PLDT reports flat profits for 1H11

2 Aug 2011

Filipino operator Philippine Long Distance Telephone Company (PLDT) today posted its financial results for the first six months of this year, which show the group’s profits flat-lined on the back of falling sales and forex fluctuations. PLDT said its H1 consolidated core net income dipped by 1% year-on-year to PHP21 billion (USD501.2 million) while reported net profits declined by 2% to PHP21.3 billion. ‘Had the peso remained stable, core income for the first half of 2011 would have been higher by PHP500 million,’ PLDT said. The telco added that first-half revenues dropped 3% y-o-y to PHP70.8 billion from PHP73.2 billion in the corresponding period of 2010, while expenses narrowed by 2% to PHP42.5 billion from PHP43.3 billion last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) reached PHP41.5 billion in H1, it said, and free cash flow of PHP24.2 billion was up 25% y-o-y.

On an operational basis PLDT reported that at 30 June 2011 the total broadband subscriber base stood at over 2.2 million users, while its cellular user base had expanded to 47.8 million – up 2.2 million since the start of the year.

The company is now awaiting the final regulatory approval for its proposed takeover of fellow Filipino operator Digital Telecommunications Philippines Inc (Digitel). To that end it has appealed to the regulator, the National Telecommunications Commission (NTC), to approve the acquisition of a 51.55% stake in JG Summit Holdings-owned Digitel, saying it will not create a monopoly situation as the market is enjoying solid and stable growth. In its application, PLDT argues that this situation has resulted in ‘robust and healthy competition’, both amongst existing telcos and new alternative service providers such as Skype. It has also stated its position that local laws do not prohibit the deal: ‘Under the Constitution, monopolies in the telecommunications industry are not prohibited per se, because telecommunications entities remain subject to the regulatory authority of this Honorable Commission.’