PLDT sees better Q2 results

by Lorenz S. Marasigan, BusinessMirror

Posted at Jun 11 2014 09:17 AM | Updated as of Jun 11 2014 05:17 PM

MANILA, Philippines - Telecommunications provider Philippine Long Distance Telephone Co. (PLDT) sees a more profitable second-quarter performance for the company, as it remains on track to meeting its P39.5-billion core net-income guidance by year-end.

PLDT Chairman Manuel V. Pangilinan said the dominant carrier is expected to post sterling growth this quarter, driven largely by its data and broadband businesses.

“It would be better than last year. The trend is broadly similar to the first- quarter result. It would be driven by data and broadband, but I think the fixed-line business has been doing very well,” he said in a chance interview after the firm’s annual stockholders’ meeting on Tuesday.

He added that the legacy business, which has been experiencing a down trend following the emergence of mobile data and broadband, is seeing better results.

“The legacy, fixed-line data and broadband have been up. The toll traffic, international and domestic, is still dropping, but the slope is narrower,” Pangilinan said.

The businessman noted that the core net income of the group by yearend would reach P39.5 billion given the initial results.

“It would be ahead of 2013. We are on the growth path,” he said, adding that the multibillion-peso growth guidance is achievable.

PLDT’s net income slid by 2 percent to P35.4 billion in 2013 from P36.1 billion as a result of higher foreign-exchange and derivative losses coupled by the damage wrought by Supertyphoon Yolanda in the fourth quarter.

Consolidated service revenues for 2013 grew 3 percent to P164.1 billion, as revenues from the data and Internet business more than offset the declines from international and national long-distance streams. Expenses grew by 2.4 percent to P125.52 billion from P122.53 billion in 2012.

Despite the setback, the dominant network carrier still posted a 2-percent increase in core net income—which strips off one-time gains or losses—to P38.7 billion last year versus P36.9 billion recorded the previous year.

PLDT President Napoleon L. Nazareno noted that the company will start focusing on maintaining its growth momentum now that the firm is back into profitability.

“Our focus for 2014 is to maintain the momentum in profitability while we manage the transformation of our revenue mix. This involves expanding our data businesses while maintaining the equilibrium of our core businesses and managing the declines in our legacy services,” he said.

The group has allotted P32 billion in capital expenditures in 2014 to bankroll its expansion and network modernization plans.

This year’s capital outlays would be spent largely to extend the group’s third-generation (3G) network coverage to all of the country’s 1,600 cities and municipalities. The amount will also be used to provide long-term evolution coverage for nearly half of the population.

“We will also expand our fiber footprint to over 90,000 kilometers, including an increase in international cable capacity. Taking to heart the lessons from Yolanda and the Bohol earthquake last year, we are also fortifying our network in anticipation of more severe weather events and other calamities,” Nazareno said.