PLDT profits drop again, officials hopeful for a turnaround

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Metro Manila (CNN Philippines, May 13) — PLDT, Inc. suffered yet another quarter of profits dropping, but officials are hopeful they've finally arrested the decline.

Its core income dropped to ₱5.3 billion at the end of the first quarter, a 26% decline from the year before, the company disclosure read. Consolidated service revenues fell 7% to ₱35.6 billion, while expenses shrank 9% to ₱30.5 billion.

PLDT Chair and CEO Manny Pangilinan said the poor first quarter result was due to the high base set last year, when the telco giant booked profits of ₱7.2 billion.

"I think first quarter last year was influenced to a degree by election spending but to a large degree because we were quite aggressive in pushing the sales in first quarter last year," he said during a press briefing on Friday. "But no excuses, [profit is] down [year on year],"

Looking beyond the annual decline, though, Pangilinan pointed out that, PLDT has been improving quarter-on-quarter.

PLDT profits PLDT's performance from January to March is a significant improvement from the last three quarters.  

"The intention is to keep our core income starting the second quarter to the third and the fourth at a level north of ₱5 billion each quarter," he said.

Data and broadband drove the business, accounting for 66% of fixed-line and 33% of wireless revenues. PLDT is hoping to bank on its "digital transformation" to capitalize on the fast-growing demand for internet.

The telco giant expanded its fiber optic network to cover over 3 million homes in the first quarter, with a target of 4.4 million homes by the end of the year. It's also rolling out wider LTE coverage in Metro Cebu and Metro Manila, after the successful deployment in Metro Davao in 2016. PLDT had promised the National Telecommunications Commission that 95% of the country's cities and municipalities would have LTE access by next year.

PLDT expects to end 2017 with ₱21.5 billion in profits, still 23% down from last year's ₱27.9-billion core income.

This could receive a boost as the company looks to sell its 8.74% stake in Manila Electric Co. (Meralco). Pangilinan said talks were "nearing closure" with a serious buyer and could wrap up in June. "It could lead to a fairly significant gain," he noted.

The search for PLDT's new CEO, however, has not been as fruitful. Pangilinan said there were no frontrunners yet in his "on-and-off market search." He said he has been eyeing Filipinos in "senior positions in companies abroad - brand names everyone knows." He also singled out PLDT's current chief revenue officer, Ernesto Alberto.