SECURITIES ANDEXCHANGE COMMISSION

Washington, D.C.20549

 

FORM 6 -K

 

REPORT OF FOREIGNPRIVATE ISSUER

PURSUANT TO RULE13a-16 or 15d-16 OF

THE SECURITIESEXCHANGE ACT OF  1934

 

Reporton Form 6-K dated August 4, 2005

(Commission FileNo. 1-15024)

 

 

PHILIPPINE LONGDISTANCE TELEPHONE COMPANY

(Name ofRegistrant)

 

Ramon CojuangcoBuilding

Makati Avenue,Makati City

Philippines     0721

(Address ofPrincipal Executive Officers)

 

 

Indicate by checkmark whether the registrant files or will file annual reports under cover ofForm 20-F or Form 40-F:

 

| Form 20-F:  y | Form 40-F:  o |
|---------------|---------------|

 

Indicate by checkmark if the registrant is submitting the Form 6-K in paper as permitted byRegulation S-T Rule 101 (b) (1):

 

| Yes:  o | No:  y |
|---------|--------|

 

Indicate by checkmark if the registrant is submitting the Form 6-K in paper as permitted byRegulation by Regulation S-T Rule 101 (b) (7):

 

| Yes:  o | No:  y |
|---------|--------|

 

Indicate by checkmark whether the registrant by furnishing the information contained in thisform is also thereby furnishing the information to the Commission pursuant toRule 12g3-2(b) under the Securities Exchange Act of 1934:

 

| Yes:  o | No:  y |
|---------|--------|

 

 

 

 

 

 

 

 

 

 

 

Enclosure:

 

 

 

A copy of the disclosure letter we filed today withthe Philippine Stock Exchange and the Securities and Exchange Commission regardingthe press release in connection with the Company’s financial condition andresults of operations for the six (6) months ended June 30, 2005.

** **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

 

August 4, 2005
 

 

Philippine Stock Exchange

4/F Philippine Stock Exchange Center

Exchange Road, Ortigas Center

Pasig City

 

Attention:  Ms. Jurisita Quintos
SVP – OperationsGroup
 

Gentlemen:

 

            Inaccordance with Section 17.1 (b) and Section 17.3 of the Securities RegulationCode, we submit herewith a copy of SEC Form 17-C with a press release attachedthereto regarding the Company’s financial condition and results of operationsfor the six (6) months ended June 30, 2005.

 

            Thisshall also serve as the disclosure letter for the purpose of complying with PSERevised Disclosure Rules.

 

 

 

Very truly yours,

 

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
 

 

 

 

MA. LOURDES C. RAUSA-CHAN
Corporate Secretary

 

 
****
 

 

 
 

 
 

 

August 4, 2005
 

 

Securities & Exchange Commission

Money Market Operations Department

SEC Building, EDSA

Mandaluyong City

 

Attention:  Director Justina Callangan
                                                                CorporationFinance Department
 

Gentlemen:

 

            Inaccordance with Section 17.1 (b) of the Securities Regulation Code and SRC Rule17.1, we submit herewith five (5) copies of SEC Form 17-C with a press releaseattached thereto regarding the Company’s financial condition and results ofoperations for the six (6) months ended June 30, 2005.

 

Very truly yours,

 

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
 

 

 

 

MA. LOURDES C. RAUSA-CHAN
Corporate Secretary

 

 

 

COVER SHEET

 

 

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(Business Address:No. Street/City/Town/Province)

 

ATTY. MA. LOURDES C. RAUSA-CHAN

 

814-3552

Contact person

 

Contact Telephone No.

 

 

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SEC FORM 17-C

 

 

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Fiscal Year

 

Annual Meeting

 
 

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Dept. Requiring this Doc.

 

Amended Articles

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Total Amount of Borrowings

2,196,804

As of June 30, 2005

 

 

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Total No. of Stockholders

 

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Foreign

 

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To beaccomplished by SEC Personnel concerned

 

 
 

 

 

 

 

 

 

 

 

 

 

______________________________

File Number

 

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Document I.D.

