PLDT(PHI) - 2025 Q1 - Earnings Call Transcript

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]