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Philippine Long Distance Telephone Company (PLDT), the country’s biggest phone company, said net income last year rose 22 per cent to a record 34.1bn pesos, beating analyst expectations.

The results were boosted by one-off gains that offset sharply lower growth in mobile phone subscribers that drove earnings in previous years.

But the company was cautious on the group’s prospects for 2006, warning that economic growth could be held in check by high oil prices, political uncertainty and possible natural disasters with the onset of La Nina weather pattern that brings above normal rains in the first half of the year.

Manuel Pangilinan, PLDT chairman, said: “Because we expect a more challenging operating environment, we have chosen to take a prudent view of our 2006 prospects. Growth in core earnings will be benign as revenue growth moderates.”

PLDT, which is a quarter owned by First Pacific of Hong Kong, said core earnings in 2005 rose by only 9 per cent to 31.3bn pesos before extraordinary gains from foreign exchange and derivative transactions.

Subscribers at Smart Communications Inc and Pilipino Telephone Corp, PLDT’s two mobile phone units, were up 4.7 per cent compared with the year before to 20.1m. Last year’s growth was the lowest in years, coming in at less than a tenth of the 66 per cent average yearly growth rate between 2000 and 2004.

Revenue, almost two-thirds of which comes from the mobile phones, rose by 5.1 per cent to 121bn pesos last year, well below the 14.5 per cent rise seen in 2004.

PLDT recorded net disconnections of 380,000 in the second half of the year compared with net activations of 1.6m in the first half of the year.

The company failed to sign up more subscribers after withdrew a marketing gimmick that gave pre-paid customers free air time for switching from rival cellular phone companies. The company found that the marketing promotion did not significantly boost revenue as most of the beneficiaries went back to their previous provider after using up the free credits.

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