MANILA, Philippines [UPDATED] – Phone giant Philippine Long Distance Telephone Co. (PLDT) realized a 6% decline in its profits from January to March as it hiked capital spending.
In a press briefing on Tuesday, May 8, PLDT officials said the country’s biggest telephone company’s net income of P10 billion for the first quarter included the P700 million profit contribution from recently acquired Digital Telecommunications (Digitel).
In a disclosure to the stock exchange, PLDT explained that its “reported net income was impacted primarily by the decline in core net income and higher net foreign exchange and derivative gains.”
Meanwhile, PLDT’s core net income showed a 12% drop to P9.3 billion. This includes P200 million from Digitel.
“Core net income declined as a result of higher expenses that reduced service revenue gains, a lower equity share in the earnings of the Manila Electric Company or Beacon Electric Asset Holdings, Inc. and higher provision for income taxes.”
PLDT chair Manuel V. Pangilinan said they are maintaining their core income target of P37 billion in 2012 and “return to growth and increased profitability starting 2013.” He said he expects core net income to reach P39 billion starting 2013 and to hit P42 billion by 2014.
Pangilinan said PLDT Group expects a 2012 capital expenditure of P38 billion, much of which is geared at increasing 3G population coverage, rolling out fiber assets and building a new cable landing station.
The group is spending around P6.13 billion for the new headquarters of its media unit, TV5, in Mandaluyong City.
Of this, P630 million is budgeted for the purchase of the land, P3 billion towards civil works and P2.5 billion for equipment.
Media assets play a key role in their future growth, stressed PLDT president Napoleon Nazareno.
Mediaquest Corp, PLDT’s employee pension unit and de facto media arm, owns and controls ABC Development Corp, which operates TV5.
Officials of the group said they expect TV5 to break even in 2013. It is currently the country’s 3rd largest media group.
The media center is expected to be broadcast ready by August or September of 2012.– Rappler.com