KARACHI, Sept 24: Pakistan Telecommunication Company Limited (PTCL) declared dividend at Rs3.50 (35 per cent) for the year ended June 30, 2003 and net earnings slightly above Rs23 billion, beating analysts’ forecasts on both counts.
Market was expecting the telecom giant to announce dividend at Rs3 (30 per cent) per share and post after tax profit in the range of Rs21.2 to Rs21.8 billion.
The PTCL board of directors, which met in Islamabad on Wednesday, however, managed to spring a pleasant surprise on most analysts with dividend higher-than-expected at Rs3.50 per share, and profit after tax at Rs23.1 billion, the latter recording growth of 16.7 per cent over the FY02 net profit at Rs19.8 billion.
On the basis of last year’s payout of 70 per cent net earnings, analysts had calculated dividend to amount to Rs3 per share, while working it out from the government’s budgeted figures of Rs2.75 per share and applying a growth rate of 8-10 per cent — consistent with the expected earnings growth — analysts had come up with dividend figure of Rs2.90 to Rs3 per share.
Since no one appeared to get a wind of the actual numbers before they were announced by the PTCL Board at around half past noon on Wednesday, the board and the management deserved kudos also on keeping the financial figures and recommended payout, a closely guarded secret.
The market, however, gave a lukewarm response to the telecom stock, which edged up just five paisa on Wednesday, to close the day’s trade at Rs37.90. PTCL stock recorded the day’s highest volume at 126 million shares, which accounted for 30 per cent of all 420 million shares traded on Wednesday.
Much of the benefit to the PTCL’s FY03 bottomline travelled down due to the 58 per cent drop in financial charges, which amounted to Rs1.0 billion, from Rs2.4 billion the year ago. That was in line with market expectations of a low financial charges, since the telecom had paid off most of its debts last year. Revenue grew two per cent to Rs67.7 billion, from Rs66.4 billion last year, but more importantly, the telecom managed to cut down operating costs by 7.5 per cent to Rs32.1 billion, from Rs34.7 billion in FY02. Operating profit, thus, improved 12.6 per cent to Rs35.7 billion for the year under review, from Rs31.7 billion last year, producing an operating margin at 53 per cent, compared with 48 per cent last year.
The PTCL board also announced that the shareholders’ AGM would be held on October 31. The company did not mention the venue but that ought to be the PTCL headquarters in Islamabad.