PLDT profit flat at P8.58b in Q1

PHILIPPINE NEWS SERVICE –Philippine Long Distance Telephone Co., the country’s largest communications company, declared yesterday a net income of P8.575 billion in the first quarter of 2007, down slightly from P8.581 million a year ago.

In a news briefing at its headquarters in Makati City, company president and chief executive Napoleon Nazareno linked the flat net income performance to lower revenues from fixed line voice business, reduced foreign exchange gains and higher tax payments.

The company’s core net income, however, grew 11 percent to 8.396 billion in the January-March period this year from 7.566 billion a year earlier as consolidated service revenues rose 10 percent to P33.012 billion from P29.977 billion.

PLDT chairman Manuel Pangilinan said these figures put the company on track toward meeting its full-year core net income target of P33 billion.

“We now expect to meet the top end of our earlier earnings guidance of P32 billion to P33 billion. Cash flows remain strong and we remain committed to our previous guidance of an increased dividend payout of 70 percent, half of which we anticipate to declare when we announce our first half results in August,” he said.

PLDT, about 29 percent owned by Hong Kong‘s First Pacific Co. Ltd., spent about P5.9 billion in capital expenditures, and plans to invest another P14 billion to P16 billion for the remainder of the year to meet its target of P20 billion to P22 billion for 2007.

The company said it spent most of its first quarter capital expenditures for the continued rollout of next generation network lines, which now number 230,000, increasing cellular capacity, expanding the wireless broadband network and investing in international cable capacity.

“During the course of the year, we will continue to look at investment areas that can provide ways to expand growth. In the event such opportunities do not arise or when they do, prove unattractive, we will consider the option of returning additional cash to our shareholders in the most efficient manner possible,” Pangilinan said.

The group also allocated P4.2 billion to pay debt in the first quarter of 2007 with another P9.4 billion was used to pay out common dividends on April 20, 2007.

This trimmed the group’s consolidated debt balances to $1.67 billion, with net debt balance falling to an all-time low of $1.1 billion after taking into account the common dividend payment made on April 20.

The company said consolidated service revenues increased by 10 percent to P33.0 billion, despite the 5 percent appreciation of the peso, which negatively affected 35 percent of the PLDT group’s revenues that are dollar-linked.

Consolidated earnings before interest, taxes, depreciation and amortization improved by 3 percent to P20.4 billion while EBITDA margin was at 62 percent. Core earnings attributable to each common share reached P44 per share, an increase of 7 percent from P41 per share last year.