PLDT ex­pects re­cov­ery to con­tinue in 2018

Business World - - CORPORATE NEWS - By Krista A.M. Mon­teale­gre Na­tional Cor­re­spon­dent

PLDT, Inc. ex­pects to sus­tain its re­cov­ery next year, as the telco gi­ant mulls rais­ing cap­i­tal ex­pen­di­tures above reg­u­lar lev­els with­out in­cur­ring ad­di­tional debt to ad­dress mount­ing crit­i­cism on slow In­ter­net speed.

In a brief­ing in Makati City on Thurs­day, PLDT Chair­man Manuel V. Pangili­nan said the fixed-line busi­ness cou­pled with cost-con­tain­ment mea­sures will drive growth next year, as the wire­less in­di­vid­ual busi­ness — while sta­bi­liz­ing — still re­quires more ef­fort to­wards op­er­a­tional im­prove­ments and ef­fi­cien­cies.

“It will be a better year next year. If it will be a sig­nif­i­cantly better year, I doubt it. PLDT will con­tinue to show signs of re­cov­ery,” Mr. Pangili­nan said.

For its cap­i­tal ex­pen­di­tures next year, PLDT may stick to the “nor­ma­tive level” of P46 bil­lion to P48 bil­lion — enough to be funded by its cash flow — or ramp up spend­ing with­out tak­ing on fresh debt.

That means PLDT would have to dis­pose as­sets to fi­nance any in­cre­men­tal spend­ing since its cash flow can only sup­port the reg­u­lar spend­ing level, Mr. Pangili­nan said.

PLDT has two key as­sets: the re­main­ing re­ceiv­ables worth P15 bil­lion from Metro Pa­cific In­vest­ments Corp. in re­spect to shares of Bea­con Elec­tric As­set Hold­ings, Inc. and a 6.1% stake in Ger­man startup Rocket In­ter­net SE val­ued at P12 bil­lion.

“We want to have an af­fir­ma­tive re­sponse to the crit­i­cism be­ing lev­elled to the in­dus­try that ser­vice is lousy, that we are not build­ing enough of this, we are not build­ing enough of that. I think we may have to at least con­sider that,” Mr. Pangili­nan.

For this year, PLDT kept its cap­i­tal ex­pen­di­ture bud­get at P38 bil­lion, but com­mit­ted to spend an­other P15 bil­lion for projects that will be fin­ished in 2018.

CORE PROFIT GUID­ANCE RAISED

Mr. Pangili­nan an­nounced PLDT up­graded its re­cur­ring core profit guid­ance to P22 bil­lion from the orig­i­nal P21.5 bil­lion, after the nine-month tally rose 5% year on year to P17.36 bil­lion from P16.55 bil­lion.

Re­cur­ring core in­come ex­cludes ex­tra­or­di­nary items such as as­set sales and ex­penses re­lated to its man­power re­duc­tion pro­gram.

In­clud­ing gains from the sale of shares in Bea­con and SPi Tech­nolo­gies, Inc., con­sol­i­dated core in­come climbed 7% to P23.2 bil­lion from a year ago.

Driv­ing PLDT’s growth was the home and en­ter­prise busi­ness units, post­ing dou­ble-digit growth rates in the first nine months of 2017. Com­bined, they now ac­count for 47% of rev­enues, sur­pass­ing the 41% con­tri­bu­tion of the wire­less busi­ness.

Net of in­ter­con­nec­tion ex­penses, home rev­enues grew 12% to P24.3 bil­lion, while en­ter­prise rev­enues in­creased 11% to P25.3 bil­lion. Quar­ter on quar­ter, the com­bined rev­enues of home and en­ter­prise seg­ments went up 5% and 2%, re­spec­tively.

The wire­less in­di­vid­ual busi­ness posted P44.2 bil­lion in ser­vice rev­enues — 14% lower than the first three quar­ters of 2016. Third- quar­ter rev­enues dipped 2% to P14.6 from the pre­vi­ous quar­ter due to sea­son­al­ity.

As a re­sult, con­sol­i­dated ser­vice rev­enues fell 4% to P107.3 bil­lion, but third-quar­ter ser­vice rev­enues were sta­ble at P36.1 bil­lion, which is 1% higher ver­sus the pre­vi­ous quar­ter.

Shares in PLDT rose 0.41% to close at P1,715 each on Thurs­day.

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