Sitio Royalties Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 3, 2023

There are 15 speakers on the call.

Operator

Okay. Good afternoon, and thank you for joining us today to discuss the company's financial and operating results for first half of twenty twenty three. A copy of today's presentation is posted on our website. For those who have not been able to do so, you may download the presentation from the Investor Relations section of our website at www.pldt.com. Kindly note that this briefing is being recorded.

Operator

A podcast of this event will be available on our website after the call. QR codes for the presentation, the MD and A, the financial statements as well as the podcasts are on the screen and in the confirmation notices e mailed to you. For today's presentation, we have with us our Chairman, Mr. Manipalighnan Mr. Alpan Lilu, our President and CEO Mr.

Operator

Danny Yu, our Chief Financial Officer and Chief Risk Officer Attorney Marilyn Aquino, our Corporate Tarian, Chief Legal Counsel Shailesh Baidwan, President of Maya Philippines and Co Founder of Maya Bank as well as other members of the PLDT management team. At this point, let me turn the floor over to Mr. Panlilio to begin the presentation.

Speaker 1

Thank you, Lisa. Good afternoon, Chairman. Good afternoon, good afternoon. Our friends in our analyst friends here today here in the hotel and online, thank you for being here. Happy to report the 1st semester performance of PBT Smart.

Speaker 1

I just want to start by saying that, I guess, all the efforts that we've been doing as a company, very proud to say in this chart that We reaffirm our top position for brand value, sustainability, perception value. That's critical because Brand is always critical in the way we run business and trusting it shows me a big trust in the brand and in the company that we have. So most viable brand at €2,600,000,000 that's up 2% actually from last year as done by brand finance and The highest number one highest sustainability production value with all the sustainability initiatives that we have been doing all this time. So again, I think core to our business, happy to report that we have been Awarded as the basically, we are the undisputed fastest integrated network. Both Smart and PLDT were recognized by UCLA.

Speaker 1

This happened about 2 weeks ago, 3 weeks ago here. They came over here. They did say that fixed broadband has been a leader for 5 years in this country. So that's a feat. I think that has not been done by any entity For sure, in the Philippines, but I think even globally.

Speaker 1

Then also a feat that we achieved was Smart was rewarded with the best mobile network for 3 consecutive semesters, and I think it's also a fit according to Ookla. So very proud of that. So as we went through the year and we were able to reinforce even more our core infrastructure. Homes passed now is up to up by 6%. We have 17,200,000 homes that we passed, and we continue to obviously expand our fiber Footprint, up 4% compared to last year.

Speaker 1

And next page, please. Because of all this, I think it is still a solid performance for the first half. Obviously, we can do better on revenues, only growing at 1%, But I think we have a healthy bottom line. TEPCO core, EUR17,600,000,000 3 percent up versus last year. And EBITDA, EUR 52,100,000,000 which is not only a semester high, but also a quarterly high in terms of EBITDA.

Speaker 1

And we're able to improve also our margin from 52% to 53% EBITDA margin. So our pillars remain to be focused on strengthening The businesses, the 3 pillars, but also driving steady growth. Individual, trying to solidify strength in key segments and services. I think what has happened, individuals were able to reverse the negative trend for individual and has been showing growth Quarter on quarter, 2nd quarter higher than the Q1. So the data revenue as of the 1st semester is up by 4%.

Speaker 1

Traffic is up 15%. Home continues to lead in the market despite the challenges, Up 3% on fixed revenue, which includes all the legacy revenues. But if you take just take a look at fiber, it's still growing at a double digit clip at 11%. And for enterprise, elevating companies by enabling transformation, and that's the focus for both enterprise and SMEs. Healthy growth, both on data center collocation and cloud.

Speaker 1

And I think we will continue to push this as we speak, as this has been the focus the past few months. We also obviously embed ESG in our company's DNA. We have a lot of initiatives across environment, social, governance initiatives. For example, in environment, we have a e waste program where we are disposing of old cell phones with lithium batteries, meaning proper disposal is what we intend to do and to make sure that we're able to do that responsibly. And also with social, a lot of diversity, inclusive Advocacy is that we cut across.

Speaker 1

And of course, our PLT Smart Foundation continues to be active in across pillars of education. Obviously, disaster response Always has been key not only for PSF, but for the entire MVP group and special projects, in particular, for example, in this case, Philippine AIMI. But all the other programs like Skol in the Bag And the like are actually still going on. And just recently, next page please, Again, PRDP and the NBP Group was involved in the response to the victims of typhoon, Aegae. We sent relief packs.

