PLDT seen on track to hit net profit target for 2012

MANILA, Philippines—Local telecommunications giant Philippine Long Distance Telephone Co. sees its second-quarter performance on track with the company’s full-year 2012 core net income guidance of P37 billion.

“It will be broadly in line with our guidance,” PLDT chair Manuel V. Pangilinan told reporters on Friday when asked about second-quarter prospects at the sidelines of the launch of the 2012 search for Ten Outstanding Young Men (TOYM) of the Philippines.

PLDT’s core net profit guidance of P37 billion is lower than last year’s actual core net profit of P39 billion but Pangilinan said he expected core bottom line to return to the P39-billion level next year and, in 2014, revisit a record-high profit of P42 billion—a level last seen in 2010.

This three-year core profit guidance has factored in the impact of PLDT’s acquisition of Digitel Telecommunications Philippines Inc. from the Gokongwei group, but not the group’s prospective takeover of local broadcasting giant GMA Network (GMA 7).

Asked whether the targets would change if his group bags a deal to take over GMA 7, Pangilinan said: “We don’t know yet. It’s supposed to.”

PLDT chalked up P9.3 billion in consolidated core net income for the first quarter of 2012, down 12 percent year on year, as an increase in service revenues was offset by higher operating expenses, lower equity share in earnings of Manila Electric Co. (through Beacon Holdings) and a higher provision for income taxes. Digitel contributed P200 million in core earnings during the first three months.

Mediaquest Holdings, a unit of PLDT Beneficial Trust, is the vehicle being considered by the group to acquire GMA 7 although ePLDT Inc. may be used to purchase the Philippine depositary receipts (PDRs) of the broadcasting firm.

A PDR is a negotiable instrument issued by a depositary bank as a proxy to a company’s publicly listed stocks, giving leeway for foreign investors to buy shares in that company.

Pangilinan also said on Friday that his group was still in discussions over the prospective acquisition of GMA 7. On the likely price tag, he said: “It will be higher than the existing market capitalization.”

As of Friday’s close, GMA 7 has a market capitalization of P33.95 billion based on common stocks plus Philippine depositary receipts (PDRs) worth P8.7 billion.

Asked whether PLDT was considering to place out shares to the open market to raise fresh funds, Pangilinan said there was “no contemplation of raising debt or equity at the PLDT level.”