PLDT Q4 profit shrinks 87%

Grace Mirandilla-Santos
09 Mar 2012
The Philippines' PLDT revealed this week that its Q411 net profit fell 87% year-on-year to 1.1 billion pesos.
The company had already reported declining Q1 to Q3 revenues from its traditional call and text messaging services, which it attributed to “bucket” and “unlimited” type offers.
At a press conference, the country’s largest telco announced that its consolidated core net income dipped by 7% in 2011 to 39 billion pesos, from 42 billion in 2010.
These figures already include the operating performance of Digitel, of which PLDT now owns 98% after a much-debated acquisition that closed in October 2011. PLDT’s full-year net profit decreased by 21% in 2011 to 31.7 billion pesos, missing analysts' expectations of around 40 billion.
PLDT, which is owned by Hong Kong's First Pacific, Japan's NTT Com and NTT DoCoMo, attributed decline in net income to lower service revenues and higher operating costs. These include a one-time asset impairment charge from an ongoing two-year 67 billion peso network modernization program that commenced in early 2011.
The company’s overall consolidated service revenues dropped by 1% to 154 billion pesos, including 3.8 billion pesos from Digitel’s revenues and already reflecting the combined effect of a 2% decline in wireless revenues, 1% decrease in fixed line revenues, and a 6% rise in revenues from business process outsourcing.
At the press conference, PLDT chairman Manny Pangilinan said that the company was forecasting a decline in 2012 core profit to 37 billion, calling the figure “the bottom of this unavoidable period of integration and alignment. We will find ourselves back on an upward growth curve starting 2013,” Pangilinan concluded. It expects profit growth from 2014, with a guidance of 42 billion pesos in core net profit.


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