PLDT Q1 profit falls 6%

Dylan Bushell-Embling
11 May 2011

The Philippines' PLDT has posted a 6% decrease in profit for the first quarter, due to declining revenue and forex losses.

The company said its reported net profit fell to 10.73 billion Philippine pesos ($249.1 million), from 4% lower revenue of 36.51 billion pesos.

Fixed voice was the segment which declined the most, with combined ILD, NLD and LEC revenue falling by 9% to 6 billion pesos.

Cellular voice revenue also fell 5% to 10 billion pesos, from lower international and domestic outbound caller revenue, cellular data revenues dipped 2% to 10.3 billion pesos and text volumes fell by 4%.

But total cellular customers grew 2% to 46.6 million, and ebitda margins grew to 64% during the quarter from 61% in 1Q10.

By contrast, combined fixed and wireless broadband revenue grew 8%, with DSL revenues up 12% to 2.2 billion pesos and fixed broadband customers growing 14% to nearly 672,000. But domestic and international data services revenue fell by a respective 14% and 29%.

Contributing to the falling figures was the appreciation of the peso – many of the reported declines would have been gains if the exchange rate had stayed consistent, PLDT said.

PLDT chairman Manuel Pangilinan said the company is “painfully aware of the revenue slowdown that is evident in this first quarter.”

He said the company's planned acquisition of a controlling stake in Digitel is part of the company's strategy to reverse this slowdown.

“While management has done a good job of controlling expenses to protect margins, there is only so much that can be done without affecting operations,” he said.

While Pangilinan expects the merger to be beneficial in terms of margins and revenue growth, he said it is too early to quantify the impact the transaction would have on PLDT's full-year results.

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