PLDT core profit up 6% in Q1

MANILA, Philippines — Telco giant PLDT Inc. said it is on track to meet its P26 billion guidance for this year as it posted a six percent increase in its core income to P7.2 billion in the first quarter of 2019.

The amount is higher than the P6.8 billion it generated in the same period last year.

The company reported that consolidated service revenues in the first quarter went up by seven percent to P38 billion, lifted in large part by its resurgent Wireless Individual business.

PLDT said 94 percent of its total service revenues comes from its three major business groups – Wireless Individual, Home and Enterprise – reaching P35.8 billion, a 12 percent rise compared to the same quarter in 2018.

The company noted that data and broadband service revenues grew 21 percent to 24.4 billion and now account for 68 percent of total service revenues.

In contrast, reported net come in the first quarter dropped three percent year-on-year mainly due to lower gain in the valuation of PLDT’s investment in Rocket Internet for the first quarter of 2019 compared with the same period last year.

The company’s Wireless Individual business posted an 18 percent rise in revenues to P16.9 billion, on the back of growing data usage and a surge in subscriber growth, while the Enterprise business raked in P9.8 billion in revenues, a nine percent rise from the same period last year.

Revenues of the Home business grew at a moderate pace of three percent to P9.1 billion.

“The impact of the DOLE ruling on outsourced services and the consequential disruption of repair and installation services starting mid-2018 continued to impact net take up of Home broadband subscribers,” the company said.

It added that net subscriber growth stalled in the last two months of 2018 and softened revenue growth in the first quarter of 2019.

“In this light, and based on the momentum we have seen in the first quarter, we maintain our guidance that full-year telco core income shall rise to (at least) P26 billion, and holding our capex level at P78.4 billion,” PLDT Inc and Smart Communications chairman and CEO Manuel V. Pangilinan said.

“As we move deeper into 2019, we are transitioning our focus and effort from placing the company back on the growth path into initiatives that should raise the business to the next level. There are still rough patches, such as the operational snags that our Home business encountered. But our agenda now is clearly to elevate our game,” Pangilinan added.

Pangilinan said the company would push forward with its digital shift – everything from the transformation of our transport network to the overhaul of our customer service policies and practices to continue the company’s growth momentum.

“Our objective is clear – for PLDT and Smart to work closely together to deliver the best possible service to our customers and improve the lives of our people,” he added.

In the first quarter of 2019, PLDT spent P12.2 billion in capital expenditures, higher than the P6.9 billion spent in the same period last year.

For this year, PLDT earmarked a record P78.4 billion budget for its capital expenditures, bulk of which, or P48 billion, will be used for technology expansion initiatives, particularly with network and IT platforms.

“We have minimal increase in borrowing because we are banking on increase in EBITDA to fund a significant portion of our capex,” PLDT chief financial officer Annabelle Chua said.

She said the company is looking to sell some of its asset properties to lessen the company’s borrowings for its capex initiatives.

“There are a few properties we are looking to dispose and that process will start soon,” Chua said adding that these properties may be sold at P3 billion to P4 billion each.

Meanwhile, Pangilinan said the company is reviving plans of redeveloping its head office, particularly the Ramon Cojuangco Building and the Makati General Office in Makati City.

“It’s an old plan but I’m reviving it principally with NTT Realty. I’ll be in Tokyo next week to give our yearly briefing with the NTT Group. We will have a conversation with them. We have chosen one local property company,” Pangilinan said.

He said the company expects to come up with a decision within this year.

“Hopefully within the year we should make up our mind,” Pangilinan said.