BayanTel profits to recover on stronger peso

Posted at 08/18/2009 8:34 PM | Updated as of 08/18/2009 8:58 PM

MANILA - Lopez-led Bayan Telecommunications (BayanTel) is expected to have a positive bottomline in the coming years if the peso strengthens against the dollar.

However, this recovery may prove to be unpredictable since it is impossible to calculate forex movements, according to BayanTel Chief Executive Officer Tunde Fafunwa.

BayanTel Chief Finance Officer Fred Bernardo said the company incurred a net loss of P542 million during the first 6 months of the year mainly because of P710 million in forex losses. About 87% of BayanTel's debt is denominated in US dollars, making the company vulnerable to the depreciation of the peso against the greenback.

The Lopez-led phone firm paid a total of P777 million in debt as of end-June, and is set to pay another P634 million in the second half of the year. This will bring the company's debt-related payments to more than P4.67 billion since BayanTel's rehabilitation plan was implemented in 2004.

According to Bernardo, BayanTel posted an operating income of P182 million during the 6-month period, a reversal of the operating loss of P133 million a year ago. Operating income is profit derived from revenues minus operating expenses, including depreciation and amortization.

BayanTel reported P3.33 billion in total revenues from January to June, an 8% growth from the same period last year. Operational expenditures dropped 3% to P2.15 billion, while EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 38% to P1.18 billion.

The company said it is allocating 60% of its capital expenditures to expand its data and wireless landline businesses. About 40% or P1.3 billion has already been spent in the first half, Bernardo said.

BayanTel is targeting to raise its number of DSL subscribers to 105,000 by year-end from around 70,000 last year. This, the company said, will be achieved through aggressive promotions, particularly its "Teach Lola the Internet" campaign for senior citizens.

Wireless landline subscribers, on the other hand, are expected to reach 206,000 by December from around 180,000 in June.