Morning Briefing –PTC- EPS of Rs 1.54 catches short term attention….Neutral – Standard Capital

Karachi, July 18, 2013 (PPI-OT): Pakistan Telecommunication Limited (PTC) on Tuesday announced 1HCY13 results, announcing the earnings of Rs.1.54 per share for this six month period against Re 0.23 in previous six month period from July 1,2013 to Dec 31,2013.

According to Standard Capital whereas company announced an interim dividend of Re 1 per share which is relatively above expectations . While in Q2CY13 company reported a 36% higher EPS of Rs 0.89 against Re.65 in Q1CY13.

In 1HCY13 , company reported revenue of Rs. 65.56bn against a lower revenue of Rs 62.58bn in 1HFY12. Whereas cost of services has also increased by 8.2 percent to Rs 41.42bn resulted to a gross margin of 36.8%.

On q-o-q basis , company performed well in Q2CY13 then the Q1CY13. Company reported 4% higher revenue of Rs 33.38bn in Q2CY13 against Rs 32.18 bn in previous quarter.

The improvement in revenue in Q2 was mainly driven by the expending broadband segment, fixed line income in this quarter, which have boosted the revenue. It is also observed that foreign incoming calls have also declined in Q2.

Standard Capital expects a good scenario for PTCL in future if Etisalat pays the payment of USD 800mn soon which Etisalat is holding since 2006 and since not getting the right to sell properties which is owned by PTC. Based on 1HCY13 Standard Capital remains neutral since PTC revenue base has marginally increase despite probable pie of ICH. PTC spells dividend yield of 8%.

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