Worldcall Telecom Ltd. (WTL) held its analyst briefing yesterday to discuss CY23 and 1HCY24 results and its future outlook.
The following are the key highlights:
- To recall, the company posted a loss of PkR750mn (LPS: PkR0.15) in 1HCY24 compared to PkR1.2bn (LPS: PkR0.59) SPLY. The reduction in loss was primarily attributable to higher revenues and the absence of exchange loss compared to 1HCY23.
- Topline clocked in at PkR2.3bn in 1HCY24 compared to PkR1.3bn in SPLY, an increase of 73%YoY.
- The company achieved positive EBITDA in 1HCY24, which is crucial for any technology firm. However, due to a substantial asset base, depreciation costs are high, preventing this achievement from fully translating into the bottom line.
- WTL is evolving from a service provider to a solutions-focused company, offering a diverse portfolio of products tailored for the Fintech, Telco, Retail, and Fashion sectors.
- CADNZ, a comprehensive 360-degree Customer Relationship Management application tailored for the banking sector, covering all non-core banking aspects, has the potential to generate annual revenue of US$4mn. At the same time, KRYTON, an infrastructure service product, is projected to achieve US$3mn in yearly revenue. Management foresees these two as promising products.
- Management announced that their holding company, GTLK, is prepared to settle TFC-III. This development indicates a willingness to resolve longstanding issues.
- WTL has 1,800km of metro fibre deployment across 20 cities, with an estimated addressable market size of 3.2mn households.
- The company stands to benefit significantly from the launch of 5G in the country, as it has already established the necessary infrastructure. This positions it as the premier fiber network provider for all telecommunications companies.
- Management stated that the company has launched the ‘Million Connect’ initiative, aiming to expand broadband access to 1 million users by leveraging existing infrastructure and thereby fostering broadband growth.
- Management stated that PkR78mn was generated as additional revenue under the affordable broadband initiative.
- Additionally, under a US$7mn technology development contract with WMG, the company plans to launch 200,000 broadband subscriptions, with 10,000 connections already activated.
- WTL’s ultimate holding company is GLTK, which is traded in the USA’s OTC market with a market cap of US$394mn.
- The company will generate revenue by providing back-office services to GLTK and its affiliates. The back-office service contract for US$1.2mn/year with GlobalTech Corp. is being negotiated.
- Efforts are being made to upgrade the existing Hybrid Fiber Coaxial (HFC) network to fibre-to-the-home (FTTH) technology. Notably, the upgrade in Lahore has already been completed, and we are transitioning from HFC to FTTH.
- Management plans to expand the network into additional cities to enhance market presence and accessibility, this initiative aims to tap into new customer bases.
- The scrip is not in our formal coverage.
Courtesy – AKD Research
