Moody’s keeps ratings, stable outlook on PLDT

FILE PHOTO

MANILA, Philippines—Credit ratings firm Moody’s Investors Service maintained Philippine Long Distance Telephone Co.’s ratings and outlook, saying that the telco’s financial performance last year was “in line” with expectations, a statement showed.

Moody’s, which earlier gave PLDT a Baa2 rating and stable outlook, cited gains in PLDT’s newer broadband business, higher revenue and lower operating expenditures. PLDT on Tuesday said core profit rose by 5 percent to P38.7 billion in 2013, as service revenue rose by 3 percent to P164.1 billion.

However, its reported net income, which included non-recurring items, dipped 2 percent to P35.4 billion. The company said the decline was mainly due to the P900 million in losses arising from Supertyphoon “Yolanda” late last year.

“PLDT’s reported consolidated service revenue grew by 3 percent year on year, due largely to the growth in its fixed and wireless broadband and corporate data businesses,” Yoshio Takahashi, a Moody’s assistant vice president and analyst, said in the statement.

“The revenue growth in these businesses offset declines in revenue from international and domestic voice segments,” he added. At the same time, the company’s reported consolidated earnings before interest, taxes, depreciation, and amortization (Ebitda) during the year improved 3 percent year-on-year, while consolidated Ebitda margin for service revenue remained flat at 47 percent.

Higher service revenue and lower cash operating expenditures (opex) offset an increase in handset subsidies, Moody’s noted.

“We expect PLDT to maintain low-single-digit Ebitda growth in 2014, supported by revenue growth in its broadband and data businesses, by leveraging on its dominant positions in the fixed line, broadband, and wireless markets,” said Takahashi, also the lead analyst for PLDT.