PLDT Q1 profit falls 34% amid flat revenue

05 May 2016

The Philippines' PLDT has reported a 34% decrease in net profit for the first quarter to 6.2 billion pesos ($131.4 million), due in part to impairment losses from the operator's stake in e-commerce company Rocket Internet.

The operator also attributed the decline to higher subsidy, depreciation and financing costs and weak revenue growth.

Revenue increased a mere 1% to 42.8 billion pesos, with service revenue staying flat at 40.6 billion pesos. A 22% increase in broadband, corporate data and data center revenues was offset by declining ILD/NLD revenues.

Excluding ILD/NLD revenue, consolidated service revenues grew 3% year-on-year to 36.2 billion.

PLDT said its revenue mix for the quarter reflects the changing nature of its operations as it shifts to digital services. Two thirds of PLDT's wireline revenue and a quarter of wireless subsidiary Smart's revenue now comes from data and digital services.

Capex for the first quarter surged by more than four times year-on-year to 14.6 billion pesos, as PLDT spent heavily to improve the coverage and capacity of its fiber, DSL and mobile networks.

“Our significantly higher capex in the first quarter of 2016 underscores the seriousness of our efforts to strengthen our fixed and mobile networks as the first leg, indeed, the foundation of our digital pivot,” PLDT CEO Manuel V. Pangilinan said.

“Our subscribers will progressively feel the impact of this network transformation over the next several quarters. But this early, various network improvements are already enabling us to grow our data revenues more rapidly.”

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