Telco giant PLDT Inc. is upgrading its full year recurring core earnings target for 2017, citing gains from its fixed line business despite continued weakness in its wireless segment.
PLDT announced Thursday that its 2017 recurring core profit, which strips away asset sales like that of the disposal of its stake in Manila Electric Co. earlier this year, would hit P22 billion, higher than its initial guidance of P21.5 billion.
This was after booking a 5-percent increase in recurring core earnings to P17.4 billion in the nine months through September this year.
PLDT introduced recurring core profit at the start of 2017. This was to isolate other factors and provide a better picture of the company’s underlying telco business prospects, part of a so-called reset in its strategy.
PLDT also disclosed that core profit during the nine-month period hit P23.2 billion, up 7 percent. The company is maintaining its forecast of P28 billion in core profit for 2017.
Moreover, earnings before interest, tax, depreciation and amortization for the full year was revised lower to P68 billion from P70 billion.
PLDT chair and CEO Manuel V. Pangilinan said Thursday there were indicators pointing to better earnings for PLDT moving forward.
“I think it will be a better year next year. Will it be significantly better? I doubt it (but) PLDT will continue to show signs of recovery,” Pangilinan told reporters in a press briefing.
Leading the way in terms of growth was the company’s increasing focus on fixed-line internet. PLDT Home saw revenue grow 12 percent to P24.3 billion during the nine-month period, while its enterprise revenues increased 11 percent to P25.3 billion.
Together, the two segments account for 47 percent of revenues, which slid lower by 4 percent P107.3 billion in the nine-month period.
PLDT’s wireless segment continued to decline as consumers shifted from sending text messages and making long-distance calls in favor of relatively lower-yielding data services.
Its “wireless individual” service revenues during the nine-month period dropped 14 percent to P44.2 billion.
PLDT chief revenue officer Ernesto Alberto said the decline was partly due to the traditionally weak third quarter period.
The telco giant is also maintaining its capital spending target of P38 billion for 2017, which would mainly be deployed to bolster data services.
Pangilinan said PLDT could spend about P46 billion in 2018 or possibly higher, saying PLDT was aware of the “criticism being levelled against the industry that service is lousy.”
“I think we may have to consider that (increase in spending),” he said. /jpv
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