PLDT posts P28.7B net profit in 9 months

MANILA, Philippines—The net profit of the country’s largest telco Philippine Long Distance Telephone Co. (PLDT) continued to slip in the third quarter as growth in revenues from traditional “call and text” services continued to slow, exacerbated by higher marketing costs.

By the fourth quarter of this year, however, PLDT is expected to post higher earnings over 2011 levels on the improved uptake of the company’s “higher-ARPU” (average revenue per user) services.

A disclosure on Tuesday showed the company generated a net income of P9.21 billion in the July-September period, down 1 percent from a year ago. Including the first half of 2012, PLDT ended September with a net income of P28.7 billion, down 6 percent year on ear.

Core profit, which excludes mark-to-market gains or losses, was at P28 billion, down 8 percent year on-year.

PLDT chairman Manuel V. Pangilinan said the company expected to post a core profit of between P9 billion and P9.4 billion in the current quarter that ends in December. This will be better than the P8.4-billion core net income posted in the same period in 2011.

“We hope to provide a better indication of when we can expect to return to the profit growth track when we announce our yearend results next March,” Pangilinan said.

The lower profit came despite a 12-percent expansion in consolidated service revenues to P126.2 billion for the nine months.

The company’s consolidated earnings before interest, taxes, depreciation and amortization (Ebitda) was down 4 percent.

“Net income declined as a result of higher operating expenses relating mainly to the manpower reduction programs at PLDT and Digitel and selling and promotions initiatives,” the company’s disclosure said.

The one-time manpower reduction cost the company P1.8 billion, which was booked in the second quarter of the year. Higher spending for marketing, meanwhile, was a result of a more competitive telecom industry, PLDT said.

PLDT said it remained optimistic despite its lower net income, noting that its consolidated subscriber base for mobile users reached 68.6 million, nearly five million more than year-ago levels.

PLDT’s budget mobile brand Talk N’ Text accounted for the biggest portion of the group’s subscriber base in September at 26.5 million subscribers. Flagship brand Smart Communications had 25.6 million users while affiliate Sun Cellular ended the third quarter with 16 million users.

The PLDT group also made significant strides in its mobile postpaid user base, which grew by 108,000 subscribers.

The company’s mobile broadband subscriber base also hit 3.2 million at the end of September, adding 241,000 new users in the nine-month period.

Revenues from broadband services rose 30 percent in the nine-month period to P17.6 billion, compared with the growth in traditional mobile revenues of just 18 percent to P87.3 billion.