MANILA, Philippines — PLDT Inc. intends to bring profitability to new heights in the coming years as it embarks on a strategic transformation initiative.
PLDT chairman Manuel V. Pangilinan said this year is the start of a new era for the company following steady growth in revenues and profits in recent years.
“Since 2016, we have seen our revenues and profits increase steadily to the point that 2021 revenues were at an all-time high and core income has returned to the P30 billion mark – something we have not seen since 2015,” Pangilinan said.
PLDT yesterday reported strong financial performance in 2021, bannered by an eight percent year-on-year jump in its telco core income to P30.2 billion, which was ahead of earnings guidance of P30 billion.
This was achieved behind an all-time high consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) which also grew eight percent year-on-year to P96.2 billion, driven by higher service revenues.
Consolidated service revenues of PLDT rose six percent to P182.1 billion in 2021, the highest full year revenue ever attained by the integrated telco.
The growth was led by data/broadband, which improved by 12 percent to P139.7 billion.
“All this will be for naught if we do not undertake changes to get better so we can be the best. The best for our customers and for our shareholders,” Pangilinan said.
“To this end, we are channeling our efforts to improve our free cash flow. The formula is simple enough – increase revenues, rationalize capex, reduce costs and manage our cash position,” he said.
In line with the company’s resource optimization plans, PLDT is earmarking between P76 billion and P80 billion in capex this year, lower than last year’s P89 billion.
This underpins PLDT’s goal to achieve positive free cash flow, alongside revenue growth and controlled opex.
“We are determined to strengthen our financial standing as we focus on generating positive free cash flow. After years of massive spending on infrastructure, we are transitioning to a more deliberate approach to our capital expenditures, having built the country’s most extensive networks. We are also renewing efforts to throttle down on operating expenses to further enhance our EBITDA,” Pangilinan said.
“If we stay to our true north, I am optimistic that by 2025, our core profitability will reach even greater heights,” he said.
According to Pangilinan, PLDT’s historic high core profitability was around P40 billion.
He acknowledged it would be a hard and steep climb that management has to take, to achieve that kind of historic high number, with the goal to eclipse that amount in the coming years.
“Why not? I think the trajectory is trending towards that number, so it’s just a question of not if, but when. There are headwinds ahead of them, particularly in the mobile side. But there are also tailwinds that significant events could assist them in achieving the target,” Pangilinan said.
For this year, PLDT and Smart Communications Inc. president and CEO Alfredo Panlilio said consolidated service revenues are eyed to grow by mid-single digit, while telco core income should reach between 32 billion and P33 billion.
EBITDA, meanwhile, is seen hitting over P100 billion for 2022.
Panlilio said the home segment is expected to continue leading the way this year at a sustained and double digit pace, alleviating the pressure on PLDT’s individual business.
He said enterprise revenues, on other hand, should also grow on the back of the gradual reopening of businesses and opportunities to serve the needs of global hyperscalers with the group’s expanded data centers.
“2021 proved to be record-breaking year for PLDT as we delivered all-time highs across the board despite the challenges brought about by the pandemic, calamities, and hyper competition. This exceptional performance sets the foundation for 2022 and beyond as we continue to build on our strengths as an integrated telco, and our commitment to serve our customers in the best way possible,” Panlilio said.
“With our strategic transformation initiative in place and our evolving fintech ecosystem, we are well positioned to maintain our growth momentum moving forward,” he said.