March 21, 2018, 10:44 pm
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Telco’s profit falls 33% to P13B

PLDT Inc. yesterday said its net income fell 33 percent to P13.4 billion last year from P20 billion in 2016 due  to higher expenses on its network transformation initiatives in Metro Manila.

PLDT implemented a swap-out of its  wireless equipment in Metro Manila as part of its network modernization when it shifted to a new technology vendor Huawei.

This resulted to a  one time-hit of P16.7 billion “in terms of shortening the life and riding off those assets,”  said Annabel Chua, PLDT chief finance officer.

Chua  said for purposes of accounting, the company had  to recognize that “we are no longer going to use those assets. It’s a big one-time hit from a profit and loss standpoint.”

This non-core capex-related expense of P16.7 billion was mainly booked in the fourth quarter that ended at P8.5 billion in net loss as compared to P4.1 billion net income in same period in 2016 .

PLDT’s consolidated service revenues were  also down 3 percent to P159.9 billion in 2017 from P165 billion  the previous year. Though lower than previous year, service revenues stabilized in 2017  as the decline in quarterly wireless revenues moderated in the course of the year.

Manuel Panglinan, PLDT president and chief executive officer, said he anticipates the company’s service revenues to increase by 4 percent this year which  will drive the higher guidance for recurring core net income this year to between P23 billion and P24 billion.

The anticipated growth in services revenues this year would be driven by double digit growth in fixed line business both home and enterprise, offsetting the anticipated flattish wireless business and decline in international business by P3 billion to P4 billion.   

PLDT’s recurring core income grew 11 percent  to P22.3 billion, higher than 2016 due to the gain from asset sales, manpower reduction program  expenses, accelerated depreciation, and EBITDA (earnings before interest, taxes, depreciation and amortization). 

Consolidated core income amounted to P27.7 billion, 1 percent lower year-on-year .

PLDT is setting a record capital expenditure of P58 billion this year bulk of which will be spent for its fixed line business and the rest for its mobile network transformation program.
This revised allocation reflects PLDT’s more aggressive rollout of its fiber broadband service which also supports the stepped-up deployment of its  mobile network.

PLDT said annual capex for 2019 to 2020 is expected to remain at the same level as 2018. This would bring total capex for the five-year period since 2016 when PLDT started its network transformation program in earnest to nearly P260  billion.

 Pangilinan said the capex this year will be funded by a combination of internally-generated funds as well as proceeds from the sale of receivables arising from the sale of its  Beacon stake to Metro Pacific Investments Corp.

Pangilinan is optimistic of  better profits this year compared last year given its January and February performance shows sales are up 3 percent.

“I’m not saying we’re completely out of the woods but it  seems that we’re getting there,” Pangilinan said.

Revenues from data, broadband and digital platforms continued to power the growth of all business units – Home, Enterprise and Wireless Consumer. Combined, these services grew 11 percent  year-on-year to P67 billion, and their share to  consolidated service revenues rose from 41 percent  to 47 percent .

Mobile internet revenues increased 17 percent  to P20 billion as ownership of smartphones grew to over 50 percent  of its mobile subscriber base. Home broadband and corporate data and data center revenues, on the other hand, each grew by 16 percent  to P20.4 billion and P19.6 billion, respectively -- much faster than other industry players.
“Moving forward in 2018, we continue to level up even more. We are continuing our aggressive network roll-out to bring world class internet to more parts of the country. We are developing more compelling digital services and solutions for both consumer and enterprise customers. We are overhauling our operations so that we can serve our customers in a more personalized way, and, do this quickly and efficiently,” Pangilinan said.

PLDT’s three mobile brands Smart , Sun and Talk N’ Text mobile had  57.9 million subscribers as of end 2017.
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