Financial Performance - Service revenues reached ₱53421 million, a 2% increase year-over-year[81] - EBITDA (ex-MRP) grew by 2% year-over-year to ₱27900 million, maintaining a 52% margin[4, 26] - Depreciation and Amortization increased by 12% year-over-year to ₱13001 million[4, 81] - Net Financing Costs increased by 33% year-over-year to ₱4100 million[4] - Telco Core Income decreased by 6% year-over-year to ₱8800 million[4] Segment Performance - Home Fiber revenues increased by 7% year-over-year to ₱14700 million[12, 13] - Enterprise Corp Data & ICT revenues increased by 1% year-over-year to ₱8800 million[17] - Mobile Data revenues remained broadly flat year-over-year at ₱18800 million[9, 21] Operational Highlights - Home Fiber net adds reached 101k[12] - Maya achieved profitability, contributing positively to earnings growth, with net income attributable to Maya at ₱127 million[7, 29] - 5G data traffic surged 81% year-over-year[23] Investments and Debt - 1Q25 capex stood at ₱10800 million[32] - Debt Balance is ₱270700 million with Net Debt/EBITDA at 248x[36]

PART I – FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=9&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The report includes unaudited consolidated financial statements for Q1 2025 and audited statements as of December 31, 2024 - The report includes unaudited consolidated financial statements for the three months ended March 31, 2025 and 2024, and audited statements as at December 31, 2024[18](index=18&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=9&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of Q1 2025 financial performance, including revenue, net income, and key indicators [Financial Highlights and Key Performance Indicators](index=10&type=section&id=Financial%20Highlights%20and%20Key%20Performance%20Indicators) Q1 2025 highlights: 2% revenue growth, 8% net income decline, 2% EBITDA growth, and stable 52% EBITDA margin Q1 2025 Consolidated Financial Highlights (vs Q1 2024) | Metric | Q1 2025 (million Php) | Q1 2024 (million Php) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | 55,277 | 54,224 | 2% | | **Net Income** | 9,064 | 9,893 | (8%) | | **Core Income** | 8,893 | 8,931 | 0% | | **Telco Core Income** | 8,776 | 9,320 | (6%) | | **EBITDA** | 27,865 | 27,315 | 2% | | **EBITDA Margin** | 52% | 52% | 0% | Key Operational Data (as of March 31, 2025 vs March 31, 2024) | Subscriber Type | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Mobile Subscribers** | 58,608,463 | 58,962,966 | (1%) | | - Prepaid | 56,300,981 | 56,785,718 | (1%) | | - Postpaid | 2,307,482 | 2,177,248 | 6% | | **Broadband Subscribers** | 3,945,937 | 3,711,094 | 6% | | - Fixed Line Broadband | 3,507,947 | 3,255,012 | 8% | | - Fixed Wireless Broadband | 437,990 | 456,082 | (4%) | - Net cash from operating activities **increased by 3% to Php24,545 million**, while payments for property and equipment decreased by 14% to Php16,142 million[25](index=25&type=chunk) [Performance Indicators](index=11&type=section&id=Performance%20Indicators) Non-GAAP performance indicators like EBITDA, Core Income, and Telco Core Income are defined for assessing financial performance - **EBITDA:** Measured as net income excluding items like depreciation, financing costs, and taxes. It is used by management to assess business unit performance and is a common metric for comparison in the telecommunications sector[28](index=28&type=chunk) - **Core Income:** Defined as net income attributable to equity holders, adjusted for non-recurring items such as foreign exchange gains/losses, derivative gains/losses, and asset impairments[29](index=29&type=chunk) - **Telco Core Income:** Further refines Core Income by adjusting for the performance of digital platform interests like Maya Innovations Holdings (MIH) and Kayana Solutions. This metric is a key basis for determining shareholder dividend payouts[30](index=30&type=chunk) [Management's Financial Review](index=12&type=section&id=Management%27s%20Financial%20Review) Reconciliation of Q1 2025 consolidated net income to non-GAAP metrics: EBITDA, Core Income, and Telco Core Income Reconciliation of Net Income to EBITDA (Q1 2025 vs Q1 2024) | (in million Php) | 2025 | 2024 | | :--- | :--- | :--- | | **Consolidated net income** | 9,064 | 9,893 | | Add: Depreciation and amortization | 13,001 | 11,642 | | Add: Financing costs – net | 4,336 | 3,377 | | Add: Provision for income tax | 2,740 | 3,299 | | Other