PLDT first-quarter net income down 3%, but revenues and core income rise

10 May 2019

PLDT Inc. (including Smart Communications and Sun Cellular) reported a 3% decline in net income to PHP6.72 billion (USD128.7 million) in 1Q19 from PHP6.92 billion a year ago, despite consolidated revenue rising 2% to PHP41.43 billion and core income improving to PHP6.60 billion from PHP6.00 billion. Within the total, revenues derived from data and broadband services reportedly climbed 21% to PHP24.40 billion in the quarter under review, and turnover from wireless activities rose 18% to PHP16.90 billion due to ‘increasing data usage and subscriber base’. Its pre-paid segment accounted for 28% of these revenues, while it added a net 3.4 million new users to end the quarter with 63.4 million subscribers.

In a press briefing, the carrier attributed the fall in profits to lower gains in the valuation of its investment in Germany’s Rocket Internet, but PLDT Chairman and CEO Manuel Pangilinan bullishly pointed out that his company was on track to meet its guidance of PHP26 billion core income increase for the full year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) – excluding the impact of its manpower rightsizing programme costs and new accounting policy – climbed 20% year-on-year to PHP19.85 billion, aided by ‘improved services and lower cash operating expenses’. PLDT also reported that 2019 capital expenditures would remain at PHP78.4 billion, noting that adjustments could be made based on 5G investments, and pointing out that Smart Communications increased the number of on air LTE base stations by 1,700 in January-March, bringing the total to 18,000.

Manuel Pangilinan also said that PLDT has ‘reactivated’ a plan to sell key property assets, including its headquarters in the heart of the Makati City financial district, to fuel capital spending and growth in 2019 and beyond. Local press quote the official as saying that the sale of properties and the eventual divestment of its remaining 2.6 million shares in Rocket Internet, currently valued at about PHP3.4 billion, would help support the CAPEX budget for 2019.