 

Cashier

 

 

STAMPS

   

 

 

 

 

Remarks: Please use black ink for scanningpurposes

 

 

 

SECURITIES AND EXCHANGE COMMISSION

 

 

 

SEC FORM 17-C UNDER SECTION 17

OF THE SECURITIES REGULATION CODE

AND SRC RULE 17.1

 

 

1.                 4 August 2005

Date of Report (Date of earliest event reported)

 

2.                 SEC Identification Number PW-55

 

3.                 BIR Tax Identification No. 000-488-793

 

4.                 PHILIPPINELONG DISTANCE TELEPHONE COMPANY

Exact name of issuer as specified in its charter

 

5.         PHILIPPINES                                                6._____________ (SEC Use Only)  

Province, country or other jurisdiction             IndustryClassification Code

of Incorporation

 

7.         RamonCojuangco Building, Makati Avenue, Makati City                1200 

Address of principaloffice                                                             Postal Code

 

8.         (632)814-3664 

Issuer's telephone number, including area code
 

9.         NotApplicable 

Former name or former address, if changed since last report

 

10.            Securities registered pursuant to Sections 8 and 12of the Securities Regulation Code and Sections 4 and 8 of the RevisedSecurities Act

 

Title of Each Class

Number of Shares of Common Stock

Outstanding and Amount of Debt Outstanding

 

______________________________________________________________

______________________________________________________________

______________________________________________________________

 

 

 

 

PLDTCONSOLIDATED NET INCOME UP 35% TO P16.8 BILLION;

CORE EARNINGS REACH P8 BILLION FOR 2ndQUARTER 2005, 15% UP FROM 1st QUARTER

 
- PLDT reports consolidated net income of P16.8 billion for the first half 2005; adjusted net income at P15 billion, before foreign exchange gains and derivative transactions 
- Core earnings for second quarter of P8 billion, a record quarterly high
- Cellular service revenues increase 8% to P35.4 billion
- Consolidated EBITDA reaches P37.5 billion; consolidated EBITDA margin maintained at 63% of service revenues
- Consolidated free cash flow surges to P27.4 billion, up from P18 billion in the same period in 2004
- PLDT Fixed Line reduces debt by US$251 million; consolidated debt declines by US$312 million

 

* *

*MANILA, Philippines, 4th August 2005*   –– PhilippineLong Distance Telephone Company (“PLDT”) (PSE: TEL) (NYSE: PHI) today announcedits financial results for the first half of 2005, reporting a consolidated netprofit of P16.8 billion, an increase of 35% from the P12.4billion net profit reported in the same period last year.   Consolidated netincome, before foreign exchange gains and derivative transactions, rose to P15billion in the first half of 2005, 9% over the adjusted and restated net incomeof P13.8 billion in the first half of 2004.  Service revenues for thePLDT Group increased by 3% to P59.5 billion while consolidated EBITDAimproved to P37.5 billion.  

 

Second quarter core earnings of P8 billion are thehighest recorded to-date, beating by 4% our core earnings in the second quarterlast year, when elections were held, and our first quarter core earnings thisyear by 15%.

 

Consolidated free cash flow grew by 52%,from P18 billion in the first half of 2004 to P27.4 billion inthe same period in 2005. The PLDT Group now expects its debt reduction for theyear to reach US$600 million instead of the set target of US$500 million. Inaddition to the PLDT Group reducing debts by US$312 million in the first sixmonths of 2005, PLDT paid, on 1st August, its 2005 maturing bondobligations of US$110 million.  

 

 

Cellular:   Moving On
 

Cellular subsidiaries, Smart Communications,Inc. (“Smart”) and Pilipino Telephone Corporation (“Piltel”), continued theirsignificant contributions to the rise in PLDT’s consolidated net income.

 

Consolidated cellular service revenuesincreased to P35.4 billion in the first half of 2005, 8% higher than theP33 billion realized in the first half last year.   Service revenues of P18billion in the second quarter were the highest recorded for such a period,besting revenues of the second quarter last year, which were boosted byelection spending, and revenues of the fourth quarter 2004, which benefitedfrom holiday traffic. 