adjustments | (1,376) | (296) | | **Consolidated EBITDA** | **27,865** | **27,315** | Reconciliation of Net Income to Core Income and Telco Core Income (Q1 2025) | (in million Php) | 2025 | | :--- | :--- | | **Consolidated net income** | 9,064 | | Adjustments (FX gains, derivatives, etc.) | (171) | | **Consolidated core income** | **8,893** | | Adjustments (Share in MIH/Kayana losses) | (117) | | **Telco core income** | **8,776** | [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Q1 2025 consolidated revenues grew 2%, but net income fell 8% due to higher expenses and segment declines Segment Performance Summary (Q1 2025 vs Q1 2024) | Segment | Revenues Change | Net Income Change | EBITDA Change | | :--- | :--- | :--- | :--- | | **Wireless** | (2%) | (24%) | 7% | | **Fixed Line** | 5% | (24%) | 5% | | **Consolidated** | 2% | (8%) | 2% | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintains solid liquidity, with increased operating cash flow and stable debt ratios Consolidated Cash Flows (Q1 2025 vs Q1 2024) | Cash Flow Activity (in million Php) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | 24,545 | 23,767 | | Net cash used in investing activities | (15,851) | (16,707) | | Net cash used in financing activities | (4,918) | (10,568) | - **Total interest-bearing financial liabilities stood at Php283,066 million** as of March 31, 2025, a slight **1% increase** from year-end 2024[113](index=113&type=chunk)[122](index=122&type=chunk) - The company declared a regular cash dividend of **Php47 per common share** in Q1 2025, totaling **Php10,155 million**[129](index=129&type=chunk) - PLDT confirms **compliance with all debt covenants** as of March 31, 2025[125](index=125&type=chunk) PART II – OTHER INFORMATION [Other Information](index=44&type=section&id=Other%20Information) Updates on significant corporate activities, including PGIH's increased stake in Multisys and ongoing legal matters - On April 2, 2025, PLDT's subsidiary PGIH acquired an additional **5% interest** in Multisys for **Php257.5 million**, increasing its total equity interest to **50.74%**[156](index=156&type=chunk) - The report refers to specific notes for updates on key ongoing matters, including the Sale and Leaseback of Telecom Towers (Notes 9 & 10), the payment demand on Dito (Note 26), the DOLE Compliance Order (Note 26), and the petition against the Philippine Competition Commission (Note 11)[157](index=157&type=chunk) ANNEXES [Aging of Accounts Receivable](index=45&type=section&id=Aging%20of%20Accounts%20Receivable) As of March 31, 2025, gross accounts receivable were Php49,413 million, with 48% over 91 days past due Consolidated Accounts Receivable Aging as of March 31, 2025 | Category (in million Php) | Total | Current | 31-60 Days | 61-90 Days | Over 91 Days | | :--- | :--- | :--- | :--- | :--- | :--- | | **Corporate subscribers** | 21,200 | 7,313 | 3,146 | 973 | 9,768 | | **Retail subscribers** | 16,715 | 6,261 | 978 | 281 | 9,195 | | **Total Gross Receivables** | **49,413** | **19,588** | **4,478** | **1,467** | **23,880** | | Less: Allowance for credit losses | 18,051 | | | | | | **Total Net Receivables** | **31,362** | | | | | [Financial Soundness Indicators](index=46&type=section&id=Financial%20Soundness%20Indicators) PLDT's key financial soundness indicators remained stable as of March 31, 2025, with minor improvements in liquidity and debt ratios Key Financial Ratios | Ratio | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Current Ratio** | 0.36:1.0 | 0.34:1.0 | | **Net Debt to Equity Ratio** | 2.34:1.0 | 2.37:1.0 | | **Net Debt to EBITDA Ratio** | 2.48:1.0 | 2.52:1.0 | | **Interest Coverage Ratio** | 3.65:1.0 | 3.96:1.0 | | **Return on Equity** | 27% | 29% | | **EBITDA Margin** | 52% | 52% | Consolidated Financial Statements [Consolidated Statements of Financial Position](index=49&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of March 31, 2025, total assets were Php626,668 million, total liabilities Php509,872 million, and total equity remained stable Consolidated Balance Sheet Highlights (in million Php) | Account | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **626,668** | **623,275** | | Property and equipment | 318,342 | 318,069 | | Cash and cash equivalents | 13,759 | 10,011 | | **Total Liabilities** | **509,872** | **506,540** | | Interest-bearing financial liabilities | 283,066 | 281,586 | | **Total Equity** | **116,796** | **116,735** | [Consolidated Income