Topline Securities Limited - Pakistan Telecommunication Co. (PTC): 2Q2019 EPS Rs0.07, down 69% YoY; 1H2019 EPS Rs0.46, down 10%YoY

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Topline Securities Limited

Topline Research

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Pakistan Telecommunication Co. (PTC): 2Q2019 EPS Rs0.07, down 69% YoY; 1H2019 EPS Rs0.46, down 10%YoY

Pakistan Telecommunication (PTC) posted 69% YoY decline in its 2QCY19 earnings as it reported EPS of Rs0.07. Significant decline in earnings is mainly due to higher exchange losses recorded by Ufone on the back of 13% increase in US$ against PKR in 2QCY19, we believe.
Furthermore, earnings were negatively impacted due to 40% YoY increase in finance cost during 2Q2019 as a result of higher interest rates.
The growth in broadband & mobile broad band subscribers has remained subdued at 3% QoQ as a result of economic slowdown & inflationary environment.
Other income of the company went up by 73% YoY due to higher income earned on bank deposits owing to higher interest rates as company has huge backlog of cash & cash equivalents (Rs10bn as of Mar 2019).
Key risks to company includes 1) increased competition among mobile network operators 2) slowdown in economy and 3) Adverse regulatory decisions.

17/07/2019 1 EN

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Topline Securities Limited

Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.

Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.

Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.

JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).

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Topline Research

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Pakistan Telecommunication Co. (PTC): 2Q2019 EPS Rs0.07, down 69% YoY; 1H2019 EPS Rs0.46, down 10%YoY

Pakistan Strategy: Foreign selling at PSX; Will this trend continue in 2021?

Pakistan Strategy: Pakistan Outlook 2021 based on Topline Poll

Pakistan Automobiles: Car sales (including KIA) up ~63% YoY in Nov-2020

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