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Digitel books third-quarter loss prior to PLDT takeover

7 Nov 2011

Filipino telecoms operator Digital Telecommunications Philippines Inc (Digitel) booked a net loss of PHP131.34 million (USD3.08 million) for the three months to 30 September 2011, the quarterly period prior to its takeover by the country’s largest telco Philippine Long Distance Telephone Company (PLDT) last month: PLDT completed its acquisition of a 51.55% stake in Digitel from JG Summit Holdings on 26 October. In a regulatory filing, Digitel attributed the performance in part to a sharp increase in operating expenses and some PHP700 million-worth of net charges, which impacted revenues for the period. The telco booked turnover of PHP4.15 billion for the three months under review, up 15% year-on-year, but said this was eclipsed by a 19% surge in operating expenses to PHP4.34 billion. Digitel also booked a net charge of PHP696.6 million which hit its bottom line and resulted in a reversal of the PHP705.43 million net profit booked in the third quarter of 2010.

For the first nine months of this year, Digitel’s net income reached PHP15.68 million, a 98% fall on the PHP850.38 million profit booked in January-September 2010. The group said that 9M earnings related to its mobile arm narrowed by 23% year-on-year to PHP983.32 million from PHP1.28 billion, on mobile revenues of PHP11.65 billion, up 22.2% year-on-year. Digitel ended September 2011 with 16 million mobile subscribers – including 1.5 million post-paid and 14.5 million pre-paid accounts. However, losses from the group’s fixed line services widened by 99% from PHP551.99 million to PHP1.10 billion over the same period. Meanwhile, nine-month profits from fixed internet increased 6% y-o-y to PHP128.19 million from PHP121.06 million last year. Despite the poor performance, PLDT chairman Manuel V Pangilinan is quoted as saying that he expects Digitel to ‘make a profit’ next year.

Philippines, Digital Telecommunications (Digitel)

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