Statements](index=51&type=section&id=Consolidated%20Income%20Statements) For Q1 2025, total revenues increased 2% to Php55,277 million, but net income decreased 8% to Php9,064 million Consolidated Income Statement Summary (in million Php) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | **55,277** | **54,224** | | Service revenues | 53,421 | 52,195 | | **Total Expenses** | 40,549 | 38,621 | | **Income Before Income Tax** | 11,804 | 13,192 | | **Net Income** | **9,064** | **9,893** | | Basic EPS (Php) | 41.71 | 45.40 | [Consolidated Statements of Cash Flows](index=54&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw net cash from operating activities increase 3%, investing activities decrease 5%, and financing activities decrease 53% Consolidated Cash Flow Summary (in million Php) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **24,545** | **23,767** | | **Net Cash used in Investing Activities** | **(15,851)** | **(16,707)** | | - Purchase of property and equipment | (15,534) | (17,980) | | **Net Cash used in Financing Activities** | **(4,918)** | **(10,568)** | | **Net Increase (Decrease) in Cash** | **3,748** | **(2,120)** | Notes to Consolidated Financial Statements [Note 4. Operating Segment Information](index=116&type=section&id=Note%204.%20Operating%20Segment%20Information) The company operates three segments: Wireless, Fixed Line, and Others, with Fixed Line leading Q1 2025 revenue and profit Segment Results for Q1 2025 (in million Php) | Segment | Total Revenues | Net Income / Segment Profit | | :--- | :--- | :--- | | **Wireless** | 26,117 | 2,249 | | **Fixed Line** | 33,467 | 7,934 | | **Others** | 0 | 113 | | **Inter-segment Transactions** | (4,307) | (1,232) | | **Consolidated** | **55,277** | **9,064** | [Note 9. Property and Equipment](index=130&type=section&id=Note%209.%20Property%20and%20Equipment) This note details PPE composition and movement, with a net book value of Php318,342 million, and updates on telecom tower sales - The net book value of property and equipment was **Php318,342 million** as of March 31, 2025[529](index=529&type=chunk) Cumulative Sale of Telecom Towers (as of March 31, 2025) | Metric | Amount | | :--- | :--- | | **Number of Towers Sold** | 6,726 | | **Cash Consideration** | Php87,319 million | | **Gain on Sale and Leaseback** | Php34,172 million | - Remaining telecom towers with a net book value of **Php4,547 million** are classified as 'Assets held-for-sale'[537](index=537&type=chunk) [Note 11. Investments in Associates and Joint Ventures](index=136&type=section&id=Note%2011.%20Investments%20in%20Associates%20and%20Joint%20Ventures) As of March 31, 2025, investments in associates and joint ventures totaled Php52,854 million, with an update on the PCC legal dispute Carrying Value of Key Investments (as of March 31, 2025) | Investment | Carrying Value (million Php) | | :--- | :--- | | **VTI, Bow Arken and Brightshare (JV)** | 33,653 | | **MediaQuest PDRs (Associate)** | 9,186 | | **MIH (Maya) (Associate)** | 6,875 | - On April 5, 2024, PCEV invested an additional **US$15.3 million (Php857 million)** in MIH (Maya), increasing its ownership to **37.66%**[558](index=558&type=chunk) - The legal petition against the Philippine Competition Commission (PCC) regarding the 2016 acquisition of SMC's telecom assets remains **pending before the Supreme Court**[575](index=575&type=chunk)[592](index=592&type=chunk) [Note 20. Interest-bearing Financial Liabilities](index=167&type=section&id=Note%2020.%20Interest-bearing%20Financial%20Liabilities) As of March 31, 2025, total interest-bearing financial liabilities were Php283,066 million, with new Green and Social Loan facilities Total Long-Term Debt (as of March 31, 2025) | Category | Amount (million Php) | | :--- | :--- | | **Long-term debt (non-current)** | 262,901 | | **Long-term debt (current portion)** | 20,165 | | **Total** | **283,066** | - The company secured a **Php1 billion Green Loan** and a **Php4 billion Green Loan** in March and May 2024, respectively, to fund its fiber network modernization and expansion[681](index=681&type=chunk) - A **Php2 billion Social Loan** was secured in October 2024 to fund network expansion in Geographically Isolated and Disadvantaged Areas (GIDAs)[682](index=682&type=chunk) - PLDT was in **compliance with all of its debt covenants** as at March 31, 2025[692](index=692&type=chunk) [Note 26. Provisions and Contingencies](index=194&type=section&id=Note%2026.