PLDT’s core income from telco operations rose by 5% year-on-year to P19.1 billion for the first nine months of 2018 (9M18), once again driven largely by PLDT Home and Enterprise while the Individual Wireless business continued to post gains and reverse past declines.
Consolidated service revenues for the period to the end of September totaled P111.9 billion, 4% higher than a year ago. Revenues in the third quarter reached P37.5 billion, the sixth consecutive quarter of sequential increases.
Excluding international and national long distance (ILD/NLD) revenues, service revenues amounted to P104.9 billion, up 7%. The third quarter of 2018 was the seventh consecutive quarter showing service revenue increases.
Consolidated EBITDA rose by 2% to P50.3 billion year on year, with EBITDA margin of 43%. Excluding Voyager, EBITDA was higher by 4% at P52.1 billion and margin at 45%.
Reported Net Income stood at P16.5 billion, impacted by, among others:
• Accelerated depreciation of P4.5 billion in connection with the shortened estimated useful life of network assets affected by PLDT’s network upgrade
• Revaluation gain of P1.1 billion on the remaining Rocket Internet shares
As of end-September 2018, Consolidated Net Debt and Net Debt to EBITDA stood at US$2.4 billion and 1.94x respectively. Gross Debt amounted to US$3.3 billion, of which only US$0.3 billion or 8% was unhedged. Fixed rate loans, post interest-rate swaps, comprised 89% of total loans while floating rate loans made up the balance of 11% of the total. The average interest cost (pre-tax) was 4.5%.
PLDT’s credit ratings remained at investment grade as of end-September 2018.
Setting the pace for growth, PLDT Home increased its revenues by 12% to P27.3 billion in the third quarter of 2018, accounting for 24% of the PLDT Group’s consolidated service revenues, 75% of which were contributed by data and broadband.
Service revenues of Enterprise grew 10% year on year by P2.6 billion to P28.4 billion in 9M18, representing 25% of total service revenues. Enterprise revenues were bolstered by a 12% increase to P18.2 billion in data and broadband which now comprise 64% of total Enterprise revenues. In particular, data center revenues grew by 21% while corporate data revenues rose 12%.
The third quarter registered the 14th quarter of sequential revenue growth for PLDT Home since the first quarter of 2015. Revenue gains in the third quarter would have been more substantial if Home installation activities had not been constrained by a Department of Labor and Employment (DOLE) Order that stopped the operations of 38 of PLDT’s service contractors that affected, among others, installation, repair/maintenance and call center services.
“Despite the extraordinary challenges posed by the DOLE Order, we have sustained the double digit growth of Home and Enterprise and added momentum to the recovery of our Individual Wireless business,” said PLDT and Smart Executive Vice President and Chief Revenue Officer Ernesto R. Alberto.
Individual Wireless services revenues continued to gain momentum – rising 4% to P45.5 billion as of 9M18. This is the fourth consecutive quarter of growth for this business group.
The 4% growth in 9M18 stands in sharp contrast to the 14% or P7.1 billion year-on-year decline registered in the first nine months of 2017. Effectively, this represents a combined turnaround of P8.8 billion.
The increase in revenues of Individual Wireless was boosted by growth in mobile internet revenues versus a year ago as mobile data traffic grew by 97% in the same period.
The combined Home, Enterprise and Individual Wireless service revenues added up to P101.2 billion in 9M18, accounting for 90% of total service revenues, and posting an 8% or P7.2 billion year on year increase. This represents a marked turnaround from the P1.8 billion year-on-year decline in 9M17 or a total positive swing of P9.1 billion.
As cited earlier, data and broadband continue to power the growth of the Home, Enterprise and Individual Wireless groups, representing 75%, 64% and 59% of service revenues, respectively. Revenues from this group of services grew 36% to P66.0 billion.
“The solid success of our YouTube promo is gratifying on several counts. First, it shows how much progress our network transformation efforts have made in the past two years. Particularly, the roll out of Smart’s LTE and LTE-Advanced services that have delivered to our customers the country’s best mobile video experience despite the massive increase in data traffic triggered by the promo. Second, it highlights how effectively the increased collaboration between our network and revenue groups is helping us attain our priority objectives. Third, it has placed our Individual Wireless business in a much better position to grow sustainably, powered by data and digital services, led by online video. Combined with our robust Home and Enterprise businesses, our Wireless business can then provide an even more powerful lift to the overall business of PLDT and Smart,” said PLDT and Smart Chairman, President and Chief Executive Officer Manuel V. Pangilinan.
“This will enable us to deal more effectively with the challenges that will be posed by heightened competition from players old and new. As PLDT celebrates its 90th anniversary this November, this will also give us the means and opportunity to further pursue the internal transformation that we must accomplish in order to thrive in the rapidly developing digital economy. Given these developments, we maintain our guidance that the full-year telco core income for 2018 (excluding Voyager) will be in the range of P23-24 billion, and, that our capex will reach P58 billion as budgeted,” he added.