PLDT cuts 2012 core profit guidance to P37B

After reporting lower earnings for 2011, Philippine Long Distance Telephone Company (PLDT) on Tuesday said it sees core profits further slipping this year.

“Accordingly, we are guiding our Core Profit for 2012 lower at P37.0 billion,” the country’s largest telco said in a statement, citing chairman Manuel V. Pangilinan.

“I am persuaded though that this figure is the bottom of this unavoidable period of integration and alignment, and we will find ourselves back on an upward growth curve starting 2013,” Pangilinan added.

The company reported its consolidated core net income dipped by 7 percent to P39 billion last year from P40.2 billion a year earlier. [http://www.gmanetwork.com/news/story/250464/economy/business/pldt-reports-7-drop-in-2011-core-net-income-to-p39b]

Pangilinan noted the merger of PLDT with former rival Digital Telecommunications Philippines Inc. (Digitel) will take hold in the medium-term.

PLDT bought Digitel in one of the largest share-swap deals in the country at P72 billion, which was completed in October last year.

“We therefore expect 2012 to be a year of alignment where we will implement a number of requisite changes — the positive effects of which are expected to be medium-term in nature simply because these will be permanent and long-lasting,” Pangilinan claimed.

The Digitel-PLDT integration will take more time, resulting in “significant benefits” for the merged entity, he said.

“The assimilation of Digitel/Sun Cellular into the PLDT Group, and the benefits that will arise from such integration, will take some time to complete because of the Group’s size and complexity. We had earlier foreseen this,” according to the PLDT chair.

“We do recognize that there will be a need for quick wins which could help efficiencies and productivity in the short-term. That said, the more significant benefits, especially to our bottom line, will take time to realize,” he added.

Smart Communications Inc. — a wholly owned PLDT subsidiary — combined with Sun Cellular has the “largest and most pervasive network in the country” having 10,482 cell sites, 14,876 mobile broadband base stations and 4,918 fixed wireless broadband-enabled base stations, the company said in it’s income statement.

Napoleon L. Nazareno, president and CEO of PLDT and Smart, said the merger gave the company certain benefits at this point.

“The acquisition of Digitel has allowed us to expand and enhance our product offerings and thereby fortify the platform that should allow our revenues to grow. We expect neither a quick nor easy transition but we will continue to refine and redefine our products and services, in both our legacy and new businesses,” Nazareno said.

“In the meantime, we are pleased that our network modernization program has already raised our network performance, with our subscribers enjoying a significantly enhanced customer experience,” he added. — With Rouchelle R. Dinglasan/VS, GMA News

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