PLDT 2011 income down 21% to P31.7-B

MANILA, Philippines [UPDATE] – Citing lower mobile phone revenues, higher operating expenses, and volatile foreign exchange rate, the country’s biggest telecommunications firm reported hitting a “bottom level” in 2011.

Officials of Philipppine Long Distance Telephone Co. (PLDT) told a press conference on Tuesday, March 6, that net profit reached P31.7 billion, reflecting a 21% slump against 2010’s and lower than most analysts’ expectations of about P40 billion.

PLDT chairman Manuel V. Pangilinan called this the “bottom level” for the company, adding that 2012 will be a “transition period.”

Revenues from wireless services, including mobile phone-based services, would have fallen 5% in 2011, but newly acquired Digital Telecommunications Philippines, Inc. (Digitel) provided a buffer with its P3.1 billion contribution.

Thus, wireless revenues only dropped by 2% to P102.1 billion in 2011, from P104 billion in 2010.

PLDT acquired Digitel in October 2011, thus PLDT’s topline only reflected 2 months from the formerly Gokongwei-controlled firm.

On the other hand, revenues from fixed line services decreased 1% to P58.8 billion in 2011, down from P59.1 billion in 2010.

Cost profile was directly or indirectly hit by fluctuations in the US dollar, which weakened against the peso in the course of 2011. The company estimates that about 30% of consolidated service revenues are vulnerable to these fluctuations.

“Had the peso remained stable, service margins would have been higher by P1.9 billion,” said PLDT President Napoleon L. Nazareno.

Pangilinan warned that profits in 2012 will remain soft and that their current plans will bear fruit only in 2013. 

“I am persuaded though that this figure is the bottom of this unavoidable period of integration and alignment, and we will find ourselves bank on an upward growth curve starting in 2013,” Pangilinan said.

Bright spots

The data market showed bright spots for PLDT in 2011 with broadband subscriber base increasing 45% to just over 2.9 million by year-end.

Meanwhile, broadband and internet revenues shot up 18% year-on-year, totally 18.8 billion in 2011 with a P0.5 billion contribution from Digitel.

Nazareno said that broadband “certainly will be a major source of business as we transfer from the legacy of voice to broadband and data.”

The telecommunications giant hopes to return to the 2010 core net income level of P42 billion by 2014. – Rappler.com