PLDT earnings defy pandemic, exceed 2019 level, says MVP
MANILA, Philippines—Earnings of industry giant PLDT are poised to exceed 2019 numbers despite the impact of the COVID-19 pandemic and expectations were similarly “optimistic” for 2021.
The company was boosted by strong financial results in the first nine month of the year, with its wireless, enterprise and home internet segments all posting gains.
PLDT chair and CEO Manuel V. Pangilinan said growth was driven by massive capital spending over the years, most of it going to its fixed and wireless networks.
“We have made significant investments in our network, which is a competitive advantage to these revenue streams,” Pangilinan said at a media briefing on Thursday (Nov. 5).
Spending this year was expected to top P70 billion and follows an aggressive push to recover lost market share to rival Globe Telecom over recent years.
The strategy is translating to gains in earnings as PLDT said core profit from January to September this year rose 8 percent to P21 billion on the back of service revenues of P126.6 billion, up 9 percent.
Pangilinan said the company was expecting growth in the fourth quarter of the year, allowing PLDT to exceed its 2019 core profit of P27.1 billion.
PLDT’s three major business segments are consumer wireless, enterprise and home broadband.
Growing demand for internet during COVID-19 lockdowns and beyond propped up these areas, with data and broadband revenues reaching P90.8 billion, up 18 percent. These now accounted for 72 percent of all service revenues, PLDT said.
Bulk of the income comes from consumer wireless, which posted P60.8 billion in revenues, a gain of 15 percent.
Enterprise, which serves businesses, rose 6 percent to P30.9 billion and home broadband jumped higher by 10 percent to P30.3 billion.
Growth on a quarterly basis has been rising since 2018 but was interrupted by the health crisis, PLDT chief revenue office Al Panlilio said.
“If not for the negative impact of the lockdown it would have had 11 quarters of consecutive growth – no small feat and a testament to the hard work and dedication of the whole group,” he said in a statement.
The lockdowns also pushed back bills payments for PLDT. Chief financial officer Anabelle Chua said PLDT had collected about 86 percent of the figure. Nevertheless, PLDT set aside accounting provisions of P6.4 billion, up 67 percent from last year.
Even with looming competition from telco startup Dito Telecommunity and newly listed fiber internet company Converge ICT Solutions Inc., Pangilinan said 2021 could be better for business should the economy bounce back.
“Generally speaking, we are slightly more optimistic in terms of our 2021 prospects,” Pangilinan said.
Moving forward, PLDT will continue to invest heavily in mobile and also its fiber network. Its home fiber network alone has 8.3 million homes passed and it planned to add 500,000 fiber ports.
For the wireless business, subsidiary Smart Communications planned to build 2,000 cell sites next year.
This is faster than previous rollouts after government bodies this year agreed to cut the permitting process that has been a drag to the construction of new infrastructure.
“Smart has also tapped six tower companies to build the initial batch of 180 to 200 common towers, pursuant to the government’s common tower policy,” the company said.
PLDT expects new network investments to lift service quality after President Rodrigo Duterte threatened the telco incumbents anew during his State of the Nation Address last July.
PLDT cited twin crowdsourced reports from OpenSignal and Ookla showing improvements. In particular, it said OpenSignal showed significant gains in Smart’s 4G availability and speed.
The company is also among the shareholders of Voyager Innovations, which operates the PayMaya digital wallet.
PLDT said PayMaya, which has 26 million users across its platforms, has seen exponential growth during COVID-19. Its business partners have grown by 1,400 percent while government transactions alone are up 3,000 percent.
“PLDT and Smart have always been committed to supporting the government in its efforts to introduce pro-investment telecommunications policies including all measures to speed up the rollout of telecommunications infrastructure in the country,” Pangilinan said in a statement.
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