PLDT Inc (PHI) Q3 2024 Earnings Call Highlights: Record Revenues and Strategic Challenges

GuruFocus News
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Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • PLDT Inc (NYSE:PHI) achieved a new high in net service revenues for the first nine months of 2024, reaching 144.9 billion, a 2% increase from the previous year.

  • Consolidated EBITDA increased by 3% to 80.7 billion, maintaining a steady margin of 52%.

  • The enterprise segment registered a 4% growth, driven by corporate data and ICT, which grew by 6%.

  • Fiber revenues, accounting for 92% of the home business, grew by 6% year on year.

  • Maya Bank, PLDT Inc (NYSE:PHI)'s fintech investment, continues to be the Philippines' number one digital bank based on deposit balances, which grew by 52%.

Negative Points

  • Operating expenses remained stable at 64.2 billion, indicating no significant reduction in costs.

  • Financing costs increased due to a rise in the average interest rate by 50 basis points and additional loans.

  • Mobile revenue dipped sequentially, with a net reduction of 500,000 subscribers in the third quarter.

  • The competitive situation in the wireless space is challenging, with the market being oversubscribed.

  • PLDT Inc (NYSE:PHI) is still in the process of selling a majority of its tower assets, with completion expected by next year.

Q & A Highlights

Q: What is driving the continued revenue stream in fixed line voice? A: The revenue stream in fixed line voice is driven by two components: copper subscribers and voice in the fiber business. The decline in copper subscribers has plateaued, and the fiber business includes voice as part of bundled packages, which helps maintain voice revenue. - Respondent: Unidentified_4

Q: Can you provide an update on the timeline for the data center stake sale? A: Discussions on the data center stake sale are ongoing, and completion is expected by May of next year, pending PCC approval. - Respondent: Unidentified_2

Q: Why have financing costs increased significantly? A: The increase in financing costs is mainly due to a 50 basis point rise in the average interest rate and an additional loan of about 15 million taken in the third quarter. - Respondent: Unidentified_2

Q: What is the status of the tower sales? A: The company is in the process of selling a majority of the towers covered by existing contracts. By the end of the year, they expect to sell around 90% of the contracted towers to the last two common tower providers. - Respondent: Unidentified_5

Q: Can you describe the competitive situation in the wireless space? A: The wireless market is oversubscribed, with more subscriptions than the population. The focus should be on adding value to offerings rather than competing for subscriber acquisition, which is costly and destructive. - Respondent: Unidentified_6

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