April 29 (Bloomberg) -- Pakistan Telecommunications Co., the biggest phone service provider, said third-quarter profit rose 31 percent because of dividend income and interest payments on a loan to a subsidiary unit.
Net income rose to 2.5 billion rupees ($29.8 million) or 0.49 rupee a share in the three months ended March 31, from 1.91 billion rupees or 0.37 rupees, the Islamabad-based company said in a statement to the stock exchange today. Revenue fell to 13.7 billion rupees, from 13.9 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 Mustufa Bilwani, research analyst at JS Global Capital Ltd. in Karachi, who has a “buy” recommendation on the stock. Pakistan Telecom also gained 670 million rupees in the form of dividends paid by Ufone, he said.
The company’s “other operating income” rose to 1.69 billion rupees in the third quarter, from 1.08 billion rupees a year ago, according to the statement.
Pakistan Telecom is facing competition from rivals including Telenor Asa., and China Mobile Communications Ltd. since 2004 when the government gave licenses to non-state telephone companies to start business, ending its monopoly.
Pakistan Telecom shares, which have risen 21.5 percent this year, rose 2.4 percent to 21.45 rupees as of 2:54 p.m. local time on the Karachi Stock Exchange.
The company plans to pay an interim cash dividend of 1.75 rupees a share, according to the statement.
Emirates Telecommunications, the state-owned telephone provider in the United Arab Emirates, won management control of Pakistan Telecom in April 2006 after it bought a 26 percent stake in the company for $2.6 billion.
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