PLDT Inc. is cutting its P83-billion capital expenditure this year by P20 billion to P63 billion due to limited mobility during the enhanced community quarantine (ECQ) that slowed down its network rollout, including its fifth generation deployment that was pushed back in the latter quarter this year.
PLDT has given a core net income guidance this year, with service revenues in the second quarter expected to be at low to mid-single digit due to the impact of the ECQ. However, revenue in the second half this year is dependent on the ECQ lifting, government stimulus packages and the economic conditions.
“Moving forward, there will be likely some softening of revenue growth in the second quarter this year. But overall, we expect revenues to stay on the growth path versus last year,” said Manuel Pangilinan, PLDT chairman, president and chief executive officer.
“Moreover, by focusing on helping companies, communities, families and individuals find the digital solutions that put them back on-track to prosperity, we will ensure that our services are maintained at a superior level across all sectors. This is the most sustainable way for PLDT to build a future in this New Normal,” Pangilinan added.
PLDT said services revenues grew 9 percent to P41.5 billion in the first quarter — a new high in its quarterly revenues. This increase was driven by data and broadband services, particularly on its wireless network, which now account for 71 percent of total revenues.
PLDT income in the first quarter dropped 12 percent to P5.9 billion, after taking into account its equity share in the results of Voyager Innovations and revaluation losses on its investment in Rocket Internet.
Anabelle Chua, PLDT chief financial officer, said the company incurred P430 million losses from its investment at Rocket Internet. The company still has 1.9 million shares in the technology firm listed in Germany.
PLDT said as it reduces its capex by 25 percent this year, the network rollout for the balance of 2020 will prioritize projects that support the changing demand profile of its customers, and to help corporate revive their business under these new conditions.
PLDT and its wireless unit Smart Communications Inc. are developing new ways to conduct their business and serve customers. This will consist of flexible working arrangements that combine social distancing for employees at the office, work from home for other staff, with carefully conducted operations for field personnel.
Earnings before interest, tax, depreciation and amortization (EBITDA) rose 8 percent to P21.6 billion, with the 9 percent rise in service revenues more than compensating for increases in cash operating expenses, PLDT said.
EBITDA margin remained at 52 percent, it added.
The company reported telco core income fell 5 percent to P6.9 billion, as the rise in EBITDA was offset by higher depreciation and financing costs resulting from higher capital expenditures — the offshoot of the PLDT group’s sustained network rollout program.
“The solid performance of our major business groups in 2019 flowing smoothly into the first quarter of 2020 provides us the firm footing needed to face the tough trials created by the pandemic in 2020 and beyond,” said Alfredo Panlilio, Smart president and chief executive officer and PLDT chief revenue officer.
“This early, we already see how the network infrastructure, expertise and technical resources that we have acquired, upgraded, and made more resilient over the past several years are playing a major role in helping our customers rebuild their lives, and the country regain its prosperity,” Panlilio added.
