PLDT Inc.

For today's presentation, we have with us our Chairman Manny Pangilinan, Mr. Al Panlilio, our President and CEO, Ms. Annabel M. Chua, Chief Finance Officer and Chief Risk Officer, Mr. Shinesh Bhatwan, President of Voyager Innovations and Paymaya Philippines, as well as other members of the PLTD Management Team. At this point, let me turn the floor over to Mr. Panlilio to begin the presentation.

Hi, Melissa. Thank you very much. Good afternoon to all and thank you for joining us in this call. You know, I'll be reporting some highlights of our Q3 and nine-month performance. Then I will pass it on to Annabel for a more detailed discussion on the financials. Then we go to SB for Paymaya and Mayapak. So happy to report for Q3 2021 performance for QuilitySmart. We end the quarter at 7.9 billion. This is the highest quarter this year. And after 7.5 in first quarter, 7.7 in the second and third quarter, 7.9. That's a 786 billion income growth in federal terms for 11%. Also happy to report that our net service revenue for the third quarter is also an all-time high of 46 billion. This is 2.8 billion higher than the same period last year, 5%. Expenses at 21.5%. For the month end of September, September YTD, we're ending the first nine months at 23.1 billion in telco core income, which is a 2.1 billion income growth compared to previous year, or at 10%. Service revenues after nine months is 135.9 billion, also an all-time high on that service revenue. Expenses of 64.8 billion and adjusted bid of 71.5 billion, 8%. Thank you very much. Thank you very much. We've also exceeded this number. We hit a little over 120,000 for October. So we continue to drive and serve the underserved market. By the end of September, we have about 800,000 new fiber customers. So we are on track of at least 1 million by the end of the year, new fiber subscribers by the end of the year. For wireless, A lot of headwinds in wireless this year, especially with all the lockdown, people losing their jobs, and really no mobility for our customers, and really customers sharing the fixed line connectivity at home. Having said that, we will see modest growth for wireless this year. Thank you very much. Starting in the third quarter of this year, 10.7 billion being the highest ever quarter for enterprise, driven by ICT business, obviously cloud, and co-location revenues from data centers at an all-time high also, increasing by 26%. Next page. So that is your integrated telco business. We continue to drive CX by improving our network. So we have the Philippines fastest and most extensive network. We are now at 615,000 kilometers of fiber, 17% increase from June. So we have the most extensive for sure in the country. HomesPass now is at 12.7 million year-to-date, which is an increase of 41% versus last year. 12.7 represents about 50% of total households in the Philippines, and so there's a lot of opportunity of growth still in the home business. FiberPorts, out of the 12.7, we have 5.29 FiberPorts that is available for our customers, which is 30% increase. And for mobile, we also continue to strengthen the mobile business. We are now at 6,400 in terms of live 5G pay stations, 96% in LTE network coverage, 72,000 total pay stations. And we continue to progress our roaming arrangements, hoping that travel will happen soon. So again, in both areas, fastest fixed network, as reported by UPLA, and also the most reliable 5G network as far as UCLAOS is concerned, and the only Filipino telco in globally with 5G experience as far as what we're seeing. So that's the Integrated Telco initiative that we have. Next page, please. And again, together with Integrated Telco, we continue to expand the PLDT ecosystem, making sure that we're able to build a digital ecosystem to secure our future growth. On the left side is Gigalife, which is an online digital platform for our wireless customers. Eventually, this will be a platform also for home. Today, we have 10 million registered users for Gigalife and an active base of 6.25 million multi-active users. I think SB will obviously talk about this more, but really driving broader financial inclusion, which we can really seamlessly integrate the PLTD smart business with Playmaya and InfoEdger. Having gotten the digital bank license is a very critical part of that journey towards financial inclusion. From a people and culture point of view, our most valued assets, of course, are people. I just wanted to report that 95% of our people in smart workforce nationwide are fully vaccinated. And we've started vaccination also for dependents and household members as we speak. So I think I move on now to, I will move the mic to the screen to Annabel.

