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PLDT Inc.: PLDT reports the results of nine in 2018



COMBINED HOME, REGION, AND INDIVIDUAL INCOME, OR 90% OF TOTAL CONSOLIDATED INCOME, RIDE 8% TO P101.2 BILLION

12% AND 10% HOME AND ROSE INCOME, RESPECTIVELY

INDIVIDUAL REVENUES ARE HIGHER 4% YEARS AND 3% YEARS-PERIODS – QUARTER FOURTH GROWTH CONSTRUCTION

DATA / BROADBAND GRAY REVENUE BY 36% TO P66.0 BILLION, NOW 59% OF TOTAL INCOME CONSOLIDATION

CONSOLIDATED EBITDA ROSE BY 2% TO P50.3 BILLION, OR BY 4% (EX-VOYAGER) TO P52.1 BILLION, AT MARGIN 45%

MAIN INCOME OF TELCO (EX-VOYAGER AND SALES OF ASSETS) INCREASED 5% TO P19.1 BILLION

CLEAN CLEAN INCOME FROM P16.5 BILLION, INCLUDING THE FASTEST DEPRESIATION FROM P4.5 BILLION

SMART, TNT AND SUN LAUNCHES 'VIDEO EVERY DAY & # 39;

SMART NETWORKS RECOGNIZED AS THE BEST VIDEO EXPERIENCE PROVIDER IN THE PHILIPPINES – BY OPEN SIGNALS

PLDT AND SMARTER TO TRANSFORM CLARK TO 5G FIRST CITY IN THE PHILIPPINES

TRAFFIC INVESTMENT AND POWER IN VOYAGERS TO BE CLOSED IN 4Q18

INNOVATION INCOME GUIDELINES FOR 2018 FROM P23-24 BILLION (EX-VOYAGER AND PRE-IFRS 15) SPECIFIC DESCRIPTION GUIDE

PLDT Inc. (& # 39; PLDT & # 39;) (PSE: TEL) (NYSE: PHI) today announced unaudited financial results and operations during the first nine months of 2018 (9M18) with Consolidated Service Revenues (after deducting interconnection fees) reaching P109.0 billion based on the new accounting standard PFRS 15, a 2% increase over the same period in 2017. Consolidated EBITDA grew by 1% to P49.7 billion a year. Telkom's core income rose 4% to P18.9 billion. Including profits from stock sales at Rocket Internet and losses from Voyager, core revenues reached P17.1 billion.

The effect of applying PRFS 15 on the Company's income statement for the first nine months of 2018 is shown below:

For apple-to-apple comparisons, Company results in the first nine months of 2018 are shown alongside those from the same period last year based on the PAS18 pro forma below:

PAS18 pro-forma consolidated revenue for the period to the end of September reached P111.9 billion, 4% higher than last year. Revenues in the third quarter reached P37.5 billion, consecutive quarterly increases.

Excluding international and national long distance revenues (ILD / NLD), service revenue was P104.9 billion, up 7%. The third quarter of 2018 is the seventh quarter (7) in a row which shows an increase in service revenue.

PASAP-forma's consolidated EBITDA increased 2% to P50.3 billion year-on-year, with an EBITDA margin of 43%. Excluding Voyager, EBITDA was 4% higher at P52.1 billion and margin was 45%.

Telco's core revenues (ie, excluding Voyager) grew 5% to P19.1 billion compared to the previous year.

Net profit reported reached P16.5 billion, which was influenced by, among others:

• Depreciation acceleration of P4.5 billion in relation to the useful life estimated by the useful life of network assets affected by the increase in the PLDT network

• Gain a P1.1 billion revaluation of remaining Rocket Internet stocks

As of the end of September 2018, the consolidation of Net Debt and Net Debt to EBITDA reached US $ 2.4 billion and 1.94x respectively. Debt debt is US $ 3.3 billion, of which only US $ 0.3 billion or 8% is unprotected. Fixed rate loans, after swap rates, consist of 89% of total loans while floating interest rate loans form a balance of 11% of the total. The average interest fee (before tax) is 4.5%.

Until the end of September 2018, the PLDT credit rating remained in the investment rating.

Maintain growth momentum

House continued to lead the way for the Group, increasing revenue by 12% to P27.3 billion in 9M18 and contributing 24% of combined service revenues, 75% of which was contributed by data and broadband.

The third quarter recorded 14th quarter sequential revenue growth from the first quarter of 2015. Income in the third quarter would be greater if House installation activities were not limited by the Ministry of Manpower and Employment (DOLE) which stopped operations from 38 PLDT service contractors that affected, among others , installation, repair / maintenance and call center services.

Service income Company grew 10% year-on-year by P2.6 billion to P28.4 billion in 9M18, representing 25% of total service revenue. The company's revenue is supported by a 12% increase to P18.2 billion in data and broadband which now covers 64% of the Company's total revenue. In particular, data center revenues grew by 21% while company data revenues rose 12%.

