PLDT reports 16.7-B net profit, down 3%, from revenues of 138 B

PLDT, Inc. (PLDT)’ reported yesterday its consolidated service revenues rose 7% year on year in the first quarter of 2019 to 138 billion, driven by its resurgent wireless individual business while net income went down 3 percent to 16.7 billion due to lower gain in the valuation of PLDT’s investment in Rocket Internet.

The telco’s core Income amounted to 17.2 billion, up 6% from last year. This increase is also stronger than the 2% full year growth recorded for 2018.

The service revenues of PLDT’s three major business groups – Wireless Individual, Home, and Enterprise – now account for 94% of total service revenues and reached 1 35.8 billion, up 12% compared to the same quarter in 2018. The 12% increase is an acceleration from the 6% year-on-year growth registered for the full year 2018.

Data and Broadband service revenues grew 21% on like-forlike basis to 124.4 billion and now account for 68% of total service revenues (excluding International).

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA), excluding exceptional manpower rightsizing program (MRP) costs and including the impact of PFRS16 (the new accounting standard for leases which took effect on 1 January 2019), increased 16% versus Q1 2018 to 120.1 billion.

This was due to the combined impact of higher service revenues and lower cash operating exxpenses.

EBITDA margin improved, reaching 51% compared with last year’s 46%, the company said.

Consolidated Net Debt stood at US$2,451 million whilst Net Debt to EBITDA was 1.92x for 1Q 2019. Gross Debt was US$3,313 million, of which 12% is US$denominated.

Only 7% of total debt is unhedged. Fixed-rate loans comprised 89% of total debt (post-interest rate swaps). Average interest cost (pre-tax)

stood at 4.7%.

For the first quarter of 2019, close to 70% of PLDT’s service revenues came from data and broadband.

Furthermore, the telco’s Individual Wireless business, which started to take off in the last quarter of 2018, gained more momentum in the first quarter this year, “surpassing even our expectations,” according to Manuel V. Pangilinan, Chairman and Chief Executive Officer of PLDT, Inc. and Smart Communications.

Among the major business groups, Individual Wireless set the pace, boosting revenues by a 18% to 116.9 billion, on the back of rising data usage and a surge in subscriber growth.

Growth was driven by the prepaid segment, which accounts for about three-quarters of the wireless business, increasing revenues by 28%.

Individual Wireless added 3.4 million subscribers in the first quarter of 2019.

When combined with new subscribers acquired in the last quarter of 2018, the total increase for the past two quarters add up to 5.8 million. Total subscribers reached 63.4 million as of endMarch 2019.

A growing number of subscribers have become active data users as more and more shift to using web-capable smart phones.

Approximately two thirds of PLDT’s subscribers now own smartphones, of which about 70% are data users.

As a result, broadband and data revenues rose to nearly 111 billion and now make up 65% of wireless revenues. This growth was powered first, by the continued increase of video usage and second, by the mounting popularity of mobile gaming.

Riding on the momentum generated by the Free YouTube promo in 2018, Smart introduced its Video Everyday data packages late last year.

Further enhanced in 1Q2019, these offers have driven up subscriber take up of various video services.