Pakistan Telecom Net Profit Increases on Higher Dividend, Interest Income

Pakistan Telecommunications Co., the country’s biggest phone company, said full-year profit rose 1.5 percent because of dividend income and interest payments on a loan to a subsidiary.

Net income increased to 9.29 billion rupees ($108.8 million) or 1.82 a share in the 12 months ended June 30, from 9.15 billion rupees or 1.79 rupees, the Islamabad-based company said in a statement to the stock exchange today. Revenue fell to 57.2 billion rupees from 59.2 billion.

The company gave a loan of 5 billion rupees to Ufone, its mobile phone subsidiary, on which Pakistan Telecom earned interest, boosting profit, said Mustafa Bilwani, research analyst at JS Global Capital Ltd. in Karachi, who has a “buy” recommendation on the stock. Pakistan Telecom also gained 330 million rupees in the form of dividends paid by Ufone, he said.

The company’s “other operating income,” under which the dividend and interest income is accounted for, rose to 5.13 billion rupees in the year ended June 30, from 4.27 billion rupees a year ago, according to the statement.

Pakistan Telecom has faced competition from Telenor ASA of Norway and China Mobile Communications Ltd. since 2004, when the government awarded licenses to private operators, ending its monopoly.

Pakistan Telecom shares, which have risen 2.6 percent this year, rose 0.8 percent to 18.10 rupees as of 9 a.m. on the Karachi Stock Exchange.

Emirates Telecommunications Corp., the United Arab Emirates state-owned phone company, won management control of Pakistan Telecom in April 2006 after buying a 26 percent stake in the company for $2.6 billion.

To contact the reporter on this story: Farhan Sharif in Karachi at fsharif2@bloomberg.net

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