PLDT Q2 profit surges 85% on Beacon divestment

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PLDT, Inc. registered an 85% increase in its attributable net income in the second quarter, due to the divestment of its equity interest in Beacon Electric Asset Holdings, Inc. last June and growth in its data and broadband businesses.

In a regulatory filing, PLDT said its net income attributable to equity holders stood at P11.57 billion for the April to June period, higher than the P6.25 billion recorded during the same period last year.

“I’m satisfied because we are on the right track. However, there are still many tasks ahead of us, particularly in the wireless side. Revenues did not match the growth in traffic. There is a huge effort to monetize incremental growth in traffic. And I think if we continue to grow, the promise is there but the task is a significant one,” PLDT Chairman, President and Chief Executive Officer Manuel V. Pangilinan said in a press briefing in Makati City on Thursday.

For the first half, the telecommunications giant’s consolidated core net income fell 2% to P17.4 billion year-on-year.

“Excluding gains from assets sales, EBITDA (earnings before interest, taxes, depreciation and amortization) adjustments (including manpower reduction program expenses) and related tax adjustments, recurring core income stood at P11.9 billion, 1% higher year on year and in line with the full year guidance of P21.5 billion,” PLDT said.

Consolidated service revenues fell 5% to P37.68 billion in the second quarter, bringing the first half figure to P71.2 billion. “Though 6% lower year on year, service revenues for the first semester indicated that the downward trend of the top-line for the past 6 quarters had been arrested, with second quarter service revenues levelling off and equaling those of the first quarter at P35.6 billion,” the company said.

PLDT highlighted the double-digit growth in service revenues of PLDT Home and Enterprise, which accounted for 46% of the consolidated revenues. PLDT Home revenues went up 12% to P15.8 billion in the first half, while Enterprise revenues climbed 11% to P16.8 billion.

On the other hand, the Wireless Consumer business, which includes Smart, TNT and Sun, reported a 16% drop in revenues to P29.6 billion in the six-month period. Quarter on quarter, second quarter revenues rose 1% to P14.9 billion, which PLDT said is the first time in eight quarters that Wireless Consumer revenues saw an increase.

Wireless service revenues for the second quarter fell to P20.6 billion, from P24 billion a year ago. This brought the six-month total 15% lower to P7.88 billion, “mainly as a result of lower revenues from mobile services, home broadband, and MVNO (Mobile Virtual Network Operator) and other services, partially offset by higher revenues from our digital platforms and mobile financial services.”

Mobile wireless revenues likewise slipped 16% to P42.59 billion in the first half, as voice services dropped 23% to P15.65 billion “due to lower domestic and international voice revenues due to the availability of alternative calling options and other over-the-top (OTT), services such as Viber, Facebook Messenger and similar services.”

PLDT said mobile data revenues, which include mobile Internet, mobile broadband and other data services, rose 3% to P12.99 billion in the first half.

Mobile Internet service revenues increased by 20% to P9.7 billion, due to higher smartphone ownership and greater data adoption by subscribers.

However, mobile broadband revenues fell 29% to P3.2 billion in the first half, due to a drop in subscribers mainly from Sun Broadband.

“Data usage is rising rapidly as our customers — whether individuals or companies — are increasingly adopting multiple digital services, including everything from video entertainment to corporate security solutions. To serve this growing need, we are utilizing our unmatched wired, wireless and digital infrastructure to give customers the best possible data experience,” PLDT Group Chief Revenue Officer Ernesto R. Alberto was quoted as saying in a statement.

For the fixed line business, revenues increased by 8% to P38.66 billion in the first half of 2017, from P35.94 billion last year, “due to higher revenues from our data and miscellaneous services, partially offset by lower voice service revenues.”

International service revenues dropped 19% to P3.38 billion in the first half, as more people opted to use Facebook Messenger or Viber over long distance services.

PLDT also lowered its capital expenditure (capex) guidance for the year to P38.1 billion from the previously announced P42.8 billion.

PLDT Chief Financial Officer Anabelle L. Chua said the decrease in capex has to do with “timing,” such as purchase of orders and commitments.

The P15-billion capex commitments made in 2017 will be completed and booked next year.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

Shares in PLDT rose 4.71% to P1,712 each on Thursday. — P.P.C. Marcelo