• PLDT Q2 profit drops 33%


    Dividend payout cut to 60% of core income

    LED Philippine Long Distance Telephone Co. (PLDT) on Tuesday said its net profit dropped by a third in the second quarter of the year after it booked charges for its investment in Berlin-based Rocket Internet.

    However, it said earnings from its mobile phone, data and landline businesses were largely unchanged from the previous year.

    In a press briefing in Makati, PLDT chief finance officer Anabelle Chua said net income reached P6.2 billion in April-June 2016, down by 33 percent from P9.3 billion during the same period a year ago.

    Core net income reached P10.4 billion in the second quarter, up by 9 percent from P9.6 billion; while revenues dropped slightly to 42.5 billion from P42.6 billion.

    “It’s a long-term haul. Not much we can do in the short-term. I think we just have to give Oliver a little bit of time,” PLDT CEO and Chairman Manuel V. Pangilinan said, referring to Rocket Internet CEO Oliver Samwer.

    The latest figures brought PLDT’s first half consolidated net income to P17.7 billion and core net income to P17.7 billion.

    Consolidated revenues amounted to P85.2 billion in the first half from P85.1 billion in the same period in 2015. Consolidated EBITDA decreased 13 percent to P30.8 billion, while EBITDA margin for the first half stood at 38 percent.

    PLDT raised its capital spending target to P48 billion to pay for facilities needed to use frequencies the carrier agreed to buy from San Miguel Corp. in May.

    The company has boosted spending to a record to raise data capacity for subscribers using social media such as Facebook and apps like Viber and Snapchat.

    PLDT and rival Globe Telecom Inc. acquired the telecommunications business of San Miguel Corp. for about 70 billion pesos, including debt, giving them equal access to the 700 megahertz spectrum.

    The bandwidth is crucial to enhance wireless internet speed and quality. The nation’s competition commission has said it will pursue a comprehensive review of the transaction.

    The carrier also said it would cut its dividend payout to 60 percent of core income from 75 percent to compensate for an increase in spending.

    “In view of our current elevated capital expenditures, the resources required to support the transaction with SMC, and our efforts to manage debt levels, we have lowered our dividend payout to 60 percent of core income,” Pangilinan said.

    As of end-June 2016, the Group’s consolidated net debt and net debt to EBITDA stood at $2.7 billion and 1.96x, respectively. Gross debt stood at $3.4 billion, 37 percent of which is US dollar-denominated.

    Fixed-line business firm
    PLDT’s-fixed line business remains firmly on the growth path, posting service revenues net of interconnection costs of P30.9 billion in the first half of 2016, up by 7 percent from last year.

    The share of data and broadband to total fixed revenues has risen to 59 percent of the total, from 57 percent during the same period a year ago.

    Wireless service revenues amounted to P52.6 billion, lower by 5.1 percent from last year, which was largely attributed to the decline in SMS and voice revenues.

    Revenues from data, broadband and digital platforms increased by 29 percent to P14.1 billion, raising its share of total wireless revenues to 27 percent from 20 percent in the previous year.

    Revenues from data and broadband rose to P29.3 billion, while mobile Internet revenues rose 55 percent to P8.1 billion.

    Fixed broadband revenues grew 16 percent to P9.0 billion as the number of subscribers grew 14 percent to over 1.3 million, with net additional subscribers of over 162,000.

    Corporate data and data center revenues grew 22 percent year-on-year to P6.5 billion.

    “Our Fixed Line and Enterprise businesses have gathered momentum in building their data and digital revenues, with the share of these revenues now reaching nearly 60 percent of the total,” Pangilinan said.

    “This places PLDT in a unique position to lead in the development of the country’s digital economy. Within this context, we are maintaining our core income guidance of P30 billion for 2016,” he said.


    Please follow our commenting guidelines.

    Comments are closed.