Recent news about decline in profit of PTCL has concerned many investors and shareholders. Will Ufone, mobile phone arm of PTCL, be able to fight back and reverse this trend? In this post I present a snapshot of Ufone. I’ll discuss its strengths, weaknesses, threats to its current position and its future prospects.

Conclusion:Lots of potential if Ufone and its parent get its act together and execute well on their expansion and competitive plan. Read on to understand the basis for this conclusion.

About Ufone

Ufone (official name: PTML) is a PTCL company and Etisalat of UAE owns 26% of PTCL. For more information about Etisalat I recommend reading this investment report from Shuaa. This report also includes details of how PTCL was privatised earlier this year in April. Please note: PTCL does not report detailed earnings results for Ufone. Therefore we need to look at PTCL results as a whole.

Highlights of Recent Earning Report

The annual 2005-2006 and first quarter 2006-2007 financial reports are available at ptcl website.

For the first quarter 2006-07 ending Ocotber 30, 2006 the profit before tax was Rs.7.7 billion with net Profit of Rs.5.1 billion, which is 7% lower than that of the corresponding quarter of last year. For the full year 2005-06 after tax profit was Rs 20.78 billion which was 22% less than previous year’s profit.
Dividend of Rs 3 per share was awarded which corresponds to an impressive dividend yield of 12.3% !

PTML (Ufone) - a wholly-owned subsidiary has improved its financial performance compared to the first quarter of last year. It added over 1.37 million new subscribers during July to September 2006 quarter, making its total subscriber base in excess of 7.52 million as of end September 2006. Ufone earned a net profit of Rs.666 million compared to Rs.389 million recorded for the same period last year.