PLDT profit down 4 pct in 2014

ABS-CBN News

Posted at Mar 03 2015 02:18 PM | Updated as of Mar 03 2015 10:18 PM

MANILA, Philippines – Philippine Long Distance Telephone Company (PLDT) posted a net income of P34.1 billion in 2014, down 4 percent from the P35.4 billion in 2013.

PLDT said its consolidated core net income dropped 3 percent to P37.4 billion in 2014 from the P38.7 billion recorded in 2013.

The telecommunications firm attributed the decrease to the rise in cash operating expenses, an increase in product subsidies, and a higher provision for income tax.

PLDT said its consolidated service revenues in 2014 grew by 1 percent to P165.1 billion, as revenues from the data and broadband and domestic voice businesses offset the declines in SMS revenues and the international and national long distance streams.

In last year’s fourth quarter alone, PLDT’s net income dropped 5 percent to P6.1 billion from P6.5 billion in the same period in 2013 due to higher operating expenses and product subsidies.

The firm said that its consolidated capital expenditures in 2014 amounted to P34.8 billion, P6 billion higher than the capex level in 2013, and was spent for improved coverage, increased fiber reach and capacity, modernized and fortified fixed line network, expanded capacity of fixed and mobile broadband network components, and unified Smart-Sun network project to build operational efficiency.

“Capital expenditures are expected to remain elevated for 2015 in light of the anticipated exponential growth in network traffic resulting from the continued growth in smartphone ownership and our own initiatives to stimulate data usage,” the firm said in a statement.

PLDT’s total broadband and Internet revenues for 2014 reached P31.9 billion, 20 percent higher than 2013 figures.

Revenues from its wireless subsidiaries Smart Communications Inc. and Digitel Mobile, however, slightly decline to P115. billion for 2014 from P116.7 billion in 2013, reflecting the pressure on SMS and inbound international revenues.

PLDT chairman Manuel V. Pangilinan, meanwhile, said that its investment in German e-commerce firm Rocket Internet has grown 55 percent.

“We are also pleased to note the appreciation of our recent strategic investment in Rocket Internet. Our €333 million investment, representing 6.1 percent of the Company, is currently valued at €515 million, or 55 percent higher than our original outlay,” he said.

Pangilinan added that the firm recognizes the need to complement its present business by participating in the digital world beyond providing access and connectivity.

“While we can maximize our strengths as an infrastructure company, we also need to act as a mediator/enabler, as well as a service provider. To this end, we are focusing on adjacent businesses which have links to or which have the ability to enhance our access business,” he said.

For 2015, Pangilinan said PLDT projects its profits to be “in the vicinity of P35 billion."

“Beyond 2015, we see brighter prospects for PLDT,” he said.