Mindanaotoday.com | Profit at PLDT increases by 1%
MANILA – Notwithstanding persistent macroeconomic challenges, PLDT Inc. (PLDT) (PSE: TEL) (NYSE: PHI) today announced that Gross Service Revenues grew 3% to ₱149.8 billion while Consolidated Service Revenues (net of interconnect costs) grew by ₱1.1 billion to an all-time high of ₱142.3 billion in the first nine months of 2023. In the third quarter, Consolidated Service Revenues grew by ₱0.3 billion to ₱47.8 billion compared with the second quarter.
Data and broadband, which grew by 4%, or ₱4.1 billion, to ₱116.9 billion, contributed 82% of consolidated service revenues.
“Now more than ever, we are witnessing how the power of technology and digital services impact Filipinos’ standard of living, with innovations bringing convenience, comfort, productivity, and security to improve overall quality of life. Our mission at PLDT is to enable our countrymen with the tools and connectivity needed to enhance their digital lifestyles,” said Alfredo S. Panlilio, PLDT and Smart President and CEO.
Consolidated EBITDA grew by 4% or ₱2.8 billion year-on-year to ₱78.4 billion in the first nine months, also an all-time high, due to higher revenues and lower opex. EBITDA margin was at 52% for the period. Recording five consecutive quarters of improvement, consolidated EBITDA is trending to exceed again the ₱100-billion mark this year. Telco Core Income, excluding the impact of asset sales and Maya Innovations Holdings (formerly Voyager Innovations Holdings), reached ₱26.1 billion, up ₱0.5 billion or 2% from the same period last year, in-line with guidance.
Reported Income reached ₱27.9 billion in the first nine months of 2023 up by 1% yearon-year. Consolidated Net Debt at the end of the first nine months of 2023 amounted to ₱252.1 billion; net-debt-to-EBITDA stood at 2.44x, down from 2.48x as at the end of 2Q23. Gross Debt stood at ₱274.5 billion, with maturities well spread out. Only 15% of Gross Debt are denominated in U. S. dollars and 5% are unhedged. PLDT credit ratings from Moody’s and S&P Global remained at investment grade.
PLDT was also among companies cited in TIME Magazine’s list of World’s Best Companies 2023. It was the only Philippine telco on the list and ranked highest among the six cited Philippine companies in terms of Sustainability. Released by TIME Magazine and its analytics partner Statista, the inaugural list names 750 most outstanding companies from different industries around the world which were independently evaluated based on revenue growth, employee satisfaction surveys, and rigorous environmental, social, and governance (ESG) performance metrics. For maintaining the highest ethical standards and best corporate governance practices, PLDT again garnered the 3-Golden Arrow Award at the ASEAN Corporate Governance Scorecard (ACGS organized by the Institute of Corporate Directors (ICD).
PLDT also recently received a strong score in the 2023 Children’s Rights and Business
Benchmark by the Global Child Forum (GCF), which has been benchmarking companies
on how well they address children’s rights in their operations. Based on GCF’s
independent scoring, PLDT has achieved “Leader” status with an overall score of 8.9,
topping Asia and ranking third best among the world’s telcos.
Home: Fiber revenues sustain double-digit growth Demonstrating that opportunities to grow in this market remain, Home’s fiber-only service revenues grew by 10%, or ₱3.6 billion to an all-time high of ₱39.3 billion in the first nine months of 2023. Fiber-only revenues accounted for 87% of total Home revenues of ₱45.3 billion, which were 2% or ₱1.0 billion higher compared with the same period last year.
PLDT’s total fiber subscribers as of end-September 2023 stood at 3.14 million, with
210,000 fiber net additions for the first nine months. The third quarter saw an increase
in net adds to about 88,000 from around 42,000 in the second quarter.
As of end-September 2023, PLDT’s total number of fiber ports rose to 6.15 million
covering over 18,000 barangays nationwide. Working with city governments in various
regions to boost productivity and hybrid learning among communities, PLDT deployed
the fastest fiber connectivity in cities and municipalities including major tourism hubs in
the country such as the Island Garden City of Samal in Davao, Siargao Island in
Tacloban, Bantayan Island in Cebu, and Cagayan de Oro.