Speaker 1

In fact, today, there's a medical mission that's already working in or has already gone to It's already in Locos Norte, but also Bulacan and Pampanga as these are in a lack of victims of the recent rains. So just to say that before I pass on to Mike Tidani, just to say that We are pushing to still remain strong at 95%, and we will plot out some growth initiatives in the next few months to ensure that we become resilient and also remain resilient until Hopefully, we can also we're planning out for 100 years in 5 years. So, Danny?

Speaker 2

Good afternoon. I'll be presenting the financial and operating highlights for the 1st semester of 2023. Service revenues for the 1st semester of 2023 rose by revenues grew by 3%. Fiber revenues, which account for 85% of the total home revenues, rose 11%. The home broadband market remains underpenetrated with unserved demand more at the lower market segments thus more sensitive to price and inflation.

Speaker 2

Home ARPU is respectable at 1488. Fiber net adds for the 1st 6 months of the year stood at 123,000. PLDT's competitive advantages remain to be Our superior network, strong brand equity, a portfolio of products at different price points using biometrics and wireless technologies. Next please. Data and ICT remain key drivers of our enterprise business, which was up by 2% to BRL23.2 billion from the same period last year.

Speaker 2

Corporate data rose 7% from higher fiber, Managed IT and iGate revenues. EPLET ICT recorded 13% improvement in revenues, mainly from data center and cloud services. PLDT Global, on the other hand, grew 31% from IPLCs, data center, cross connect and carrier hubbing. Opportunities for growth in enterprise will come from hyperscale datacenterbusiness and increased focus on digital transformation by corporates, SMEs and government. The capacity utilization of our existing 10 data centers stands at 71% versus practical capacity of 80%.

Speaker 2

Our 11 data center in Santa Rosa, Laguna is expected to go live in the 1st semester of next year. Next, revenues for our individual business remained stable year on year with the 2nd quarter registering a 3% rise versus the Q1. This was supported by a 2% increase in prepaid and a 7% increase in postpaid. Mobile data revenues were higher by 4% at €34,500,000,000 year on year with active data users rising by 2%. Compared with the full year 2022, data usage per sub and data traffic continued to register improvements of 14% 15%, respectively.

Speaker 2

After the deadline for SIM registration on July 25 And the 5 day extension, 52,500,000 smart and TNT subscribers had registered, Representing about 99% of our active subscriber base and representing about 96% of revenues. To make up for the potential revenue shortfall, we will accelerate our efforts to optimize revenues and continue to make available great value promo offers supported by network expansion and superior customer experience. Thus, we expect the positive momentum in the first half to be sustained in the second half of the year. In the first half of twenty twenty three, 83% Of consolidated service revenues were from data and broadband. By service type, mobile data grew 2% year on year, While home broadband and corporate data rose by 5% and 7%, respectively, ICT revenues were 13% higher, which included an 11% rise in data service revenues.

Speaker 2

Consolidated EBITDA for the 1st semester hit an all time high of BRL52,100,000,000 up 3% or €1,600,000,000 compared with the same period last year. This was a result of the €900,000,000 increase in revenues and an €800,000,000 reduction in OpEx. Telco core for the 1st 6 months of the year rose 3% to €17,600,000,000 from last Steer, higher EBITDA and lower depreciation fully offset increases in financing costs and income tax provision. On reported basis, PLDT income rose 10% to BRL18.6 billion, higher by BRL1.1 billion year on year. This was mainly from the gain of tower sales, ForEx and derivative gains, partly offset by MRP expenses.

Speaker 2

Last year, the company recorded a €7,800,000,000 gain from prescription of preferred shares redemption liability MRP expenses of €4,600,000,000 Note that our share in Voyager losses stood at €1,200,000,000 lower than last year's EUR 1,600,000,000. Today, the Board of Directors approved payout of an interim cash dividend of €49 per share, representing a 60% payout of all of our first half telco core income per share of $0.81. Record date is August 17 with a payout date set for September 1. PLDT's balance sheet remains strong with net debt to EBITDA of 2.48x as of June. We expect this we expect to reduce with the receipt of tower sales proceeds in the second half of the year.

