MAKATI CITY — “A year of transition” was how Napoleon Nazareno described 2012 for the Philippine Long Distance Telephone Co. (PLDT) after completing the acquisition of Digitel and Sun Cellular.
The largest Philippine company is also on track to achieve its core profit guidance after “encouraging” results in the first five months of the year, added Nazareno, PLDT president and CEO, in his report during the annual stockholders meeting of the company last Friday at the Shangri-La Hotel here.
“We completed ahead of schedule our network transformation program fortifying our advantage in the delivery of data services over our fixed and wireless networks,” reported Nazareno.
He said “faced with intense competition, the group strengthened its position in the mobile business. We rationalized our business portfolio leading to the sale of our outsourcing business and moved towards greater involvement in the multi-media space.”
Nazareno said PLDT’s “financial and operating results were shaped by these transition process” which made service revenues from continuing operations rise 10 percent year on year to P160.2 billion in 2012 following a 13 percent increase in wireless business revenues to P108.9 billion and a four percent rise in fixed land revenues to P51.3 billion.
The BPO business registered revenues of P9.1 billion in 2012. But Nazareno said with the intended sale of the BPO business, its financials were classified as discontinued operations. He reported that the net income rose by 12 percent to P35.5 billion in 2012.
Nazareno said despite challenging operating conditions and a high level of capital expenditures this year, free cash flow remained robust allowing the declaration of 100 percent of core earnings as dividends.
A total of P172 per share was paid out to shareholders representing 2012 core earnings consisting of P120 or 70 percent regular dividends and P52 or 30 percent special dividends.
2012 is the sixth consecutive year of 100 percent dividend bailout (considered one of the highest in the region), he said.
PLDT remained the market leader with a combined subscriber base that grew to about 75.3 million at the end of 2012 consisting of 69.9 million cellular subscribers, 3.3 million broadband subscribers, and 2.1 million fixed line subscribers.
At the end of March this year, the combined subscriber base rose to 77 million, Nazareno said.
The two-year network transformation program was also completed in 2012 which involved a total investment of P67 billion which, according to Nazareno, resulted in an unparalleled network with the capability and capacity to deliver quality service.
These included the upgrade of the access network, the expansion of the 3G coverage to over 70 percent and 1,000 operational Long Term Evolution sites.
He said almost 100 percent of Metro Manila sites are with “fiber” and “IP” ready while 68 percent of provincial sites are IP ready. This is the reason why we now have “fiber to the home service,” Nazareno said, adding that PLDT’s slogan now is “the future is in our fiber.”
Nazareno said the company’s core network has been re-architectured to integrate the PLDT, Smart, Sun and Digitel networks. He said because of this, the company’s transmission network remains unmatched by competition with 54,000 kilometers of fiber which is projected to reach 60,000 kilometers by yearend.
Nazareno said broadband and data service remained the bright spot for the business growing double digit with the changing demographics with mostly young and enthusiastic users.
On the sidelines of the stockholders meeting, PLDT Chair Manuel V. Pangilinan told reporters that the company’s mobile internet and home businesses was buoyed by profits in the January to May period.
“The surprising growth in mobile internet as well as pleasant growth in what we call the home business of PLDT — which is the DSL (digital subscriber line), the wireless DSL, the Telpad, and now we have Cignal TV over fiber — that’s all propelling the fixed-line businesses of PLDT and that has shown significant growth in the first five months and we expect that to continue,” said Pangilinan.
“It looks like the outlook for the year is better than we anticipated,” added Pangilinan.
PLDT is partly owned by Hong Kong’s First Pacific Co Ltd. and Japan’s NTT group.