Individual Wireless Service revenues continued to gain momentum – up 4% to P45.5 billion in 9M18. This is the fourth consecutive quarter growth for this business group.

4% growth in 9M18 contrasts sharply with the decline of 14% or P7.1 billion year-on-year recorded in the first nine months of 2017. Effectively, this is a turnaround combination of P8.8 billion.

Increased revenue from Individu Wireless was driven by growth in cellular internet revenue compared to a year ago because cellular data traffic grew by 97% over the same period, as a result of higher usage.

Home, Enterprise and Individual Wireless combined service revenues were added to P101.2 billion in 9M18, accounting for 90% of total service revenues, and posted an increase of 8% or P7.2 billion year-on-year. This is a marked turnaround from the decline in P1.8 billion years to 9M17 or positive total swing of P9.1 billion.

As mentioned earlier, data and broadband continue to strengthen the growth of the Home, Enterprise and Individual Wireless groups, each representing 75%, 64% and 59% of service revenues. Revenues from this service group grew 36% to P66.0 billion.

"Despite the tremendous challenges posed by DOLE Order, we have maintained a double-digit growth of Home and Enterprise and added momentum to our Wireless Individual business recovery," said Ernesto R. Alberto, PLDT and Smart Executive Vice President and Chief Revenue Officer.

The network roll-out exceeded the target

The rapid pace of its network transformation program has enabled PLDT to surpass several full 2018 launch targets by the end of 9M18.

One important activity is the expansion of the PLDT fiber optic cable network. At the end of September 2018, the total footprint of the PLDT fiber – which consists mainly of transmission and distribution facilities – has reached 221,000 kilometers (km), exceeding the 2018 target of 210,000 km. This has provided an important foundation for the expansion of fixed and cellular networks of the group.

Until the end of 9M18, PLDT Home's fiber coverage had reached 5.75 million homes, exceeding the 2018 target of 5.3 million homes. At the same time, the total capacity reaches 2.25 million ports – more than double the number at the end of 2017 and above the 2.20 million ports targeted for 2018. At the end of September, there were 1.25 million ports available to subscribe .

Meanwhile, Smart installed around 5,700 new LTE or 4G BTSs, increasing the total number to around 14,400 LTE BTS nationally – 65% more than the end-2017 number. He also added about one thousand 3G BTS in the same period, increasing the total number to around 11,000.

& # 39; Accelerating the launch of the PLDT fiber network has placed us in a good position to provide all PLDT customers with fiber-sourced broadband services in the next 12 to 18 months. In addition, Smart increases the deployment of LTE, LTE-Advanced, and 3G facilities will enable us to fulfill our commitment to the government to provide broadband services moving to more than 90% of the country's cities and municipalities by the end of 2018, said Mario G. Tamayo, Senior Vice President for network planning and engineering for PLDT and Smart.

Mobile data driving videos

The aggressive network transformation carried out by PLDT and Smart has given a strong impetus to their respective businesses which increasingly depend on the use of broadband and digital service customers, especially watching videos.

The fast adoption of Smart from LTE and the LTE-Advanced facility, for example, allows it to do a very successful YouTube promo where customers enjoy one hour of free impressions per day from the most popular video websites in the world if they buy a quality cellular data plan.

As a result of the promo, the number of YouTube viewers among Smart, TNT and Sun customers surged more than six times from the initial offer in April to October this year. During that period, the volume of data traffic jumped more than 13 times. In addition, despite offering YouTube to be seen for free, the average revenue per prepaid customer increased by 9%.

Despite a large increase in data traffic, Smart provides a quality video viewing experience for those who use YouTube promos. In its latest report released last week, international cellular analytics company OpenSignal quoted Smart as providing the best video experience for customers in the Philippines.

Covering the period May to August 2018 at the peak of YouTube promos, the report provides details on the performance of mobile operators in Asia. It was said that Smart collected a 42.2 video experience score, far ahead of competitors' scores and major US operators. This comes at the heels of previous reports from OpenSignal and Ookla, global leaders in internet testing and analysis that show Smart provides the fastest LTE service in the country. [These network achievements are, to a great extent, enabled by the spectrum bank from the co-acquisition of San Miguel’s telecoms business in 2016.]

& # 39; We are very happy with the results of the YouTube promo. This is the beginning, even during the promo period, we have received additional income. And because of the hard work done by our network team, the customer's video viewing experience is very positive. This has placed us in a very good position to offer more attractive video services on an ongoing basis, & says Oscar A. Reyes, Jr., Senior Vice President of Consumer Market Development for PLDT and Smart.

Building on the success of YouTube promos, Smart was launched on November 6 new data packages loaded with & # 39; Videos Every Day & # 39; – offers access not only to YouTube, but also to other popular video sites such as iflix, iwantTV, NBA League Pass, children's Discovery and Cignal Play.

