LAHORE - Despite commitments, the government may not be able to transfer all the properties to the Etisalat in next couple of months due to pending litigations in courts.
Telecom industry sources said that despite repeated efforts the authorities failed to transfer 131 properties out of 3,248 buildings to Etisalat in the past.
They said that as part of the PTCL privatization deal, the government of Pakistan was obligated to transfer 3,248 properties. However, due to some disputes, 131 properties remained outstanding since 2008 that triggered Etisalat to suspend remaining cash streams totaling $800 million out of the total price of $2.6 billion for 26 per cent stakes.
“The government is yet unable to fulfill the commitment of handing over of all the properties this time either. Even if all properties are transferred, no major increase in company’s profitability in near future is possible.”
Telecom industry experts said that current valuations suggest Etisalat’s stake of $330 million (26 per cent of PTCL Market Cap $1.3 billion) in PTCL for which Etisalat has already paid $1.8 billion while $800 million are still outstanding.  Analysts are of the view that along with the expectation of better result and likely dividend in 2Q, developments on transfer of properties and upcoming 3G auction have generated much volatility in the share price of Pakistan telecom giant, PTCL.
They expect profitability of PTCL to increase by 15 per cent QoQ to Rs3.8 billion in 2Q2013 versus Rs3.3 billion in the last quarter. In addition, there is also a possibility of dividend payout.
However, they remain cautious on property transfer issue while the transfer of properties is not a major earning booster for the company in immediate future.
As the International Clearing House arrangement is still intact, they expect profits will remain strong going forward.
They said that on the back of higher revenues from incoming international calls, it is expected that PTCL would post profit of Rs3.8 billion for 2Q2013, 15 per cent higher than Rs3.3 billion in 1Q2013.
They attribute the increase to higher ASR (Approved Settlement Rates) on incoming international calls due to ICH agreement. Further, growing broadband and recovering fixed line base is also expected to lend its due hand in the growth.