November 27, 2022

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‘PLDT on course to meet profit target despite headwind’

3 min read

PLDT Inc. is on track to meet its core profit target of 33 billion pesos this year after reporting 25.4 billion pesos at the end of September, up 10 percent from the same period last year.

PLDT Chairman Manuel V. Pangilinan said Thursday that the target numbers “will be met” amid concerns about mounting economic headwinds.

“At this time when consumer wallets are shrinking — when consumer income is under threat and government finances are in question — investment is becoming a primary recovery tool. Therefore, investments from both government and private sector are needed to fuel the economy,” Pangilinan said.

Alfredo S. Panlilio, President and CEO of PLDT and Smart Communications, said the company’s performance in the third quarter showed that the business continues to perform well despite external challenges such as Covid-19, inflation and high interest rates, and typhoons. Still, Panlilio said, “So far, all indications are that full-year performance will be above last year’s, especially as the fourth quarter is typically good.”

From January to September this year, the company’s reported net profit was P27.4 billion, up 45 percent. This includes pre-tax gains of 22.3 billion pesos from the sale of the towers through the third close. Core income, excluding the impact of asset sales and Voyager innovations, rose to 25.4 billion pesos over the same period.

Consolidated service revenue rose 4.5 percent to a nine-month high of 141.9 billion pesos as consumers embraced their digital lifestyles in the new normal.

During the same period, consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 6 percent to P75.4 billion, also an all-time high. Consolidated EBITDA tends to exceed P100 billion for the full year despite the tough economic conditions.

“Enterprises seem to be our bright spot as we continue to support businesses in their digital transformation and help make the Philippines the next great digital hub of ASEAN. Our 11th and by far largest data center is also on track to be completed by the end of 2023,” said Panlilio.

Meanwhile, PLDT Home continues to grow despite increasing challenges for people’s wallets due to rising inflation and the ongoing impact of Typhoon Odette.

“Our goals are quite ambitious as we strive for big goals even though we know it won’t be easy,” added Panlilio. “We are aware of the headwinds we face and this will certainly not be the last time we will encounter challenges.”

“The key here is that while we continue to grow revenue by responding to our customers’ needs, we are attempting to establish discipline by focusing on strong efforts to control our operational costs and improve operational efficiencies.”

At the same time, PLDT is currently reviewing its 2022 consolidated capital expenditure (capex) which could exceed the initial capital expenditure forecast of P85 billion.

“We are also monitoring our investment levels, particularly the impact of the weakening peso on our dollar-denominated debt and imported investments, even investments made in previous and current years. With the disciplined efforts of our transformation office, we are trying to soften our topline a bit and tightly control our costs,” added Panlilio.

On the sale of telecom towers and associated passive telecom infrastructure, PLDT said ownership of a total of 4,435 towers, or 75 percent of the 5,907 towers affected by the sale-and-leaseback transaction, was transferred to the tower companies on Oct. 3 and a A total cash payment of 57.7 billion pesos was received.

PLDT expects additional closures before the end of the year, with the final closure expected to be completed by Q1 2023. In addition to the 5,907 towers sold or available for sale, additional telecom towers are being considered for sale.

Proceeds from the sale of the towers will support operating and capital expenditures. The transaction is timely, PLDT said, as it allows it to avoid additional debt amid a rising interest rate environment.

Photo credit: Photo of the BusinessMirror file

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