1H22 CONSOLIDATED SERVICE REVENUES INCREASE BY 5%, OR ₱4.4B, TO ₱94.3B
2Q22 CONSOLIDATED SERVICE REVENUES RISE BY 6%, OR ₱2.9B, TO ₱47.9B LED BY DATA AND BROADBAND
EBITDA FOR 1H22 AT ALL-TIME HIGH OF ₱50.5B, UP 8% YEAR-ON-YEAR, MARGIN AT 52%
2Q22 EBITDA HIGHER BY 7% AT ₱25.0B FROM 2Q21
1H22 TELCO CORE INCOME UP 12% TO ₱17.0B
REPORTED INCOME UP 30% TO ₱16.7B
FIBER-ONLY HOME REVENUES GREW 62% OR ₱8.9B TO ₱23.2B TOTAL HOME REVENUE INCREASE OF 24% YEAR-ON-YEAR TO ₱28.1B
ENTERPRISE REVENUES GREW 9% YEAR-ON-YEAR TO ₱23.2B
1H22 CAPEX AT ₱46.0B
₱75 INTERIM REGULAR AND SPECIAL DIVIDENDS DECLARED
5G NETWORK GROWS TO 7,300 BASE STATIONS, FASTEST AND MOST EXTENSIVE NATIONWIDE
PLDT IS FASTEST BROADBAND, SMART IS BEST IN MOBILE COVERAGE FOR 1H2022: OOKLA
MANILA, Philippines 4th August 2022 – Surmounting increasingly tough economic conditions, PLDT Inc. (PSE: TEL) (NYSE: PHI) (PLDT) grew Consolidated Service Revenues (net of interconnection costs) by 5% or ₱4.4 billion to an all-time high of ₱94.3 billion in the first half of 2022. In the second quarter of 2022, Consolidated Service Revenues grew by 6% to ₱47.9 billion, showing robust growth despite more difficult market conditions as the Company notched a fifth quarter of sequential improvements.
Sustained quarter-on-quarter growth in data and broadband, which grew by 10% or ₱6.6 billion to ₱74.9 billion in the first half, contributed 79% to consolidated service revenues. Consolidated EBITDA in the first six months grew 8% or ₱3.9 billion year-on-year to ₱50.5 billion, another all-time high, crossing the ₱100-billion mark for the last 12-month period.
EBITDA margin was at 52% in the first half of 2022, from 51% the previous year.
Telco Core Income, excluding the impact of asset sales and Voyager Innovations, reached ₱17.0 billion, up 12% or ₱1.8 billion from the same period last year. Reported Income jumped by ₱3.8 billion or 30% to ₱16.7 billion.
Alfredo S. Panlilio, PLDT and Smart President and CEO, said that PLDT is on track to meet its 2022 targets. Service Revenues are expected to post a mid-single digit growth. “Home broadband will lead this growth, with Enterprise also expected to register stronger performance, underpinned by ICT. And although Wireless faces tough market conditions, it should benefit from the continued opening up of the economy,” he said.
“Improved customer experience is one of the key transformational goals in PLDT's aspirational 2025 vision and strategy, under which the company is also establishing new ways of working and a much higher pace of execution,” added Panlilio. “All these are in support of our mission to provide better connectivity for all in an enhanced digital ecosystem, accelerating Filipinos’ pivot to their digital lifestyles.”
Consolidated Net Debt as of the first half of 2022 amounted to US$3.9 billion while netdebt-to-EBITDA stood at 2.16x. Gross Debt was at US$4.8 billion, with maturities well spread out. Only 16% of Gross Debt are denominated in US dollars and 5% are unhedged. PLDT maintained its credit ratings from Moody’s and S&P Global at investment grade.
In April, PLDT announced the signing of Sale and Purchase Agreements in connection with the sale of 5,907 telecom towers and related passive telecom infrastructure, the largest ever acquisition of assets in the Philippines by international investors.
Following this, PLDT announced on 1 st June that its subsidiaries Smart and Digitel Mobile Philippines, Inc. have successfully achieved First Closing by completing the sale of 3,012 telecom towers, representing more than half of the towers being monetized. The corresponding cash consideration of approximately ₱39.2 billion has been received.
The Second Closing was concluded on 1 st August with the completion of the sale of 1,013 towers, with the corresponding cash consideration of ₱13.2 billion also received.
