PLDT clears P9.6 billion in first quarter

MANILA, Philippines - Philippine Long Distance Telephone Co. (PLDT), the country’s biggest telephone operator, reported a net profit of P9.6 billion in the first three months of this year, down eight percent from P10.4 billion a year earlier, largely due to non-recurring losses from the foreign exchange revaluation of PLDT’s financial assets and liabilities and derivatives, the company said yesterday.

Group service revenues increased four percent to P36.2 billion, fueled mainly by the six percent growth in data and broadband revenues. Consolidated earnings before interests, taxes, depreciation and amortization (EBITDA) was stable at P21.9 billion while EBITDA margin was at 60 percent.

“We are buoyed by our strong start for 2009 – we have sustained our growth in both subscriber numbers and revenues across business lines. On this basis, prospects for our full year performance are quite encouraging,” PLDT chairman Manuel V. Pangilinan said.

Pangilinan stressed he still expects net income for 2009 to be higher than the initial guidance number of P40 billion, or at least five percent more than last year.

But he added that if the peso exchange rate is maintained at the current 47-49 to $1 range, the company does not anticipate any further forex losses being booked other than the one already reflected in the first quarter. “If this happens, it is likely that the reported net income this year will be similar to the 2009 core income of P40 billion,” he said.

Service revenues for 2009 is expected to hit P150 billion, a five percent increase over 2008 while EBITDA is forecast to be three to five percent higher at P90 billion to P92 billion.

Also yesterday, PLDT subsidiary Mediascape launched its direct-to-home (DTH) satellite television service under the brand name Cignal with an initial investment of $10 million.

Mediascape head Orlando Vea said they have covered the whole country in terms of signal while the soft launch covers several provinces in Luzon, focusing on areas that still do not have cable TV access. In the next few months, the company plans to offer high definition pay TV.

PLDT also announced it is planning to roll out soon and implement the fiber-to-the-home (FTTH), a high-end service that promises better Internet access, by the middle of the year.

Vea also revealed that following the success of their mobile virtual network operations (MVNO) in Italy, the group is now looking at two other countries in Europe.

“We are also pursuing Macau and looking into Taiwan. Plans for MVNO in Japan are on hold due to problems with current regulations while entering the Middle East appears difficult also because of their MVNO regulations,” he said. MVNO allows PLDT’s wireless unit Smart Communications to offer its services in other countries without actually building a network.

Meanwhile, the PLDT group’s capital expenditures stood at P3.9 billion for the quarter. Capex for 2009 is estimated to reach P27 billion or 18 percent of service revenues, of which 58 percent or P15.8 billion will be spent for wireless, 38 percent or P10.2 billion for fixed line, and four percent or P1 billion for information and communications technology.

Pangilinan said the group plans to incur additional debt within the year, mainly denominated in pesos, to fund various investments. It is expected that the new debts this year will amount to around P15 billion.

Meanwhile, PLDT president Napoleon Nazareno reported that wireless service revenues rose to P23.9 billion for the first quarter of 2009, six percent higher than the P22.5 billion realized in the same period last year.

The PLDT Group’s total cellular subscriber base for the first quarter of 2009 grew to 36.9 million subscribers, a 17 percent growth year-on-year. For the first three months of 2009, Smart Communications and Piltel added 1.7 million subscribers, as compared with 1.5 million in the first quarter of 2008. Smart recorded net additions of approximately 440,000 subscribers to end the period with 21.3 million subscribers while Piltel’s Talk ‘N Text brand added 1.3 million subscribers to end the quarter with 15.6 million subscribers.

Cellular data revenues were up three percent to P12.1 billion, making up 55 percent of net service revenues. Cellular voice revenues were likewise up, improving six percent to P9.5 billion.

Nazareno said Smart continues to expand and improve its 2G network capacity while the rollout of the 3G and HSPA networks has been accelerated to meet expected demand.

“Despite earlier apprehensions that our core businesses would already be negatively impacted by the global recession, we are pleased by our strong performance in the first quarter of 2009, activations for the period were the highest in recent history and revenues continue to grow,” Nazareno, also Smart president, said.