%20Provisions%20and%20Contingencies) This note outlines ongoing legal proceedings, including a DOLE order, DITO dispute, and ETPI arbitration - The Supreme Court affirmed a Court of Appeals decision to remand a DOLE order regarding the regularization of **7,344 contractor workers**. The case was sent back to the DOLE Regional Office for further proceedings to determine which workers performing installation, repair, and maintenance services should be regularized. PLDT filed a Motion for Partial Reconsideration, which is **pending**[776](index=776&type=chunk)[783](index=783&type=chunk)[786](index=786&type=chunk) - Regarding DITO's complaints to the NTC and PCC, Smart and DITO have executed a memorandum of agreement on bypass activities, and Smart has provided additional interconnection capacity. The matter is **still under investigation by the PCC**[796](index=796&type=chunk)[798](index=798&type=chunk) - A long-standing arbitration with Eastern Telecommunications Philippines, Inc. (ETPI) over various claims and counterclaims totaling approximately **Php2.9 billion** and **Php2.8 billion**, respectively, remains **suspended pending dismissal** as part of a broader agreement with Globe[774](index=774&type=chunk)[775](index=775&type=chunk) [Note 27. Financial Assets and Liabilities](index=203&type=section&id=Note%2027.%20Financial%20Assets%20and%20Liabilities) This note details financial instruments and risk management policies for liquidity, foreign currency, and interest rate risks - The company manages foreign currency risk as a substantial portion of its capital expenditures and debt is foreign currency-denominated. As of March 31, 2025, **14% of total consolidated debt was in U.S. Dollars**[831](index=831&type=chunk)[835](index=835&type=chunk) - After accounting for hedging instruments and U.S. Dollar cash balances, the unhedged portion of consolidated debt was approximately **5%** as of March 31, 2025[835](index=835&type=chunk) - The company manages interest rate risk through a mix of fixed and variable rate debt. As of March 31, 2025, approximately **60% of consolidated debt was at variable rates**[841](index=841&type=chunk)[848](index=848&type=chunk) Maturity Profile of Financial Liabilities (Undiscounted) as of March 31, 2025 | (in million Php) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | **Debt (Principal & Interest)** | 383,244 | 16,789 | 93,921 | 73,603 | 198,931 | | **Lease obligations** | 77,244 | 16,614 | 20,103 | 15,709 | 24,818 | | **Trade and other obligations** | 135,361 | 133,258 | 276 | 21 | 1,806 | | **Total** | **595,849** | **166,661** | **114,300** | **89,333** | **225,555** |

Financial Data and Key Metrics Changes - Net service revenue increased slightly year on year, with gross revenue reaching $27.9 billion, up 2% from last year [4] - EBITDA grew by 2% to $7.9 billion, driven by strength in fiber and ICT segments, along with prudent cost management [4][11] - Telco core income was recorded at $8.8 billion, down 6% year on year due to increased depreciation linked to strategic investments [4][12] - Core income remained steady year on year, supported by Maya's positive contribution, which turned profitable this quarter [12][13] Business Line Data and Key Metrics Changes - Home segment revenue rose by 4% year on year to $15.2 billion, with fiber now accounting for 97% of home revenues, up from 92% in 2024 [5][8] - Enterprise segment total revenue remained steady at $11.9 billion, with corporate data and ICT revenues slightly up by 1% [5][9] - ICT revenue grew by 16% year on year, now accounting for over 22% of enterprise revenues, up from 19% a year ago [6][9] - Mobile revenues decreased slightly due to lower packet Wi-Fi usage, but 5G adoption and data traffic are on the rise, indicating potential for future growth [6][11] Market Data and Key Metrics Changes - Mobile data, fiber, corporate data, and ICT now account for 89% of total revenues, up from 88% in 2024 [7] - 5G data traffic surged by 81% year on year, with 5G device adoption growing by 60% quarter on quarter [11] - The churn rate remains below 2%, one of the lowest in the industry, reflecting effective customer retention strategies [8][59] Company Strategy and Development Direction - The company aims to pursue steady revenue growth, disciplined expense management, asset monetization, and prudent capital allocation [5] - PLDT is focusing on expanding its fiber footprint and enhancing its