The Group has to date completed the sale of 4,025 telecom towers representing 68% of the towers portfolio subject to the sale. PLDT’s gain on the First Closing stood at ₱12.6 billion in the first half of the year. PLDT anticipates additional closings over the next few months based on the number of towers being transferred. Final closing is expected by the fourth quarter of 2022.
Earlier today, the Board of Directors declared: (i) an interim regular dividend of ₱47 per share, representing 60% of first half 2022 telco core income in line with PLDT’s dividend policy, and (ii) a special dividend of ₱28 per share, resulting from the proceeds of the towers sale. Record date is set for 18th August 2022, while payment date is on 5th September 2022. Another ₱3 billion of special dividends in connection with the towers sale will be declared together with the final dividend for 2022.
Enhancing the digital ecosystem
As the PLDT Group expands its digital ecosystem, synergies with Voyager Innovations (Voyager) through its digital payments arm, PayMaya Philippines, and digital banking arm, Maya Bank, are delivering the next-stage financial services to Filipino consumers and enterprises.
PayMaya rebranded to Maya in April with a new all-in-one money app for consumers that seamlessly integrates wallet features and crypto with savings and credit powered by Maya Bank. The Maya app is now the highest-rated local finance app in both Google Play and App Store. As of end-June, Maya had 50 million registered users across its consumer platforms. On the other hand, more than 650,000 customers had opened a Maya Save account three months after it launched, making Maya Bank the fastestgrowing digital bank in the country.
Most recently, PayMaya relaunched Maya Business as the all-in-one growth partner for enterprises. On top of being the largest fully integrated payment service processor in the Philippines, Maya Business offers digital banking services powered by Maya Bank, such as enterprise deposit, payroll management solutions, credit products for customers and employees of large corporations, and working capital loans for MSMEs.
In April, Voyager raised US$210 million in new funds, reaching tech unicorn status with a US$1.4 billion valuation. PLDT remains the largest shareholder of Voyager.
Home: robust broadband demand, accelerated migration sustain record revenues
As home broadband use remained robust with customers sustaining the hybrid model of work and study from home set-ups, fiber-only service revenues grew 62% or ₱8.9 billion to ₱23.2 billion for the first half of 2022, driving total Home service revenues to ₱28.1 billion, up 24% or ₱5.4 billion year-on-year for the first half of the year. Fiber-only revenues account for 82% of total Home revenues, up from 63% from a year ago.
Home added more than 401,000 net fiber subscribers in the first half of the year, bringing total fixed broadband subscribers to 3.2 million, on the back of continued strong customer demand and unparalleled network quality. In the first half of the year, total fiber capacity further increased by 16% to 6.72 million ports, as homes passed grew 17% to 16.2 million. In the first half of the year, PLDT added 950,000 ports out of the total 1.7 million target for the full year. PLDT’s fiber-to-the-home (FTTH) is present in 65% of the country’s cities and municipalities.
PLDT Home inked an exclusive partnership with LionsGate Play, the fast-growing Southeast Asian streaming platform of the global content studio behind major franchise properties such as John Wick and The Hunger Games. LionsGate Play launched in the Philippines in June.
Affirming PLDT Home’s commitment to keep families safer at home, PLDT Home and Google have partnered for the “Be Internet Awesome” campaign, educating Filipino children and families about online safety and digital citizenship.
PLDT has also continuously enhanced its digital customer service channels, allowing customers to conveniently pay bills, report service issues, track service repair tickets and new service applications, and monitor service interruptions. These include the official PLDT Home Facebook Messenger via the PLDT Home Digital Assistant (https://m.me/PLDTHome), and the PLDT tracker on its website.
Paybox kiosks where customers can pay their bills have also been deployed in PLDT and Smart stores nationwide. Other digital payment options are the all-in-one money app Maya and platforms like PayExpress Online, Lazada, and Shopee.
PLDT Home remains to be the fastest broadband in the Philippines. The global benchmarking company Ookla® announced that PLDT Home won over all major internet service providers in the Philippines for fifth consecutive year at the Ookla® Speedtest™ Awards Q1-Q2 2022.
Enterprise: enabling the digital transformation of Philippine business
PLDT Enterprise’s service revenues grew 9% or ₱1.9 billion year-on-year to ₱23.2 billion in the first half, driven mostly by the return of business activities with the gradual reopening of the economy.
