PLDT earns P16.5 B, down 25% from 9-month P109-B revenues » Manila Bulletin Business

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PLDT earns P16.5 B, down 25% from 9-month P109-B revenues


By Emmie V. Abadilla

PLDT, Inc. reported yesterday it hauled in P109.0-billion consolidated service revenues for the first nine months of 2018, a 2% increase from the same period in 2017 and netted P16.5-billion earnings, down 25 percent, based on the new accounting standard PFRS 15.

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An accelerated depreciation of P4.5 billion due to the shortened estimated useful life of network assets affected by PLDT’s network upgrade plus the revaluation gain of P1.1 billion on the remaining Rocket Internet shares affected the telco’s net earnings.

PLDT Home continued to lead the way for the PLDT Group, growing revenues by 12% to P27.3 billion in the first nine months of the year and accounting for 24% of consolidated service revenues, 75% of which were contributed by data and broadband.

Consolidated EBITDA (Earnings before interest, tax, depreciation and amortization) grew by 1% to P49.7 billion year-on-year. Telco core income rose by 4% to P18.9 billion. Including the gain from the sale of shares in Rocket Internet and losses from Voyager, the telco’s core income stood at P17.1 billion. PLDT’s revenue gains in the third quarter would have been more substantial if Home installation activities had not been constrained by a Department of Labor and Employment (DOLE) order that stopped the operations of 38 of PLDT’s service contractors affecting installation, repair, maintenance and call center services.

The service revenues of the telco’s Enterprise segment grew 10% year on year by P2.6 billion to P28.4 billion in the first nine months, representing 25% of total service revenues.

A 12% increase to P18.2 billion in data and broadband revenues, which now comprise 64% of total Enterprise revenues, boosted sales. In particular, data center revenues grew by 21% while corporate data revenues rose 12%.

Individual Wireless services revenues continued to gain momentum – rising 4% to P45.5 billion as of 9M18. This is the fourth consecutive quarter of growth for this business group.

The 4% growth in the first nine months of this year stands in sharp contrast to the 14% or P7.1 billion year-on-year decline registered in the first nine months of 2017. Effectively, this represents a combined turnaround of P8.8 billion.

Growth in mobile internet revenues versus a year ago also boosted Individual Wireless revenues as mobile data traffic grew by 97% in the same period, as a results of higher usage.

The combined Home, Enterprise and Individual Wireless service revenues added up to P101.2 billion in the first nine months, accounting for 90% of total service revenues and posting an 8% or P7.2 billion year on year increase.

This represents a marked turnaround from the P1.8 billion year-on-year decline in 9M17 or a total positive swing of P9.1 billion.

Data and broadband continue to power the growth of the Home, Enterprise and Individual Wireless groups, representing 75%, 64% and 59% of service revenues, respectively. Revenues from this group of services grew 36% to P66.0 billion.

“Despite the extraordinary challenges posed by the DOLE Order, we have sustained the double digit growth of Home and Enterprise and added momentum to the recovery of our Individual Wireless business,” noted Ernesto R. Alberto, PLDT and Smart Executive Vice President and Chief Revenue Officer.

As of end-September 2018, the telco’s Consolidated Net Debt and Net Debt to EBITDA stood at US$2.4 billion and 1.94x respectively.

Gross Debt amounted to US$3.3 billion, of which only US$0.3 billion or 8% was unhedged. Fixed rate loans, post interest-rate swaps, comprised 89% of total loans while floating rate loans made up the balance of 11% of the total.

The average interest cost (pre-tax) was 4.5%. As of end-September 2018, PLDT’s credit ratings remained at investment grade.

PLDT Inc.’s capex for the entire year stood at P58 Billion and will likely remain in the P58-60 billion level for next year, according to PLDT and Smart Communications Inc. Chairman, President and CEO Manuel V. Pangilinan.

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