Speaker 2

Gross debt amounted to BRL270,300,000,000 of which 15% are dollar denominated and 5% unhedged. Interest cost for the 1st semester stood at 4.32 percent, while the average life of debt is 6.7 years. Total CapEx for the 1st semester amounted to BRL40.8 billion, consisting of network and IT CapEx of BRL34 1,000,000,000 and business CapEx of 4,200,000,000. Included in the CapEx spend are investment in capacity to drive revenue growth and support continuing rise in network traffic and as well as the construction of our 11 data center among other projects. In line with our objective of bringing down CapEx and aiming for positive free cash flow, CapEx intensity for the 1st months of 2023 has moderated to 41% from last year's 48%.

Speaker 2

In addition, the CapEx of BRL 40,800,000,000 is €11,300,000,000 lower than EBITDA for the period of €52,100,000,000 The next page shows the usual network highlights. On the fixed network, we passed 17,200,000 homes and cover 18,000 barangays, representing 43% of the total barangays in the Philippines. Total fiber ports stood at 6,100,000, excluding VBDSL of around 1,000,000. Utilization of these ports remain high as we carefully rationalize the rollout of new ports. PLDT's total fiber footprint remains unparalleled with a total of over 1,100,000 kilometers.

Speaker 2

The population coverage of our 3 gs, 4 gs, 5 gs wireless network stands at 97%, about 83% of the total handsets on the network are LTE. The last page shows the number of unique 5 gs devices and 5 gs traffic increasing from end of 2022. As part of our network optimization to realize operational CapEx and spectrum efficiencies, We reduced the number of our 5 gs base stations from the end of 2022. Nevertheless, 5 gs speeds remain faster than the competition based on a plus speed test. I will now turn you over to our Chairman for the guidance.

Speaker 3

Thank you, Danny. Good afternoon, everyone. So we launched Maya Bank about 12 months back and put it at the heart of our payment ecosystem, And we've had fantastic response to the launch of the bank, and I'll share some of the statistics on that along with, of course, recognition that we have got amongst not just the peers in Philippines, but globally. The Maya launch of Maya Bank and deepening of financial services has, of course, helped us. And the consumer business, Where by virtue of having a single unified app, we are seeing the performance in terms of customers using us for multiple use cases, And the app continues to be rated the best finance app.

Speaker 3

And on the other side of the payments where we power enterprises to accept Visa, Mastercard, Banknet, QRPH, business continues to grow in strength day to day by day. Today, we process more than 50% of all Visa, Mastercard, QRPS transactions in the Philippines. On the next slide, as I mentioned, our plan always was to launch an all in one digital banking solution, whether you're a consumer or whether you're an SME. On the consumer side of the house, we've already introduced saving products like the personal goals and Myer Savings, high engagement banking, and we have launched Myer Credit, and we will be introducing our buy now, Pay Later, which is already in test mode. And on the SME side, I'll talk in a minute, where on the back of providing Enabling them to accept payments from all kinds of digital means, we are now adding on other services to allow them to settle that money into a business deposit And on the back of that provide working capital loans.

Speaker 3

And of course, all of this underpinned by our payment network. On the next slide, if I can just give some color on the digital banking progress that we have made at Maja. So the numbers as of first half, we have over 2,300,000 depositors who have placed Ps. 25,000,000,000 worth of deposit with us, and we've been able to disperse over Ps. 10,000,000,000 worth of loans to our customers.

Speaker 3

And if you look at the statistics as published by the BSP as of end of Q1, as of end March, the charts below the green is Maya's share as a percentage of the total share amongst the 6 digital banks. So I share 61% of total accounts, 71% of the total depositors and 46% of the balances. Of course, we were the last one to receive the digital bank and the Pretty much first one out of the door. This pie is expanding rapidly as the other banks continue to grow and launch new products. But our push, of course, will continue to make sure we keep a leadership position in this space with new innovative products.

Speaker 3

So as I mentioned on the consumer side of the house, that was our first board of call where we are off to the races by providing services. Our next area where we are pushing on the next slide, please, is on the SME side of the house. So we've launched a bundle for this extremely large and important segment And deeply underserved segment in the Philippines are 1, 2, 3 grow bundle. What that allows you is to accept all forms of payments. So you can digitize your payments, which is number 1.

