Worldcall Telecom Limited: A Financial Performance Review (2019-2024)

Worldcall Telecom Limited (WTL), a Pakistani public limited company established in 2001, commenced operations in 2004. The organization delivers Wireless Local Loop (WLL) and Long Distance and International (LDI) services throughout Pakistan. Additionally, WTL engages in re-broadcasting international/national satellite/terrestrial wireless, cable television, and radio signals, alongside interactive communication and the development, maintenance, and operation of licensed telephony services, all authorized by PTA and PEMRA.

Shareholding Structure

As of December 31, 2024, WTL has 4.982 billion outstanding shares, distributed among 27,841 shareholders. The local general public holds the majority stake at 63.83%, followed by associated companies, undertakings, and related parties with a combined 19.6%. Joint stock companies possess 9.33% of the shares, while foreign public investors hold 6.92%. The remaining shares are spread among other shareholder categories.

Performance Overview (2019-2024)

WTL’s revenue, which declined until 2021, began to recover thereafter. However, its net income remained negative post-2019. Margins hit their nadir in 2021. Conditions saw a slight upturn in 2022, marked by a positive EBITDA margin and a reduced net loss. Yet, the bottom line and margins deteriorated once more in 2023. In 2024, the company reported a positive EBITDA margin, and its net loss decreased substantially.

Detailed Financial Analysis
2019 Performance

In 2019, WTL’s revenue decreased by 12% to Rs. 3,857.07 million, driven by reduced revenue across telecom, broadband, and other segments. A decrease in interconnect, settlement, and other charges caused a 22.86% year-over-year reduction in direct costs. Operating costs also fell by 18.57% due to workforce restructuring, which lowered salary expenses.

Despite lower direct and operating costs, other expenses rose significantly due to provisions for expected credit losses on long-term receivables, increasing by 102.44%. Other income also declined by 27.35%. Consequently, EBITDA fell by 19.52%, with the EBITDA margin dropping to 40.11% from 43.82% in 2018. High depreciation, amortization charges, and finance costs resulted in a pre-tax loss of Rs. 201.58 million, compared to a profit of Rs. 562.28 million in 2018. Tax adjustments led to a net profit of Rs. 65.49 million, an 85% decrease from the previous year. The net profit margin decreased from 10% to 1.7%, and EPS was Rs. 0.02, down from Rs. 0.09 in 2018.

2020 Performance

In 2020, revenue further declined by 18.59% to Rs. 3,140.13 million, mainly due to a substantial decrease in broadband and telecom services revenue. Direct and operating costs also decreased. Other expenses fell due to reduced provisions, and other income declined due to IFRS-9 impacts and fewer write-offs. Despite cost-saving measures, EBITDA decreased by 22.71%, with an EBITDA margin of 38%. Depreciation and amortization charges provided relief, decreasing by 23.97%.

However, finance costs increased by 8.54% despite discount rate reductions due to COVID-19, driven by restructurings with financial institutions and fewer liabilities written back. This resulted in a net loss of Rs. 150.27 million and a loss per share of Rs. 0.06.

2021 Performance

In 2021, WTL’s revenue further decreased by 32.67% to Rs. 2,114.22 million, leading to reductions in direct and operating costs. Other expenses increased by 26.45% due to impairment of long-term investments, losses on inventory disposal, and higher provisioning for expected credit losses. Other income decreased by 52.96% due to fewer write-offs.

EBITDA turned negative, resulting in a loss of Rs. 90.15 million. Depreciation and amortization increased by 12.84%. Finance costs decreased by 43.45% due to monetary easing. The net loss increased by 902.41% to Rs. 1,506.36 million, with a loss per share of Rs. 0.51.

2022 Performance

In 2022, revenue showed recovery, increasing by 8.85% to Rs. 2,301.25 million, driven by robust LDI revenue and support from the broadband segment. Direct costs increased by 6.34%, while operating costs slightly decreased as the company did not book provisions for advances to suppliers.

Other expenses supported EBITDA as losses from inventory disposal and impairment losses were absent. However, other income was unfavorable due to fewer reversals of provisions and write-offs. EBITDA entered positive territory at Rs. 104.65 million, with an EBITDA margin of 4.55%.

While depreciation and amortization remained stable, finance costs increased by 24.915%, pushing the bottom line into a loss. WTL reported a net loss of Rs. 1,384.98 million, 8% less than the previous year, with a loss per share of Rs. 0.32.

2023 Performance

In 2023, WTL’s revenue increased by 27.91% to Rs. 2,943.55 million, primarily due to increased LDI earnings, driven by the demand for remote working. However, a significant rise in interconnect, settlement, and other charges increased direct costs by 51.58%. Operating costs increased by 18.59% due to higher payroll and traveling expenses.

Despite reducing the workforce from 354 to 317 employees, payroll expenses remained high. Other expenses surged by 78.93% due to exchange losses from Pak Rupee depreciation. Other income decreased by 3% due to lower gains on adjustments from IFRS 9 and fewer liabilities written back. WTL recorded an LBITDA of Rs. 422.64 million, compared to an EBITDA of Rs. 104.65 million in 2022. Depreciation and amortization decreased by 11.17%. Finance costs increased by 59.87% due to high discount rates and increased borrowings, pushing the gearing ratio from 70.26% to 111.47%. The company recorded a net loss of Rs. 2,008.44 million, with a loss per share of Rs. 0.46.

2024 Performance

In 2024, WTL’s revenue posted a substantial year-on-year growth, reaching Rs. 5,046.44 million, driven by increased LDI earnings. However, direct costs, including interconnect, settlement, and other charges, increased by 65.42%. Operating expenses decreased by 8.76% due to a significant drop in fee and subscription charges, offset by higher payroll expenses due to inflation.

Despite reducing the workforce from 317 to 251 employees, payroll expenses remained high. Other expenses decreased by 91.52% due to no exchange losses. Provisions against ECL also decreased. Other income increased by 9.38% due to exchange gains and unclaimed liabilities written back. WTL recorded an EBITDA of Rs. 176.40 million, with an EBITDA margin of 3.5%. Depreciation and Amortization decreased by 15.93%. Finance costs increased by 10.78% due to higher discount rates. WTL recorded a net loss of Rs. 1,358.61 million, down 32.36% year-on-year, translating to a loss per share of Rs. 0.27.

Future Prospects

With several projects planned, including blockchain deployment, fiber to home deployment in urban areas, and a strategic alliance with World Mobile Group (WMG), WTL’s revenue is expected to improve significantly. The evolution of technologies like 5G also presents numerous opportunities for WTL and the broader telecommunications sector. WTL’s increasing investments in R&D, infrastructure, and unexplored business ventures will drive growth. The company plans to add 200,000 broadband subscribers in low-income areas and introduce a new service named “CADNZ” for the banking sector. Other initiatives include “billcare” to streamline billing, and “million connect” to boost broadband growth. The parent company, GlobalTech Corporation (GTC), has announced the establishment of a center of excellence for artificial intelligence and big data services in WTL Pakistan. Furthermore, geographical expansion in the UK, Europe, and the Middle East is also anticipated to yield positive results. However, with consistently rising direct and finance costs, the outlook for margins and the bottom line remains uncertain.