PLDT’s net income slips 6% in Q1 amid stiff competition

Telecoms heavyweight Philippine Long Distance Telephone Company (PLDT) has reported a 6% year-on-year fall in net profits for the three months ended 31 March 2011 as tough competition combined with the effects of a strong peso to squeeze its bottom line. The telco, owned by Hong Kong’s First Pacific and Japanese firms NTT Communications and NTT DoCoMo, booked net income of PHP10.7 billion (USD249 million) in the period under review, down from PHP11.4 billion in the first quarter of 2010. Reuters writes that PLDT beat market expectations however. Analysts had forecast the group to report net profit of PHP10.2 billion for the first trimester, and are currently forecasting PHP40.3 billion for the full year, according to a Thomson Reuters poll. PLDT’s first-quarter core net profit, which strips out the effects of currency and derivatives-related items, climbed 1% y-o-y to PHP10.6 billion. The company had previously set a core net profit guidance of PHP40.5 billion for the full year. Service revenues declined 4% to PHP34.6 billion, largely related to the effect of a strengthening peso. Turnover derived from mobile operations, which contribute around two-thirds of the group total, also slipped by 4%, it said. PLDT closed out March 2011 with 46.6 million mobile users, up from 45.6 million at the end of 2010.