Enterprise: Data and ICT are key revenue drivers During the first nine months of 2023, the B2B arm of the PLDT Group continued its growth trend, reaching an all-time high of ₱34.8 billion in service revenues, driven by a significant growth in its ICT business and its Fixed and Wireless solutions. Noteworthy in the ICT business-to-business space was a robust 28% growth in the Multi-Cloud and
Tech Services space, while the Data Center segment continues its steady growth vs the
same period last year, solidifying the PLDT group’s aspiration to the be the hyperscaler
hub in Asia.
ePLDT, the ICT subsidiary of PLDT Group, continues to see a revenue increase largely
driven by hyperscalers that have colocated in VITRO data centers, which is the
Philippines’ widest data center network.
ePLDT’s 11th data center, VITRO Sta. Rosa (VSR), is on track for launch in Q2 of 2024,
almost a year ahead of other planned data centers. Once fully operational, the
Philippines’ largest hyperscale data center will have a total of 4500 racks and 50MW
power capacity. VITRO Sta Rosa has already been receiving several colocation requests
from a diverse range of industry leaders including hyperscalers, content delivery
networks, banks, BPOs, carriers and government agencies.
On the multi-cloud front, ePLDT’s roster of innovative solutions for enterprises now
includes artificial intelligence solutions such as Talkbots, which are capable of
understanding and responding intelligently to 11 different languages. PLDT itself uses
conversational AI in, among other areas, customer collection where efficiencies have
significantly improved.
ePLDT has also launched the ePLDT Pilipinas Cloud (ePPC), becoming the first Filipino
corporation to offer a sovereign cloud. The ePPC infrastructure will host highly sensitive
government data and applications in a trusted cloud environment to help fast-track the
digital transformation of the country’s public sector, a priority of the current
administration.
Driving the growth for the Fixed business pillar are managed networking solutions and
global connectivity, contributing 21% increase vs the same period last year, mostly due
to the substantial uptake of SD-WAN technology and increased adoption of private
network connectivity.
On the Wireless business front, international messaging revenues increased 57%,
buoyed by a recently finalized single aggregator partnership, solidifying a foothold in the
growing international A2P space. Mobility solutions continue to spur optimism via a 20%
increase in IoT connections, driven by increased use cases propelled by big ticket IoT
partnerships with Toyota Connected Car, Maya POS and Foodpanda.
Individual Wireless: Posting growth with increased data usage among subs, new
products PLDT’s Individual Wireless segment posted revenues of ₱60.6 billion in the first nine
months of 2023, higher year-on-year by ₱0.3 billion, as mobile data revenues grew by
5% to ₱52.4 billion for the period, driven by a 15% year-on-year increase in mobile data
traffic to 3,630 Petabytes.
Quarter-on-quarter, the segment posted ₱0.1 billion growth, despite the third quarter
being a traditionally slow quarter.
Wireless Consumer Mobile Data revenues now account for 86% of total Individual
Wireless revenues.
The Individual business has started to manifest positive trends amidst a rational
competitive environment, the recognized superiority of the PLDT group network and the
results of various initiatives being implemented.
The improved performance after the SIM registration deadline has been driven by
structural revenue optimization, marketing campaigns which increased data usage
among subscribers, including those in support of the country’s recent hosting of the FIBA
Basketball World Cup, and sponsorships for musical events such as the staging of the
Broadway hit Hamilton and concert of K-Pop girl group TWICE; and new product offers
such as Triple Data, Super Value Campaign and Plan 999+. During the quarter, Smart
became the first Philippine telco to offer e-SIMs to both postpaid and prepaid customers.
Further improving the accessibility of essential digital services for Filipinos, Smart is also
collaborating with Google Cloud to become one of the first communication services
providers in the Asia Pacific region to adopt Telecom Subscriber Insights, Google
Cloud’s AI-powered solution that ingests data from various sources, provides contextual
insights on subscribers’ propensity to consume services, and presents personalized
recommendations to their devices for activation.
As of the end of September, Smart has registered 55.2 million mobile subscribers, higher
than its closest competitor, with TNT once again being the leading SIM brand.
Network: Philippines’ most extensive fiber footprint
The PLDT Group has further expanded its total fiber footprint to over 1.1 million cable
kilometers, consisting of over 0.2 million cable kilometers of international fiber and about
0.9 million cable kilometers of domestic fiber as of end-September 2023. Homes passed
reached more than 17.3 million homes in 69% of the country’s municipalities/towns.
