3 min read
In this exclusive TechJuice report, it is revealed that PTCL Group’s financial trajectory during the first half of FY2025 reflects a growing imbalance between revenue growth and long-term profitability. Despite solid gains in topline revenue, driven primarily by broadband and corporate services, the group’s net profits have seen a sharp decline, falling nearly 50% year-over-year.
The analysis highlights how increasing operational expenses, volatile exchange rates, and mounting debt are eroding margins and placing PTCL under financial strain. Group-level losses remained substantial at Rs 14.39 billion, only slightly improved from last year.
This story also examines how the group’s strategic ambitions, including Ufone’s aggressive 4G expansion, UBank’s rapid microfinance scale-up, and the high-stakes acquisition of Telenor Pakistan, are creating both opportunities and heightened risks. While these moves aim to transform PTCL into a digital powerhouse, they also raise questions about sustainability, financial resilience, and execution capability in a highly competitive and economically fragile landscape.
PTCL Posts Rs 7.2 Billion Loss
PTCL Profit and Loss: Rising Revenues, Shrinking Profits
PTCL posted standalone revenues of Rs 107.77 billion in H1 FY2025, up 12% from last year. Despite this growth, net profit fell to Rs 4.82 billion from Rs 9.39 billion due to finance costs. Costs of services surged due to higher energy prices and maintenance. Employee liabilities and forex losses also weakened financial performance.
Group-Level Performance: Revenue Up, But Losses Persist
Consolidated group revenue rose to Rs 219.78 billion from Rs 188.66 billion in FY2024. Despite the rise, the group still posted a Rs 14.39 billion loss, down from Rs 16.72 billion last year. Rising finance charges and economic conditions remain key challenges.
Ufone’s Operational Growth Despite Financial Pressure
Ufone led the market in 4G net additions with 27% subscriber growth during the period. It faced pressure from spectrum costs, forex risks, and limited pricing flexibility in a competitive market. The aggressive 4G expansion demands heavy capital, impacting cash flow.
UBank Growth Exposes Credit Risks
UBank saw 65.7% YoY revenue growth driven by digital banking and microfinance operations. While outreach expanded, rapid growth poses credit risks amid Pakistan’s fragile economy. The rise in non-performing loans could impact medium-term profitability.
Comparison with Last Year’s Performance
PTCL’s net margin dropped to 4.47% in FY2024, down from 9.8% in FY2023. The group’s finance charges surged to Rs 47 billion from Rs 40 billion. Short-term and long-term borrowings increased sharply, raising sustainability concerns. Retirement liabilities grew to Rs 42.65 billion, up from Rs 34.32 billion last year.
PTCL-Telenor Deal
PTCL signed a Share Purchase Agreement to acquire 100% of Telenor Pakistan. If completed, the deal would add 45 million subscribers and expand market share.
However, the acquisition carries significant risks:
-
Regulatory approval remains pending.
-
Debt financing could destabilize the balance sheet.
-
Integration of systems and workforce poses operational challenges.
-
Spectrum liabilities and forex exposure may increase future financial strain.
Future Outlook
PTCL aims to modernize its fiber and broadband networks while preparing for 5G. Ufone continues expanding 4G while planning for 5G readiness. UBank is scaling digital microfinance but must manage loan quality. Despite growth strategies, high debt, forex risks, and economic instability challenge PTCL Group’s sustainability.
Despite facing significant financial headwinds, PTCL Group remains committed to a bold transformation agenda. The company is accelerating efforts to modernize its fiber-to-the-home (FTTH) broadband networks, enhance digital infrastructure, and lay the groundwork for 5G deployment. These initiatives are crucial for maintaining competitiveness in an increasingly data-driven economy.