Thank you. Thank you. Good afternoon, everyone. And welcome to our nine-month results presentation. As Sal has indicated, total service revenues for the nine-month period came in at 135.9 billion, which is 7% up year-on-year. How it breaks down? About 65 billion from individual, 35 billion from home, and another 35 billion from the enterprise and international combined. In terms of the growth versus last year, that's a 9 billion increase led by home, which accounted for 7 billion out of the 9 billion uplift that we saw in the first nine months. And as Alice mentioned, if we zero in on the fiber-only subcomponent of the home business, that's actually growing at a much higher clip, at 78% year-on-year, registering a 10 billion increase for the period. Together with the 7 billion increase from home, we saw another 2 billion increase from our individual business, which is up 3% year-on-year, and then 600 million from our enterprise business, which is a 2% year-on-year growth. Next chart, please. Over the three quarters of 2021, the increase in the third quarter revenues to $46 billion from $45 billion in the second quarter and $44.8 billion in the first quarter. Compared to the same period last year, it's a 5% growth equivalent to $2.8 billion. Again, the charge is small, which is showing a very impressive 29% increase in the third quarter compared to, say, last year. Enterprise is also showing 2% growth now and hitting a record high of 10.7 billion during the quarter. There's more pressure in our individual business given the lack of mobility during the pandemic period and the knockout effect it has had on people's consumer wallets as well as the increased competition that we're starting to see in the market. But although the group was able to hit an all-time high of 46 billion for the Thank you very much. When you break it down between data and non-data revenues, our data revenues are growing at 14% year-on-year and account for 76% of the nine-month service revenues. For the quarter, it's already 77% of total revenues. Next chart. Making up our 104 billion of data revenues, on the right-hand side of this chart, you see that mobile data is about half of that number growing at... Thank you very much. That's 8% increase equivalent to 5 billion pesos compared to the same period last year. Depreciation and amortization as well as financing costs have also been a bit higher compared to prior periods given our investments in our CapEx for the net worth and other items. So DelcoCorp income at 23.1 billion is a 10% or 2.1 billion rise over the 21 billion that we reported for last year. There is also the benefit of the lower income tax rates as a result of the create tax loan to SPACs. Moving on. Again, showing it over the three quarters of the year. Just to take note that we've been able to manage our cash OPEX to a relatively flat number over the three quarters of this period, such that even during the third quarter benefited from the higher income numbers. So we have 24.5 billion to be the outcome for the third quarter, which again represents also an all-time high for us. On a telco core income, as noted, we've been able to see improvements over the quarters from 7.5 to 7.7 and 7.5 billion in the third quarter. Looking at our total subscriber customer base for the group, We have a total customer count of 77.8 million across our mobile, broadband, and fixed-line voice businesses. Just to highlight, for our broadband customers, there are almost 3.8 million broadband customers, fixed wireless of about a million, and 2.8 million at the fixed side. Fiber, as you can see here, increased 800,000 for the nine-month period since the start of the year. I'll show the details for that data. Thank you very much. Thank you very much. Now we've hit the new record at 114,000, but we're also pleased to note that in the month of October, we've been able to break that record again and have come in at about 120,000 new connects for the month of October alone. So taken together with the chart that we saw during the period, the net ads for our fiber customer base was 800,000 in the nine-month period and 324,000 from the third quarter alone. So we are in good shape to exceed the target that we set for ourselves to have 1 million net new customers for our fiber business. So that's likely to be exceeded even if we're already at 800,000 as of September. Just some highlights on the various business segments, starting with the individual wireless business, of course, facing some headwinds because of the challenging conditions as a result of the limited mobility from the pandemic lockdowns, which has confined people largely to home and less need for the mobile service. The knockout effect of also the lockdown situation has been tighter consumer wallets due to job losses and obviously there's been also more active competition from Globe and Tito as the third entrant. But happy to note that our data usage continues to grow. We have 40 million data users since the end of September, averaging 7.9 GB per month. Data traffic numbers continue to be on the rise. The nine-month data traffic is up about 16%. That's driven by both the strong adoption of LTE as well as the early adoption of 5G by the customer base. And then happy to also note that the early statistics from the mobile number portability has shown smart enjoying a net gain from MMT, albeit at relatively low numbers to start off. Next, in terms of the home business, as we noted, upward momentum in our installs. has accelerated our revenue growth and we have clearly been able to show a leading performance in the market. The third quarter revenues for home business is at 12.6 billion, an all-time high, of which 9 billion is the Fiverr revenue contribution and you can contrast that to what it was at the start of 2020. The first quarter of 2020, that was only 3.8 billion, so almost three times from that standpoint. We continue to build out also our ports. We have built 1.2 billion new ports for the nine-month period, so we are well on our way to achieve or in fact exceed the 1.7 billion new ports filled out that we anticipate for this year. We've been asked what we expect if the lockdowns ease and people start to go out. We do anticipate the demand for home broadband will remain quite strong. So there will be still hybrid work and other study arrangements. The lives of people have to change forever and consumer behavior has to be changed. So a lot of dependency still on home broadband as a service to keep people connected and connected. Thank you very much. Thank you. and other corporate clients. WINS with government, the largest is the DepEdWIN where we are servicing the wireless load requirements of teachers supported by the Department of Education. We are very positive about the opportunities that 5G, IoT and especially on the hyperscaler data center business could provide moving forward. We have Red East started the planning for our 11th data center, which will have a capacity that will actually equal or actually be in excess of the combined capacity of our 10 existing data centers. We would have to work with government and other stakeholders to position the Philippines as the next Asia-Pacific hyperscaler hub as part of the growth pillar for this business. There are other digital transformation opportunities Thank you. Thank you, Charlie. We've been able to keep it relatively flat at about 1.4-1.5 billion per quarter revenues for international sign. Moving on, to recap, our increase of revenues by 9 billion. has been translating to about 5 billion EBITDA growth. We also have lower provisions this year, but of course there are some higher cash capex in some cities that we have incurred during the period. As noted also earlier, depreciation and financing costs have risen as a function of the capex investments that we've made behind the net burn. But helping us during this period is the lower income tax rate as well. Inacted through the CREATE tax law. Moving on. So on an EBITDA basis, just to also highlight, we've seen five consecutive quarters of EBITDA growth. So we've hit 24.5 billion for the third quarter. That is an all-time high, and that's an EBITDA margin of 52%. Next chart for core income. Last year, our average for this year is 7.7 billion, from 7.5, 7.7 to 7.9 billion in the third quarter below. So a 10% increase, and we are well on track to hit our 2021 full-year guidance of 30 billion telco core income. Just to see some of the other items that impact our P&L. If we include the results of Voyager, we do have some gain and dilution. So there's still a 14% increase in the core income to add Voyager. Now for the reported income, some movements, the largest one would be the swing of the FX rates from a situation where the PESO appreciated last year to one where it has depreciated this year. So there are rebound gains last year versus rebound losses last year. So that's a 3.3 billion swing year on year. So when you take into account the other numbers, costs are reported income to be a bit lower by 4% compared to what it was last year.