PLDT says consolidated core net income down 6% in 2015

Philippine Long Distance Telephone Co. (PLDT) registered a 6 percent decline in consolidated core net income last year, depressed by the sluggish performance of prepaid consumer business.

The telco revealed on Monday its consolidated core net income fell to P35.2 billion, down P2.2 billion from P37.4 billion in 2014.

“Last year alone we lost about five million subscribers to Globe... the loss of subscribers to Globe and incremental ads they managed to gain accounted probably for the biggest hole in our service revenues in prepaid,” PLDT CEO Manuel V. Pangilinan told reporters in a briefing.

“It’s really the epicenter of the whole,” Pangilinan noted.

The company's net income fell 35 percent to P22.1 billion from P34.1 billion, and consolidated service revenues fell by 1 percent to P162.9 billion The

Pangilinan, however, noted 2015’s performance exceeded the company’s guidance of P35.0 billion. Other businesses of the company – fixed broadband service PLDT Home, ecommerce portal PLDT Enterprise, and postpaid business – continued to lead the market.

“Core earnings have exceeded guidelines slightly... Our other businesses continue to dominate,” he said.

The next two to three years will be “challenging” for the company which has set an income guidance of P28 billion for 2016, Pangilinan noted.

“As PLDT and Smart try to regain its market share, there will be some give-ups... promotional marketing costs. The working budget is P28 billion for 2016. Assumption is that it will gradually improve in 2017 and 2018 by not much, but at least there’s some improvement in core profitability,” he said.

The company has a 55-percent market share of the prepaid market, which has historically dropped by 0.05 percentage point on yearly basis, according to PLDT data.

“It’s a pressure point for Smart in particular. We’re losing 5 basis points per year,” PLDT Vice President and Head of Consumer Business Ariel Fermin said in the same briefing.

Moving forward, Pangilinan said the company's performance is expected to improve.

“We have managed to maintain a significant profit level for the group despite the challenging circumstances of the business. We have to take our foot out of the financial pedal a bit... It will be a totally different company two to three years from now,” he added. – VDS, GMA News