PLDT H1 profits dip 6% to PHP18.8bn, as revenues flat-line

5 Aug 2015

Philippine Long Distance Telephone Company (PLDT) reported net income of PHP18.75 billion (USD411 million) for the six months ended 30 June 2015, down 6% from PHP20.00 billion in the corresponding period a year ago, as revenues remained flat at PHP85.19 billion, attributed in part to a continuing decline in turnover from international and national long-distance call services. Pre-tax profits declined by 8% year-on-year and EBITDA slipped 7% to PHP35.52 billion; EBITDA margin of 44% was worse than the 46% reported in H1 2015. In addition, PLDT said that operating expenses climbed 3% y-o-y to PHP64.16 billion and core income was down 5% at PHP18.93 billion, which PLDT blamed on ‘lower EBITDA reflecting the impact of expenses relating to the manpower reduction programme, and higher financing costs, offset by gain from the sale of Meralco shares’.

Operationally, PLDT – which offers mobile services through its Smart Communications and Digital Mobile Philippines (Sun Cellular) divisions – closed out 30 June 2015 with a total of 68.862 million mobile subscribers, broadly unchanged y-o-y, as fixed line voice connections increased 5% to more than 2.257 million and broadband subscriptions surged 34% to over 4.861 million from 3.637 million. Within this, wireless broadband connections rose by a net 1.077 million lines to 3.676 million and fixed (ADSL) broadband increased 14% to 1.185 million.

PLDT chairman Manuel V Pangilinan noted that the rapid decline in the telco’s call services revenue continued to ‘bear down heavily’ on the company’s medium-term revenue growth, with the ‘onslaught of the internet causing adverse substitution’ (i.e. VoIP). Pangilinan estimates that the impact of substitution has cost PLDT between PHP4 billion and PHP5 billion in 2015. However, he noted that the company is working to improve its CAPEX through to 2016 by being ‘nothing less than the consumer’s preferred digital services provider’.