Videos also increase Home fiber

The demand for better online video watching is also a key factor increasing the demand for fiber to home services. This is because of the habit of watching videos Filipinos are experiencing tectonic shifts to online services that allow them to watch programs when and where they want – whether at home or while traveling.

A recent study from Limelight Networks, & # 39; The State of Online Video 2018 & # 39; found that of the 10 countries covered, Filipinos watch the most videos online every week at 8 hours and 46 minutes – more than online video viewers in the United States and India. In addition, Filipinos – along with Indians and Singaporeans – now watch more online videos than traditional television broadcasts.

Driven by a shift in this viewing habit, broadband penetration at home reached an all-time high, just under 2 million customers in 9M18. This is an 8% year-on-year increase in unique data service customers. Across the country, the demand for broadband Home is fibrous which can provide quality video watching online.

To further enhance the customer experience on fiber Home services, PLDT Home has, during the past quarter, provided a free speed boost to fiber broadband customers. Customers who register for Fibr Plan 1699 at speeds of 5 Mbps for example now enjoy 10 Mbps. Meanwhile, PLDT Home launched its partnership with Google WiFi to expand the coverage of fiber-powered WiFi data to every part of the customer's residence.

Moving forward, the House is set to introduce new digital services with online videos on the cutting edge.

Focus on Digital services

For the PLDT Enterprise group, the focus remains on driving digital data and services such as data centers and cloud infrastructure and Software-as-a-Service that companies embrace increased enthusiasm. One of the fastest growing digital services is Cyber ​​Security, because more and more companies and government institutions are built by the growing threat posed by malicious malware and cyber attacks.

The Enterprise Group also took the lead in reaching an agreement with Clark Development Corporation and the Bases Conversion and Development Authority to launch Clark Freeport Zone (CFZ) as the first Smart 5G City in the country. Under the Memorandum of Understanding signed this week with CDC and BCDA, PLDT and Smart will deploy 5G BTS at CFZ over the next few months, with the first to be installed this November.

& # 39; The growing hope is that the initial use cases for 5G technology will be the application of companies in fields such as transportation, traffic management and health care. We will work with zone and business authorities at CFZ to develop smart services that can utilize the 5G capabilities to provide very fast, real-time, massive, & # 39 connectivity, said Juan Victor Hernandez, PLDT and Smart Senior Vice President for Business Companies .

Voyager gets fresh funds

In early October 2018, Voyager Innovation signed a subscription agreement to collect a total of US $ 175 million in new funds through the issuance of new shares to the leading global investment company TRC (NYSE: KKR), and Tencent Holdings Ltd. (0700.HK), a leading internet service provider in China.

New funding – the largest investment in Philippine technology companies to date – is expected to cover Voyager's cash requirements for a minimum of 2 years. This in turn will enable the PLDT to direct available funds to support a large capital expenditure program.

Other investors are expected to inject more capital into Voyager and because new funding from investor followers comes, PLDT's shareholding is expected to fall below 50%, while remaining the single largest shareholder.

Transactions with the main TRC and Tencent investors are expected to be closed in the fourth quarter of this year.

& # 39; Injection of fresh capital and global expertise from new major investors will enable Voyager to increase its efforts to make mobile payments and other digital services more accessible to Filipinos. This will help accelerate digital and financial inclusion in the country and benefit many Filipinos who still do not have bank accounts and have little or no access to the financial system, "said Orlando B. Vea, Voyager President and CEO.

Conclusion

& # 39; The strong success of our YouTube promo is satisfactory on several things. First, this shows how much progress our transformation efforts have made in the past two years. In particular, the launch of Smart's LTE and LTE-Advanced services that have provided the best cellular video experience to our customers, despite a large increase in data traffic triggered by promos. Second, highlighting how effectively increasing collaboration between networks and our income groups helps us achieve our priority goals. Third, it has placed our Individual Wireless business in a far better position to grow sustainably, supported by digital data and services, led by online video. Combined with our strong Home and Enterprise business, our Wireless business can then provide a stronger increase for the entire PLDT and Smart businesses, & # 39; said Manuel V. Pangilinan, PLDT and Smart Chairman, President and Chief Executive Officer.

& # 39; This will enable us to face challenges more effectively which will be caused by high competition from new and old players. When PLDT celebrates its 90th birthday this November, it will also give us the means and opportunities to further pursue the internal transformation that we must achieve in order to develop in a rapidly developing digital economy. With this development, we maintain our guideline that telco core income for the full year for 2018 (excluding Voyager) will be in the range of P23-24 billion, and that our capital expenditure will reach P58 billion according to the budget, "he added.

Rejection
PLDT Inc. publish this content November 8, 2018 and is fully responsible for the information contained herein. Publicly distributed, not edited and unchanged, active November 8, 2018 09:47:08 UTC



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