PLDT core income up 4% in Q1

MANILA, Philippines - Publicly-listed telecom giant Philippine Long Distance Telephone Co. (PLDT) is optimistic that it would be able to reverse the two-year decline in its core net income this year after core earnings climbed four percent in the first quarter of the year.

PLDT president Napoleon Nazareno said in a press briefing that PLDT’s core income amounted to P9.6 billion from January to March this year or P400 million higher than the P9.2 billion booked in the same period last year.

Nazareno traced the increase in core income in the first three months of the year to stable service revenues as well as earnings before tax, depreciation and lower depreciation expense and lower provision for income taxes

He said the company sees its core income increasing three percent to P38.3 billion this year from P37.3 billion last year, with the complete integration of Digital Telecommunications of the Philippines (Digitel) which was acquired from taipan John L. Gokongwei Jr. for P69.2 billion in October 2010.

“PLDT expects to return to growth in 2013 with core income anticipated to rise by P1 billion from last year, which was impacted by heightened competition and integration of Digitel into the group,” he added.

For his part, PLDT chairman Manuel V. Pangilinan told reporters that the company’s performance in the first quarter of the year showed that it would be able to achieve its profit guidance for the year.

“The first quarter profitability provides a good start towards our achieving core profit guidance for 2013 of P38.3 billion,” Pangilinan stressed.

He pointed out that the company would await the financial results in the second quarter of the year to determine if there would be a need to revise its core profit guidance for 2013.

“There is no commitment that we will indeed revise the profit guidance as we speak. If circumstances warrant then we will do so but as of now we are maintaining the P38.3 billion profit guidance,” Pangilinan said.

PLDT’s reported income fell eight percent to P9.2 billion in the first quarter of the year from P10 billion in the same quarter last year after the company booked a P900 million reduction in its net foreign exchange and derivative gains due to a stronger peso.

The peso averaged P40.70 to $1 in the first quarter of the year, or five percent stronger than the P43.03 to $1 average in the first quarter of last year.

Consolidated service revenues for the first three months of 2013 was stable at P40 billion, reflecting the effect of steady wireless and fixed line revenues.

Data showed that non-short messaging system (SMS) data revenues jumped 10 percent to P8.2 billion and accounted for 20 percent of the total consolidated revenues, while SMS revenues that cornered 60 percent remained stable at P24.2 billion.

Revenues from national long distance, international long distance and cellular international voice fell nine percent to P6.6 billion accounting for the remaining 17 percent of total revenues.

The Group’s consolidated net debt stood at $1.8 billion as of end-March as gross debt amounted to $2.8 billion with the inclusion of Digitel’s debt amounting to $400 million.

Data showed that the PLDT Group’s total cellular subscriber base reached 71.7 million as of end-March with the net additions of 1.8 million new subscribers. Wireless subsidiary Smart Communications, Inc (“Smart”) had 25.4 million subscribers while value brand Talk ‘N Text followed with 30.6 million, and Digitel with 15.8 million Sun Cellular subscribers.

The Group’s combined postpaid cellular subscriber base, inclusive of Sun Cellular’s 1.3 million postpaid customer count, stood at 2.1 million at the end of the period. On the other hand, the Group’s combined broadband subscriber base was 3.2 million at the end of the first quarter of 2013.