In the second quarter alone, revenues hit ₱11.6 billion, up 11% or ₱1.2 billion compared with the same period last year, spurred by focused on-line and on-ground digital transformation initiatives. In parallel, to serve the growing demand for content and cloud consumption to serve hyperscalers, PLDT Enterprise has accelerated its readiness in capacity, capabilities and infrastructure.
Positioning the country to become the Asia-Pacific region’s preferred hyperscaler destination, PLDT, through its ICT arm ePLDT, is leading the capacity build with the construction of its eleventh and largest hyperscale data center to-date—the VITRO Sta. Rosa.
VITRO Sta. Rosa, with a total power capacity of 50MW, is the first in the series of planned hyperscale Data Center builds to total over 100MW. Designed to be Tier-3 certified and Tier-4 ready with the highest level of network diversity and resilience, VITRO Sta. Rosa will host the country’s richest internet ecosystem and premiere internet exchanges, making it the most ideal location for Availability Zones and Points-of-Presence of hyperscalers, as well as for critical systems of Enterprises.
On top of being the largest Data Center Operator in the country with an existing network of 10 purpose-built Data Centers nationwide, ePLDT is also a trusted and reliable Business Transformation partner of organizations nationwide and has once again been recognized as the 2022 Microsoft Partner of the Year.
Moreover, to ensure that businesses are prepared for Industry 4.0, PLDT Enterprise has fortified its Internet of Things Portfolio, launching the “Internet of Possibilities” portal. This is the Philippines’ first IoT platform that can equip enterprises with full control, transparency and visibility and self-care of up to hundreds of thousands of connected devices. It is designed to give businesses more ways to be efficient with time, effort and spend by improving business processes through an automated workflow.
In the first half of the year, PLDT Enterprise enabled 627,000 cloud licenses, up 32% from the same period a year ago.
Individual: reversal of downward trend with modest recovery in the 2nd quarter
In the first half of the year, Individual Wireless revenues hit ₱41.2 billion. In the second quarter alone, revenues were at ₱20.9 billion, up 2% or ₱0.5 billion from the previous quarter, boosted by the return of mobility and economic activity, the continued refinement of plans and load packages to address consumer preferences and usage patterns, and Smart’s network advantage in terms of quality.
Mobile data traffic reached 2,081 petabytes in the first half, up 32% from the same period last year. Average monthly mobile data usage per subscriber reached 8.7 gigabytes, 20% higher than the monthly average for 2021. Active data users reached 41.9 million in the first half of the year.
Meanwhile, data traffic on Smart’s 5G network in the second quarter grew 133% compared with the fourth quarter of 2021, as the number of unique 5G devices on the network breached the 2 million mark, growing 80% from end-2021.
The increase in data traffic is on the back of enhanced mobile data offers and promos. TikTok is the fastest growing video app in the Philippines driven by its usage amongst the GenZ. In view of this, Smart launched its Free TikTok For All campaign in April for its Smart Prepaid and TNT brand. In May, Smart also boosted its Smart Signature Plans+ with 12 months of Unli 5G. Smart also launched its Free 6 months Apple Music advertising campaign in June.
Smart has also boosted available content on GigaPlay, a mobile app where Smart subscribers can watch live and video-on-demand (VOD) sports, music, and entertainment shows, which is downloadable for free in the Apple App Store or Google Play Store. In addition to top-notch sports content, which includes the streaming of the UAAP, NBA, PBA, PVL, and FIBA games, GigaPlay also features exclusive world-class entertainment content, including concerts, music awards, and Korean entertainment content like TVN, KCON:TACT, and Hallyu Hangouts.
Network: enabling PLDT’s digital transformation initiative
Underpinning these services are PLDT’s fixed and wireless networks. As of end-June, PLDT has expanded its fiber footprint to 837,900 kilometers, up 13% from end-2021, bringing much-anticipated fiber for the first time to islands like Bantayan and Camotes Islands in Cebu, Siargao and Socorro in Surigao del Norte, Dinagat Islands, Burias Island in Masbate, Lubang Island in Occidental Mindoro and Semirara Island in Antique.
