PLDT sees recurring income growing to P24 billion this year

MANILA, Philippines — PLDT Inc. has set its recurring core income guidance for 2018 at P23-to P24-billion as it anticipates growth in service revenues and allotted its highest capital expenditures ever to continue aggressive network rollout to deliver better internet services.

PLDT chairman and chief executive officer Manuel V. Pangilinan expects to sustain the company’s positive performance last year as recurring core income, which excludes asset sales, manpower reduction program expenses and accelerated depreciation, grew 11 percent to P22.3 billion from P20.2 billion in 2016.

“In this light, we expect to sustain the positive trend set in 2017. For 2018, we expect our recurring core income to rise anywhere between P1- and P2-billion to about P23-to P24-billion on the back of anticipated growth in service revenues in 2018 by around four percent. That will take us another step forward on the path to sustained growth and profitability,” Pangilinan said.

Last year’s higher recurring core income was driven primarily by the higher earnings before interest, taxes, depreciation and amortization (EBITDA), which rose 11 percent year-on-year to P67.8 billion.

Including gain from asset sales, manpower reduction program expenses, accelerated depreciation, and EBITDA adjustments, PLDT’s consolidated core income declined slightly to P27.7 billion last year from P27.9 billion in 2016.

PLDT’s net income, meanwhile, fell 33 percent to P13.4 billion last year from P20 billion in 2016 due to non-core capex-related expenses of P16.7 billion as it swapped some equipment in the National Capital Region as part of its network upgrade to deliver improved services.

The company’s consolidated service revenues reached P143.5 billion last year, down three percent from P147.6 billion in 2016.

Revenue from the home and enterprise business groups posted respective year-on-year growth rates of 13 percent and 11 percent, to reach P33 billion and P34.1 billion last year.

While wireless revenues declined 11 percent year-on-year to P82.3 billion last year, the decline has stabilized as the year progressed.

Pangilinan said this year’s financial performance is expected to be driven by anticipated continued growth in fixed line, both in home and enterprise.

“On the wireless side, our target is to at least keep revenues flattish, if not slight improvement,” he said.

After spending around P40 billion capital expenditures last year, PLDT is expected to spend P58 billion this year with 53 percent of the total allotted for the fixed network business requirements.

Pangilinan said this year’s capex would be funded by a combination of internally generated funds, as well as proceeds from the sale of receivables arising from the sale of the Beacon stake to Metro Pacific Investments Corp., and half of PLDT’s position in European internet company Rocket Internet.

 “Things are beginning to look up for the group. I’m not saying we’re completely out of the woods, but it seems we are getting there,” Pangilinan said.