"We recognize the present state of flux of our businesses and thus proceed to optimize efforts in pushing the growing segments, managing the stable ones, while long-tailing our legacy businesses. It is clear our future lies in the broadband/data and Internet space, evidenced in our numbers this year, and in recent past years," PLDT Chairman
The company said the increase in earnings was due mainly to higher service revenues and equity share in earnings of subsidiaries, and lower financing costs.
PLDT's reported net income, after reflecting exceptional transactions for the period, grew 2 percent to
EBITDA (Earnings before interest, taxes, depreciation, and amortization) margin for the period was at 46 percent, higher than 45 percent in the second half of 2013.
Consolidated EBITDA for the first half of 2014 was 4 percent lower at
Consolidated service revenues for the first six months of 2014 grew 2 percent to
Earlier today, the company's Board of Directors approved the amendment of its dividend policy increasing the regular dividend payout from 70 percent to 75 percent of core earnings. Reflecting this change in policy, PLDT declared an interim dividend of P69 per share equivalent to 75 percent of first half this year core income.
"For the past seven years, we have maintained an unprecedented dividend payout of 100 percent of our core earnings, based on a payout rate of 70 percent for regular dividends, and an additional 30 percent in special dividends," Pangilinan said.
"The decision to increase our minimum dividend payout ratio to 75 percent attests to our confidence in the company's ability to sustain strong free cash flows without affecting our ability to continue making the necessary investments to maintain and indeed grow PLDT's businesses," he added.
Consolidated free cash flow for the first six months of the year remained robust at
Consolidated capital expenditures (capex) for the period amounted to
Ongoing network initiatives include the continued expansion of 3G and LTE coverage as well as the increase in fiber footprint. The network infrastructure is also being reconfigured and reinforced to better withstand severe weather disturbances.
Capital expenditures for 2014 are projected to be in the range of
The company said that it is currently in talks with some international companies that have a global footprint for a possible strategic partnership in the Internet space.
"We are reviewing a number of exciting opportunities in this space and would anticipate making an announcement soon," he said.
PLDT was the first Philippine company to be rated "investment grade" by all three major international ratings agencies.
"The ongoing structural shift in our revenue mix continues to impact our performance. Our 'growing' revenues, or those from our data businesses, are now larger than those from our legacy businesses," Pangilinan said.
In addition, SMS revenues continue to be pressured by the growth of OTT messaging services.
"We are also seeing the ascent of the postpaid business, which bodes well for data adoption, but generates lower margins vis-...-vis prepaid. These forces, expected to persist for the near-term, will likely moderate consolidated revenue growth and soften EBITDA margins,"
The Group's combined postpaid cellular subscriber base grew by over 179,000, rising to about 2.6 million at the end of the period, while the combined prepaid base stood at 66.3 million.
Total broadband, data, and Internet revenues for the first six months of 2014 totaled
Wireless broadband revenues, exclusive of mobile Internet revenues, increased by 7 percent to
Moreover, mobile Internet usage continues to grow strongly, with mobile Internet revenues increasing by 77 percent to
The Group's combined broadband subscriber base was 3.6 million at the end of
In addition, Sun Cellular had a wireless broadband subscriber base of over 540,000.
Meanwhile, PLDT's fixed broadband subscribers increased by 7 percent from the end of 2013, bringing the total fixed broadband subscriber base to just over one million for the first half of 2014, and now represents 47 percent of the fixed line subscriber base.
"The market is beginning to see the influx of lower cost smartphones which can only increase penetration and data usage. Over 20 percent of our subscriber base now own a smartphone and mobile Internet usage surged 121 percent in the first half of the year to over 15,000 Terabytes. We are now directing our efforts to stimulating data usage amongst prepaid subscribers," said
Fixed line service revenues for the first six months of 2014, net of interconnection costs, increased to
PLDT data and fixed broadband revenues, representing 53 percent of total fixed line revenues, continued to grow on the back of a 14-percent increase in fixed broadband revenues, a 7percent rise in corporate data and other network services, and an 18 percent increase in data center revenues.
The fixed line subscriber base reached about 2.2 million at the end of
"Our Fixed Line Business continues to be a star performer, bucking global trends, as business and revenues from our retail and corporate customers proceed to grow at a steady pace," Nazareno noted.
Meanwhile, Pangilinan clarified that the airline business is not their core business.
"This time, investment in an airline is not on the radar scene," Pangilinan said.
When asked if he would be interested to buy an airline company like
"It's not within our line of business," he added. "I don't think we're good in running an airline."
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