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Higher expenses drag PLDT’s first-quarter income

President-CEO Pangilinan passing baton to Panlilio

By Arjay L. Balinbin, Senior Reporter

PLDT, Inc. reported on Thursday an attributable net income of P5.80 billion for the first three months of 2021, down 1.84% from  P5.91 billion in the same period a year ago, mainly due to higher expenses.

“The first-quarter results look pretty good. We are on target in terms of our telco core income for the year of P29 billion to P30 billion,” PLDT Chairman, President and Chief Executive Officer Manuel V. Pangilinan said at an online press briefing.

In a statement to the stock exchange, PLDT said its first-quarter telco core income, which excludes the impact of asset sales and Voyager Innovations, Inc., increased 9.02% to P7.50 billion from P6.89 billion in the same period in 2020.

The company saw its total revenues climb 9.80% to P47.92 billion from the P43.65 billion reported in the same period a year earlier. Service revenues rose 9.28% to P45.68 billion from P41.80 billion previously, with data and broadband services accounting for around 76% of the total.

PLDT’s expenses increased 16.05% in the first quarter to P37.75 billion from P32.53 billion in the same period last year. Expenses cover selling, general and administrative expenses; de-preciation and amortization; cost of sales and services; asset impairment; and interconnection costs.

PLDT Chief Finance Officer Anabelle L. Chua said the recently signed Republic Act No. 11534 or the Corporate Recovery and Tax Incentives (CREATE) law that lowered the income tax rates from 30% to 25% also aided the company’s performance.

“With respect to the current year, the impact of the 25% versus 30% tax rate was close to P400 million for the quarter,” she noted.

The company’s consolidated EBITDA  (earnings before interest, taxes, depreciation and amortization) increased 7% year on year to P23.3 billion, excluding MRP (manpower reduction program) expenses, “driven by higher service revenues.”

“EBITDA margin was at 51% in the first quarter of 2021,” the company noted.

Out of the capital expenditure (capex) commitment of up to P92 billion for 2021, PLDT spent over P20 billion in the first quarter, Mr. Pangilinan said.

Network upgrades, the company said, made up bulk of the capex spend. “The unrelenting rollout of fiber, 5G and 4G/LTE networks to support business demand underpin the 2021 capex commitment.”

As for the second quarter, Mr. Pangilinan said: “Revenues for April and the first week of May are looking good, so revenues for the second quarter are likely to be similar to, if not higher than, the first quarter growth.”

Mr. Pangilinan still expects Voyager Innovations to turn a profit by 2024.

“The strategy is concentrated on the local markets. Profitability is possible by 2024,” he said.

“If they accomplish P1 trillion or more than a trillion of gross transaction value [this year] on both sides, merchants and consumers, then they are closer to positive EBITDA by 2023 or even earlier. It depends on the volume,” Mr. Pangilinan explained.

Voyager’s portfolio includes digital payments firm PayMaya Philippines, Inc., mobile remittance brand Smart Padala, and financial technology firm FINTQnologies Corp. whose products include digital banking, digital aid and finance, and digital lending platforms.

Also on Thursday, Mr. Pangilinan said he will soon retire as president and chief executive officer of PLDT.

He said the matter will be discussed at PLDT’s annual shareholders’ meeting “scheduled next month.”

“I will retire as president and CEO of PLDT and pass the baton over to Al so I will stay as chairman,” Mr. Pangilinan said, referring to Smart President and Chief Executive Officer and PLDT Chief Revenue Officer Alfredo S. Panlilio.

“Of course, that’s subject to shareholders’ consent,” he noted.

PLDT shares closed 1.12% higher at P1,264 apiece on Thursday.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

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