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  • PLDT Reports 19 Pct Increase in 1997 Net Profit
  • March 13, 1998 (MANILA) -- Philippine Long Distance Telephone Co. (PLDT) said that improvements in its national network operations and more international calls resulted in a 19 percent year-on-year increase in its 1997 net profit to 7.65 billion pesos (US$191 million).
    The number of its telephone lines in service at the end of 1997 reached 1.66 million, up almost 10 percent.

    Total revenue for the country's largest telecommunications carrier reached 35.62 billion pesos (US$890 million), an increase of 24 percent from a year earlier.

    More than half of its gains were from international operations, the company said. This growth in earnings from international operations reflected the combined effects of an increase in call volumes and the depreciation of the Philippine peso against the dollar.

    >From July 1997, when the central bank allowed the peso to trade within a wider band against the dollar as a result of the regional currency crisis, the peso weakened from a reference rate of 26.40 pesos to the dollar to 40.116 pesos at the end of last year.

    Local network revenues accounted for 29 percent of the company's total earnings or 10.39 billion pesos (US$230 million), up 31 percent year on year.

    Earnings from long-distance operations improved by 33 percent to 5.93 billion pesos (US$148 million) from a year earlier.

    Operating expenses stood at 20.56 billion pesos (US$514 million), up 19 percent.

    The increase was due to higher depreciation charges resulting from continuing investments in telecommunications facilities, the weakening of the peso against the dollar, retirement of obsolete switching equipment, higher maintenance costs associated with network expansion, greater provisions for problem accounts and an increase in other operating costs.

    PLDT also reported a one-time charge of 585 million pesos (US$15 million) in 1997 to cover severance pay. Since 1995, a total of 3,450 employees have left the company under its staff reduction program. Its work force registered 15,711 as of the end of 1997.

    Other expenses surged 102 percent to 3.78 billion pesos (US$94 million) in 1997 largely due to increased interest charges resulting from a higher level of borrowings and foreign exchange losses arising from the peso's depreciation.

    The company said these costs were partly offset by reduced insurance expenses and lower rental costs on circuits owing to the company's full utilization of its own cable systems.

    PLDT's total assets as of the end of 1997 stood at 185.47 billion pesos (US$4.6 billion), up 48 percent from a year earlier.

    PLDT said it expects its revenue to grow by 15 percent annually from 1998 through 2000. The company expects to benefit from the peso's weakness because most of its revenues are dollar denominated.

    (Margarita Roa, Asia BizTech Correspondent)

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    Updated: Thu Mar 12 17:17:35 1998