July 19, 2018, 12:02 am
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Stake sale lifts telco’s net

PLDT Inc. posted a 33 percent increase in net income in the first half this year boosted by the sale of its stake in Manila Electric Co. ( Meralco) and the absence of the reckoning of losses from its investment in Rocket Internet which negatively impacted on the company’s net income last year.

PLDT netted P16.5 billion. Excluding gains from asset sales, PLDT’s consolidated core income in the first half of 2017 amounted to P17.4 billion, 2 percent  lower than last year’s P17.7 billion figure but 72 percent  higher than the second half of 2016. Recurring core income stood at P11.9 billion, 1 percent  higher year-on-year and in line with the full year guidance of P21.5 billion.

Last June, PLDT divested all its 8.74 percent remaining stake in Meralco  for P21.8 billion which will be used to finance network expansion and debt payments.

  Manuel V. Panglinan, PLDT chairman,  said  the company is confident it will  achieve its guidance for EBITDA (earnings before interest, taxes, depreciation and amortization), recurring core net income and core net income. 

“We are maintaining our EBITDA guidance number that is P70 billion…the first half EBITDA is P33.5 billion…The momentum of revenue increase on the fixed side of our business in Home and Enterprise should continue for the second half. We’re quite confident it should continue that way and there’s some modest increase in the second half on the wireless side as well. It involves capex (capital expenditure) and opex (operating expenditure) and reduction on subsidy and EBITDA,” Pangalinan said in a press briefing. 

 The company expects a  P10 billion recurring core net income and P10 billion core net income in the second half to achieve the target of P21.5 billion and P28 billion recurring income and core net income, respectively. 

Consolidated service revenues in the first half stood at P70.5 billion,  6 percent  lower year-on-year; service revenues indicated  the downward trend of the topline for the past six quarters had been arrested, with second quarter service revenues levelling off and equaling those of the first quarter at P35.6 billion. 

Bulk of the total service revenues comes from the Home and Enterprise business which reported P15.8 billion and P16.8 billion revenues, respectively while individual or wireless business revenues stood at P29.6 billion and international business, P8.3 billion. 

PLDT Home and Enterprise continued to set the pace for service revenues, posting double-digit growth rates in the first half of 2017. Home revenues grew 12 percent to P15.8 billion, while Enterprise revenues increased 11 percent  to P16.8 billion. Home and Enterprise combined accounted for 46 percent of consolidated service revenues, surpassing the contribution of Wireless Consumer business of Smart, TNT and Sun.

The Wireless Consumer Business posted P29.6 billion in revenues – 16 percent  lower than the first half of 2016. However, quarter on quarter, revenues in the second quarter of this year rose 1 percent  from the previous quarter, from P14.7 billion to P14.9 billion – the first time in eight quarters that Wireless Consumer revenues registered an upturn.

Consolidated EBITDA for the first half of 2017 reached P32 billion, 4 percent  higher than the same period last year and 5 percent higher than the second half 2016. 

Excluding the P 1.5 billion in manpower reduction program (MRP) costs booked in the second quarter, EBITDA for the first half would be 9 percent  higher than the same period in 2016. 

In terms of capex, PLDT Group has reduced the capex for the year to P 38 billion from P 46 billion.

“With respect to our full year capex guidance, we expect to complete projects amounting to P38 billion in 2017, with a balance of approximately P15 billion that we forecast will be finished in 2018,” added Pangilinan.

As a result, the footprint of PLDT’s fiber network covered about 3.1 million homes passed as of end-June 2017, up from 2.8 million as of end- 2016.

The FTTH (fiber to the home) rollout is being complemented by the deployment of hybrid fiber technologies like G.fast, which is used extensively in Germany and South Korea, to deliver fiber-like data speeds via copper lines in residences and offices. 

Smart is pursuing its three-year program to roll out LTE in 95 percent  of the country’s cities and municipalities by end-2018.

PLDT will push through the manpower reduction this year despite the failed deal with US-based firm, International Business Machines (IBM) for outsourcing of its IT business. 

Pangilinan said currently, the company is in talks with a group of international IT company as part of move to outsource the back-office IT operation of the PLDT Group. 

PLDT expected to incur P 7 billion savings over the next five years with this initiative.  
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