PLDT grows profits despite pandemic disruptions

MANILA, Philippines — Stay-at-home customers supported PLDT Inc. amid a tumultuous first half, growing its profits on the back of higher demand for broadband services despite pandemic-induced disruptions on its expansion plans.

In a disclosure to the stock exchange on Thursday, the Panglinan-led telco giant registered a net income of P12.28 billion, inching up 1% year-on-year.

Excluding the effects of foreign exchange movements and share of losses from Voyager Innovations Inc., a subsidiary of Smart Communications, core net income went up a bigger 5% annually to P13.87 billion. 

“COVID-19 has set our agenda for the foreseeable future. At the outset, our task was clearly to keep people connected as the country went into lockdown,” Manuel V. Pangilinan, company chairman, president and chief executive, said in a statement.

Breaking down the financial statements, total revenues rose 6% year-on-year to P86.74 billion in the first half, while expenses rose a slower 5% to P64.82 billion.

The bulk of revenues were from services offered by PLDT to customers such as fixed line and broadband connection. From January to June, the telco firm posted an across-the-board increase on its telecom services while most people were stuck and working from home following government lockdown orders.

As a result, among various telco services, revenues from data and broadband rose 18% year-on-year, and accounted for 71% of service revenues. Earnings from wireless services spiked 23% year-on-year.

Revenues from ICT services, meanwhile, increased 4%, while fixed line services inched up 1% during the six-month period.

Broadband earnings rose as a result of a wider reach for both PLDT and Smart. The telco giant said the kilometer reach of PLDT’s fiber optic services grew 11%, adding 8% more customers from end-2019 on its fixed broadband network. Smart, which recently launched its 5G service, boosted its LTE stations by a tenth from end last year.

Capex reduced to P70-B

Expenses, on the other hand were heavily a result of "administrative" disbursements as well as "depreciation and amortization" costs, financial statements showed.

“Moving forward, we will grow our business by helping our customers – and the country – rebuild their lives and livelihoods with powerful connectivity like fiber, 4G and now 5G, combined with innovative digital solutions,” Pangilinan said.

Despite the strong financial performance, PLDT reduced capital expenditure plans this year to P70 billion from the initial record of P83 billion due to work stoppages triggered by the pandemic. The amount will be spent mostly to finance “short-term requirements” of the network, Pangilinan said without providing details.

The balance from the original spending plan will be spent next year when the outbreak is seen to be more under control, he added.

Shares at PLDT traded 1.26% higher to close P1,370 apiece on Thursday, better than the 1.18% increment of the benchmark index.

Editor's Note: A unit under PLDT's media conglomerate has a majority stake in Philstar Global Corp., which runs Philstar.com. This article was independently produced following editorial guidelines.