LAHORE - PTCL has reported Profit After Tax of Rs8.6 billion, up by a massive 497 per cent annually in its financial results for the Oct-Dec 2012 quarter. According to experts, stellar earnings are largely driven by higher post International Clearing House rates on international incoming calls enjoyed by the PTCL. They said that while core earnings have been robust, additional buttress to earnings stems from PTCL availing tax benefit on VSS and reversal of Rs1,531m of VSS expense booked in the last quarter.Zeeshan Afzal, an expert from Topline observed that since the implementation of higher charges by Long Distance International operators, investors remained excited about the potential profitability growth in the telecom sector. Furthermore, Voluntary Separation Scheme charge and tax implications added more uncertainty to the actual profitability of the telecom giant. He recommended investors to look at PTC consolidated accounts as it includes cellular operations which has 46pc shares in revenue and 63pc in profit in FY12 and is growing. During 4QCY12, PTC’s consolidated revenues increased to Rs33.5b, rise of 15pc as compared to Rs29.1b in the preceding quarter. Although detailed accounts are not available yet, experts attribute total increase of Rs4.5b in revenues to estimated Rs5b incremental revenues from LDI business after the implementation of unified USc8.8 per minute with the start of the quarter. However, they estimate decline in Ufone revenues by Rs1.4b, due to multiple restrictions on cellular firms in last quarter causing stagnant customer base and declining Average revenue per user.In addition, partial reversal of Rs1.5b in VSS charge and positive tax adjustments provided further impetus to the bottom-line to Rs9.4b (Rs1.85 per share) in 4QCY12 as compared to loss of Rs8.3b in previous quarter. Complying with the Lahore High Court orders, Pakistan Telecommunication Authority has withdrawn its all notifications related to ICH. Now previous allowable charges of USc6.25 (LDI Share USc5) per minute on incoming international calls are effective. Analyzing the situation, although there is a risk, experts don’t expect any unfavorable decision from court after the withdrawal of ICH.As per sources, monthly incoming international traffic remained to the tune of 800m minutes showing 25-30pc decline to pre ICH levels of 1-1.2b minutes per month, due to higher call charges and that was expected. Going forward, with similar minutes and declining LDI charges (after cancellation of ICH regime), its expect company’s consolidated revenues to grow to Rs138b in 2013 and Rs141.3bn in 2014.
 Further, decline in salary expense after VSS is also expected to bode well to the company.