KARACHI — Pakistan Telecommunication Company Limited (PTCL) has announced a strategic shift in its approach towards currency exposure, opting to convert its exposures into Pak Rupee instead of the US dollar.
The decision was revealed during a conference call by the company’s management, as reported by analysts at Arif Habib Limited on Thursday.
The company acknowledged incurring an exchange loss of Rs323 million due to the depreciation of the Pak Rupee. In response to this, PTCL management outlined a proactive measure to mitigate the impact of currency devaluation in the future by converting exposures into the local currency.
Despite facing currency-related challenges, the group reported a notable growth in profitability during CY18, with a 7 percent year-on-year increase. The profit reached Rs5,710 million compared to Rs4,318 million in CY17. This positive trend was attributed to higher revenues from Ufone and Ubank, recording increases of 13 percent and 64 percent YoY, respectively.
On a sequential basis, the Profit after Tax for CY18 stood at Rs1,764 million, marking a significant improvement compared to the Loss after Tax of Rs1,024 million in the same period last year, up by 13 percent YoY.
Contributing to the group’s profitability, PTCL, Ufone, and Ubank reported growth rates of 39 percent, 70 percent, and 86 percent YoY, respectively. Ufone particularly benefited from a Rs775 million boost following the Supreme Court’s verdict removing advance tax on prepaid mobile cards.
During 4QCY18, the group’s topline increased by 13 percent YoY, reaching Rs32,953 million from Rs29,138 million in 4QCY17. PTCL, Ufone, and Ubank experienced revenue growth of 3 percent, 21 percent, and 61 percent YoY, respectively. This brought the total revenue for CY18 to Rs126,160 million, registering a 7 percent YoY increase.
Ufone’s subscriber base expanded from 22 million to 24 million during the same period. PTCL’s sales were driven by a rise in Wireline Data, Corporate Services, and Wholesale revenues by 6 percent, 9 percent, and 22 percent, respectively. Additionally, in the DSL segment, the percentage of subscribers in the 4 Mbps & above package increased from 49 percent in December 2017 to 65 percent in December 2018.
Despite a 7 percent YoY decline in PTCL’s EBITDA due to Pak Rupee devaluation against the US dollar and increased costs in fuel, power, cables, media, and SAC prices, the group’s overall EBITDA for CY18 grew by 5 percent YoY, reaching Rs41,499 million.
During the conference call, the management also revealed key developments, including the launch of Ufone’s 4G/LTE services in Islamabad and Rawalpindi, with plans for further expansion to Lahore and Karachi. Ubank’s footprint expanded to 140 branches nationwide, focusing on micro-financing in rural areas, experiencing single-digit growth.
The conference call highlighted a positive trend in data services, with the percentage of customers using data services increasing to 58 percent in 4QCY18 from 51 percent in 4QCY17. As PTCL adopts strategic measures to manage currency risks, industry observers are keenly watching the company’s continued resilience and adaptability in the dynamic telecom market.
