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Staying on the growth path: PLDT’s core income up 6% for the 1st half of 2018

by PLDT Public Affairs | Aug 13, 2018
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PLDT’s core income from telco operations grew 6% year-on-year to P13 billion for the first six months of 2018, driven largely by contributions from the major business segments PLDT Home and the Enterprise Group.
 
PLDT Home increased its revenues in the first half of 2018 by 14% year-on-year to P18 billion, an improvement of the 12% growth posted in the first half of 2017. Growth was underpinned by the strong demand for its fiber-powered broadband service.
 
The Enterprise Group posted revenues of P18.7 billion, raising its growth rate to 9% year-on-year in the first half of 2018 from 7% year-on-year for the1st quarter of 2018. Growth continued to be driven by increasing wireless data and cloud and other ICT services.
 
Combined, Home and Enterprise accounted for 50% of total service revenues and rose by 11% or P3.8 billion year-on-year.
 
Continuing its turnaround, the Individual Wireless business group posted revenues of P29.9 billion, a 2% increase year-on-year, driven chiefly by growing mobile data revenues.
 
Consolidated Service Revenues (net of interconnection costs) rose 4% to P74.2 billion. Revenues in the second quarter of 2018 reached P37.5 billion, the highest level attained on a quarterly basis since 2Q 2016. This also marks the fifth consecutive quarter of steady sequential improvements in service revenues, during which service revenues increased over P1.8 billion. This follows a period covering five consecutive quarters starting 2Q 2016 during which service revenues declined by P2 billion – a turnaround of about P3.8 billion.
 
Consolidated EBITDA grew 4% to P33.3 billion in 1H 2018. Excluding Voyager, EBITDA increased by 7% to P34.6 billion while EBITDA margin improved to 45% from 43% in the 1st half of 2017.
 
Reported Net Income stood at P11.8 billion, 29% less than the previous year mainly due to a higher gain from asset sales in 1H 2017.
 
According to PLDT and Smart Chairman, President and CEO Manuel V. Pangilinan,“We have stayed on the growth path through the mid-point of this year by banking chiefly on the momentum of our Home and Enterprise businesses. Our Individual Wireless business has taken further steps forward, making gradual additions to its revenues and subscriber base. Life has, however, become more complicated due to developments like the order of the Department of Labor and Employment for PLDT to hire over 7,300 employees from 38 of our service contractors. The injunction order granted by the Court of Appeals and the court’s reversal of certain findings relating to labor-only contracting provide relief, but considerable work still has to be done to resolve this matter with finality.”
 
“Despite these headwinds, the favorable factors for our continued recovery remain in place. Through creative and persistent efforts, we can make these factors work for us and enable us to attain our goals this year. In light of these developments, we maintain our guidance that full-year telco core income for 2018 (excluding Voyager) will be in the range of P23-24 billion, and that our capex will come to around P58 billion this year as budgeted,” Pangilinan added.
 
Data and Digital keep powering growth
 
Data/broadband and digital services continued to be the main growth drivers for all three business segments. Combined, these services accounted for P39.6 billion in revenues, 54% of 1H 2018 total service revenues, up from 46% in 1H 2017.
 
Fixed Home broadband revenues jumped 58% to P13.2 billion, while mobile internet revenues surged 29% to P12.3 billion. Corporate data and data center revenues increased 13% to 10.9 billion. As a result, data/broadband and digital services increased their share of revenues to 75%, 64% and 45% for the Home, Enterprise and Individual business segments, respectively.
 
“We have crossed an important threshold now that our data and digital services generate more than half of our total service revenues. Moving forward, our task is to accelerate our digital pivot by pursuing whenever possible converged digital initiatives across our business segments – Home, Enterprise and Individual Wireless,” said PLDT EVP and CRO Ernesto R. Alberto.
 
Accelerating the network roll-out
 
In the first half of 2018, PLDT and Smart accelerated the roll out of the group’s fixed and mobile networks, providing a stronger lift for revenue growth.
 
As of end-June 2018, PLDT increased the coverage of its fiber-power fixed broadband network to 5.1 million homes passed, up from 4 million homes passed as of end-2017. This is nearly 100% of its full-year 2018 target. PLDT boosted its capacity by almost 86% to 1.86 million ports, or, nearly 85% of its full-year target of 2.2 million ports.
 
Meantime, Smart installed over 3,900 new LTE bases stations, boosting its total count by 45% to over 12,600. This has enabled Smart not only to improve its LTE coverage but also to activate LTE-Advanced (LTE-A), which offers even higher data speeds, in more areas of the country. To complement its LTE roll out, Smart also added over 500 3G base stations, raising the total to over 10,400. The stepped-up roll-out of LTE and 3G base stations will enable Smart to meet its commitment to the government to provide high-speed wireless data services in over 90% of the country’s cities and municipalities earlier than end-2018.
 
Underpinning PLDT and Smart’s fixed and mobile network roll-out was the expansion of PLDT’s fiber optic transmission and distribution network. In the first half of 2018, PLDT added over 29,000 kilometers of fiber cable, 97% of its full-year 2018 target. This increased its fiber footprint to about 204,000 kilometers, further boosting the reach, capacity and resiliency of PLDT’s fiber network.
 
“The beneficial impact of these network roll-out efforts has been enhanced by the tighter coordination between our business and network organizations, and, between the fixed and mobile engineering teams. As a result, we are prioritizing the roll-out in areas where there are ready customers. Also, our deployment of network facilities – particularly fiber – more efficiently boost the expansion efforts of both our fixed and mobile network,” said PLDT and Smart SVP for Network Planning and Engineering Mario G. Tamayo.

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