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WorldCall H1 2026: EBITDA Recovery Meets a Deep Liquidity Test

WorldCall doubled H1 EBITDA and narrowed its loss, but Q2 momentum softened while negative cash flow, a large current-liability gap and licence uncertainty remained.

Sep 19, 2026

Company Name: WorldCall Telecom Limited

Ticker: WTL

Reporting period: three months and six months ended 30 June 2026. Primary analytical basis: the group’s unaudited consolidated interim financial statements in Pakistani rupees (Rs '000). WorldCall’s statutory auditor performed a limited review under ISRE 2410 of the parent company’s cumulative six-month standalone interim statements; the separate three-month figures were not reviewed. The consolidated statements are presented as unaudited.

AlphaGen model outputs

Alpha QoQ Score: 38.03

TTM Performance Score: 97.6

3Y Business Perf Score: 77.85

Sector Leadership Score: 32.3278

These four scores are AlphaGen model outputs, not company-reported figures.

Verdict

WorldCall’s first half of 2026 shows a real improvement in the income statement, but not yet a clean turnaround. Consolidated revenue rose 11.1% and EBITDA more than doubled as the direct-cost burden improved over the six-month period and finance cost fell. The loss after tax narrowed by about 31%. The problem is that the second quarter itself was less convincing: revenue still grew, but direct costs rose faster than sales and Q2 EBITDA slipped year on year. Cash conversion also weakened, the group remained in negative equity, the current-liability gap widened, and licensing and going-concern uncertainties remained material. The next result therefore needs to show that the H1 EBITDA recovery can be sustained in Q3 without heavier working-capital or sponsor-funding dependence.

Results at a glance

  • H1 consolidated revenue: Rs3.09bn, up 11.1% from Rs2.78bn.
  • H1 EBITDA: Rs207.4m, up 104.5% from Rs101.4m; EBITDA margin improved to about 6.7% from 3.6%.
  • H1 loss after tax: Rs339.0m, narrowed 31.1% from Rs492.3m.
  • H1 finance cost: Rs205.1m, down 13.2% from Rs236.2m.
  • Q2 revenue: Rs1.64bn, up 4.3% year on year, but Q2 EBITDA fell 3.8% to Rs75.1m.
  • Consolidated operating cash flow: negative Rs64.6m versus positive Rs26.9m in H1 2025.
  • At 30 June, current liabilities exceeded current assets by Rs8.44bn and group equity was negative Rs750.2m.
  • No cash dividend, bonus issue or right issue was declared with the result.

What improved

The clearest operating improvement was visible across the six-month period. Revenue increased by Rs309.2m to Rs3.09bn, while direct costs excluding depreciation and amortization rose by only Rs209.0m to Rs2.72bn. That widened the spread between revenue and direct costs to Rs368.5m from Rs268.3m, a gain of roughly 37%. Operating costs increased only 3.1%, and other income rose to Rs62.4m from Rs47.2m. Together these movements lifted reported EBITDA to Rs207.4m, more than double the prior-year level.

Management attributes the improvement primarily to positive revenue movement, while saying direct-cost growth remained aligned with the increase in revenue. The six-month numbers broadly support that explanation: direct costs represented about 88.1% of revenue versus 90.4% a year earlier. Depreciation and amortization also declined 6.2% to Rs302.7m. Finance cost fell 13.2% to Rs205.1m, which management links to lower markup rates. The result was a pre-tax loss of Rs339.0m compared with Rs492.3m in H1 2025 and the same Rs339.0m loss after tax because no current or deferred income-tax charge was recognized beyond the separately presented levy/minimum-tax line.

The broader connectivity market provided a supportive demand backdrop. Pakistan’s Economic Survey 2025-26, using PTA data, reported 161 million broadband subscriptions and 64.2% broadband penetration by March 2026, up from 150 million and 60.6% in FY2025. Telecom-sector revenue reached Rs837bn during July-March FY2026. That sector growth does not prove WorldCall gained share, but it does establish that the company was operating in an expanding connectivity market rather than a contracting one.