digital infrastructure, including the launch of the Asia Direct Cable to improve international connectivity [22][24] - Maya, the fintech driver, is positioned for sustainable growth with its all-in-one ecosystem combining payment, banking, and lending services [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's market position despite near-term challenges, supported by strong operational fundamentals and strategic investments [33] - The company anticipates continued growth in the home segment and is optimistic about the enterprise segment recovering as new capacities come online [36][40] - Management highlighted the importance of maintaining a strong focus on customer experience and product innovation to drive future growth [72] Other Important Information - PLDT's net debt stood at $270.7 billion, with a net debt to EBITDA ratio of 2.48 times, slightly improved from the previous year [15] - The company retains investment-grade credit ratings, underscoring investor confidence in its financial health [17] - PLDT is committed to generating positive free cash flow by 2026 and reducing leverage to around a 2.0x net debt to EBITDA ratio over the medium term [17] Q&A Session Summary Question: What is the outlook for the enterprise segment regarding Pogo-related revenue pressures? - Management indicated that the impact from Pogo cancellations is expected to continue until at least Q3, but efforts are being made to mitigate revenue loss [38] Question: Can you provide updates on VITRO's capacity take-up and profitability contributions? - A significant hyperscale customer has already signed for 4 megawatts of capacity, with ongoing discussions for further capacity fill [40] Question: What is the profit momentum expected for Maya for the rest of the year? - Management expects steady and gradual margin improvement rather than a sharp increase, as operating leverage continues to strengthen [42] Question: How is the mobile business expected to perform in the second quarter? - Management noted that while the market has softened, they continue to see growth in traffic, which is expected to help monetize demand [44] Question: What is the current water usage rate for VITRO Santa Rosa? - Water usage is currently at normal levels, with expectations for an increase as AI workloads ramp up [47] Question: What is the target loan to deposit ratio for Maya? - There is no specific target, but the company aims to maintain a conservative loan to deposit ratio compared to traditional banks [50] Question: How does the company plan to improve working capital efficiency? - Strategies include asset monetization, consolidation of central offices, and seeking strategic partners in data centers [82]

Financial Data and Key Metrics Changes - Net service revenue increased by 2% year on year, reaching R27.9 billion, with EBITDA also growing by 2% [4][12] - Telco core income decreased by 6% year on year, primarily due to increased depreciation from network investments [4][13] - Core income remained steady, supported by Maya's positive contribution, which turned profitable this quarter [4][13] Business Line Data and Key Metrics Changes - Home segment revenue rose by 4% year on year, driven by fiber demand, which now accounts for 97% of home revenues, up from 92% in 2024 [5][8] - Enterprise segment total revenue remained stable at R11.9 billion, with ICT revenues growing by 16% year on year [6][10] - Mobile revenues declined slightly due to lower packet Wi-Fi usage, but 5G adoption and data traffic are increasing [6][12] Market Data and Key Metrics Changes - Mobile data, fiber, corporate data, and ICT now account for 89% of total revenues, up from 88% in 2024 [7] - 5G data traffic surged by 81% year on year, with 5G device adoption growing by 60% quarter on quarter [12][63] Company Strategy and Development Direction - The company aims for steady revenue growth, disciplined expense management, and prudent capital allocation [5][14] - PLDT is focusing on expanding its fiber footprint and enhancing its digital infrastructure, including the launch of the Asia Direct Cable to improve international connectivity [23][24] - Maya, the fintech driver, is positioned for sustainable growth with its integrated ecosystem of payment, banking, and lending services [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges near-term challenges but remains confident in market position supported by strong operational fundamentals [35] - The