PLDT Posts Record Net Profit of P28 B in 2004; Resumes Dividends to Common Stockholders

Manila Bulletin, March 2, 2005 | Go to article overview

PLDT Posts Record Net Profit of P28 B in 2004; Resumes Dividends to Common Stockholders


Byline: EMMIE V. ABADILLA

With the sustained strong performance of its cellular business, the Philippine Long Distance Telephone Company (PLDT) registered a record net profit of P28 billion in 2004, 1,221 percent more than the preceding years P1.123 billion.

It was also the highest net income ever recorded in history by a Philippine corporation.

PLDT Chairman Manuel V. Pangilinan said PlDT next year expects its recurring net income to rise to about P27 billion in 2005.

In view of the record earnings, the PLDT Board of Directors approved the payment of dividends to common shareholders at the rate of P14/share. Payment will be made on 12th May to shareholders of record as of 31st March 2005. This marks the resumption of dividend payments to common shareholders since April 2001 when the last dividend was paid.

The carriers normalized and restated net income adjusted for non-recurring items and write-offs of subsidiary Pilipino Telephone Corporation (Piltel) also grew 237 percent to P25.2 billion from P7.5 billion in the same period.

Service revenues for the PLDT Group likewise increased by 14 percent to P115 billion while consolidated EBITDA improved to P70.4 billion as cash operating expenses declined by 9 percent.

PLDT has adopted the International Accounting Standards for its 2004 financial report.

The increase in consolidated free cash flow, which grew 65 percent from R22.6 billion in 2003 to P37.3 billion in 2004, enabled PLDT to quicken its deleveraging program. PLDT fixed line business reduced its debt by US$500 million in 2004, surpassing both initial target of US$300 million and the subsequently raised target of US$350 million.

Smart Communications Inc. and Piltel added more than 6.2 million subscribers in 2004, bringing the PLDT Groups total cellular subscribers to 19.2 million and maintaining its 59 percent market share.

Smart added over 4.5 million subscribers while Talk N Text added 1.7 million subscribers to end 2004 with 14.6 and 4.6 million subscribers, respectively. Total net subscriber additions in 2004 increased by 35 percent, from 4.6 million last year to over 6.2 million this year.

The cellular penetration rate continues to exceed expectations, reaching approximately 39 percent at the end of 2004 although the existence of subscribers owning multiple SIMs has likely inflated this rate to a certain extent.

Consolidated cellular revenues and net income continued to rise, with consolidated service revenues increasing to P67 billion, 27 percent higher than the P53 billion realized last year.

Consolidated cellular EBITDA grew by 31 percent to P42.5 billion from P32.4 billion mainly due to higher revenues. EBITDA margin improved to 63 percent in 2004 from 61 percent last year. Normalized net income nearly doubled to P23.3 billion from P12 billion last year while free cash flow remained strong at P17.6 billion.

(Contd on page B-3)

Smart paid an additional cash dividend of P4.8 billion to PLDT in December 2004, bringing its 2004 total dividend payments to P16.1 billion. Smart intends to raise its dividend payment to PLDT to P20 billion in 2005, subject to securing the relevant approvals from its creditors.

The consolidated debt position of the wireless group now takes into account the debts absorbed by Smart arising from the Piltel debt exchange transaction which closed on 2nd July 2004, as well as the residual third party debt remaining at Piltel. …

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