MVP: PLDT expects lower income for 'horrible' 2016

MANILA, Philippines – PLDT Incorporated lowered its core income guidance to P28 billion for 2016, after it booked a 50% plunge in the 3rd quarter, mainly due to lower revenues as well as higher costs and expenses.

"It's an annus horribilis (horrible year). Hopefully 2017 will be annus mirabilis (wonderful year)," PLDT chairman Manuel V. Pangilinan said in a media briefing in Makati City on Monday, November 14.

"We slightly lowered our core income guidance for 2016 to P28 billion due to the decline in EBITDA (earnings before income, taxes, depreciation, amortization), increases in financing costs and depreciation due to higher capex (capital expenditure), equity losses from the telco business acquired from SMC, offset by the net gain from the sale of PLDT's 25% interest in Beacon Electric Assets Holdings," Pangilinan told reporters. 

The Pangilinan-led telco saw its 3rd quarter core income cut in half to P4.04 billion, from P8.15 billion in the same period a year ago.

PLDT's revenues slid by 6% at P40.10 billion in the 3rd quarter of 2016, from P42.680 billion in the same period last year.

Expenses increased by 6% at P33.35 billion from P31.64 billion.

Losing subscribers

"This is a combination of many factors," Pangilinan said, admitting that one of these is the continuing decline in wireless revenues.

The PLDT chairman said both Smart Communications and TNT "lost about 17 million subscribers from 2013 to 2017."

The number of wireless subscribers dropped from 68 million in the 2nd quarter of 2016 to 65 million in the 3rd quarter, "mainly on competition," according to Pangilinan.

"We've seen the fiercest competition in the past months. Price points being brought down and disrupted, caused by intended competition. The group will now focus on quality [by] improving our network and service support platform," Eric Alberto, executive vice president at PLDT, said in the briefing.

PLDT's Alberto says price points being brought down and disrupted, caused by intensified competition @rapplerdotcom pic.twitter.com/pn3389Qe7C — Chrisee V. Dela Paz (@chriseedelapaz) November 14, 2016

 

The telco has set aside P48 billion this year to improve its network program for both mobile and fixed services. (READ: PLDT's income drops by 33% on Rocket Internet losses)

Setting a 2017 launchpad

Excluding the impact of the sale of the rest of its stake in SPi Global Holdings Incorporated and its 25% stake in Beacon, PLDT expects to end 2016 with a core income of P20 billion and an EBITDA of P60 billion.

"As we close 2016, and look to next year and beyond, I believe it is critical that PLDT establish a baseline position from which we could pivot to a higher plane in the coming years," Pangilinan told reporters.

The P60-billion EBITDA and P20-billion core income "are the take-off points for PLDT to have starting 2017 onwards," the PLDT chief said.

"You've seen the thrust PLDT has been making on the home and enterprise side. We have to continue that. We have to accelerate the conversion of legacy revenues to data revenues," he added.

As part of the 2017 launchpad, Pangilinan said he will organize a search committee for the telco's new president. (READ: PLDT president and CEO Nazareno to retire end-2015)

"We should have a complete management in place in 2017. This will be the final wave," Pangilinan said on the sidelines of the briefing. – Rappler.com