company is committed to generating positive free cash flow by 2026 and reducing leverage to around a 2.0x net debt to EBITDA ratio [17][18] Other Important Information - PLDT's CapEx for Q1 2025 was R10.8 billion, lower than the previous year, with a guidance adjustment for 2025 [14][15] - The company maintains investment-grade credit ratings, reflecting investor confidence in its financial health [16][17] - Sustainability initiatives include commitments to no net deforestation and enhancing online safety for customers [32][33] Q&A Session Summary Question: Impact of Pogo-related revenue pressures on the enterprise segment - Management anticipates continued impact from Pogo cancellations until Q3, but efforts are being made to mitigate revenue loss [40] Question: Take-up levels for VITRO Santa Rosa's new capacities - A significant hyperscale customer has already signed for four megawatts, with ongoing discussions for additional capacity [42] Question: Profit momentum for Maya for the remainder of the year - Management expects steady and gradual margin improvement rather than a hockey stick growth pattern [45] Question: Trends in the mobile business for Q2 - The market has softened, but traffic growth year on year gives confidence in monetizing demand [47] Question: Water usage for VITRO Santa Rosa - Current water usage is normal, with expectations for increased usage as AI workloads ramp up [49][50] Question: Interest income on loans and cost of funds for Maya - Specific numbers on loan yields and cost of funds were not disclosed, but receivables include credit card business [51] Question: Target loan to deposit ratio for Maya - No specific target is set, but a conservative approach will be maintained [53] Question: Subscriber growth in the home segment - Management anticipates sustained growth in subscriber additions throughout 2025 [55] Question: Guidance for 2025 net income - No guidance is provided due to the fluid environment [81] Question: Strategies to improve working capital efficiency - Focus on asset monetization and consolidation of central offices is planned over the next three years [85] Question: Competition in the mobile business - Management does not foresee the same trend of softness as the rest of the industry, citing continued traffic growth [86] Question: Revenue uplift from VITRO Santa Rosa - The facility is expected to generate significant enterprise revenue once fully operational, with current AI workloads already recognized [88]

Core Insights - The article emphasizes the importance of the Zacks Rank system, which focuses on earnings estimates and revisions to identify strong stocks [1] - Value investing is highlighted as a favored strategy that seeks to find undervalued companies in the market [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly in the Value category [3] Company Analysis: PLDT (PHI) - PLDT (PHI) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock has a Forward P/E ratio of 7.67, significantly lower than the industry average of 9.34, with historical fluctuations between 6.91 and 10.14 over the past year [4] - The P/B ratio for PHI is 2.44, which is attractive compared to the industry average of 4.05, with a historical range of 2.20 to 3.18 [5] - These valuation metrics suggest that PLDT is likely undervalued, and its strong earnings outlook positions it as one of the market's strongest value stocks [6]

Core Viewpoint - Investors are evaluating the attractiveness of PLDT (PHI) and TeliaSonera AB (TLSNY) as value stocks, with a focus on their valuation metrics and earnings outlooks [1][3]. Valuation Metrics - PLDT (PHI) has a forward P/E ratio of 7.46, while TeliaSonera AB (TLSNY) has a forward P/E of 21.06, indicating that PHI is significantly cheaper relative to its earnings [5]. - The PEG ratio for PHI is 1, suggesting a favorable valuation considering its expected earnings growth, whereas TLSNY has a PEG ratio of 4.08, indicating a higher valuation relative to its growth expectations [5]. - PHI's P/B ratio is 2.38, compared to TLSNY's P/B of 2.51, further supporting the argument that PHI is undervalued relative to TLSNY [6]. Earnings Outlook - Both companies currently hold a Zacks Rank of 2 (Buy), reflecting positive earnings estimate revisions and improving earnings outlooks [3]. - Despite both companies having solid earnings prospects, the valuation metrics suggest that PHI is the superior value option at this time [6].

