Philippine Long Distance net profit down 11%

Philippine Long Distance Telephone on Tuesday posted an 11 percent drop in second-quarter profit from a year earlier due to the costs of modernising its networks in a fiercely competitive market. PLDT, the archipelago's most valuable listed company, said its core net profit for the period April-June was 9.353 billion pesos ($223.57 million), down from 10.467 billion for the same period in 2011. "We will continue to exert our utmost effort to get back on the profit growth track as quickly as we can, as we harness the opportunities for synergy within the group," PLDT chairman Manuel Pangilinan said in a statement. He pinned the blame for the fall on the cost of modernising its wireless service for Digitel's Sun Cellular service, which PLDT acquired last year. Pangilinan also highlighted the cost of sales and promotions initiatives in a competitive industry but said he was optimistic that the company's future was bright. "It is noteworthy that, despite the earnings pressure from the competitive state of the local industry and continuing pressure on margins, our free cash flows remain strong," he added. PLDT, which described competitive pressure in the second half of last year as "severe", saw service revenues rise 11 percent to 41.945 billion pesos in the second quarter while expenses surged 33 percent to 32.598 billion pesos. PLDT said its first half net profit similarly declined 11 percent, to 18.7 billion pesos. First half service revenues rose 12 percent to 84.725 billion pesos. Pangilinan said PLDT's net profit forecast of 37 billion pesos for the entire 2012 remained on track. PLDT net profit fell 21 percent to 31.7 billion pesos in 2011.