PLDT Group on track to attain 2011 targets

By Lenie Lectura, BusinessMirror

Posted at Nov 29 2011 07:09 AM | Updated as of Nov 29 2011 03:28 PM

MANILA, Philippines - Telecom firm Philippine Long Distance Telephone Co. (PLDT) President Napoleon Nazareno said on Monday the PLDT Group is on track to attain its revised guidance numbers for the year.

“Our guidance this year is slightly lower than what was earlier stipulated. ?We are on track though as yearend approaches,” said Nazareno.?

From a target of P40.5 billion in core net income for 2011, the phone giant may only reach P39 billion as revenues from its legacy businesses of voice and text continue to decline. Although there is a shift for data and broadband services, Nazareno said the transformation process will take some time before a 1-for-1 revenue substitution process can be achieved.

“We are still in the transformation stage but broadband seems promising; that’s why we continue to invest in our network for data and broadband services,” he said. The PLDT group posted P42 billion in core net income last year.

Service revenues for the group this year is likely to go down by 4 percent from P142.2 billion in 2010.

Nazareno, however, sees brighter prospects ahead despite intense competition. He expects 2012 as a “year of growth” as the group undertakes a capital-intensive network upgrade designed to handle new technologies.

“For next year, the industry will still continue to experience a tight competition but hopefully with new services that we have started to offer and will offer will pave the way for new growth areas. Overall, it will be a year of growth next year,” he said.

The wireless business will still be the group’s biggest revenue component, albeit noticeably lower. “Mobile revenues contribute roughly 55% to 60%. Revenue for next year should be stable, and if not, it should be growing slightly,” said the PLDT official.

PLDT is banking on its broadband service to sustain momentum growth. ?At end-September this year, the PLDT group’s total broadband and Internet revenues totaled P13.9 billion, up 10 percent year-on-year. The group’s broadband business now account for 13 percent of consolidated service revenues.

“Broadband will be higher. Now, it contributes to about between 12 to 15 percent and it may be higher next year,” said Nazareno.

The phone firm’s reported net income in the third quarter and first nine months of the year were down by 10% and 4%, respectively.

From January to September this year, PLDT’s reported net income stood at P30.6 billion from the P32 billion recorded in the same period last year. Core profit, which excludes currency and derivatives-related items, was also lower at P30.6 billion from P31.4 billion recorded in the same period last year.

Third-quarter net profit plunged 10% to P9.3 billion compared with P10.3 billion a year earlier. Core net profit also fell by 6% to P9.6 billion.

At end-September, PLDT’s service revenues declined by 3% to P103.2 billion, reflecting the combined effect of a 7% decline in combined cellular and fixed voice revenues and a 4% reduction in cellular and data revenues, including text.