Core Viewpoint - The article emphasizes the importance of value investing and highlights PLDT (PHI) as a strong candidate for value investors due to its attractive valuation metrics and earnings outlook [2][4][6]. Company Analysis - PLDT (PHI) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock's Forward P/E ratio is 7.29, significantly lower than the industry's average of 10.40, suggesting it may be undervalued [4]. - Over the past year, PHI's Forward P/E has fluctuated between a high of 10.14 and a low of 7.06, with a median of 8.49 [4]. Cash Flow Metrics - PLDT has a P/CF ratio of 2.92, which is attractive compared to the industry's average P/CF of 4.43, indicating a favorable cash outlook [5]. - The P/CF ratio for PHI has ranged from a high of 4.05 to a low of 2.88 over the past year, with a median of 3.34 [5]. Investment Outlook - The combination of low valuation metrics and a strong earnings outlook positions PLDT as one of the market's strongest value stocks [6].

Group 1 - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets [1] - Investment diversification has become a strategy for individuals, moving away from traditional savings in banks and properties [1] - The popularity of insurance companies in the Philippines has influenced investment choices since 2014 [1] Group 2 - Initial investments were made in blue-chip companies, but there is now a broader portfolio across various industries and market capitalizations [1] - The US market was entered in 2020, expanding investment opportunities beyond the Philippine market [1] - The use of analytical tools and resources, such as Seeking Alpha, has enhanced comparative analysis between the US and Philippine markets [1]

Core Insights - The article emphasizes the importance of a proven ranking system that focuses on earnings estimates and revisions to identify winning stocks [1] - Value investing is highlighted as a popular and successful strategy across various market conditions, relying on traditional analysis of key valuation metrics [2] - The Zacks Rank and Style Scores system are tools for investors to identify high-quality value stocks, particularly those with high Zacks Ranks and "A" grades for Value [3] Company Analysis: PLDT (PHI) - PLDT (PHI) is currently rated with a Zacks Rank of 2 (Buy) and an A for Value, indicating strong investor interest [4] - The stock has a P/E ratio of 7.83, which is lower than the industry average of 9.36, suggesting it may be undervalued [4] - Over the past 52 weeks, PHI's Forward P/E has fluctuated between 10.14 and 7.06, with a median of 8.55 [4] - PHI's P/CF ratio stands at 3.22, which is attractive compared to the industry's average P/CF of 4.21, indicating solid cash flow prospects [5] - The P/CF ratio for PHI has ranged from 4.05 to 2.88 over the past year, with a median of 3.37 [5] - These metrics contribute to the strong Value grade for PLDT, suggesting it is likely undervalued and has a positive earnings outlook [6]

Financial Performance - Adjusted EBITDA is monitored by management for each business unit separately, and it is presented as a key performance indicator to assist investors in analyzing the performance of PLDT[35]. - Core income for PLDT is defined as net income attributable to equity holders, excluding certain non-recurring items, and is used for resource allocation and performance assessment[36]. - Telco core income is adjusted for specific losses and is a basis for determining dividend payouts to shareholders[37]. - The company reported total revenues of Php216,833 million (approximately US$3,748 million) and a net income of Php32,307 million (approximately US$558 million) for the year ended December 31, 2024[156]. Dividends - Total dividends declared for 2023 amounted to Php 20,525 million, with a per share dividend of Php 95[41]. - The company declared a total of Php 28,951 million in dividends for 2022, with a per share dividend of Php 134[41]. - In 2024, PLDT plans to declare dividends totaling Php 20,958 million, with a per share dividend of Php 97[41]. Market Competition - The company faces increased competition in the telecommunications sector, which may impact market share and profitability[46]. - The mobile telecommunications industry is experiencing intense price competition, particularly in data services, affecting customer experience and pricing strategies[47]. - Regulatory changes, such as the amendment to the Public Service Act, may increase competition and impact customer retention[48]. - The amendment to the Public Service Act allows for increased foreign investment but may also enable competition from foreign telecommunications companies[67]. - In 2022, the amendment to the Public Service Act removed the 40% foreign ownership restriction on telecommunications companies, increasing competition[83]. Technology and Innovation - The company is actively integrating AI into its operations, starting with a smart voice AI solution to enhance payment collections and improve