PTCL Investor Call Financial Results for Q2 2018 26 th July, 2018 0 - - PowerPoint PPT Presentation

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PTCL Investor Call

Financial Results for Q2 2018

26th July, 2018

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Pakistan Telecommunications Company Limited (PTCL) and its subsidiaries have prepared this presentation in good faith, however, no warranty or representation, express or implied is made as to the adequacy, correctness, completeness or accuracy of any numbers, statements, opinions or estimates, or other information contained in this presentation. The information contained in this presentation is an overview, and should not be considered as the giving of investment advice by the company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this presentation is made available must make its own independent assessment of the company after making such investigations and taking such advice as may be deemed necessary. Where this presentation contains summaries of documents, those summaries should not be relied upon and the actual documentation must be referred to for its full effect. This presentation may include some “forward-looking statements”. Such forward looking statements are not guarantees of future performance and may involve risk of uncertainties. Actual results may differ materially from these forward looking statements.

Disclaimer

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Business Overview

• Dr. Daniel Ritz

President & Chief Executive Officer PTCL Group

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PTCL Group

* Other subsidiaries include DVCOM and SmartSky

PTCL Group

• PTCL
• Ufone
• Ubank
• Others*

PTCL

• Retail
• DSL
• Wireless Data
• Voice
• IPTV
• Corporate
• ICT Services
• Cloud & Data Services
• Managed Services
• Wholesale
• Carrier services
• International business

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PTCL Group

2% QoQ and 3% YoY Topline Growth with Positive Contributions from all Group Opcos

HY 2018 Change % YoY QoQ

• Rs. M

YoY Revenue 30,612 3% 2% 60,662 4% EBITDA 10,112 3%

• 1%

20,353 2% EBITDA Margin 33% 0 p.p

• 1 p.p

34%

• 0.5 p.p

Net Profit 1,131

• 59%

12% 2,138

• 45%

Net Profit Margin 4%

• 5.5 p.p

0.3 p.p 4%

• 3.1 p.p

Net Profit like-for-like 1,663 32% 7% 3,223 28% PKR Million Q2 2018 Change %

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PTCL

PTCL continues QoQ revenue growth after arresting the decline last year

HY 2018 Change % YoY QoQ

• Rs. M

% Revenue 17,779

• 1%

1% 35,358 0% EBITDA 5,430

• 5%
• 5%

11,172

• 5%

EBITDA Margin 31%

• 1.4 p.p
• 2.1 p.p

32%

• 1.7 p.p

Net Profit 1,873

• 26%

3% 3,690

• 21%

Net Profit Margin 11%

• 3.7 p.p

0.2 p.p 10%

• 2.7 p.p

Net Profit like-for-like 1,848

• 9%
• 4%

3,770

• 12%

PKR Million Q2 2018 Change %

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PTCL Revenue stabilized

Growth in DSL, CharJi & Corporate Services

• 3%
• 2%

4% 1%

• 4%
• 3%
• 2%
• 1%

0% 1% 2% 3% 4% 5% Q3 2017 Q4 2017 Q1 2018 Q2 2018

% Change in Revenue QoQ

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• Network transformation project for top 100 local exchanges continues – DSL subscriber and revenue growth
• Continued migration of EVO (CDMA) subscribers to Charji (LTE) with device swap - double digit growth
• Corporate growth mainly driven by Managed Services and Cloud based solution

PTCL

• Subscribers growth momentum leading to revenue upside – increase in market and value share
• Increased 3G network footprint by upgrading network sites
• Sustained TRI*M score as number 2 operator

Ufone

• Increased branch network to 130 locations especially in rural areas to provide formal banking services to

unbanked population

• Accelerated profitable growth - almost doubled revenue YoY along with significant margin expansion
• Initiated process of automating / digitizing its core lending operations
• Increase in deposit base by 20% in Q 2 only.

