PLDT lost hundreds of billions of pesos due to stock weakness

MANILA, Philippines- Telecom giant Philippine Long Distance Telephone Co. has lost nearly P140 billion in market value due to market weakness caused by rampaging oil prices and spiking inflation, a top executive said. In his speech at the company's stockholders' meet, PLDT chairman Manuel V. Pangilinan said that the firm's share prices have declined 23 percent since the start of the year due to the volatility of stock markets all over the world. "Despite our record profits and dividends, disappointingly and perhaps painfully, our share price has declined since December 2007, reflecting the pronounced bearish tone of financial markets globally," Pangilinan said. In the first quarter of the year, PLDT posted a net income of P10.4 billion, 21 percent higher from the P8.6 billion in the same period last year. PLDT shares closed at P2,345 apiece on June 10, the date of the company's stock meet, or a sharp reduction of 23 percent since year-end. This translates to a market value of P460 billion for the company. In 1998, the value of PLDT in the PSE stood at P121 billion -- equivalent to about $3 billion at the then exchange rate, with the price being P1,000 per share. "We have lost P139 billion in market value -- more than our entire market capitalization 10 years ago. The consolidation is the Philippine Stock Exchange Index has dropped by more than share price -- by 27 percent for the period," Pangilinan said. PLDT, the PSE's heaviest stock, is a significant influence on the bourse's movement. This year, Pangilinan said the company faces with risks and pressures that PLDT never experienced before. "The Asian financial crisis of 1997 involved the failure of financial assets, arising from exuberant and exaggerated values then. This time, we're seeing not only financial assets languishing - as they did 10 years ago - but, as well, rising food and fuel prices," Pangilinan said. Pangilinan said the company expects growth in consumption spending to abate because of high food and fuel prices. "This is critically important for since consumer expenditures is the mainstay of our business. The good news might lie in the continued strength in the flows of overseas remittances, to compensate for accelerating prices," he said. Pangilinan, however, said that the direction of remittance-led spending is likely to shift away from asset acquisitions such as the purchase of real estate and move towards maintaining people's ability to spend on life's necessities like food, rent and education. Despite this, Pangilinan is optimistic to post a "steady" growth this year. PLDT maintained its guide core net income this year to P37 billion and service revenue of between P145 billion and P146 billion. Last year, the company's core net income amounted to P35.2 billion. PLDT is partly owned by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT group. - GMANews.TV