PLDT 9M18 profits drop 25%

12 Nov 2018

PLDT Inc. reported that pro-forma net income for the first nine months of this year declined 25% to PHP16.49 billion (USD240.02 million), compared to PHP21.88 billion billion in 9M17, although total revenues and service revenues each improved by 4% year-on-year to PHP117.30 billion and PHP109.03 billion, respectively. Pro-forma EBITDA, meanwhile, was PHP50.32 billion (+2% y-o-y), with an EBITDA margin of 43% (unchanged). Core net income improved 5% to PHP19.08 billion from PHP18.13 billion. The company attributed the drop in net income to the accelerated depreciation of PHP4.5 billion in connection with the shortened estimated useful life of network assets affected by the group’s network upgrade and the ‘revaluation gain’ of PHP1.1 billion on remaining Rocket Internet shares. Despite the drop, PLDT chairman, president and chief executive Manuel Pangilinan said that robust home and enterprise business, as well as wireless business, were expected to provide an even more powerful lift to the overall business of PLDT and mobile division Smart. ‘This will enable us to deal more effectively with the challenges [posed] by heightened competition from players old and new,’ he said.

PLDT’s capital spending increased by PHP6.91 billion to PHP11.28 billion for the three months ended 30 September 2018, with the monies used to finance the group’s mobile network modernisation programme and for the continuous facility rollout and expansion of its domestic fibre-optic network, and expansion of its data centre business. In its filing, PLDT note that the rapid pace of its network transformation programme enabled it to surpass several key full-year 2018 rollout targets by end-September 2018. By that date, the total fibre footprint – consisting chiefly of transmission and

distribution facilities – had reached 221,000km, exceeding the full year 2018 target of 210,000km, and helping to underpin the expansion of the group’s fixed and mobile networks. By 30 September 2018 PLDT Home’s fibre coverage had reached 5.75 million homes, surpassing the full-year 2018 target of 5.30 million homes. At the same time, total capacity reached 2.25 million ports – more than double the count as of end-2017 and above the 2.20 million ports targeted for 2018. At the end of September, there were 1.25 million ports available for subscription, it said. Moreover, mobile unit Smart had installed about 5,700 new 4G LTE base stations, boosting its total count to about 14,400 LTE base stations nationwide – 65% higher than its end-2017 count. It also added about 1,000 3G base stations in the same period, raising the total to about 11,000. ‘Smart’s stepped-up deployment of LTE, LTE-Advanced and 3G facilities will enable us to fulfil our commitment to the government to provide mobile broadband services to over 90% of the country’s cities and municipalities by end-2018,’ said Mario G Tamayo, Senior Vice President for network planning and engineering for PLDT and Smart.

Operationally, PLDT closed out September 2018 with a total of 58.034 million mobile subscribers, broadly unchanged y-o-y, of which 55.627 million are pre-paid (unchanged). The number of broadband subscribers stood at 2.054 million, up 8%, of which 1.859 million are fixed and 195,015 fixed-wireless users. In addition, a total of 2.778 million fixed telephony accesses were in service, up 6% when compared to 2.614 million at 30 September 2017.