Speaker 3

On the back of that, you can connect that to your Maya business deposit account where you earn interest rate, You can pay salaries of your employees, you can pay your suppliers through that bank account. And as we see the transactions at your end, Over the course of 90 days, we can start lending you working capital on the back of that. This is our next thrust area. Even as we made good progress in the consumer side continue to push our next area, port of call, is really growing our SME business. And with that, I will hand you over to the Chairman on the guidance.

Speaker 4

I guess this is the outlook, so I'll just read through this. In terms of services revenue growth, the outlook is low single digit growth For the full year, EBITDA is quite similar, low single digit growth for the full year. Telco core is a range of €33,500,000,000 BRL234,000,000,000 anticipated for the full year, CapEx between BRL80,000,000,000 to BRL85,000,000,000 and let's focus on deleveraging. I think you saw the net debt to EBITDA ratio as of June 30 being 2.48. We should anticipate that, that should drop to around 2.3 by year end, in part because of healthier EBITDA for the year and proceeds from the tower sales for balance of the year.

Speaker 4

Thank you.

Operator

So we're now ready to take your questions. For those online, you may type your questions in the Q and A box In the upper right side of the screen, you may also click the raise hand option and wait for me to call your name before you unmute your microphone. You may also send your questions via e mail to plddircenterpldt.com. Ph. Don't forget to indicate your name and company name so we can get back to you for any additional information you may need.

Operator

Allow me to take questions on the floor first before we go to those Online. Anyone? Just raise your hand. No questions. So let's go to the question that we received Online.

Operator

There's a question from CLSA, Derek. There are 3 questions. We'll start with the first one. What pulled down the growth in enterprise revenues, when ICT revenues rose 13% year on year. I guess that question goes out to Mitch.

Speaker 5

Thank you, Melissa. So our we actually grew 13% in the first half, but that was pulled down by the decline of legacy services like our voice services and discontinued services like, for example, the Department of Education load that we provide to all the teachers nationwide. And due to the face to face learning, they stopped already the service. But all in all, we still grew by BRL600 1,000,000 in the first half, bringing our revenues to BRL23.2 billion.

Operator

The next question from Derek is, can you give us updates on the Sky Cable acquisition?

Speaker 6

We're still awaiting the approval of the PCC for the transaction. So I think there's a scheduled meeting sometime next week so that we can settle other any outstanding issues with the PCC, but we've submitted the a lot of documents that they requested. So we'll That's the only thing basically that's outstanding, I believe, at this point in time.

Operator

The next question and the last question from Derek. For Maya, the loan book has tripled year to date. What are the NIMs like now? And is there a new time line for profitability?

Speaker 3

What was the first part, Melissa?

Operator

From Maja, the loan book has more than tripled year to date. What are the NIMs like now? And is there a new time line for profitability? The NIMs?

Speaker 3

Yes. So at this stage, we are very pleased with the way the loan book is performing. As you know, this was first we started with our existing customers for whom we have rich data on their transaction history and using our internally developed AI credit scoring models. We've been disbursing them loans and we're seeing over 80% of them coming back month on month for repeat. So the NIMs, I won't be able to share the exact numbers, but they're extremely low in factor margins are Very, very healthy on the loan book.

Speaker 3

The idea is to keep expanding and adding newer products. Our first product is a short tenure line of credit. We're adding on top of that installment loans and expanding to other segments like the SME. As regards to profitability, Absolutely, the whole plan of introducing products like the loans products, these are high margin products that help us to deepen the customer relationship And we see that the usage of the loan customers not just on the loan side, but then they use us for all the payments and other use cases. So we make a lot more ARPU per customer once they start taking loans from us.

Speaker 3

So the idea is as we expand the loan book to help us create higher margin products to push towards profitability. Already all our businesses are segment EBITDA positive. Now our push is towards group EBITDA profitability, which we are aiming for the second half of twenty twenty four.

Operator

Any questions from the floor before we take part from the online participants? If there are none, the next set of questions are from Rainier Niu of Abacus Securities. Were there any reversals in asset impairment in the second quarter. And what is the nature of it?

Speaker 2

There's none.

Operator

The second question, given the slight sequential decline in quarter 2 service revenues, Where do you expect the bottom line growth to come from moving forward? Given the slight sequential decline in 2nd quarter service revenues, where do you

Speaker 1

Well, I think the targets really for us is higher in the second half. As we expect, a lot of the Long cycle contracts, for example, or contracts with enterprise, we expect that to happen in the second half. We're also seeing positive trend in wireless that has grown from 1st quarter to 2nd quarter, 3%. And we could we Our we I believe that, that growth will continue in the second half. And I think for Home, showing 11% growth in fiber, that does remain to be the focus on revenues for home.

