PLDT Q3 net profit slips 1.1%, keeps core profit guidance

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Philippines operator’s latest numbers hit by cost of merging with Digitel, marketing expenses.

Philippine Long Distance Telephone Co. Tuesday maintained its core profit guidance for the year as it reported third-quarter net profit was weighed down by marketing and merger costs.

The company kept its 2012 core profit guidance at PHP37 billion. “We continue our steady financial performance as we wait for the industry situation to stabilize. We hope to provide a better indication of when we can expect to return to the profit growth track when we announce our year-end results next March,” PLDT Chairman Manuel Pangilinan said in a statement.

Third-quarter net profit declined 1.1% to 9.21 billion Philippine pesos ($223 million) from PHP9.32 billion a year ago. Marketing and lay-off costs were moderated by net foreign exchange and derivatives gains, the Philippines’ largest fixed-line and mobile service provider said in a statement. PLDT acquired rival Digital Telecommunications Philippines Inc. last year and is merging their operations.

Third-quarter core profit declined 2.3% to PHP9.36 billion, with revenue rising 14% to PHP42.33 billion from PHP37.29 billion. In 2011, core profit–which excludes one-time gains–was PHP39 billion, down from PHP42 billion in 2010.

In the first nine months of the year, net profit was PHP28.71 billion, down 6.2% from the year-earlier period even as total revenue climbed 13% to PHP128.56 billion. Nine-month core profit declined 8.4% on year to PHP28.02 billion.

Wireless–which includes cellular and broadband–contributed PHP87.3 billion to PLDT’s nine-month revenue, up 18% from the year-earlier period.

PLDT said that at the end of September, cellular subscribers reached 68.6 million, thanks to net additions from its Talk ‘N Text and Sun cellular brands which together signed up 7.43 million new subscribers in the first nine months of 2012. Those additional subscribers more than offset 2.53 million fewer subscribers at Smart and Red Mobile brands in the January-July period. At the end of September 2011, PLDT had 47.74 million total cellular subscribers.

Broadband–a fast-growing segment for PLDT–added 240,662 subscribers in the January-September period to push the total to 3.17 million subscribers, up from 2.3 million in the year-earlier period. A total 107,345 new broadband subscribers were added in the third quarter alone.