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Philippine Long Distance Telephone (PLDT), the Philippine telecommunications arm of conglomerate First Pacific, has reported a 63 per cent drop in earnings to 1.6 billion pesos (about HK$314.4 million) for the six months to June 30.

 First Pacific spent 30 billion pesos to buy a 17.2 per cent stake in PLDT last November - paying the equivalent of 1,420 pesos a share.

 At the time, the purchase price was a 35 per cent premium to the market price of 1,055 pesos.

 PLDT shares have since fallen and at 950 pesos yesterday values First Pacific's stake - which was boosted to 23 per cent after the injection of Smart Communications into PLDT in June - at 26.5 billion pesos.

 PLDT attributed the first-half decline in earnings to substantial write-offs of bad accounts, exchange rate adjustments, and equity losses in its subsidiaries of one billion pesos.

 Interim operating revenues of the Philippines' largest telephone company fell to 22.8 billion pesos, from 23.5 billion pesos a year earlier.

 Earnings per share plunged to 8.93 pesos from 31.99 pesos.

 'Disconnection rates may remain high for the rest of 1999, but should reduce as the economy recovers. The company expects to sustain its line additions in the second half of 1999,' PLDT said in its financial report.

 International long distance revenues fell 20.6 per cent to 8.2 billion pesos, also due to the peso's gain, a fall in agreed international rates and fewer outbound calls, it said.

 National long distance revenues rose 18.2 per cent to 5.23 billion pesos because of increased traffic with other carriers interconnected with PLDT's backbone network.

 PLDT said debt-laden Pilipino Telephone (Piltel) had accounted for 781.5 million pesos of the equity losses in its subsidiaries.

 It said 50 per cent-owned Piltel had about 34.9 billion pesos in debt.

 Piltel's cellular phone services contributed 1.32 billion pesos, or 5.8 per cent, of PLDT's revenues.

 Piltel had stopped repaying principal to creditors, including Philippine banks, Japanese company Marubeni and bondholders, at the end of June, pending a new debt agreement, PLDT said.

 PLDT made provisions of 1.2 billion pesos for bad accounts in the period, up from 512.6 million pesos in the first six months of last year.

CONGLOMERATES 



PLDT's fall blow for First Pacific