Speaker 1

So just a bit of catch up for home on installation as we are able to roll out more ports In Greenfield. And that's also supposed to happen in the second half.

Operator

There's a raised hand from JP of JPMorgan. You may unmute your mic. Hi.

Speaker 7

Hi. Am I audible?

Operator

Yes, we can hear you.

Speaker 7

Yes. So my first question is on the increase in finance cost year on year, up to around 20%. So what is really driving this?

Speaker 2

On the accretion of lease liabilities arising from our sales.

Speaker 7

Okay. Got it. And the other thing is, are there any one off costs that are impacting the EBITDA? And also, if could share the accelerated depreciation that's recorded in 2nd quarter?

Operator

Could you repeat your question? You were saying was there any one off costs impacting EBITDA after that?

Speaker 7

Yes. The second part was, is there any accelerated depreciation that is recorded in the second quarter?

Speaker 2

For the second 3rd, there is none. There's no accelerated depreciation for the 2nd quarter. What was your first question again? Sorry, I didn't get it. [SPEAKER UNIDENTIFIED

Operator

COMPANY REPRESENTATIVE:] Anyone of Yes.

Speaker 2

Well, the only non recurring items I think I mentioned earlier is the gain on sale of Stratosphere, that's around €3,000,000,000 then partly offset by the MRP cost of around €1,800,000,000 There was also a gain on ForEx hedging and derivatives of around RMB1.2 billion. That's for the 1st semester.

Speaker 7

Okay. But would the gain on sales Stratosphere impact the EBITDA?

Speaker 2

Yes, in a sense that with Stratosphere, there will be a reduction in depreciation, right? But there's also An increase in financing costs arising from the accretion of lease liabilities. Is that your question?

Speaker 7

No, actually, Mind if anything that is impacting the operating expenses.

Operator

Whether Stratosphere Impacts operating expenses, the sale of towers impacts operating expenses. Is that your question? Yes. Do you have any other follow-up questions?

Speaker 7

No, that's it. Thank you.

Operator

Thank you. Hosseini, you have your hand raised.

Speaker 8

Yes. Okay. Hi. Good afternoon and thanks for the call And thanks for the opportunity. Several questions from me.

Speaker 8

First is on guidance. Now as the revenue sorry, The EBITDA growth guidance is lowered from mid to low single digit. Just wanted to understand what is driving then the lift in core telco net income guidance? The second question is on the mobile side. I see that the guidance for the mobile in the second half is or The outlook in second half is better than the first half.

Speaker 8

So what is driving that? Are we seeing any price increase efforts in the market? And how are your competitors, especially the new player responding to that? And on the enterprise side, I read in the press release, the Elite is going for the 12th data center. So just wanted to understand that, are we already seeing customer traction for the 11th data center?

Speaker 8

And are there any plans to monetize data center in the coming years? Thank you.

Operator

The first question is

Speaker 2

on the EBITDA guidance from mid to low. We're expecting better revenues in the 2nd semester combined with Reduction of operating expenses. So that will drive the EBITDA in this for the full year of 2023.

Operator

So Francis, on the mobile, the second question is the second half outlook Looking better than what it was in the first.

Speaker 9

Okay. For the second half, there are a few factors that we're looking at. That's why we're more optimistic. The first one, during the first half, because of similarization, we have seen our churn rates reduced by around as much as 35%. So we expect that to continue in the second half 2nd semester.

Speaker 9

We've also seen our ARPU grow by at least 7.5%, Also because we're getting more quality subscribers because of single registration, and we did a lot of revenue optimization initiatives to maximize the revenue for subscribers. So we expect that to continue in the 2nd semester. 3rd point, we're going to further invest on improving our network experience. That's going to happen, that's resuming in the 2nd semester. So we expect some revenue definitely to come from that one.

Speaker 9

And lastly, I think there's an opportunity now to further drive activation Because not only did we lose or we have unregistered subs, more so from our competition. So there's a big Sea of REMNA unregistered subs in the next few months. And finally, if I may add, From a macro perspective, the inflation is also the outlook, the forecast of inflation is much better as compared to the same period last year and even better than the 1st semester. So those are the key This is why we're more confident in this EBITDA.