 

Consolidated cellular EBITDA grew by 1%to P22.8 billion from P22.5 billion.  EBITDA for the cellularbusiness in the second quarter increased to P11.7 billion, compared toan average quarterly EBITDA of P10.6 billion in 2004. The EBITDA marginof 65% in the second quarter of 2005 bettered the FY04 EBITDA margin of 63% andimproved on the first quarter 2005 margin of 64%.

 

Net income, as adjusted for foreignexchange movements and derivative transactions, increased to P12.5billion from P11.7 billion in the same period last year.  Core earningsbefore foreign exchange gains improved quarter-on-quarter to P6.7 billion,another quarterly record high.

 

Net cellular activations totaled 1.5million subscribers in the first half of 2005, bringing the PLDT Group’s totalcellular subscriber base to 20.8 million and maintaining its market share ofabout 58%.   The PLDT Group’s share of industry revenues was likewisemaintained at 58%. Smart added approximately 1.2 million subscribers while *Talk‘N Text* added 352,000 subscribers to end the half with 15.8 and 5 millionsubscribers, respectively.  Net activations in the second quarter of 537,000were 49% lower than the 1 million recorded in the first quarter of 2005 and 68%lower than the 1.7 million activations in second quarter of 2004.  With thetermination of SIM-swapping activities beginning May 2005, it is anticipatedthat churn rates will increase for the rest of the year as subscribers acquiredthrough SIM-swapping leave the system.  As it takes four to six months forchurn to manifest itself in the system, the downward trend in subscriberadditions is expected to be more pronounced in the second half of the year andcould lead to some months of net disconnections. This development in itself isnot expected to affect Smart’s underlying revenues.

 

Smart has continued its *Smart 25**8**Unlimited Calland Text* promo wherein Smart and *Talk ‘N Text* prepaid subscribers canavail of unlimited on-network calls or text. The promotion has been renewed anumber of times, with modifications, and a total of 1.4 million subscriberswere using the unlimited text service at the end of June 2005. In addition toenhancing revenues, *Smart 25**8* also allows Smart to maximizeutilization of its network capacity, particularly for SMS.

Smart’s cellular network has expanded to36 switches and over 5,600 base stations covering 98% of the country’spopulation. Capital expenditures were P3.6 billion in the first half of2005.  Full year capex is expected to be approximately P8 billion, or P2 billion lowerthan the earlier guidance of P10 billion.  

With the reduced capex spending, free cash flow doubled to P20billion in the first half of 2005 from P10 billion in the first half of 2004.Smart has already paid cash dividends of P14 billion to PLDT in the first half of2005, in line with its commitment to make a total distribution of at least P20billion for 2005. 

 

“The record performance of our cellularbusiness in the second quarter this year only validates our stance thatrevenues and cash flows are what ultimately matter,” explained Napoleon L. Nazareno, President andCEO of PLDT and Smart.  

 

 

 

PLDT Fixed Line:  Looking Ahead

 

Fixed Line service revenues were stableat P24.2 billion in the first half of 2005.  Quarter-on-quarter, fixedline revenues grew 5% to P12.4 billion, as the increase in data revenuesmore than offset the decline in the NLD and local exchange sectors. 

 

Postpaid subscribers increased by 12,200 inthe second quarter alone – a complete reversal of previous quarters’ trends ofnet disconnections - fueled by the “P10 per call promotion” for NLDcalls.  DSL subscribers surpassed 68,800 at the end of June 2005.  Thissubscriber base is expected to increase even further as network coverageexpands and bundling schemes are introduced.

Cash operating expenses were up 3% due tohigher selling and promotion expenses associated with ongoing NLD and DSL marketinginitiatives. As a result, EBITDA declined 1% to P13.6 billion while theEBITDA margin dropped slightly to 56% in the first half this year from 57% inthe same period last year.

Capital expenditures for the first halfof 2005 were at P3.1 billion with the ongoing upgrade of the fixed line networkto a Next Generation Network or NGN.  This capex was utilized for requirementsof the IP core, transmission and access facilities.  Full year capex isanticipated to be P7 billion.

