In the annual report published this week; Wateen Telecom Limited has posted Rs 8,608 million as revenues in the year ended June 30, 2010 (FY10) with the gross margin for second half of FY10 increasing to 38% from 30% compared to the first half of FY10. Although Wateen posted Rs 1,994 million as after tax loss for FY10, this was an improvement over initially projected loss of Rs 2,071 million for the same period. Company’s financial performance in FY10 has shown a positive trend marked by a positive EBITDA of 6% for second half compared to negative 3% for first half of FY10.
Wateen Telecom outperformed management expectations through various cost rationalizing and consolidation initiatives aimed at lowering operational overheads. This effort has resulted in significant cost savings from initially projected. Overall, Wateen was able to cut more than Rs 700 million in operating costs which resulted in EBITDA of 4% for FY10 compared to projected EBITDA of 0%.
As a result of this positive trend; the sponsors have recently extended a support of over Rs 2,100 million to Wateen. This news has resulted in renewed investor confidence and a positive impact on the share price.