PLDT(PHI) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Service revenues for the first half of 2023 rose by 1% to PHP94.5 billion, while OpEx declined by 2% to PHP42.4 billion [9] - EBITDA grew by 3% to PHP52.1 billion, marking an all-time high, with EBITDA margin improving to 53% from 52% year-on-year [9][20] - Telco Core income, excluding asset sales and Voyager impact, rose to PHP17.6 billion, up 3% from last year [9][20] Business Line Data and Key Metrics Changes - Data and ICT revenues were key drivers for the enterprise business, which grew by 2% to PHP23.2 billion [10] - Mobile data revenues increased by 4% to PHP34.5 billion, with active data users rising by 2% [11] - Home broadband revenues grew by 3% to PHP30.1 billion, with fiber revenue increasing by 11% to PHP25.7 billion [17] Market Data and Key Metrics Changes - PLDT's homes passed increased by 6% to 17.2 million, with a 4% expansion in fiber footprint compared to last year [7] - The company reported a 99% registration rate for Smart and TNT subscribers post-SIM registration deadline, representing about 96% of revenues [11] Company Strategy and Development Direction - The company aims to strengthen its core businesses while driving steady growth, focusing on individual and enterprise segments [15] - PLDT is expanding its data center business, with the 11th data center expected to go live in the first half of next year, and plans for a 12th data center are underway [10][64] - The launch of Maya Bank is central to the company's payment ecosystem, with a focus on expanding financial services for consumers and SMEs [24][29] Management's Comments on Operating Environment and Future Outlook - Management expects low single-digit growth for service revenues and EBITDA for the full year, with Telco Core income anticipated between PHP33.5 billion to PHP34 billion [31] - The outlook for the second half is optimistic, driven by long-cycle contracts and improvements in wireless and home broadband segments [41][60] Other Important Information - The company approved an interim cash dividend of PHP0.49 per share, representing a 60% payout of first-half Telco Core income [12] - PLDT's balance sheet remains strong, with a net debt to EBITDA ratio of 2.48x as of June [12] Q&A Session Summary Question: What pulled down the growth in enterprise revenues when ICT revenues rose 13% year-on-year? - The growth in enterprise revenues was impacted by declines in legacy services like voice services and discontinued services due to the return to face-to-face learning [34] Question: Can you give us updates on the Sky Cable acquisition? - The company is awaiting approval from the PCC for the transaction, with a scheduled meeting to settle outstanding issues [35] Question: For Maya, the loan book has tripled year-to-date. What are the names like now and is there a new timeline for profitability? - The loan book is performing well, with over 80% of customers returning for repeat loans. The aim is to achieve group EBITDA profitability by the second half of 2024 [36][85] Question: Given the slight sequential decline in quarter two service revenues, where do you expect the bottom line growth to come from moving forward? - The expectation is for higher revenues in the second half, driven by long-cycle contracts and improvements in wireless and home segments [41] Question: What is driving the increase in finance costs year-on-year of around 20%? - The increase is fully attributed to the accretion of lease liabilities arising from sales [45] Question: Are there any one-off costs that are impacting the EBITDA? - There are no one-off costs impacting EBITDA for the second quarter, with only non-recurring items shown after Telco Core income [47][71] Question: What is the outlook for mobile in the second half? - The outlook is positive due to reduced churn rates from SIM registration, increased ARPU, and ongoing revenue optimization initiatives [60] Question: Are there plans to venture into prepaid fiber? - The company is considering prepaid fiber as part of its monetization strategy, focusing on targeted areas to avoid further commoditization [77][82]