PLDT expects to surpass P37-B core income target for 2008

Telecommunications leader Philippine Long Distance Telephone Co. (PLDT) is expected to attain, even surpass its P37-billion core net income target for 2008, and to suffer a slight drop in its consolidated reported net income for the whole of last year compared with the previous year.

PLDT group chairman Manuel Pangilinan told The STAR that while it is difficult to comment on how the numbers for 2008 will look like he does not expect any surprises. Last year’s numbers will be finalized by the second week of February.

Earlier, Pangilinan expressed confidence that they could still attain their P37-billion projected core net income for 2008, which is five percent more than the 2007 figure.

He also said that the 2008 reported net income will be lower than 2007’s P36 billion, but did not say by how much.

Service revenues for the whole of 2008 are expected to grow by five percent to P142 billion (slightly lower than the earlier projection of a seven-percent growth) while earnings before interests, taxes, depreciation and amortization (EBITDA) are seen hitting P87 billion for the entire year, or a five-percent increase.

PLDT wholly owned wireless subsidiary Smart Communications recorded a total of 35 million subscribers in 2008, up 16 percent from the 2007 level.

The company noted that its client base grew despite slow consumer spending and stiff competition because of services focused on specific segments of prepaid and postpaid users.

“We call it ‘slicing and dicing’ the market and the objective is to address the needs of different segments of our subscriber base,” Smart president and chief executive Napoleon Nazareno said.

Nazareno pointed out that much of the growth in the cellular business was powered by new low-cost service offerings that were developed based on the usage patterns of subscribers.

PLDT has suffered a two-percent drop in its consolidated net income to P26.2 billion during the first nine months of the year, from P26.4 billion in the same period last year, largely due to foreign exchange revaluation.

But the group’s core net income is still strong at P27.8 billion during the January-September 2008 period, a five percent growth from the P26.4 billion recorded in the same period last year.

Core net income for the fourth quarter of 2008 is expected to reach P9.2 billion or similar to that of the first two quarters of the year, in order to achieve the projected yearend core profit numbers.