Speaker 8

Thanks, Francis. Maybe if I can just have one follow-up out here. So based on all the points you enumerated, is the growth in second half will be driven by Market share or are you all of the view that the overall industry will go at a healthy pace?

Speaker 9

I think a lot of it will be driven by maximizing the revenue per subscriber from our end. Because of single registration, I think Driving stealing some share will be more challenging from both parties, from both players. So I think the key to driving the further global let's say we're not going share because I guess I think that's where the network experience would come in. At the end of the day, consumers choose the better telco, the better network experience. But I think a huge part of the growth now, unlike before where we rely a lot on driving activation, would be driving retention and driving the ARPU of our current subscribers.

Operator

Useni, are you okay with that? We'll go to the data center question.

Speaker 8

Yes, sure. This is very helpful. Thank you. Thank you.

Speaker 10

Usaini, thank you for the question. So with regards to Data Center 11, which is the first true hyperscaler data center in the country, We are on schedule. We're on track. We expect customers to be able to move in by the Q1 with full facility readiness by the Q2 of 2024. There's been a lot of interest.

Speaker 10

We've actually entertained some customers to come in and do a due diligence already On the site, and we are entertaining these as we speak. With regards to Data Center 12, we want to build ahead of demand, and we're in the process now of going through a very rigid site selection process to ensure that the 12th data center that we're planning to build fits all of the requirements for both hyperscalers and enterprise customers that we intend to target.

Operator

And there was a question on the monetization

Speaker 1

Yes. I just I guess I can take that. As Hussein, on the data center, when you say In terms of monetization of auto data center, we are exploring, looking for a partner to be to bring in, into EPLD data center business only, Maybe three factors. One is we believe if we can bring a partner, we can actually drive top line even more if we can be part of the platform of this partner that we're looking at. 2nd is to really improve also operations In terms of they're more used to operating hyperscaler data centers, and that's something we can learn from, be more efficient, be more cost effective.

Speaker 1

And lastly, of course, capital. As we continue to build out 12 or 12 and maybe in the future 13 14. So that's something that I think we are able we want to have a partner come in and address those three factors for us.

Operator

Sure. Thanks.

Speaker 8

I have some more questions. I'll get back into the queue. Thank you very much.

Operator

Are there any questions from people who are here? Mr. Hanres.

Speaker 11

Zoran from Security Bank. Do you expect any one offs in the 3rd quarter regarding this Typhoon or this weather? That's all for me.

Operator

1 offs due to the typhoon.

Speaker 1

We actually don't see any yet. I don't think it's going to be

Speaker 3

as bad as

Speaker 1

Odette last year. So There might be a few areas affected, but I think restoration is not as difficult as the one in Odette. Jeremiah, do you want to add something?

Speaker 12

Just to add to that, Al. Al is actually spot on in terms of the number of households that have been impacted. So today, we currently have about 16,000 households that we are still in the middle of actually restoring services to. So when you look at the size and the scale of that versus a debt or other calamities we've had in the past, it's significantly lower. So this is something that we will do as a matter of, I guess, a regular operation.

Speaker 12

Don't necessarily see any large one off costs associated with it.

Speaker 2

I just want to clarify something because earlier there was apparently a question whether there was Or there are one offs items on the EBITDA. My answer is no, there's none. Because any one off or nonrecurring gain is shown after telco core income before reported net income. Thank you.

Operator

Any other questions from the floor?

Speaker 13

Stephen here from China Bank Securities. I just wanted to ask if you could provide more color on the lower depreciation charges for the first half. And for my second question, is PLDT planning to venture into prepaid fiber similar to what competitor has been doing?

Operator

Why was there lower depreciation in the first half?

Speaker 2

Last year, we had accelerated depreciation of certain assets such as like 3 gs, VVDSL, transport equipment, about €51,000,000 were written up in 2022. So that had an impact on our depreciation this year.

Operator

And then the prepaid fiber?

Speaker 12

Sure. Just in terms of prepaid fiber. So we are looking at all of our options, and prepaid fiber includes one of them when it comes down to our 5% monetization strategy. As you know, we actually have a slightly different strategy to what our competition is doing. We currently sit at about the 60 Same point utilization level, very, very different to what our competition is doing, much significantly lower.

Speaker 12

So one of the things we're doing in looking at prepaid is actually being very, very targeted in our approach to ensure that we're using the prepaid offering as something for to better utilized in a specific area to ensure that we don't necessarily drive further commoditization of the sector and that we are able to actually extract as much value from the existing assets we've already put out there.

