Charges on job cuts and loss-making companies cost PLDT dear

16 Jul 2003

The Philippines’ dominant fixed and mobile operator Philippine Long Distance Telephone Co (PLDT) [1079.HK] posted a loss of PHP700 million (USD13 million) for the three months to 30 June 2003, compared with a profit of PHP1.45 billion last year, as it took the hit on charges for job cuts and investments in two loss-making ventures. The loss was calculated by deducting Q1 profit from the telco’s reported PHP1.8 billion half-yearly net profit. Despite the unexpectedly poor results, PLDT is sticking to its guns and keeping its full-year net income figure of between PHP9 billion and PHP10 billion. The company is confident that the trend of rising mobile revenues will continue over the course of the year as more and more people sign up for wireless services. PLDT’s two mobile units Smart Communications and Pilipino Telephone added close to a million customers in the period in review, increasing their combined base to 10.3 million. Smart alone contributed PHP6.1 billion profit in the first half of the year compared with PHP2.3 billion a year ago. The strong performance was used to offset 1,759 redundancies which cost the company PHP1.3 billion in severance pay, and PHP3.5 billion in provisions related to investments in a satellite company and a cable TV operator.