PLDT profits down 8% in Q1

Telecommunications giant Philippine Long Distance Telephone Company's (PLDT) profits went down 8 percent in the first quarter of the year to P9.2 billion from P10 billion in the same period last year. On the other hand, PLDT netted P9.6 billion core consolidated earnings for the first three months of the year, or 4 percent higher compared to the same period last year. In a statement Tuesday, the telecommunications firm cited as reasons for the plunge the retroactive effect of the adoption of revised Philippine Accounting Standard (PAS) 19, as well as the combined impact of higher core income, lower foreign exchange and derivative gains. As a result of the revised PAS, PLDT reversed P1.3 billion of Manpower Reduction Program expenses accrued in the fourth quarter of 2012 and recognized P791 million of those expenses in the first quarter of 2013, based on actual offer letters accepted by employees. Last month, PLDT concluded the sale of its BPO businesses owned by its wholly-owned subsidiary SPI Global Holdings, Inc. to Asia Outsourcing Gamma Limited (AOGL), a company controlled by CVC Capital Partners (CVC). PLDT has reinvested $40 million in AOGL for a 19.7 percent stake in the company, enabling it to continue participating in the growth of the BPO industry as a partner of CVC. Net proceeds from the sale are approximately US$316 million. Consolidated free cash flow remained robust at P7.1 billion, although albeit lower by P5.0 billion compared with last year due to movements in working capital. Consolidated capital expenditures for the period amounted to P3.1 billion as the PLDT Group continues to fortify its network despite having completed its two-year network transformation program ahead of schedule. Capital expenditures are expected to reach P29.0 billion for the year, P7.4 billion lower than the capex spend for 2012.  — KBK, GMA News