PLDT posts 19% rise in 1Q income, revenues down

13 May 2010

Philippine Long Distance Telephone Company (PLDT) today published its unaudited financial and operating results for the three months ended 31 March 2010. The group reported service revenues of PHP36 billion (USD802.1 million), down by 1% year-on-year, as the 3% growth in voice revenues was wiped out by a 4% drop in sales of data and ICT services. Consolidated EBITDA fell to PHP21.2 billion PLDT said, while EBITDA margin was 59%, unchanged on the FY2009 margin. The group said free cash flow ‘remained strong’ at PHP12.8 billion in the period under review, up 22% y-o-y, while consolidated CAPEX topped PHP5.2 billion for the first three months of the year, as the operator continued to improve both its broadband and cellular coverage and capacity. Consolidated net income climbed 19% y-o-y to PHP11.4 billion, from PHP9.6 billion in the first three months of 2009. Core net income (i.e. profits available to common stockholders on a pre-tax basis) for the first quarter of 2010, excluding exceptional items, rose 3% y-o-y to PHP10.5 billion. PLDT said its first-quarter performance reflected ‘higher recurring net income and a net gain from foreign exchange revaluation of [its] financial assets and liabilities, and derivatives.’

PLDT’s wireless division posted 1Q10 revenues of PHP23.7 billion, down 1% compared with the PHP23.9 billion reported last year. The telco said that but for the impact of the sale of its satellite transponders, wireless service revenues would have been flat year-on-year at PHP23.3 billion. PLDT subsidiary Smart Communications reported a fall in wireless EBITDA to PHP14.4 billion in the first three months of 2010; the EBITDA margin decreased to 61%. Nonetheless, PLDT’s overall cellular subscriber base increased 17% y-o-y to 43.2 million as at 31 March 2010. Of these, Red Mobile, the brand owned by Smart subsidiary, CURE, claimed 280,000 subscribers. Red Mobile was relaunched again in March 2010, this time positioned ‘to meet market demand for unlimited services, particularly for ‘second SIM’ holders’. Meanwhile, Smart’s wireless broadband service ‘SmartBro’, offered through its wholly-owned subsidiary Smart Broadband, Inc, continued to expand: it ended the period under review with 1.2 million users including around 770,000 taking SmartBro’s pre-paid option. Wireless broadband revenues rose 23% y-o-y to PHP1.6 billion and now account for 7% of total wireless service revenues.

In the fixed line sphere, PLDT said service revenues increased 1% year-on-year to PHP12.9 billion, driven by a 13% increase in data revenues, both from corporate data and residential DSL services. In 2010 the business is continuing to pursue initiatives aimed at tapping new markets and generating new and higher ARPUs, it said. PLDT DSL reported sustained growth in terms of subscribers, reaching 590,000 at the end of March 2010, from 560,000 at the end of 2009. PLDT DSL generated PHP2.0 billion in revenues in 2010, up 24% from PHP1.6 billion in the same period in 2009.