Lower SMS, voice earnings drag down PLDT profit

Telecom giant PLDT Inc. saw a 26-percent year-on-year drop in its first quarter 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 statement.

Including nonrecurring 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 telco disclosed to the Philippine Stock Exchange yesterday.

Consolidated service revenue 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.

“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, while 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 revenue (net of interconnection costs) reached P7.8 billion, up by 12 percent, while enterprise service revenue (net of interconnection costs) rose by 13 percent to P8.5 billion.

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

The wireless consumer group posted service revenue of P14.7 billion, down 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.