In the second quarter of 2024, Pakistan Telecommunication Company Limited (PTCL) faced a notable decline in profitability, with its profit after tax plummeting by 53.3% compared to the previous year, reaching Rs705.82 million. This translates to an earnings per share (EPS) of Rs0.14, down sharply from Rs1.51 billion and an EPS of Rs0.30 in the corresponding period last year.
Despite the profitability setback, PTCL managed to achieve an 11.7% year-on-year increase in revenue, amounting to Rs26.78 billion. The company’s gross profit saw a significant improvement, rising by 30.3% year-on-year to Rs6.79 billion, resulting in a higher gross margin of 25.35%, up from 21.74% in the previous year. Moreover, PTCL’s other income grew by 28.5% year-on-year, totaling Rs4.1 billion.
However, PTCL encountered substantial challenges in managing its costs. The cost of sales rose by 6.5% over the same period, while finance costs surged dramatically by 158.2% year-on-year to Rs5.7 billion, primarily due to higher interest rates. Administrative expenses increased by 4%, and selling expenses rose by 3.5% year-on-year.
On a positive note, PTCL benefited from a significant reduction in tax expenses, which decreased by 56.8% year-on-year to Rs421.73 million, down from Rs976.43 million in the second quarter of the previous year.
In summary, while PTCL saw a commendable growth in revenue and gross profit margins, the sharp increase in finance costs and moderate rise in operating expenses contributed to the substantial decline in net profitability for the second quarter of 2024.