Digitel and Bayan cut 9M losses on improved sales

20 Nov 2009

Filipino telecoms operators Digital Telecommunications Philippines Inc (Digitel) and Bayan Telecommunications (Bayan) reported narrowing losses in the first nine months of 2009 on the back of increased sales and a stronger peso. Gokongwei-controlled Digitel reported net losses of PHP394.2 million (USD8.4 million) for 9M09, significantly lower than the PHP2.7 billion loss the company booked in the corresponding period of 2008. In a filing the company’s parent said: ‘Consolidated cost and operating expenses increased by 30% to PHP7 billion from last year’s consolidated figure of PHP5.4 billion … Higher cost of sales, network-related expenses and general and administrative expenses primarily contributed to the increase.’ The filing went on to say that Digitel’s consolidated service and non-service revenues for nine-month period under review totalled PHP10.3 billion, up by nearly 33% from PHP7.7 billion, with the wireless division contributing 73% of the total – or PHP7.5 billion (up 58% year-on-year). Digitel’s Sun Cellular brand has reached the nine million subscriber mark – confirming it as the third largest player in the domestic market. The parent noted that non-service revenues stemming from higher sales of SIM packs and phone kits also grew 55.7%, while company EBITDA stood at PHP3.2 billion, 40% better than a year ago.

Meanwhile, Lopez-owned Bayan Telecommunications (Bayan) reported a net loss of PHP565 million for the January to September 2009 period, compared with a PHP2.57 billion net loss in the same period last year. The company said its massive losses in 2008 came about as a result of the peso’s depreciation, which increased the servicing costs of its dollar-denominated loans. Having suffered such massive losses in a competitive telecoms market, Bayan opted to sign up to a 19-year rehabilitation plan, ending in 2023, which will see it pay off about PHP1.4 billion in debt this year.

Philippines, Sun Cellular (Philippines)