Bayan trims first half loss by 66% to P542 million

MANILA, Philippines - Lopez-owned Bayan Telecommunications has trimmed its net loss to P542 million for the first half of 2009, a 66 percent improvement over the P1.59-billion loss incurred during the same period last year.

The company also posted a P182-million operating income in the first half of 2009, from a loss of P133 million during the same period in 2008, reflecting a 237 percent growth. 

Bayan officials explained that the growth in operating income was a result of sustained total revenue growth at P3.33 billion in the first half of 2009, or an eight percent increase over the P3.08 billion realized during the same period last year. 

Coupled with prudent operational spending at P2.15 billion reflecting a three percent reduction over the same period last year, Bayan realized a 38 percent growth in its earnings before interests, taxes, depreciation and amortization (EBITDA) at P1.18 billion compared to P852 million the previous year.

Operating income is income derived from revenues less operating expenses, including depreciation and amortization.  

 “Our first half performance underscores a simple fact: we are competing fairly amidst a challenging economy and heightened competition in the industry. Our numbers speak for themselves: our business is gaining momentum and customers who value our simple and honest service proposition are also growing,” Bayan chief executive consultant Tunde Fafunwa said.

Bayan’s total customer base has now reached more than 500,000 nationwide, propelled by the explosive growth of its wireless landline and DSL subscribers, officials said.

Meanwhile, Bayan’s wireless landline business grew six percent over the previous year, at P751 million. Subscriber base, which are all current and predominantly in post-paid plans, grew 21 percent over last year and now stands at about 200,000. The growth in wireless landline softened the flat growth posted by its wired landline business and the negative impact of declining NDD and IDD revenues.

Data business, which includes DSL and other corporate data services, grew 27 percent in the first half of the year to P1.49 billion from P1.16 billion the same period last year. Data business revenues account for about half of Bayan’s total revenue.

Bayan’s DSL business improved 28 percent over the previous year at P808 million, on the back of a 39 percent subscriber growth which now stands at close to 90,000. 

“The churn levels for our fixed landline and DSL businesses are only slightly above two percent, indicating that there remains a high level of loyalty to the Bayan brand despite the aggressive promotions of our competitors. At the same time, we are getting more and more customers into our fold by simply communicating what we do best, which is to provide simple, honest and reliable service,” Fafunwa pointed out.

Bayan chief finance officer Fred Bernardo said the company’s healthy financial performance allowed the company to fund its expansion programs and service its maturing debt obligations.

Bayan paid a total of P777 million in the first half of 2009 and is scheduled to pay an additional P634 million for the second half. This will bring the company’s total debt-related payments to more than P4.67 billion since the rehabilitation plan was implemented in July 2004.