Digitel’s 1Q net profit dented by lower forex gains

17 May 2011

Filipino operator Digital Telecommunications Philippines Inc (Digitel) reported a 54% fall in net profit to PHP151.3 million (USD3.5 million) for the three months ended 31 March 2011, attributed to lower foreign exchange gains, despite revenues climbing 15.9% year-on-year to PHP4.52 billion on strong wireless and wireline growth. Digitel, which is subject to a takeover by the country’s leading telco Philippine Long Distance Telephone Company (PLDT), had 14.06 million mobile subscribers at the end of the first quarter – including pre-paid and post-paid users on its 2G/3G networks – and over 450,000 subscribers across its data and wireline segments. Digitel’s mobile brand Sun Cellular counted 12.75 million pre-paid and 1.31 million post-paid users at end-March 2011, helping push wireless revenues up 22.2% year-on-year to PHP3.72 billion, it said. Wireline data revenues increased 5% over twelve months to PHP121.4 million, fuelled by the popularity of broadband internet and data connection services. However, the group’s wireline (voice) business posted an 8.5% dip in turnover to PHP678.7 million from PHP742.1 million in 1Q10, due to lower revenues from local exchange call services, domestic tolls and international call traffic.

TeleGeography’s GlobalComms Database writes that at the end of March this year PLDT agreed to buy a 51.55% equity stake in number three operator Digitel in a PHP74.14 billion cash and share swap. In the wake of the agreement the country’s President, Benigno Aquino, called for a review of the proposed takeover amid antimonopoly concerns in the country. Nevertheless, the PLDT-Digitel deal is currently expected to be completed on or before end-June.

Philippines