The funding-cost environment also changed materially from the prior comparable period. WorldCall explicitly cites lower markup rates as a reason finance cost declined. SBP did raise the policy rate from 10.5% to 11.5% effective 28 April 2026 and kept it there in June, so the company’s lower H1 finance charge should not be read as a simple consequence of continuously falling rates through the whole half. It reflects the average financing environment versus H1 2025 together with WorldCall’s own liability mix, repayments and financing arrangements.

What weakened / needs attention

The Q2 trend was softer than the H1 headline. Revenue in the quarter rose 4.3% to Rs1.64bn, but direct costs increased 5.3% to Rs1.50bn and operating costs rose 9.1%. The revenue-minus-direct-cost spread therefore fell to Rs143.2m from Rs152.3m. Q2 EBITDA declined 3.8% to Rs75.1m and the EBITDA margin eased to about 4.6% from 4.9%. The Q2 loss after tax narrowed to Rs191.5m from Rs224.9m, helped partly by lower depreciation and finance cost, but the operating direction was not as strong as the six-month comparison suggests.

This matters because the H1 EBITDA improvement was heavily concentrated in the first quarter. Subtracting the disclosed Q2 figures from the six-month totals implies Q1 EBITDA of roughly Rs132.3m versus about Rs23.4m in Q1 2025. The second quarter did not extend that same operating acceleration. For the next result cycle, the important question is whether Q2 was a temporary cost-pressure quarter or whether the six-month margin gain has already started to fade.

Cash flow and working capital

Cash conversion is another weak point. The group generated Rs114.0m of cash before finance cost, taxes and other operating payments, down from Rs143.3m a year earlier. Trade debts absorbed Rs173.2m of cash, partly offset by a Rs156.0m increase in trade and other payables. Overall working-capital movements absorbed about Rs49.2m versus a Rs27.0m inflow in the comparable period. After Rs162.7m of finance cost paid and Rs14.4m of income tax paid, net operating cash flow was negative Rs64.6m versus positive Rs26.9m.

Investing activities generated Rs34.8m, largely because income on deposits and savings accounts contributed Rs33.8m, while capital expenditure was modest. Financing activities provided Rs30.6m, principally because the sponsor’s loan increased by a net Rs96.6m, partly offset by repayments of long-term financing, short-term borrowing and lease liabilities. Period-end cash was only Rs22.0m. In other words, the narrower accounting loss did not translate into positive operating cash generation, and sponsor funding remained part of the liquidity bridge.

Balance-sheet pressure remains the central risk

At 30 June 2026, consolidated current assets were Rs3.19bn against current liabilities of Rs11.62bn, leaving a current-liability excess of Rs8.44bn compared with Rs8.29bn at December 2025. The current ratio was therefore only about 0.27x. Group equity deteriorated to negative Rs750.2m from negative Rs407.5m, while accumulated losses reached Rs21.62bn. Sponsor loans stood at Rs2.93bn.

Management’s going-concern assessment argues that not every item within the current-liability gap represents an immediate cash requirement. It identifies roughly Rs2.55bn of PTA-related liabilities, Rs557m of challenged claims, Rs1.03bn of contract liabilities and Rs99m of tax provision as components for which management expects no immediate or equivalent cash outflow in the manner implied by the headline current-liability balance. The group also says its majority shareholder has provided assurance of continued cash-flow support. These are management’s mitigation arguments; they do not eliminate the balance-sheet deficit.

The statutory auditor’s limited-review report on the parent company reached an unmodified review conclusion but included emphasis-of-matter paragraphs. It highlighted the standalone company’s Rs337.4m half-year loss, accumulated losses of Rs21.58bn, an Rs8.40bn excess of current liabilities over current assets and the related material uncertainty around going concern. It also drew attention to a Rs1.65bn deferred-tax asset whose realization depends on sufficient future profits. Because the consolidated group statements are presented as unaudited, this review conclusion should not be described as an audit or review opinion on the consolidated accounts.

