AKD Securities Limited – Off the Analyst’s Desk (25 May 2023)

Karachi, May 25, 2023 (PPI-OT): PTC - Analyst Briefing Key Takeaways

Pakistan Telecommunication Company Ltd (PTC) held its corporate briefing session today to discuss its CY22 results and future outlook. To recall, the company posted unconsolidated PAT of PkR9.1bn (EPS: PkR1.78) in CY22 vs PkR6.9bn (EPS: PkR1.35) in SPLY, growing 32%YoY.

On a standalone basis, company has posted revenue of PkR83.4bn, up by 9%YoY. Increase in the revenue is attributed to growth in the Wireline data/Corporate and wholesale by 12%/14%YoY. The said increase offsets the impact 16%YoY decline in wireless data operations.

PTCL has achieved subscriber sales and revenue growth of 2xYoY for Fiber-to-the-home (FTTH). Likewise, Fixed Broadband (FBB) and PTCL smart TV also witnessed revenue growth of 12%/8%YoY, respectively. Moreover, Flash Fiber market share increased to 27% in 2022 vs 17% SPLY.

Ufone also witnessed revenue growth of 7%YoY during the outgoing year. Meanwhile, the total subscriber base and 4G base increased by ~1.0/4.3mn customers, respectively.

On Ubank front, revenue rose by 35%YoY during CY22, where deposit customer base witnessed an increase of 34%YoY to 3.7mn, and deposit amount increased by PkR37bn to reach PkR92bn CY22. Likewise, Advances increased by PkR15bn to reach PkR51bn in the outgoing year. Moreover, bank has currently 300 plus branches and more than 230 ATM's. Furthermore, 56% of the Gross Loan Portfolio (GLP) is secured via Gold Backed Loans.

Additionally, Ubank has currently 30 standalone Islamic branches operational and has launched its first digital Islamic product. Bank has also acquired commercial license for nationwide Islamic banking services during the year.

On a consolidated basis, PTCL group has reported revenue of PkR151.6bn during CY22, up by 10.2%YoY. Revenue growth is attributed to all three companies, as all of them posted positive revenue growth in the group. While on the flipside, company posted a LAT of PkR7.8bn in CY22, largely impacted by operating expense increase from Ufone and 158%YoY increase in finance cost. Said increase in the finance cost is attributable to exchange losses booked by Ufone and increase in benchmark rate during the year.