Philippines-based telecoms operator PLDT reported “encouraging” results for Q1 2018, recording a strong profit jump, even after excluding one-offs, and a modest increase in mobile revenue after a sharp fall a year ago.
Net income increased 39 per cent year-on-year to PHP6.9 billion ($133 million). The increase included a PHP3.4 billion gain on its Rocket Internet investment and non-core accelerated depreciation expenses of PHP2.4 billion related to network assets as part of its modernisation programme. Excluding these gains and exceptional charges, consolidated core income grew 13 per cent to PHP6 billion.
Service revenue rose 3 per cent from Q1 2017 to PHP36.7 billion. The company noted while the gain was modest, it represents a PHP3.8 billion swing over the past two years: in Q1 2017 service revenue dropped PHP2.7 billion compared with the previous year.
Manuel Pangilinan, PLDT chairman and CEO (pictured, right), said after several quarters of challenged revenue, the Q1 upswing is “definitely encouraging”, adding “we are keenly aware that it has taken great efforts and historic investments to get this far. The different factors for recovery are coming together. Our network transformation has made much headway and our customers are feeling the difference”.
In a statement Pangilinan said: “We are building on the gains of 2017, leveraging on the strength of our home and enterprise businesses, which achieved record high revenues in the first quarter. Both now account for nearly half of our total service revenues. At the same time, we are stabilising and raising the trajectory of our wireless [consumer] business which registered two sequential quarters of top-line growth.”
Its wireless consumer business posted a 2 per cent increase in service revenue in the quarter from the comparable 2017 period, when sales fell 18 per cent year-on-year. The turnaround was driven largely by increasing data revenue. The business contributed 40 per cent of consolidated revenues.
The company’s mobile unit Smart installed more than 1,300 additional LTE base stations in Q1 2018, raising its total count to about 10,000. Its 2018 capex budget was increased to PHP58 billion as part of PHP178 billion it earmarked in February to expand and upgrade its mobile and fixed networks over the next three years.
PLDT in March reported its net income for 2017 dropped 33 per cent from the previous year to PHP13.4 billion, which it said was mainly due to non-core capex-related expenses of PHP16.7 billion in connection with its transformation initiatives. Consolidated service revenue for the year fell 3 per cent year-on-year to PHP143.5 billion.
Over the past two years Smart and rival Globe Telecom have traded places as the Philippines’ market leader in terms of mobile connections. GSMA Intelligence figures showed each held a near 50 per cent market share at end-March.