PLDT’s free cash flow in the first sixmonths of 2005 remained strong at P7.1 billion, supplemented by the P14billion dividend from Smart.  Accordingly, PLDT Fixed Line reduced its debts byUS$251 million during the period, thus bringing its debt balance to US$1.7billion as of the end of June 2005, from a peak of over US$3 billion five yearsago.  Interest costs decreased by almost P1 billion to P4.7 billion,reflecting the benefits of PLDT Fixed Line’s aggressive deleveraging strategy.

 

"The next two years willbe a “re-investment and re-invention” phase for PLDT Fixed, as we pursueour goal of progressing to our NGN in order to simplify our networkarchitecture, develop new revenue streams and growth opportunities and ascloser coordination between our fixed and wireless businesses continue,"concluded Nazareno. 

 

ePLDT:  Holding Its Own

 

ePLDT, the Group’s information andcommunications technology arm, reported a profit of P83 million for thefirst half of 2005. Service revenues grew 39% to P1.3 billion from P953million in the same period last year as all of its business segments postedimproved results. 

 

Consolidated call center revenuescontinued to lead the way, growing 52% to P836 million as a result ofcontinued growth in transaction volumes and increased capacity utilization.Combined call center seats reached 3,179, making ePLDT one of the largest callcenter operators in the country. Ongoing expansion will increase capacity to4,800 seats by the end of this year with two additional sites being put up. 

 

ePLDT’s other business segments, whichinclude *Netopia*TM, *Vitro*TM Data Center andother Internet-related services, registered significant revenue improvements aswell, as their combined service revenues increased by 22% to P492million for the first half of 2005, compared to P402 million in the sameperiod last year.  *Netopia*TM has expanded its network to 163stores with over 7,500 PC terminals as of the end of June 2005, and thisexpansion is expected to continue throughout the year.

“This positive trend of revenue growthbodes well for our performance for the rest of the year.  Through our keybusinesses, we will continue our efforts to foster and extend the PC and ITcultures in order to drive demand for broadband in the future”, said Ray C.Espinosa, ePLDT President and CEO.

 

PLDT Group: Transformation Underway 

 

“Despite somewhat unsettling times, PLDTcontinues to show its resilience.  We certainly don’t expect the second half ofthe year to be any easier, but we remain focused on the tasks at hand –maintaining growth in profitability, continuing the develeraging efforts andincreasing cash returns to our shareholders,” said Manuel V. Pangilinan, PLDT Chairman.

 

###

 

 

 

 

*(a)     **Asrestated to reflect adoption of International Accounting Standards*

*(b)     **EPSbased on reported net income*

*(c)      **Netincome excluding the net impact of gains/losses on FX and derivativetransactions*

*(d)     **EPSbased on net income excluding the net impact of gains/losses on FX andderivative transactions*

 

*This press release may contain somestatements which constitute “forward-looking statements” that are subject to anumber of risks and uncertainties that could affect PLDT’s business and resultsof operations.  Although PLDT believes that expectations reflected in anyforward-looking statements are reasonable, it can give no guarantee of futureperformance, action or events.*

 

 

For further information, please contact:

 

Anabelle L.Chua                  Anna V. Bengzon                  Ramon R. Isberto
Tel No: 816-8213                    TelNo: 816-8024                    Tel No: 511-3101

Fax No: 844-9099                   FaxNo: 810-7138                   Fax No: 893-5174

 

 

 

**About PLDT**

PLDT is the leadingtelecommunications provider in the Philippines. Through its three principalbusiness groups – fixed line, wireless and information communications technology– PLDT offers a wide range of telecommunications services across thePhilippines’ most extensive fiber optic backbone and fixed line, cellular andsatellite network.

PLDT is listed on the PhilippineStock Exchange (PSE:TEL) and its American depositary shares are listed on theNew York Stock Exchange (NYSE:PHI) and the Archipelago Exchange.  PLDT has oneof the largest market capitalizations among Philippine listed companies.

Further information can be obtainedby visiting the web at www.pldt.com.ph.

 
****
 

 

SIGNATURES

 

 

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hadduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

 

 

PHILIPPINE LONG DISTANCE TELEPHONECOMPANY

 

 

 

 

By:  MA. LOURDESC. RAUSA-CHAN

CorporateSecretary

 

 

 

Date:  August4, 2005