Ubank

Key Strategic & Operational Highlights

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Financial Overview

Nadeem Khan Chief Financial Officer PTCL Group

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PTCL Group Key Financials

Normalized for negative Forex impact Net Profit up by 32% instead of 59% decline as reported

Revenue (PKR M) EBITDA & Margin Net Profit & Margin

Q2 2017 Q2 2018 +3% 30,612 Q1 2018 30,050 +2% 29,680 9,794

• 1%

+3% Q2 2018 10,112 33% 33% 10,241 Q1 2018 34% Q2 2017 1,131 1,007 2,736 Q1 2018 4% Q2 2018 9% 3% Q2 2017

• 59%

+12%

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PTCL Group – Revenue Evolution YoY

Revenue growth of 3% despite tough competition in cellular market and decline in fixed voice

379 665 +3% Eliminations Q2 2017 Ufone PTCL 36 30,612 148 Ubank Q2 2018 29,680

• 1%

5% 54%

PKR Million

X% YOY % Change

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PTCL Group – EBITDA Evolution YoY

Growth of 3% mainly driven by growth in revenues

553 288

Eliminations

+3%

Q2 2018 10,112 9,794 PTCL Q2 2017 Ubank Ufone

54 2

• 5%

14% 73%

PKR Million

X% YOY % Change

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PTCL Group – Net Profit Evolution YoY

Normalized for negative Forex impact Net Profit up by 32% instead of 59% decline as reported PKR Million

883

1,663

228 123

1,131

990 673

2,736

• 59%

Tax Impact Liability Reversal Q2 2018 Like-for-Like Forex Loss Q2 2017 Ubank Ufone Q2 2018

58

PTCL

• 26%
• 917%

72%

Q2 2017 Like-for-Like 1,260 +32%

X% YOY % Change

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PTCL Key Financials

Higher SAC and Cable & Media cost put pressure on EBITDA

Revenue (PKR M) EBITDA & EBITDA Margin Net Profit & Margin

Q1 2018 17,779 17,579 +1%

• 1%

Q2 2018 Q2 2017 17,928 5,430 5,742 5,718 Q2 2018 33% 31% 32% Q2 2017 Q1 2018

• 5%
• 5%

1,873 1,818 2,545 14% 10% Q2 2017

• 26%

Q1 2018 Q2 2018 +3% 11%

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PTCL Revenue

Wireline Data, CharJi and Corporate continue to contribute positively

YoY QoQ Wireline Data 6,737 6% 2% Wireless Data 819

• 30%
• 10%

CharJi 572 77% 9% EVDO 247

• 71%
• 37%

Voice 3,638

• 6%
• 5%

Retail 11,194

• 1%
• 1%

Corporate Services 1,725 12% 1% Wholesale 4,860

• 3%

8% Total 17,779

• 1%

1% PKR Million Q2 2018 Change %

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PTCL – Growing Vs Shrinking Segments

Share of growing segments increased form 59% to 63%

• Growing segments 59%
• Shrinking segments 41%
• Growing segments 63%
• Shrinking segments 37%

Wireline Data 35% CharJi 2% Corporate 9% C&WS 13% Voice 21% International 15% EVDO 5% Wireline Data 38% CharJi 3% Corporate 10% C&WS 13% Voice 21% International 14% EVDO 1%

Q2 2017 Q2 2018

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DSL Revenue

Higher than average DSL revenue growth in transformed exchanges

1,426 1,369 4%

Q2 2017 Q2 2018

1,514 1,480

Q2 2017

2%

Q2 2018

6,475 6,080

Q2 2018 Q2 2017

6%

• Avg. Subscribers (‘000)

ARPU (PKR) Revenue (PKR M)

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CharJi Revenue (LTE)

Double Digit Growth Continues

218 97 124%

Q2 2017 Q2 2018

876 1,109

Q2 2017

• 21%

Q2 2018

572 323

Q2 2018 Q2 2017

77%

• Avg. Subscribers (‘000)

