PILTEL Reports 3rd Quarter Loss of P2.56 Bln Amid Decreased Revenue, Higher Depreciation Costs

November 12, 1999 PSE CIRCULAR FOR BROKERS NO. 2893-99 PILTEL REPORTS 3rd QUARTER LOSS OF P2.56 BLN AMID DECREASED REVENUE, HIGHER DEPRECIATION COSTS The Pilipino Telephone Corporation (Piltel) announced today that its net loss widened to P2.56 billion in the year's first nine months from P38 million a year earlier, reflecting lower revenue, as well as increased costs due largely to sharply higher depreciation. llcd Piltel's revenue declined 31 per cent to P2.78 billion, while its total subscriber base increased 32 per cent to 558,553 as at 30 th September, comprising 433,376 cellular subscribers, 79,148 land-line subscribers and 46,029 paging subscribers. The Company's cellular subscriber base continued its trend toward the growing dominance of pre-paid subscribers who now account for 66 per cent of cellular customers compared with 40 per cent a year earlier rather than those subscribing to billed subscription plans. cdll Operating costs rose by 43 per cent to P4.48 billion, due largely to an 82 per cent rise in depreciation to P2.25 billion related to the completion of cell sites. This brings the Company's total number of cell sites to 400 (including micro-cells and repeaters). Utilities, maintenance, insurance and related security services grew 63 per cent to P378 million due to the payment of prior year's billings, while provisioning for doubtful accounts increased 7 per cent to P181 million as a result of a more conservative provisioning policy. llcd Piltel's CEO and President Napoleon Nazareno said: "As you know, we signed the Memorandum of Understanding with our creditor banks last October 8. This should give us the momentum to move forward and discussions are moving ahead as well with our other financial creditors. On the revenue side, we have not yet seen the effect on revenues of our marketing efforts as these were only launched in the third quarter and we should see the benefits from the fourth quarter onwards. For further information, please contact: Deborah Anne Tan (632) 845-6166 Manager, Corporate Communications cdll