PLDT’s core profit at P5.3B

INQUIRER FILE PHOTO

Telecom giant PLDT Inc. saw a 26 percent year-on-year drop in core net profit to P5.3 billion as lower text (SMS) messaging and voice call businesses gnawed on wireless revenues.

The three-month core earnings accounted for about a fourth of PLDT’s full-year guidance. “It is thus with watchful optimism that we are maintaining our guidance for full-year recurring core income at P21.5 billion,” PLDT and Smart Communications chair and chief executive officer Manuel V. Pangilinan said in a press statement on Friday.

Including non-recurring items, PLDT’s three-month net profit attributable to equity holders of parent firm slipped by 20.4 percent year-on-year to P4.95 billion, the company disclosed to the Philippine Stock Exchange.

Consolidated service revenues net of interconnection costs slipped by 7 percent year-on-year to P35.6 billion. But PLDT reported that quarter-on-year, the pace of decline has eased to 1 percent, “in line with the objective to arrest the negative momentum of the topline.”

“As we indicated earlier, our focus since the latter part of 2016 has been to stabilize the overall business, which involves stemming the decline of revenues and profitability in the wireless consumer segment, sustaining the upward momentum in the home and enterprise businesses and laying the ground for recovery through the digital transformation of our businesses. We’ve produced encouraging results in the first quarter this year, thanks to the continued strong growth posted by our home and enterprise businesses, whilst our wireless consumer group re-doubled efforts to break the negative momentum and hold the line,” Pangilinan said.

PLDT’s home and enterprise business units posted double-digit revenue increases year-on-year. Home service revenues (net of interconnection costs) reached P7.8 billion, up by 12 percent, while enterprise service revenues (net of interconnection costs) rose by 13 percent to P8.5 billion.

The combined revenues of home and enterprise groups now make up 46 percent of consolidated service revenues, compared to the 41 percent contribution of the wireless consumer business of Smart, TNT and Sun.

The wireless consumer group posted service revenues of P14.7 billion, 18 percent year-on-year due to declines in SMS and voice revenues. On a quarter-on-quarter basis, however, the rate of decline eased to 2 percent.

The combined subscriber base of Smart, TNT and Sun rose by about 400,000 in the first quarter of 2017 from end-2016.

“It is perhaps auspicious that the franchise of Smart Communications was renewed and extended for another 25 years by Congress, and then signed into law by President Rodrigo Duterte on April 21. We are grateful for this action by Congress, the Senate and the President. In a way, this marks a new beginning for Smart and indeed for PLDT as well. The next 25 years will be very different from the previous 25. The world today is turning deeply digital. And, as our results for the first quarter this year show, PLDT and Smart are moving with the times and making their digital pivot at an accelerating pace,” Pangilinan said.

“Led by our home and enterprise business units, we are at the cusp of crossing the 50 percent threshold in terms of the share of data and digital revenues out of total revenues. Also, as the quarter on quarter results in service revenues, EBITDA (earnings before interest, taxes, depreciation and amortization) and core income suggest, we are levelling off from our descent path, and are at the threshold of returning to the growth track in the second half of the year. Going digital is the difficult but only viable path to growth,” Pangilinan said.