PLDT’s fiber infrastructure supports Smart’s 73.8 thousand base stations deployed
nationwide. Smart’s network covers around 97% of the population.
Capex for the first nine months of 2023 amounted to ₱55.3 billion, lower than the ₱67.3
billion for the same period last year. Capex intensity ratio (capex as a percentage of
revenues) was at 37%, lower than the 46% for the same period last year. This is in line
with the goal of reducing capex spend in the near- to medium-term, and attain positive
free cash flow position as soon as practicable.
Guidance for the year remains at ₱80-85 billion, including approximately ₱11.0 billion of
the ₱33.0 billion capex commitments from prior years, net of advances.
Tower sale and leaseback milestones
In connection with the sale and leaseback of 1,012 telecommunications towers and
associated passive telecommunications infrastructure to Frontier Tower Associates
Philippines Inc. on March 10, 2023, PLDT announced on October 5th the completion of
the sale of the first 230 towers forming part of this portfolio. A corresponding cash
consideration of ₱2.8 billion was
received by the PLDT Group.
The sale and leaseback of towers are in line with the PLDT Group’s strategy to push
for an asset-light balance sheet, while providing superior network quality and an even
better customer experience. It further supports the government’s program of building a
strong digital infrastructure program to allow Filipinos to access affordable and reliable
internet services.
Including the ₱1.1 billion cash consideration received on November 3rd from the closing
of another 91 towers, PLDT has received ₱77.9 billion in tower sales proceeds to date.
Maya’s ecosystem fuels digital banking growth
Maya, the #1 digital bank and digital payment processor in the Philippines, is leading the
way as it revolutionizes financial services in the country. Maya sets the industry
benchmark with an astounding 2.6 million depositors, with deposits totaling ₱23.5 billion
as of end-September 2023. Driving this remarkable growth is its high-engagement
banking model that strategically leverages its payment ecosystem to deliver innovative
services and unparalleled value to customers.
For consumer banking, Maya has offered depositors higher interest rates credited daily,
boosted based on wallet transactions. With depositors and borrowers transacting 2 to 4
times more than payment-only users, enterprise partners like Smart have started
harnessing Maya’s high-engagement banking to drive transactions and propel growth.
Through Maya Business, Maya enables merchants to accept all forms of digital
payments like cards and QR in the Philippines. Maya Business is the leading online and
offline payment processor for cards and QRPh transactions by number of transactions
processed in the Philippines as of end-September 2023. Maya now provides the MSME
segment with banking products like savings accounts and working capital loans.
As part of its commitment to drive financial services adoption, Maya has significantly
ramped up its lending initiatives, introducing Maya Credit and Maya Personal Loans for
consumers, Negosyo Advance and Negosyo InstaCash for MSMEs, alongside Maya
Flexi Loans for small and medium enterprises (SMEs), all fueled by transactional data
within Maya’s ecosystem. As of end-September 2023, Maya has disbursed ₱16 billion in
loans for the past twelve months.
Sustainability: Reinforced commitment to doing business responsibly
In the third quarter, the PLDT Group continued to reinforce its commitment to embed
sustainability into its business.
PLDT remains committed to implementing decarbonization measures across the whole
group. This includes PLDT’s existing decarbonization roadmap which aims to reduce
Scopes 1 and 2 emissions by 40% by 2030. Initiatives focused on the use of renewables,
green technology in the network and energy efficiency achieve twin-goals of cost
optimization and reduction of GHG emissions while maintaining the quality of our
products and services.
In support of UN SDG 13 (Climate Action) and SDG 15 (Life on Land), PLDT continues
to pursue efforts focused on biodiversity conservation leveraging on partnerships (UN
SDG 17) to achieve progress. These include tree planting and reforestation activities
supporting Maynilad Water Services, Inc., the water and wastewater services provider
of cities and municipalities that form the West Zone of the Greater Manila Area. PLDT
is also collaborating with various stakeholders for the conservation of a nature-based
climate solution, the Agusan Marsh Wildlife Sanctuary (peatlands), a carbon-sink that
has been identified as a RAMSAR Wetlands of International Importance.
