In the first quarter that ended on March 31, 2023, Pakistan Telecommunications Company Limited posted a net loss of Rs5.7 billion. This 1QCY23 total deficit is almost multiple times the misfortune found in a similar period last year.
Subsequent to recording a lot of overall deficit (almost Rs8 billion) in Current Year 22, the country's telecom monster PTCL is struggling in the continuous schedule year too.
Despite double-digit topline growth during the period under review, the group, which includes the PTCL Company and its main subsidiaries Ufone and UBank, ended up deep in the red. The PTCL Company's top line increased by 17% year-over-year to nearly Rs23 billion in 1QCY23, according to the most recent financials. Ufone was the most profitable of the subsidiaries, while UBank was profitable.
When it came to controlling costs and expenses, the PTCL Company performed much better. As a result, it was able to generate an operating profit of roughly Rs1.5 billion in the first quarter of Q3’23, which was 55% higher than the previous year. In the meantime, Ufone suffered a significant operating loss that resulted in a Rs321 million group-level operating loss that only got worse over time.
The PTCL group saw a four-fold increase in its "other income" as a result of better returns from financial assets and PKR depreciation, but the increase in finance costs wiped out those gains. That was good news for the PTCL Company, as its "other income" increased almost five times, more than making up for the rise in its own finance costs. Consequently, during the analyzed quarter, the company's net profits nearly tripled to Rs5.5 billion.
That strong commitment to bunch financials was damaged by gigantic overal deficit at Ufone. The primary cause is Ufone's long-term loans, whose interest payments significantly increased following an unprecedented rise in the policy rate. The group's financial resiliency is likely to be further tested as the macroeconomic challenges are unlikely to resolve soon.
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