PLDT sees net profit of P12.8-B in ’03

Telecommunications leader Philippine Long Distance Telephone Co. (PLDT) is expected to post a net profit of P12.8 billion for last year, 75 percent higher than the P7.3- billion net income in 2002.

Based on projections by financial analyst UBS Investment, PLDT’s revenues for 2003 could rise to P96.1 billion compared to P80.16 billion in the previous year.

PLDT’s net income for 2004 is projected at P17.11 billion while revenues are expected to reach P109.5 billion.

Earnings before interest and taxes (EBIT) in 2003 is forecast to hit P31.3 billion as against P20.78 billion in 2002 and P38.53 billion this year. EBIT margin, on the one hand, is seen reaching 32.6 percent in 2003 and 32.6 percent in 2004 compared to 25.9 percent in 2002.

UBS said it has raised its price target for PLDT shares by 14 percent, from P1,050 to P1,200.

Meanwhile, the group noted in its report that consumer spending may continue to shift to telecommunications as operators strive to make their service more affordable and accessible.

UBS has raised its cellular penetration forecast from 35.4 percent to 38.2 percent by 2005 in light of continued efforts by cellular operators to make the service more affordable and accessible to the public. Penetration rate in 2003 is estimated at 27.8 percent and this year, 34 percent.

It pointed out that after launching lower denominated electronic loads, PLDT wireless subsidiary Smart Communications recently launched a new product that allows for P10 load transfers to other Smart subscribers, potentially opening up a distribution network of 13 million subscribers.

With the e-load, which is currently being distributed by small retail outlets nationwide, Smart had been able to increase its distribution outlet to 400,000 nationwide. The new product could result in a distribution network involving a substantial portion of Smart/Piltel’s 13 million subscribers. "We think the move may also stimulate usage of the service (i.e. parents sending loads to children). These developments may also continue to push back penetration barriers," the report stated.