Licensing remains a material operating uncertainty

The group discloses that its LDI and FLL telecommunications licences expired in July 2024. As of 30 June 2026, the FLL renewal matter remained pending before the Islamabad High Court. The company says PTA had renewed the LDI licence subject to conditions, some of which WorldCall challenged before the Sindh High Court, and that the court had restrained PTA from taking coercive measures while the case remained pending. This is not a routine footnote: licence continuity affects the legal and operating framework around core telecom services and is explicitly included in the group’s going-concern discussion.

Recurring versus exceptional

The H1 earnings improvement does not appear to be driven by a single large one-off income item. Other income was Rs62.4m, only Rs15.2m higher year on year, while the biggest drivers were revenue growth, a better six-month direct-cost ratio, lower depreciation and lower finance cost. That makes the EBITDA improvement more meaningful than a turnaround created mainly by an exceptional gain.

However, the equity section contains large non-cash capital-structure movements that should not be confused with earnings. During the period, 16.5 million preference shares were converted into ordinary shares. The company says preference-share capital of Rs465.4m and accrued preference dividend of Rs1.13bn were converted, producing a net Rs1.60bn increase in ordinary share capital after the conversion discount. Preference dividends also continued to accrue in equity following an extension of the conversion date to 31 December 2030. These movements reshape reported equity accounts but do not represent operating profit or operating cash flow.

What changed after the reporting date

A major capital restructuring was completed after June. The Lahore High Court sanctioned the capital-reduction scheme on 8 July 2026, and WorldCall announced completion of the court-sanctioned capital reduction and consequential stock split on 10 August. The company stated that the number of ordinary shares remained unchanged while the nominal value per ordinary share was reduced from Rs10 to Rs1. Accounting adjustments are expected through capital reserves, discount on shares and other equity accounts.

That restructuring can materially change the presentation of WorldCall’s equity in subsequent financial statements, but it does not itself generate cash, improve EBITDA, collect receivables or settle the large current-liability gap. The next report should therefore be read carefully to separate accounting clean-up in equity from genuine operating and liquidity improvement.

Growth initiatives: useful, but execution evidence is still needed

Management says WorldCall has begun deployment of a 200,000-connection low-cost broadband project across underserved areas in 20 cities already covered by its metro fibre networks. It also plans to augment the core and access network to handle additional bandwidth and subscriber loads. In technology products, management says go-to-market plans have been finalized for CADNZ, a CRM/contact-centre and digital-lending support platform aimed initially at financial institutions, while client engagement has started for AI and big-data solutions.

These initiatives fit the broader rise in broadband adoption, but they are still plans and early-stage commercial activity rather than demonstrated earnings contributors. The key evidence in subsequent quarters will be actual connections activated, revenue conversion, direct-cost behavior and whether new technology revenue produces cash rather than merely adding development expenditure.

What to monitor next

  • Q3 revenue versus direct costs: the H1 ratio improved, but Q2 direct costs grew faster than revenue.
  • EBITDA durability: H1 EBITDA doubled, yet Q2 EBITDA declined. Sustained quarterly improvement would be stronger evidence of a turnaround.
  • Operating cash flow and collections: trade debts absorbed cash and CFO turned negative.
  • Finance-cost cash burden: reported finance cost fell, but actual finance cost paid increased to Rs162.7m in H1.
  • Current-liability gap and sponsor support: the Rs8.44bn deficit and negative equity remain central liquidity constraints.
  • LDI/FLL litigation and licence status: any definitive regulatory or court development could materially affect risk.
  • Execution of the 200,000-connection broadband rollout and monetization of CADNZ/technology offerings.
  • Post-restructuring equity presentation: distinguish accounting effects from changes in cash, liabilities and recurring profitability.

Bottom line

WorldCall’s H1 2026 result is better than the prior year in several important ways: revenue grew, the six-month direct-cost burden improved, EBITDA more than doubled, finance cost fell and the net loss narrowed. But the quality of the recovery is not yet uniform. Q2 EBITDA softened, operating cash flow was negative, the current-liability deficit widened and the group still reported negative equity alongside significant licence and going-concern uncertainty. The next result will be most informative if it shows that the Q1-led EBITDA recovery can become a sustained quarterly pattern and, crucially, begin to convert into cash.

Sources

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