Pakistan Telecommunication Company Limited (PTCL) reported a sharp decline in profitability in the third quarter of calendar year 2026, with profit after tax plunging 96% quarter-on-quarter to PKR 62 million. Earnings per share fell to PKR 0.01 from PKR 0.31 in the preceding quarter.
Revenue remained largely stable, declining just 1% sequentially to PKR 102.7 billion. However, rising service costs, weaker gross margins and higher selling and marketing expenses placed significant pressure on the company’s operating performance and bottom line.
Rising Costs Squeeze PTCL’s Profit Margins
PTCL’s gross profit declined 11% compared with the June quarter as the cost of services increased 4%. Consequently, the gross margin narrowed to 32.2% from 35.8%, reflecting mounting pressure on profitability despite relatively stable revenue.
Administrative and general expenses fell 18% quarter-on-quarter, providing some relief. However, selling and marketing expenses surged 52%, offsetting part of the savings from lower administrative costs.
Operating profit dropped 20% sequentially to PKR 12.8 billion, while the operating margin contracted to 12.4% from 15.3% in the previous quarter.
The figures indicate that PTCL’s challenge during the quarter was not a significant decline in revenue but the impact of higher costs and deteriorating margins.
PTCL’s Profit Falls to PKR 62 Million
Lower operating earnings continued to weigh on PTCL’s financial performance further down the income statement. Although finance costs and other expenses declined 8% quarter-on-quarter, the reduction was insufficient to prevent a steep fall in pre-tax profitability.
Profit before tax plunged 97% sequentially to PKR 134 million. Following a small tax charge, the company recorded a quarterly profit of just PKR 62 million, leaving its net profit margin at approximately 0.1%.
PTCL did not declare a dividend for the quarter, consistent with its recent payout record. The company has not paid a dividend in any of the last five quarters covered by the reported data.
Nine-Month Earnings Reflect a Broader Recovery
Despite the sharp quarterly decline, PTCL’s performance over the first nine months of 2026 remained stronger than in the corresponding period last year.
The company reported a cumulative profit of PKR 4.7 billion, compared with a loss of PKR 11.2 billion in the same period last year. Revenue for the nine-month period increased 62% year-on-year.
This contrast highlights the difference between PTCL’s broader earnings recovery and its weaker performance in the latest quarter. While the nine-month figures show a substantial improvement over last year, the September-quarter results point to renewed pressure on margins and profitability.
The coming quarters will be important in determining whether PTCL can stabilise its cost structure and restore margins while sustaining revenue growth.