employee productivity[55]. - The Philippine government is developing regulations for AI technologies, which may impose obligations and costs related to monitoring and compliance[56]. - The introduction of new prepaid eSIMs and digital delivery of eSIMs in 2023 supports the growth of mobile services, enhancing customer experience and engagement[181]. Infrastructure and Investments - The company has entered into agreements with vendors to upgrade and modernize significant portions of its IT infrastructure, but completion on schedule is not guaranteed[60]. - The company secured Php1.0 billion and Php4.0 billion Green Loan Facilities to fund the modernization and expansion of its fiber network, aiming to reduce greenhouse gas emissions by 40% by 2030[160]. - A Php2.0 billion Social Loan Facility was obtained to expand network fiber to underserved municipalities, aligning with government connectivity initiatives[161]. - The company invested Php840 million in Kayana, representing a 60% equity interest, to enhance digitalization initiatives within the MVP Group[163]. - On April 30, 2024, the company invested Php2,116 million for a 34.9% equity interest in Radius Telecom, Inc. to enhance market share[165]. - The company increased its ownership in MIH from 36.97% to 37.66% through a US$15.3 million investment in convertible preferred shares[166]. - The company sold a 4.99% equity interest in Multisys for Php270 million, retaining a 45.73% interest and continuing to consolidate its financial results[167]. Customer Base and Services - As of December 31, 2024, the company served 66.6 million users across mobile, fixed line, and data services[154]. - The total mobile subscriber base reached 58,989,807 as of December 31, 2024, reflecting a growth of 2% in prepaid subscribers and 5% in postpaid subscribers compared to the previous year[176][177]. - Mobile data services accounted for 89% of the wireless consumer segment revenues, with mobile internet revenues increasing by Php3,793 million, or 5%, to Php75,061 million from Php71,268 million in 2023[169][178]. - PLDT Home serves 3.3 million subscribers nationwide as of December 31, 2024, positioning itself as the leading home broadband service provider in the Philippines[204]. Operational Challenges - The company faces declining revenues from traditional services due to the growing use of mobile data and competition from alternative technologies[52]. - Limitations in frequency spectrum availability could negatively impact service quality and competitiveness, affecting customer retention[94][95]. - Cybersecurity threats pose significant risks to operations, with potential legal and financial repercussions from successful attacks[107]. - The company faces challenges in timely installation and maintenance of telecommunications facilities, which could adversely affect market share and service quality[101][102]. - Compliance with varying international data protection regulations may incur substantial costs and impact business practices[91]. Financial Risks - The company has significant internal cash requirements for debt service, capital expenditures, and operating expenses, which may limit its ability to pay dividends to the parent company[122]. - The company is vulnerable to fluctuations in the Philippine peso against the U.S. dollar, which could increase its U.S. dollar-denominated obligations[115]. - The company may incur significant costs due to potential new environmental legislation and regulations introduced by the Philippine Government[110]. - The company faces risks from climate change, which could increase the frequency and severity of natural disasters, impacting operations and supply chains[108]. - The company may face difficulties in funding capital expenditures if it cannot secure financing on acceptable terms[112]. Governance and Legal Matters - The company is involved in various legal proceedings that may materially impact its financial condition and operating results[135]. - Smart received a subpoena from the PCC Competition Enforcement Office related to an ongoing investigation in the telecommunications industry, submitting relevant corporate documents[82]. - House Bill 9021 mandates refunds for internet service outages lasting 24 hours or more, requiring significant operational adjustments for compliance[84][86]. - House Bill 10289 institutionalizes a roll-over data allocation scheme for ISPs, necessitating substantial capital and operational expenditures for compliance[87]. - The KP Act, if enacted, will liberalize the telecommunications sector by removing legislative franchise requirements, potentially reshaping market dynamics[88]. Strategic Partnerships - PLDT's strategic partnerships with institutional investors like First Pacific and NTT DOCOMO enhance its market position and product offerings[171]. - Smart enhances PLDT Enterprise's portfolio with IoT solutions, driving operational efficiency through advanced analytics and connected devices[227].