PLDT Inc. Q2 FY2025 earnings call

• Fiber and ICT are key growth drivers: Fiber demand remains strong, and ICT saw a 15% year-on-year growth. - Cost management efforts: Cash operating expenses decreased 3% year-on-year, with reductions in compensation, selling/promotions, and subsidies, though repairs and maintenance increased. - Maya's performance: Delivered PHP 406 million in core income in the first half, its first profitable semester, marking a significant turnaround from a loss last year. - 5G and innovations: 5G traffic continued to rise, and Smart launched KiQ, an app-based mobile service targeting Gen Z. - Data center development: VITRO Santa Rosa, the country's first AI-ready hyperscale facility, was inaugurated.

Home segment revenues grew 4% year-on-year to PHP 30.4 billion, led by strong fiber demand. Fiber revenues reached PHP 29.5 billion, up 7% versus last year and making up 97% of total home revenues, with 169,000 net fiber adds in the first half. Enterprise revenues for the first half were PHP 23.5 billion, slightly down 1% from last year, with corporate data and ICT remaining stable at PHP 17.4 billion and accounting for 74% of total enterprise revenues; ICT grew 15% year-on-year. Individual segment revenues totaled PHP 42.3 billion, slightly down. Mobile data revenues were PHP 37.4 billion, making up 89% of the segment, with 5G traffic surging 84% versus last year and 5G devices making up 17% of the base. Fixed wireless revenues grew 12% year-on-year.

• Full year CapEx revised to approximately PHP 63 billion, down from the original guidance of PHP 68 billion to PHP 73 billion. - Target to achieve a net debt-to-EBITDA ratio of 2.0x over the medium term. - Declared an interim cash dividend of PHP 0.48 per share, in line with the regular payout policy.

• Regulatory risks: Concerns regarding the Konektadong Pinoy Bill, including potential unconstitutional aspects such as discriminatory treatment of data transmission providers and satellite providers. - Legacy business challenges: Enterprise revenues were impacted by declines in legacy businesses, POGO connectivity losses, and delays in public sector deals due to elections.

Q: Two questions, firstly on mobile softness in trends and third quarter guidance; secondly on regulation and Konektadong Pinoy Bill.

A: Softness is seen as normal fluctuation, expecting improvement in second half. On Konektadong Pinoy Bill, if not returned by August 24, it becomes law; concerns over unconstitutional aspects like discriminatory treatment and multiple subjects.

Q: Guidance regarding refinancing activities for maturing debt and interest rates.

A: Currently interest rates are high, but spreads have contracted, and they are borrowing long-term facilities with floating rate structured price to take advantage of potential rate declines.

Q: Updates on 5G cities and ARPU uplift from 5G users.

A: 5G is being propagated to provinces, starting with Iloilo; ARPU for 5G is PHP 300 vs. PHP 101 for LTE, indicating revenue lift.

Q: Updates on asset monetization plans, including data center sale and legacy assets.

A: Receiving inquiries on data center sale, and ongoing monetization of legacy assets like copper and 3G equipment.

Q: Prepaid plans for home business and its fit in portfolio.

A: Prepaid is for onboarding price-sensitive households and first-time fiber users, not cannibalizing postpaid; growth from deepening penetration and entering emerging markets.

Q: Enterprise revenues decline and return to growth in second half.

A: Enterprise revenues were affected by election delays and POGO losses, but anticipate return to growth in second half with expected deal closures.

Q: NIMs, NPLs, and loan growth for Maya.

A: NIMs increased due to credit card and personal loan growth, NPLs inched up but expected to stabilize; loan growth from diversified products targeting mass affluent and Gen Z.