The use of electronic devices is closely related to the provision of telco services, and
electronic waste or e-waste an area of environmental concern. With waste management
having been identified by PLDT’s stakeholders as one of the company’s key material
ESG topics, PLDT launched ‘Be Kind. Recycle.’, a recycling and waste management
program focusing on the collection, treatment and proper disposal of e- waste. Initially
piloted with employees during the celebration of Environmental, Health and Safety
Week, the Group has expanded the program to include e-waste collection activities in
HOME sales blitzes, deployment of e-waste bins in selected Smart mall stores, and
programs with Enterprise customers. Supporting circularity at the community level, the
PLDT Group has also recently teamed up with the United Nations Industrial Development
Organization (UNIDO), the Department of Environment and Natural Resources,
Ecowaste Coalition, Integrated Resources Inc., and the city of Baguio, for a Treatment,
Storage and Disposal (TSD) facility in Baguio City – the first local government initiated
TSD outside Metro Manila. This initiative supports UN SDG 12 (Responsible
Consumption and Production) and UN SDG 17 (Partnerships).
The PLDT Group is also leading the way in opening discussions on advanced technology like artificial intelligence in the home. In an event held as one of the highlights of the Philippine Digital Convention 2023 organized by PLDT Enterprise, a session centered around “Family Perspectives on Smart Home and Artificial Intelligence” brought together thought leaders on technology and parenting and emphasized the importance of fostering meaningful connections and responsible use of technology, in line with UN SDG 9 (Industry, Innovation and Infrastructure) SDG 16 (Peace, Justice and Strong Institutions) and SDG 17 (Partnerships).
In connection with its commitment to create a safe online environment for its customers, PLDT and Smart continue to undertake measures focused on data privacy and cybersecurity. Among its customers, the group continues to be a leading champion of child online safety, having pursued a multi-pronged approach that includes collaboration with legislators, law enforcement, child protection advocates and investment in a custombuilt platform that detects and blocks child sexual abusive and exploitative material (CSAEM). In 2022 alone, PLDT and Smart prevented 1.3 billion user attempts to access
online CSAEM. PLDT and Smart count UNICEF, the Internet Watch Foundation, and the Canadian Centre for Child Protection, among its partners. Enabling community-based reporting, the group, through its B2B arm PLDT Enterprise, has also helped the Council for the Welfare of Children set up the MAKABATA 1383 Helpline for the reporting of child abuse and child rights violations. PLDT and SMARThave also collaborated with the local government units of Angeles City in Pampanga, General Santos City, Cagayan de Oro City, and Iligan City on efforts to develop local ordinances and expand grassroots programs on anti-OSAEC (Online Sexual Abusive and Exploitative Content) measures.
PLDT and Smart have also supported the local government of Siargao by donating solar lights to light up the island’s Catangan Bridge.
PLDT and Smart also continue to play an active role in building disaster-resilient Filipino communities through the nationwide rollout of the Ligtas Kit, an all-in-one communications package that extends emergency communications support to communities during disasters. PLDT and Smart also continue to foster a culture of innovation alongside academic and professional excellence through the Smart Wireless Engineering Education Program or SWEEP, the first and longest-running industryacademe linkage in the Philippines, now on its 20th year.
Championing inclusivity, PLDT and Smart, with ATRIEV, continue to train more persons with visual impairment in using the Android Accessibility Suite program to aid them in maximizing the use of their smartphones and help improve the quality of life of the visually impaired sector through inclusive technology. PLDT and Smart also continue to partner with leading tech platforms for ‘eBiznovation’, a digital upskilling-to-ecommerce program for local entrepreneurs, MSMEs and coops, including those in the agricultural and fishery sector. To date, PLDT has trained over 10,000 MSMEs and cooperatives, and successfully onboarded 100 MSMEs to e-commerce platforms Shopee and TikTok Shop.
As part of transforming each employee into a sustainability champion, PLDT continues to conduct educational sessions to ensure a common understanding of ESG. One such program was the Community Learning Series titled “Beyond Going Green: “Sustainability Everyday for Everyone”. The webinar discussed what sustainability is (“debunking the myths”) and how each can support the overall PLDT goal of attaining ESG leadership. Outlook PLDT Chairman Manuel V Pangilinan maintains a positive view about PLDT’s performance for the full 2023 amidst a tough economic environment.
“The Company has done reasonably well against a tough inflationary environment, relatively high interest rates, and a slowing economic growth. In this regard, we are guiding full year Core Net Income of ₱34.0 billion, compared with ₱33.3 billion in 2022,” Pangilinan said.