MANILA, Philippines – PLDT Inc. intends to take profitability to new heights in the coming years by embarking on a strategic transformation initiative.
PLDT Chairman Manuel V. Pangilinan said this year marks the beginning of a new era for the company after steady revenue and profit growth in recent years.
“Since 2016, we have seen our revenues and profits steadily increase to the point that 2021 revenues were at an all-time high and basic income is back to the 30 billion peso mark – something we never had. not seen since 2015,” Pangilinan said.
PLDT yesterday announced a strong financial performance in 2021, marked by an 8% year-on-year increase in its basic telecommunications income to 30.2 billion pesos, which was ahead of forecasts from profits of 30 billion pesos.
This was achieved thanks to a record consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) which also increased by 8% year-on-year to reach 96.2 billion pesos, thanks to the increase in services income.
PLDT’s consolidated service revenue grew 6% to 182.1 billion pesos in 2021, the highest annual revenue ever for the integrated telecom operator.
Growth was driven by data/broadband, which increased by 12% to reach 139.7 billion pesos.
“All of this will be for nothing if we do not undertake changes to improve ourselves in order to 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 quite simple: increase revenue, streamline capital expenditure, reduce costs and manage our cash position,” he said.
In line with the company’s resource optimization plans, PLDT expects between 76 billion and 80 billion pesos in investments this year, less than the 89 billion pesos last year.
This underpins PLDT’s goal of achieving positive free cash flow, alongside revenue growth and contained operating expenses.
“We are committed to strengthening our financial position as we focus on generating positive free cash flow. After years of massive infrastructure spending, we are moving to a more deliberate approach to our capital spending, having built the most extensive networks in the country. We are also renewing our efforts to reduce operating expenses to further improve our EBITDA,” Pangilinan said.
“If we stay in our true north, I’m optimistic that by 2025 our core profitability will reach even greater heights,” he said.
According to Pangilinan, PLDT’s high historical profitability was around 40 billion pesos.
He acknowledged that it would be a difficult and steep climb for management to undertake to reach this kind of all-time high figure, with the aim of eclipsing this amount in the years to come.
“Why not? I think the trajectory tends towards that number, so it’s just a question not if, but when. There are headwinds ahead of them, especially on the moving side. But there are also headwinds favorable that significant events could help them achieve the goal,” Pangilinan said.
For this year, Alfredo Panlilio, President and CEO of PLDT and Smart Communications Inc., said consolidated services revenue is expected to grow by mid-digits, while basic telecommunications revenue is expected to reach between 32 and 33 billion pesos.
EBITDA, meanwhile, is expected to reach over 100 billion pesos for 2022.
Panlilio said the domestic segment should continue to lead the way this year at a strong, double-digit pace, easing the pressure on individual PLDT businesses.
He said business revenues, on the other hand, are also expected to grow thanks to the gradual reopening of businesses and opportunities to meet the needs of global hyperscalers with the group’s sprawling data centers.
“2021 proved to be a banner year for PLDT as we achieved unprecedented heights in all areas despite the challenges posed by the pandemic, calamities and hyper competition. This outstanding performance lays the foundation for 2022 and beyond as we continue to build on our strengths as an integrated telecom operator and our commitment to serve our customers in the best way possible,” said Panlilio.
“With our strategic transformation initiative in place and our evolving fintech ecosystem, we are well positioned to maintain our growth momentum going forward,” he said.