Further boosting PLDT’s domestic fiber network is the US-Transpacific Jupiter cable system, which greatly boosts the telco’s extensive fiber network, providing greater capacity in multiple Terabits per second to customers as well as cable diversity to ensure ability to re-route traffic in the event of undersea cable cuts. Jupiter is anticipated to increase PLDT’s international capacity by 40 Terabit/s, to a total of about 60 Terabit/s to the US and Japan further establishing its lead, and ready to scale with the growing demands of digital services. These include the delivery of Cloud services, Fintech, and rich media content, which seamlessly complements PLDT’s existing fixed and mobile services. Market share of PLDT in terms of international cable capacity stands at more than 60%.
PLDT’s fiber infrastructure also supports Smart’s mobile network, which has around 77,100 total base stations, including 7,300 5G base stations, as of end-June. This puts Smart’s 3G, 4G/LTE and 5G population coverage at 97% and Smart 5G population coverage at 66%.
Following these continued network investments, Smart has also been cited by Ookla for delivering the country’s Best Mobile Coverage for the first half of 2022. This award comes at the heels of Smart sweeping the Ookla Speedtest Awards™ in all the quarters of 2021.
Capex guidance
PLDT’s continuous investment in expanding its network to reach more Filipinos and improve overall customer experience brought total first half capex spending to ₱46.0 billion. This includes investments in capacity to support the Home broadband business and the rise in network traffic, the construction of the 11th data center targeting hyperscalers, the international cabling systems Jupiter and Apricot, and the impact of the sale and leaseback of towers and build out of additional towers by tower companies. Capex guidance for 2022 is ₱85 billion.
Sustainability: one of the key drivers of performance of PLDT Group’s vision and strategy
Capping off the celebration of the Philippine Environment Month in June, PLDT and Smart marked another significant milestone in their sustainability journey after energizing solar rooftop panels in its biggest business facility in the Visayas, located along Osmeña Boulevard in Cebu City.
This is one of five PLDT facilities in the Visayas to be partly powered by solar energy. Four other offices in Bacolod, Cebu, Iloilo, and Roxas City, Capiz are also equipped with solar panels. The project aims to cut carbon emissions by integrating renewable sources of power in its energy mix, aligning with PLDT and Smart’s direction to further embed sustainability in the business, while also being an opportunity to reduce energy costs. The solar panels in the five facilities were installed by Spectrum, a subsidiary of the Manila Electric Company (Meralco).
Sustainability has been identified as one of the key drivers of performance of PLDT Group’s vision and strategy, advocating for the expanded use of renewable energy and green technologies in its operations. To realize this, the PLDT Group developed a decarbonization roadmap that aims to reduce its Scope 1 and 2 greenhouse gas (GHG) emissions by around 40% by 2030.
PLDT Group has also underscored the importance of connectivity, cloud technology, and collaboration in the fight against global warming. At the Stockholm+50 conference, the PLDT Group highlighted the Connected Mangroves Project in Sasmuan, Pampanga as an example of how technology and different stakeholders come together to support environmental sustainability.
The Group also formally launched its Diversity and Inclusion Policy which aims to foster an inclusive culture and behavior. Promoting digital inclusion in the areas of Education, Livelihood and Food Security, Disaster Resilience, and Digital Wellness, PLDT and Smart deployed 21 School-in-a-Bag packages to last-mile schools, reaching 3,027 teachers and 5,654 students, helping bridge the digital divide in education.
The Group also trained 751 smallholder farmers under its Digital Farmers Program in partnership with the Department of Agriculture – Agricultural Training Institute and 19 farmer cooperatives under its Smart Coops program. Under the Better Today program, the Group also established three child-friendly spaces in Online Sexual Abuse and Exploitation of Children (OSAEC) hotspots in Mindanao and trained 812 parents, children, community, and academe partners on OSAEC prevention and response.
PLDT and Smart also deployed free calling, WiFi, and charging stations to communities hit by disasters, including the 7.0 earthquake last July 27 in Northern Luzon, enabling affected residents to connect with their families.
Outlook
PLDT Chairman Manuel V Pangilinan expects PLDT to outperform, against a very challenging environment. “We expect stronger headwinds in the second half, with higher inflation impacting our customers’ pockets as well as our own operating costs. With so much pressure on growth, it is imperative that we stay focused on our strategic initiatives and managing costs. As to full year profit guidance, we maintain Telco Core Income at ₱33.0 billion, albeit some upside may be possible as portions of proceeds from the Towers sale are used to pay down debts in the second half,” he concluded.
