PLDT to increase core earnings, dividends

Wednesday, June 14, 2006

By Darwin G. Amojelar, Reporter

PHILIPPINE Long Distance Telephone Co. (PLDT), the Philippines’ largest telecom corporation in terms of market value, has revised upward its core earnings forecast this year on the back of expected higher revenue from its wireless mobile services.

Manuel V. Pangilinan, PLDT chairman, announced at the company’s annual stockholders’ meeting, that the company, after deducting foreign-exchange gains and deferred tax assets, has raised its core earnings this year to P32 billion from P31 billion it projected in May.

Last year, PLDT posted P29 billion in core earnings.

Pangilinan, however, said the company expects core earnings available to common shareholders to improve by a higher percentage, since dividends on preferred shares will decline as they are converted to common shares.

“Our cash flows remain healthy; as a result, we’ve raised our dividend payout from 50 percent to 60 percent of 2006 core earnings. In the future, more and more of our free cash flows will be used to pay dividends as maturing debt obligations decline,” Pangilinan said.

As part of PLDT’s overall campaign to curb expenses, Pangilinan said the company plans to reduce debt by about $350 million this year. In the first quarter of the year, PLDT paid some $65 million in outstanding loans.

By end-2006, Pangilinan said the company’s gross debts should stand at more than $1.7 billion compared to $3.8 billion in 2000.

He added that the company is greatly concerned about its ability to maintain sustained and steady revenue, or topline growth, given that revenues from its wireless business are rising at a moderate pace when compared with previous years as a result of a flattening S-curve.

Pangilinan also announced that the company is set to spend about $1 billion over the next three to four years.

In the first quarter of the year, PLDT’s net income declined 7 percent to P8.6 billion in the first quarter of the year from P9.2 billion in the same period in 2005.

PLDT attributed the decrease in profits to additional depreciation expenses and lower foreign exchange gains owing to declining net debt balance.

 

http://www.manilatimes.net/national/2006/june/14/yehey/business/20060614bus6.html