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PLDT hikes 2017 profit guidance, ramps up 2018 spending

MANILA, Philippines — PLDT Inc. is hiking its core profit guidance this year after posting positive financial results in the first three quarters, while also indicating plans to ramp up spending next year to boost its network.

“With two months to go before the end of the year, we have a firmer handle of what the full year results are likely to be. We raise our recurring core income guidance (before exceptionals) to P22 billion from P21.5 billion,” PLDT chairman and CEO Manuel V. Pangilinan said yesterday.

PLDT’s recurring core income, which excludes gains from asset sales, earnings before interest, tax, depreciation and amortization adjustments and related tax adjustments, posted a five percent year-on-year increase in the nine-month period ending September to P17.4 billion.

Consolidated core income for the period rose seven percent to P23.2 billion. This includes gains from the sale of the company’s shares in Beacon Electric (P6.9 billion) and SPi Technologies (P1.4 billion).

PLDT’s consolidated service revenues, however, dipped four percent year-on-year to P107.3 billion.

In terms of business units, PLDT Home and Enterprise continue to set the pace for service revenues, posting double-digit growth rates in the first nine months of 2017.

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“We are pleased to see the sustained improvement in most of our metrics, be they financial or operational. The rising and sustained strength of our Home and Enterprise businesses is particularly heartening. Our wireless individual business, while stabilizing, requires more effort towards operational improvements and efficiencies. We are mindful that progress in this space will take some time,” Pangilinan said.

Pangilinan said PLDT would continue to ramp up investments in the near-term as the company is “determined to have the best network.”

“Our full year capex guidance remains at P38 billion in 2017, with about another P15 billion committed already this year, but which we forecast will be finished in 2018,” he said.

For next year, PLDT may allocate at least P46 billion in capex as the company works to improve its infrastructure.

“It’s boiling down to two choices. One is to go for the normative level of capex which will probably be in the area of P46 billion to P48 billion. Or do we push it further than that because we want to have an affirmative response to the criticisms being leveled against the industry that service is lousy and we’re not building enough of this and that,” Pangilinan said.

“I think we can handle P46 billion out of our cash flows,” he added.

Pangilinan said PLDT is looking forward to a better year in 2018 as it continues to move toward recovery.

“Will it be a significantly better year? I doubt it, I think PLDT will continue to show signs of recovery because a great deal of it depends on how the seller industry not only here, but elsewhere in the world could develop a breakthrough whatever breakthrough products and service that could deliver the kind of revenue and margins that the texting phenomenon did starting in the year 1999. Is that artificial intelligence, internet of things, we don’t know yet,” he said.

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