- *Carrier blames loss on depreciation charges on some assets
- *Loss of users, decline in revenue also cited as causing loss
Philippine Long Distance Telephone Co. tumbled by a record in Manila trading after a charge on its investment in a German company caused it to report its first quarterly loss in more than 12 years.
The stock fell 18 percent to close at 1,830 pesos, the steepest decline based on data stretching back to 1990. The net loss was 3.27 billion pesos ($69 million) for the three months ended Dec. 31, the country’s largest phone carrier said in a statement Monday. Profit excluding one-time items will fall 20 percent to 28 billion pesos this year, the company forecast.
PLDT said the 10 percent stake it bought in Germany-based Rocket Internet SE in 2014 was worth about 14.6 billion pesos as of the end of 2015, compared with the 19.7 billion pesos it paid. Mobile phone subscriptions fell 5 million to 65 million last year as rival Globe Telecom Inc. was quicker to offer free Facebook access, contributing to a 3 percent decline in revenue from calls, messages and Internet for the year, the company said.
“We really need to reset the dial of the company,” Chairman Manuel Pangilinan told reporters at a briefing in Manila. The company needs to regain lost market share, while competition is likely to remain intense, he said.
Net income declined 35 percent to 22.1 billion pesos in 2015, a third year of decline.
Capital spending will remain elevated at 43 billion pesos this year, similar to the previous year, Pangilinan said.
“It’s a changing landscape and the transition is going to be painful at the onset,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “More capital will have to be spent as it harnesses the power of the Internet.”
The carrier also took charges in the fourth quarter for writing down fixed assets rendered obsolete by new network plans and programs and it expects further impairment of the investment in Rocket Internet.
PLDT said it won’t declare a special dividend for 2015 earnings, the first time it’s skipping the payment since 2006.