PLDT 1H20 earnings rise despite economic slowdown

6 Aug 2020

The Philippines’ largest integrated telecommunications company PLDT Inc. reported that net income in the first half of the year climbed 1% to PHP12.28 billion (USD250.5 million) from PHP12.21 billion in 1H19, while core income rose 5% year-on-year to PHP13.87 billion, as service revenues increased 7% to PHP83.48 billion – on total revenues of PHP86.74 billion (up 6%). In a stock exchange filing, the telco said its strong set of financial results came despite the stringent COVID-19 lockdowns that had sent the Philippine economy into recession. In a press release it said that quarantine restrictions put in place in mid-March had trimmed service revenues to PHP41.3 billion in Q2 2020 – slightly lower than the PHP41.5 billion posted in Q1 2020, but still 7% higher y-o-y. Nevertheless, data and broadband revenues in January-June 2020 reached PHP59 billion, up 18% on an annualised basis and accounting for 71% of service revenues. Meanwhile, EBITDA reached PHP43.20 billion in 1H20, up 8% from 1H19, as a result of higher service revenues, and ‘as prudent cost management compensated for unbudgeted COVID-19-related expenses and increases in provisions’.

‘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. Moving forward, we will grow our business by helping our customers – and the country – rebuild their lives and livelihoods with powerful connectivity like fibre, 4G and now 5G, combined with innovative digital solutions,’ said Manuel V Pangilinan, Chairman, President and CEO of PLDT Inc. Going forward, the telco has hiked its CAPEX to PHP70 billion for FY 2020 in response to increased demand for digital connectivity – a figure it says comes on top of the PHP260 billion total CAPEX spent in the last five years. Furthermore, it notes it has signed agreements with six tower companies to build 181 pilot sites, and claims that Ookla recognised PLDT and mobile arm Smart Communications ‘as the fastest fixed and mobile networks in the Philippines’.

Mobile data usage on Smart’s network jumped about 30% from February to May while PLDT’s fixed broadband data traffic rose around 20% during the same period. In response, PLDT-Smart implemented targeted expansions of capacity outside the central business districts (CBDs) and boosted the capacity of its international internet cable systems by 65%. In April, Smart converted 3,785 2G base stations into 4G LTE, raising the capacity of its LTE network throughout the country. Smart’s 4G and 3G mobile data service now reaches over 95% of the population, it said. In addition, PLDT extended the reach of its fixed broadband service to cover some 7.8 million homes passed by 30 June 2020, up 8% from end-2019. The total number of available fibre-powered ports increased 5% to 3.67 million by the same date, with 1.6 million available for new customers. Moreover, the total footprint of PLDT’s fibre-optic network grew 11% to about 358,700km.