PLDT 2013 core profit up by 5%, beats expectations

Philippine Long Distance Telephone Co. (PLDT) said core profit beat internal expectations and rose for the first time in two years as revenues increased.

The country’s biggest telecommunication provider said core profit, which removed the effect of non-recurring items, grew by 5 percent in 2013 to P38.7 billion from year-ago level. The 2013 profit also exceeded the company’s guidance of P38.3 billion for the year.

PLDT said consolidated service revenue rose by 3 percent to P164.1 billion while cellular subscriber growth was relatively flat at 70 million, with the prepaid business accounting for 95 percent of the total.

A continued shift in its revenue mix away from its legacy businesses—like fixed international voice—to the fast-growing broadband was seen the previous year.

PLDT reported its legacy business now accounted for only 16 percent of service revenue while 22 percent came from broadband, which grew by 16 percent last year. Its core cellular business was flat with a contribution of 62 percent.

PLDT chair Manuel V. Pangilinan on Tuesday said earnings would accelerate this year, as the company was seen to continue the current growth pattern for broadband.

Added gains are also seen from the increasing market penetration of feature-rich smartphones, which are being used by 17 percent of its subscribers, and as the company lures more of its pre-paid clients to use data services via so-called low-denomination data sachets.

“PLDT has turned the corner and is back on the growth track as demonstrated by the marked improvement in our 2013 numbers and early indications from the first two months of 2014. I fully expect our 2013 performance to be the springboard for continued growth,” Pangilinan said.

“Accordingly, our guidance number for core net income in 2014 is P39.5 billion,” he added.

In 2013, net income was lower by 2 percent to P35.4 billion. PLDT president Napoleon Nazareno said the decline was mainly due to about P900 million in losses from cell towers knocked down and fiber cables damaged by Yolanda, on top of foreign exchange losses.

Without Yolanda-related losses, non-recurring profit would have been “stable,” Nazareno said.

Nazareno said the company was forecasting to spend more this year to make its network more resilient in light of more powerful storms, on top of strengthening its fiber optic network.

Capital spending this year was estimated at P31 billion to P32 billion. PLDT spent P28.8 billion in 2013.