ARPU (PKR) Revenue (PKR M)

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Corporate Revenue

Accelerating Growth by Offering New Services

175 Managed Services 1,547 22 Q2 2017 12% 1,725 Voice & Others Q2 2018 Cloud Services 19 Leased Lines & IP Bandwidth 0.3

PKR Million

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PTCL – EBITDA Evolution YoY

Higher SAC and Cable & Media charges put pressure on EBITDA

217 148 Cost of Sales 5,718 77 5,430 Q2 2017

• 5%

OPEX Q2 2018 Revenue

PKR Million

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PTCL – Net Profit Evolution YoY

Lower Net profit driven by lower Non-operating Income and favorable one-offs in Q 2 2017 PKR Million

349

1,849

123

1,873

789 288

2,545 Q2 2018

• 26%

Q2 2018 Like-for-Like Taxation Q2 2017

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Tax Impact

89

Forex Loss Liability Reversal Non Operating D&A

55

EBITDA Q2 2017 Like-for-Like 2,033

• 9%

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PTCL Balance Sheet & Cash Flow Statement

Strong Unleveraged Balance Sheet

* Short term investment in Jun-17 of Rs. 14 B (not included in above Cash & Cash equivalent - maturity > 3 months)

Balance Sheet Cash Flow Statement

Dec-17 Jun-18 PKR Million Non Current Assets 116,098 116,831 Cash & Cash Equivalents 19,851 19,037 Current Assets 71,250 74,602 Total Assets 187,348 191,433 Share capital 51,000 51,000 Reserves 34,102 37,792 Equity 85,102 88,792 Employees retirement benefits 23,504 24,783 Deferred government grants 8,060 7,983 Non-current liabilities 39,263 39,593 Current liabilities 62,984 63,048 Total Liabilities 102,247 102,642 Total Liabilities & Equity 187,348 191,433 Description

Jun-17 Jun-18 PKR Million Cash generated from operations 15,262 8,706 Employees retirement benefits paid (441) (504) Payment to PTET (5,254) Payment of voluntary separation scheme (4,687) (8) Cash inflows from operating activities 1,353 6,144 Capital expenditure (6,908) (4,271) Acquisition of intangible assets (51) (207) Long term loans and advances (757) (2,262) Government grants received 160 Long term investment in Ubank

• (1,000)

Cash Inflow/(outflow) from investing activities 222 (3,873) Dividend paid (4,503) (4) Net inc/(dec) in cash and cash equivalents (2,928) 2,266 Opening Cash and cash equivalents 5,902 16,770 Closing Cash and cash equivalents 2,974 19,037

21204499

Description

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Dividend

PTCL announced PKR 1 interim dividend per share for the year 2018, equates to PKR 5.1 B dividend payout

10.9% 12.1% 5.8% 7.7% 8.1% 0% 2% 4% 6% 8% 10% 12% 14% 2014 2015 2016 2017 2018

Dividend Yield

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Summary & Conclusion

• Dr. Daniel Ritz

President & Chief Executive Officer PTCL Group

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• PTCL Group has maintained revenue growth with all three operating companies contributing
• PTCL Group Net Profit (like-for-like) for Q2 2018 up significantly both on YoY and QoQ
• PTCL revenue decline has been arrested, key growth drivers are DSL, Charji and Corporate segments
• SAC and Cable & Media spend weighing on PTCL Q2 2018 EBITDA
• Net profit down year-on-year due to lower non-operating income, however decline reduces on like-for-like

basis

• PTCL announced PKR 1 interim dividend per share for 2018 equal to PKR 5.1 B dividend payout - PTCL share
• ffers attractive dividend yield of 8.9%.

Summary & Conclusion

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Questions & Answers

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Investor Relations

PTCL Investor Relations Email: amir.siddiqi@ptcl.net.pk

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THANK YOU