base by 98% YoY along with loan portfolio by 43% YoY. Alongside this, the company processed 46% fresh loans through its Digital Loan Acquisition App. Ubank has a network of 201 branches and 199 ATMs in Pakistan.

· Pertinently, sales and subscribers of PTCL’s fixed broadband business were the highest in 2020 compared to the last 5 years.

· While its wireless BB Business also depicted an 8% YoY growth in CY20. In wireline business, the company is embarking to take it to the next level by rolling out fibers from 4QCY20 onwards.

· The company during CY20 reduced its fuel and power cost (which comprise 12% of cost of goods sold) by 6% YoY by modernizing its equipment which eased energy consumption. The company is also installing solar panels in some of its offices to further curtail the fuel and power costs.

· Regarding a question on towers, the company is consider two options; i) tower outsourcing, and ii) sharing towers with other mobile companies.

· Upon a question on SBP’s relief given to borrowers in times of COVID-19, the company informed that for Ubank it has made voluntary provision to deal with any non-performing loans in futures.

· PTCL group is significantly exposed to the USD. Ufone, which is a leveraged business, has a higher exposure. For this, the company undertook hedging, and has split currency exposure between USD and Chinese Yuan.

PTC group (holding company) is composed of PTCL and three wholly-owned subsidiaries namely Ubank, Ufone, and Dvcom & SmartSky. The company provides telecommunication and other communication facilities throughout Pakistan. The major source of revenue comes from services such as data, voice, IPTV, connectivity services, interconnect, information and communication technology (ICT), digital solutions, and equipment sales. The government of Pakistan and Etisalat International Pakistan (EIP) holds the majority of the shares of the group.

Courtesy – AHL Research/ Spectrum Research 

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