Pakistan Telecommunication Company Limited (PTCL) has reported a substantial net loss of Rs 6.3 billion for the third quarter ending on September 30, 2024, a significant increase from the Rs 2.8 billion loss recorded during the same period last year. This financial setback comes despite notable improvements in the company’s revenue and gross profit.
According to the latest consolidated financial results submitted to the Pakistan Stock Exchange (PSX) on Tuesday, PTCL’s revenue surged by nearly 11%, reaching Rs 55.56 billion in 3QCY24, compared to Rs 50.09 billion in the corresponding quarter of 2023. However, the sharp rise in operational costs and finance expenses overshadowed these gains, leading to a deepening of the company’s financial losses.
The company’s cost of revenue escalated by over 14%, amounting to Rs 42.6 billion in the third quarter, compared to Rs 37.4 billion in the same period last year. This surge in expenses chipped away at PTCL’s profitability, with gross profit edging up by just over 1% year-on-year to Rs 12.9 billion, reflecting a gross profit margin of 23.2%, down from 25.4% in the previous year.
Operating expenses also saw a substantial rise, increasing by 26% to Rs 13.1 billion in 3QCY24, up from Rs 10.4 billion in 3QCY23. Consequently, PTCL posted an operating loss of Rs 240 million, a sharp contrast to the operating profit of Rs 2.3 billion recorded in the same period last year.
Another factor contributing to the mounting losses was the significant decline in the company’s other income, which dropped to Rs 2.9 billion in the third quarter, down from Rs 6.3 billion in 2023. Meanwhile, the company’s finance costs skyrocketed, ballooning to Rs 12.1 billion, further eroding profitability.
The impact of these rising costs resulted in a pre-tax loss of Rs 9.4 billion for the quarter, more than doubling the Rs 4.1 billion loss recorded in the corresponding period last year.
Incorporated in Pakistan on December 31, 1995, PTCL is a leading provider of telecommunication services across the country, offering a wide range of domestic and international telephone and communication services. The company’s key assets include Ufone, a major mobile operator in Pakistan with over 20 million subscribers. While the government of Pakistan holds a majority stake in PTCL, Etisalat, a UAE-based telecom giant, has a significant minority stake and manages the company under an agreement with the government.
Despite its strategic importance in the telecommunications sector, PTCL’s growing financial challenges underscore the pressures faced by the company in navigating rising costs and shrinking margins.