Operator

Thanks, Jeremiah. Any other questions on the floor? We'll entertain questions that were emailed. This one is from Arthur Pineda of Citi. What is driving the reduction in revenue and EBITDA guidance for the year?

Operator

I guess it was similar to what Husseini asked that the initial guidance for the year set out at mid levels and then our updated guidance is on low single digit.

Speaker 4

So the guidance for growth of revenue and EBITDA is similar to the 1st semester. The bottom line is higher.

Operator

Then the second question from Arthur. Fiber broadband net adds remain relatively soft. How do you see this as changing into the second half? Are you seeing your competitors gain from prepaid fiber?

Speaker 12

Okay. Thanks for the question. Zafar, I think it

Operator

was right.

Speaker 12

So our focus in the first half has really been around sweating our assets. Have 6,100,000 ports, and we've been very much focused in monetizing as much of that as we possibly can. That's seen us take 2 approaches. Number 1 is switching. So really looking at how do we have compelling switching plans for our customers so that they move over from our competition.

Speaker 12

And the second one is also looking at prepaid fiber. So we are looking at prepaid fiber as an alternative and a way for us to be able to help drive improvement in net adds moving forward. In terms of are we seeing any impact From competition with regards to prepaid fiber. Competition has also been very, very selective with their prepaid fiber offering. So it's not something that they've been offering nationally.

Speaker 12

From what we've seen on the ground, they've been very, very selective in the areas that they do offer prepaid as well. And they've been very, very targeted, prominently targeted at areas where they have capacity. Now they have admittedly, they have actually a lot more capacity than PLDT because we are currently sitting on average about 20%, and we are sitting at about the 60% level. So whilst we will be venturing into the prepaid space, We are just looking very selectively at these particular areas.

Operator

The next question from Arthur. Voyager's loss has narrowed further quarter on quarter. I guess it's similar to the earlier question. What are your expectations on the timing for profitability? And what milestones need to be achieved?

Speaker 3

As I mentioned, all the businesses are now segment EBITDA is our now segment EBITDA positive. So we are now trying to make sure that the whole company is EBITDA positive, which, as I mentioned, the second half of twenty twenty four. We will get there as we continue to launch and scale up new products with high margin, especially products like lending as we expand into other segments. At this stage, the loan book is growing, but as we can see, the deposits are have grown very fast. The good news is these customers are transacting.

Speaker 3

So they're giving us a lot of rich data on them, which helps us in our credit scoring model in turn to start lending to them. So that's one part. And the second is by Helping to grow the deposit base, it continues to provide us with a very healthy cost of fund base on which as we grow the lending book over the period of the next 12 months that helps us the balance sheet that we need. So that is the plan in second half of twenty twenty four.

Operator

Thanks, ESP. And his final question, how should we look at the manpower related charges reduction charges into the second half? This has actually declined quarter on quarter. Is this done and dusted or are there still more in the second half of twenty twenty three?

Speaker 1

I'm Gina, Head of People Group.

Speaker 14

We don't expect for the second for the balance of year any additional. But what we're doing is really focusing on the So, so far, if ever we have, that do not be as significant as previous year.

Operator

Thanks, GPO. There's one on the queue from Jojo Gonzalez of PEP. Any further update to the CapEx Overrun, has the total sum been pared down further from what was indicated in the Q1? How much of the first half CapEx is from the overrun?

Speaker 6

What we're going to do is to just announce to you when everything has been completed because we need to reflect in our financials any additional settlements that we enter into. So until then, we prefer not to say anything more.

Operator

Thanks, Attorney Mawa. Any last questions from the floor? There are none in the queue. Last chance. So if there are no further questions, we will now turn the floor back to Mr.

Operator

Pangarillion for his closing remarks.

Speaker 4

Thank you. Thank you for joining us for this briefing. And we'd like to invite you for the FIFA World Cup starting August 25. First game of Gilas is against the Dominican Republic at 8 p. M, broadcast live nationwide and globally.

Speaker 4

So look forward to 1 or 2 Philippine victories, we hope. So thank you, and we look forward to seeing you again on the 3rd quarter briefing.

Operator

And that concludes today's briefing. As always, should you have any further questions or

Remove Ads
Powered by Quartr
Earnings Conference Call
Sitio Royalties Q2 2023
00:00 / 00:00
Remove Ads