PLDT H1 profit grows 2% to P20B
MANILA, Philippines – Philippine Long Distance Telephone Company (PLDT) said Tuesday, August 5, its first-half earnings rose from a year ago, helped by foreign exchange and derivative gains.
PLDT reported its consolidated net income rose 2% to P20 billion ($454.94 million*) from P19.7 billion last year.
Excluding one-time gains, core net income amounted to P19.8 billion ($454.64 million), a 2% increase from P19.4 billion ($445.45 million) in the first half of 2013.
PLDT attributed the increase to higher service revenues, equity share in earnings of subsidiaries and lower financing costs.
Consolidated service revenues for the first 6 months also grew 2% to P82.5 billion ($1.90 billion) as revenues from the data and broadband businesses more than offset the decline in the international and national long distance streams.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin for the period was at 46%, higher than 45% in the second half of 2013, PLDT reported. Consolidated EBITDA for the first half was 4% lower than the year-ago level, at P38.2 billion ($877.89 million).
Shifting growth source
SMS revenues continued to be under pressure from growth of over-the-top messaging services. PLDT also saw improvement in its postpaid business, which bodes well for data adoption but generates lower margins vis-à-vis prepaid.
These forces, expected to persist in the near term, would likely moderate consolidated revenue growth and soften EBITDA margins, PLDT president and CEO Napoleon Nazareno explained.
Wireless subsidiaries Smart Communicationsand Digitel Mobile together continued to lead the industry in terms of both revenues and number of subscribers, PLDT said. Its wireless service revenues of P57.9 billion ($1.33 billion) in the first half were slightly higher than last year's P57.6 billion ($1.32 billion), reflecting the continued growth of non-SMS data and the growth in cellular voice revenues.
The PLDT group’s total cellular subscriber base at the end of June was 68.9 million: Smart had 25.6 million subscribers under its mainstream Smart brands; value brand Talk ‘N Text ended with 28.1 million subscribers; and there were 15.3 million Sun Cellular subscribers.
The group’s postpaid cellular subscriber base grew by over 179,000, rising to about 2.6 million at the end of June, while the prepaid base stood at 66.3 million.
Postpaid revenues accounted for 20% of cellular revenues, having grown 14% to P10.4 billion ($238.85 million) in the first half.
Broadband, data and Internet revenues for the first 6 months totaled P15.4 billion ($353.63 million), a 22% year-on-year growth. Broadband and Internet accounted for 19% of group service revenues.
Wireless broadband revenues, exclusive of mobile Internet revenues, increased by 7% to P4.9 billion ($112.51 million) from P4.6 billion ($105.62 million) last year.
PLDT group’s fixed broadband businesses generated P6.7 billion ($153.83 million) in revenues for the first half, up 13% from P5.9 billion ($135.46 million) in the same period of 2013.
“The market is beginning to see the influx of lower cost smartphones which can only increase penetration and data usage. Over 20% of our subscriber base now own a smartphone and mobile Internet usage surged 121% in the first half of the year to over 15,000 terabytes. We are now directing our efforts to stimulating data usage amongst prepaid subscribers,” Smart Chief Wireless Adviser Orlando Vea said.
Meanwhile, fixed line service revenues for the first 6 months, net of interconnection costs, increased to P28.1 billion ($645.23 million), or 6%, from P26.5 billion ($608.50 million) last year.
Combined international long distance and national long distance businesses of PLDT, representing 14% of fixed line revenues, declined by 6%. Local exchange carrier revenues, which contributed 29% of fixed line revenues, were higher by 1% at P8.2 billion ($188.26 million).
“We recognize the present state of flux of our businesses and thus proceed to optimize efforts in pushing the growing segments, managing the stable ones, while long-tailing our legacy businesses. It is clear our future lies in the broadband/data and Internet space, evidenced in our numbers this year, and in recent past years. In this regard, we are reviewing a number of exciting opportunities in this space and would anticipate making an announcement soon,” PLDT Chairman Manuel Pangilinan said.
PLDT’s dividend policy amended
PLDT’s board of directors also approved the amendment of the company’s dividend policy increasing the regular dividend payout from 70% to 75% of core earnings.
Reflecting this change, PLDT declared an interim dividend of P69 ($1.59) per share equivalent to 75% of the first half.
Also, PLDT’s consolidated free cash flow for the first 6 months emained robust at P18.1 billion ($415.76 million).
Consolidated capital expenditures (capex) for the period amounted to P8.1 billion ($186.06 million), P3.3 billion ($75.8 million) higher than the capex for the same period of 2013.
Capital expenditures for 2014 are projected to be from P31 billion ($712.07 million) to P32 billion ($735.04 million).
Ongoing network initiatives include the continued expansion of 3G and LTE coverage, increase in fiber footprint, and reconfiguration and reinforcement of network infrastructure to better withstand severe weather disturbances. – Rappler.com
*($1 = 43.55)