September 15, 2006	Friday	Sha'aban 21, 1427

KARACHI, Sept 14: Pakistan Telecommunication Company Limited (PTCL) announced a final cash dividend at Rs2 (20 per cent) per share for the year ended June 30, 2006. The announcement made by the board on Thursday took the market by surprise. Having already declared an interim cash dividend at Rs3 (30 per cent), not many investors were expecting the board to propose a final dividend at what was seen as a high rate of Rs2 per share.

The aggregate payout for the year stood at Rs5 (50 per cent), which compared with cash dividend at Rs2 (20 per cent) paid last year.

The results were greeted by the market with a massive rise in KSE-100 index in early morning after the announcement was made, but the index latter slipped on account of other factors. The PTCL stock closed with a gain of Rs1.35 to Rs41.15 with trading seen in 5.2 million shares.

The telecom posted profit after tax (PAT) at Rs20.8 billion for the year which represented a 22 per cent drop from after tax profit amounting to Rs26.6 billion the previous year. Earning per share (eps) worked out at Rs4.07 compared with Rs5.22 last year.

PTCL revenue declined by 9.2 per cent to Rs69.1 billion for the latest year, from Rs76 billion the earlier year. Operating costs, on the other hand increased by 5.3 per cent to Rs41.7 billion, from Rs39.6 billion a year ago.

Analysts said that lower revenue and profit were foreseen mainly due to strong competition faced by the company from private LDI operators. The telecom had already slashed its NWD and international outgoing call rates by more than 15pc in order to ride out the challenge posed by other operators.

“Going forward, we believe, PTCL’s focused strategy towards fixed line business bodes well for the company”, wrote Muzzamil Mussani, analyst at JSCM in his pre-result report.The analyst mentioned that in terms of the latest statistics released by PTA, WLL subscribers of PTCL stood at 0.7m at the end of FY06 as against 0.2m in FY05, whereas, Ufone’s (100pc subsidy of PTCL) users had grown by 206pc to 7.9m in FY06 from a year ago users at 2.6m.