Wireless business remains headache for PLDT

WHILE its net profits widened by a third during the first half of the year, PLDT Inc. still took a hit from its wireless business with Chairman Manuel V. Pangilinan saying the telecommunications company is not “out of the woods” yet.

On Thursday Pangilinan said the firm’s net income stood at P16.5 billion, a 33-percent increase from the P12.46 billion it booked the year prior, as impairments relating to its investment in Rocket Internet were significantly reduced.

Consolidated core income during the said period was lower by 2 percent to P17.4 billion, while recurring core income was 1 percent higher at P11.9 billion.

“We have made steady progress in the first half of this year in stabilizing our overall business and positioning the group to return to a growth path, largely on the back of data and broadband services,” Pangilinan added during a news briefing.

In the same comparative periods, revenues declined by 7 percent to P79.02 billion, from P85.28 billion due to the continued tapering off of earnings from its legacy businesses.

Data, broadband and digital services, on the other hand, continued to help boost the company’s topline, contributing a total of 46 percent to total earnings.

In terms of business units, the home and enterprise verticals kept on setting the pace for service revenues, posting double-digit growth rates in the first half of 2017. Home revenues grew by 12 percent to P15.8 billion, while enterprise revenues increased by 11 percent to P16.8 billion.

The wireless consumer business, on the other hand, posted a 16-percent drop to P29.6 billion.

“We’ve followed through on the initial gains in our efforts to stabilize the overall business of the group by stanching the decline of the wireless-consumer business and sustaining the strong growth of our home and enterprise businesses,” Pangilinan said. “While it is still early in the game, our focused, collaborative efforts, efficiently utilizing the resources of the entire group to pursue clearly defined goals, have produced encouraging results.”

Meanwhile expenses dropped by 10 percent to P62.75 billion, from P69.65 billion on the back of cost-reduction programs.

With this, Pangilinan added the company is on track to reach its full year recurring core profit guidance of P21.5 billion.

“Our home and enterprise business units have led the way, in growing for at least six consecutive quarters already, because they have succeeded in executing their digital shift much earlier,” he said. “We are now focused intently on doing the same for our wireless-consumer business. The interim results have lent greater confidence in maintaining our guidance for full-year recurring core income at P21.5 billion.”

The company has also revised its capital expenditures guidance for the year, now at P38 billion from P46 billion, which, Pangilinan explained, is a result of a timing difference on the issuance of purchase orders.

He noted while he is happy with the first-half results, the company has a long way to go before finally “getting out of the woods”.

“Personally, I’m satisfied. We’re on the right track. I did point out that there are still many tasks ahead of us, particularly on the wireless side of the business,” Pangilinan said. “My main worry there is the significant data-traffic volume for the first half, and the growth in revenues does not match the growth in data traffic. Maybe there is a huge effort needed to monetize the incremental growth in traffic. The task is a significant one.”

Meanwhile, Pangilinan added the sale of his stake in the Philippine Daily Inquirer would be negotiated with the Prieto family.

“We’ve reached an agreement with Mrs. [Marixi] Prieto in terms of our stake in the Inquirer, and I believe the document should be executed pretty soon,” he said. “I’d say we could probably sign next week or so.”

When asked if the transaction could reach a billion pesos, Pangilinan replied, “More or less.”

“The negotiations are with her family,” he said. “They’re probably going to sell to Ramon Ang.”