PLDT’s net profits fall 7% in 1Q

10 May 2006

Philippine Long Distance Telephone Company (PLDT) posted net income of PHP8.6 billion (USD167.8 million) in the first quarter of 2006, down 7% on the same period a year ago, after it accelerated the depreciation of its old network assets and posted almost 50% lower foreign exchange gains. However, core earnings – excluding the impact of foreign exchange, deferred tax assets and additional depreciation – were up 16% at PHP7.6 billion from PHP6.5 billion in 1Q05. Consolidated service revenues rose by 2% to PHP30 billion and EBITDA climbed 8% to PHP20.1 billion, while the group’s EBITDA margin rose to 67% compared with 64% previously. Consolidated net debt was down 35% to PHP70 billion. Consolidated free cash flow remained strong at PHP6.4 billion despite increases in capital expenditures and working capital requirements.

At the end of March 2006 PLDT’s total mobile subscriber base stood at 20.9 million. Smart recorded net additions of approximately 117,000 subscribers while Talk ‘N Text added about 374,000 subscribers to end the first quarter with 15.4 million and five million subscribers respectively. By the 1 April Smart’s 3G network comprised more than 800 cell sites covering 119 cities and municipalities nationwide representing the first and widest 3G network in the country. The unit also reported close to 40,000 wireless broadband subscribers at the same date.

PLDT said that group wireless service revenues rose by 6% year-on-year to PHP18.9 billion for the first quarter of 2006, while capex reached PHP2.5 billion – part of a proposed annual spend of PHP9 billion. The telco’s fixed line business saw a small improvement in quarterly revenues, which were up 3% at PHP12.1 billion, driven by increased demand for data revenues, which offset declines in local. DLD and ILD call services. Retail DSL reported strong growth with the number of subscribers breaking the 100,000 barrier for the first time, while the number of Vibe dial-up customers rose by 38,000 in the period to 420,000. PLDT hopes to see its broadband base double in 2006 as network coverage expands. To that end it spent PHP2 billion on its next generation network in Q1 and had installed 65,000 broadband-capable lines by the end of March; total capital expenditures for the year are expected to reach PHP9 billion.

Elsewhere the group’s information and communications technology arm, ePLDT, reported service revenues of PHP813 million for the first three months of 2006, a 25% increase from PHP652 million a year ago, thanks in part to high growth at its call centre business.