R.E.S.P.E.C.T. for PLDT

Break out the champagne! The largest telco in the Philippines, Philippine Long Distance Telephone Co. (PLDT) , has raised its sales and profit forecast for the full year following increases in revenue and net income for the first half of 2009.

PLDT predicts rises in all its key indicators for 2009 over 2008. It expects a 4 percent increase in service revenues to 148 billion Philippine pesos (US$3.09 billion) for the year, with core net income set to reach PHP41 billion ($856 million), up 8 percent on 2008.

"On the back of our strong first half performance, we have adjusted our core profit guidance for the year," stated PLDT chairman Manuel Pangilinan in the company's official statement following the decision to raise the carrier's previous full year profit prediction by PHP1 billion ($20.9 million).

The company also committed to a 7 percent year-on-year increase in capital expenditure, which is now expected to reach PHP27 billion ($563 million) in 2009. Of this, PHP15.8 billion ($330 million) will be spent on wireless, primarily on the development of HSPA and WiMax, while PHP10.2 billion ($213 million) will go toward fixed network upgrades, including the development of the company's FTTH network. The remaining PHP1 billion ($20.9 million) is allocated to the carrier's ICT business.

The company boosted its 2009 outlook as it issued results for the first half of the year.

For the first six months of the year, PLDT's services revenues reached PHP72.9 billion ($1.52 billion), up 4 percent year-on-year, according to the company's unaudited figures.

PLDT's mobile subsidiaries, Smart Communications Inc. and Pilipino Telephone Corporation (Piltel), led the way, with wireless services accounting for PHP48.1 billion ($1 billion), while fixed service revenues were up 3 percent year-on-year to PHP25.4 billion ($530 million).

However, fixed revenues for the second quarter were down PHP100 million ($2.09 million) on the same quarter a year earlier.

EBIDTA (earnings before interest and other stuff) for the fixed services also fell for the half year. At PHP13.3 billion ($278 million), it was down 3 percent compared to the previous year.

Despite this slight blip, PLDT reported core net income up 11 percent year-on-year to PHP20.8 billion ($434 million), helped by reductions in corporate tax as well as the service revenue increases. Combined, these were significant enough to cover an 8 percent increase in company's capex for the half year.

PLDT wasn't the only Filipino carrier to report a good first half of the year: It was joined by the country's second largest telco, Globe Telecom Inc. , which, for the three months ended June 30, reported service revenues of PHP15.7 billion ($328 million) and core net income of PHP3.23 billion (67.4 million), the latter up 16.5 percent on the previous year, according to this Reuters report.

— Catherine Haslam, Asia Editor, Light Reading

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