MANILA, Philippines — Telecoms and digital services provider PLDT Inc. posted lower earnings in the first quarter despite a sustained revenue growth, with the company looking to reduce its planned capital spending by over a fifth this year due to challenges in network rollout posed by the enhanced community quarantine.
PLDT reported yesterday a five percent drop in telco core income to P6.9 billion in the first quarter behind higher depreciation and financing costs resulting from higher capex for the group’s sustained network roll-out program.
Reported income, on the other hand, fell by 12 percent year-on-year to P5.9 billion after taking into account equity share in the results of Voyager Innovations and revaluation losses in its Rocket Internet investment.
PLDT posted a new high in its quarterly revenues during the January to March period as it expanded nine percent year-on-year to P41 billion.
The combined service revenues of the consumer, home, and enterprise business groups grew by 11 percent to P39.9 billion and accounted for 96 percent of total revenues, while the international and carrier business group added P1.6 billion of service revenues.
“Moving forward, there will be likely some softening of revenue growth in the second quarter this year. But overall, we expect revenues to stay on the growth path versus last year,” PLDT chairman, president and chief executive officer Manuel V. Pangilinan said.
Pangilinan said it is still difficult for the company to provide a full year core income guidance given the ongoing situation.
“We have, of course internally develop several scenarios. And the more we develop them. We’re finding out that it’s becoming a very complex environment for us to work in. So there are too many variables to deal with as some of which are uncertain, principally the quarantine whether the government will extend this enhanced quarantine period and by how long,” he said.
But for the meantime, PLDT said its original capex guidance for the year of P83 billion would probably be pared down, with anywhere between 20 to 25 percent of the budget deferred.
PLDT said network rollout has been hampered by the limited mobility because of the quarantine imposed in Luzon, with the rollout upon lifting of the lockdown expected to be gradual as suppliers and sub-contractors restart operations.
“Our best estimate now is from P83 billion, it will probably drop to P63 billion for the year, unless of course we regain much of the momentum loss during this quarantine,” Pangilinan said.
“Mobility has been restricted to a degree so that’s the only reason. If for example they relax the quarantine starting May 16, we will try to regain our momentum. Of course we like to build as much as we can,” he said.
Still, amid the challenges, PLDT said new opportunities for growth have arisen, with life under the quarantine pushing the rapid adoption of online and digital services as people working from home have turned to web-based collaboration tools, distance learning, online shopping and payments, and e-health services.
“The solid performance of our major business groups in 2019 flowing smoothly into the first quarter of 2020 provides us the firm footing needed to face the tough trials created by the pandemic in 2020 and beyond,” PLDT chief revenue officer and Smart president Alfredo Panlilio said.
“This early, we already see how the network infrastructure, expertise and technical resources that we have acquired, upgraded, and made more resilient over the past several years are playing a major role in helping our customers rebuild their lives, and the country regain its prosperity,” Panlilio said.