PLDT Inc.

Good afternoon and thank you for joining us today to discuss the company's financial and operating results for the nine months of 2024. 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 www.eldt.com under the Investor Relations section. A timely note that this briefing is being recorded. Podcasts of this event will be available on our website at www.eldt.com. A QR code for presentations is on the screen and in the confirmation notices email field. Joining us today is our Chairman, Mr. Manny Pangilinan, CFO and Chief Risk Officer, Mr. Danny Yu, Attorney Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel. And also here with us today is our new Investor Relations Head, Mr. Guido Branes, as well as other members of the PLD League Group's Management Team. At this point, let me turn the floor over to Mr. Yu to begin the presentation.

Good afternoon, everyone. Let me share with you highlights of PLDT's financial and operating results for the first nine months of the year. Our net service revenues for the first nine months hit a new high of $144.9 billion, higher by 2% from last year. On gross basis, service revenue grew by 4% compared to the same period last year. Operating expenses remained stable at 64.2 billion. Consolidated EBITDA increased by 3% to 80.7 billion, with margins steady at 52%. Telco core income, excluding the impact of asset sales in Maya, rose by 2% to 26.6 billion. On segment basis, our individual business recorded a 1.5 billion or 2% rise in revenues to 62.1 billion. Our enterprise segment registered revenues of 45.2 billion, 4% or 1.3 billion higher than last year. While our home revenues were stable year on year at 45.2 billion. Fiber-only revenues increased by 6% or 2.4 billion to 41.7 billion. We continue to highlight that there are underlying revenue streams registering stronger growth than the headline numbers. This reflects the drag from legacy revenues. Overall, excluding the impact of legacy revenues, net service revenues rose by 5% with the growing segment revenues accounting for 88% of the total. For the individual business, mobile data, which represents 89% of total segment revenues, grew 5% year-on-year, more than doubled the segment growth of 2%, which reflects the drag from legacy SMS and voice. The overall home segment, on the other hand, remains stable year-on-year, Fiber-only revenues, which now account for 92% of the segment, actually grew by 6%. Corporate data and ICT, accounting for 72% of the total enterprise revenues, rose by 6% compared to the overall segment increase of 4%. Let me share more details of the respective business segments. Service revenues for the individual business rose by 2% in the first nine months of 2024, with postpaid and prepaid revenues higher by 3% and 2% respectively. Mobile data remained to be the growth driver, accounting for 89% of the segment revenues. Blended ARPU rose by 6%, mainly from a 7% rise in average usage and a 10% growth in data traffic. Notable for the segment is the continuing increase in active mobile data users to 41.2 million from 40.5 million as of end of June. We are currently revitalizing the mobile data playbook to reaccelerate the segment's performance. Part of this includes subscriber acquisition through continued site rollout, capacity expansion, and geo-targeted campaigns. upselling to higher value offers, and further stimulating usage through enhanced service offers and improved customer service. Fiber revenues, which account for 92% of our home business, continues to rise steadily, having registered a 6% year-on-year growth. We continue to focus on managing churn and accelerating fiber installations. Improvement in service delivery continue to register industry-leading fiber churn levels of 1.7% in nine months of 2024 from 1.91% in nine months of 2023. Fiber installation capacity continues to ramp up with 3Q 2024 fiber installed of 228,000, the highest since first quarter of 2023. Home fiber ARPU remain at around the 15,000 level with lower price plan offered selectively in areas where we have spare capacity. There has been a strong market adoption of new broadband products, which include a fiber only all bundle, lower price postpaid fiber plan, and a home Wi-Fi 5G plan. Other network initiatives include leveraging on our fiber and mobile networks to grow the segment, including expanding in green and brownfield areas, as well as building and multi-dwelling unit fiberization. PLET continues to enjoy strong brand equity and superior network quality, making it a formidable competitor in the market. Growth in the enterprise is driven by continued focus on pushing enterprise solutions. The enterprise segment registered a 4% growth, with corporate data and ICT being the growth drivers, having grown 6% during the period. Included among the revenue streams that recorded improvements were core connectivity, higher ICT revenues from managed IT services, cybersecurity solutions, data center, and cloud services, plus A2P messaging services. Locators in our Santa Rosa data center energized in July have started to come on board. Approximately 20 megawatts of a 36 megawatts IT load capacity are expected to be available by end of 2024. The Vitro Santa Rosa data center is well positioned to capture growth from a hyper scale and AI data center demand ahead of competition. Amidst pressure from higher costs to operate, total OPEX for the period was marginally higher by 300 million as we continue to identify and extract operating cost efficiencies. EBITDA at the end of September 2024 rose by 3% to 80.7 billion on the back of higher revenues. EBITDA margin was steady at 52%. Telco core income for the first nine months of 2024 grew by 2% to $26.6 billion, reflecting the impact of higher dividends, partly offset by higher depreciation and financing costs. On reported basis, PLDT income rose 1% to $28.1 billion. Our share in losses from Maya continues to decline, with Maya on track to achieve bottom line breakeven towards the end of 2024. PLAT's balance sheet remains healthy with net debt to EBITDA of 2.44 times as at the end of September. We remain focused on bringing down leverage to the 2.0 times level, which we expect to attain with the anticipated increase in EBITDA, reduction in CAPEX, and with the balance of the tower sales proceeds. Discussions for the potential monetization of our data center business are still ongoing. Gross debt stood at 272.6 billion, of which 14% are dollar-denominated and 5% unhedged. The average interest costs for the period stood at 5% pre-tax, with the average life of debt at 6.7 years. CAPEX amounted to 52.3 billion at the end of September, consisting of network and IT CAPEX of 46.7 billion and business CAPEX of 5.7 billion. CAPEX intensity or CAPEX to service revenue stood at 34% for the period versus 37% in 2023. Of the remaining 33 billion commitment, Net of Advance is for major vendors. The remaining commitment has been reduced to 4.2 billion. For 2024, our CapEx guidance is 75 to 78 billion, consistent with our aim to continue to reduce CapEx. The increase in the number of unique 5G devices and 5G data traffic continues into 2024. which we expect to be sustained as the price of 5G devices trends downward. 5G adoption is one of the emerging growth streams of our individual business. Moving on to Maya, our fintech investment. Maya Bank continues to be the Philippines' number one digital bank based on deposit balances, which grew by 52% to $36 billion at the end of September. The bank continues to register robust growth in bank customers and borrowers. Loans disbursed life to date stood at 67 billion at the end of September. Maya takes pride in its unmatched speed to market, delivering multiple high-tech banking products for consumers, SMEs, and micro enterprises. With the lenders cast everywhere, Credit card. A collaboration between Maya and Landers, Maya delivered the first digital bank credit card in the market. As mentioned earlier, Maya is on track to turn bottom line positive towards the end of 2024. We're also pleased to report that PLDT's score in the S&P Global Corporate Sustainability Assessment jumped by 13 points to 71%. the highest in the Philippines as of November 2022. In October, PLDT also secured a $2 billion social loan from HSBC for the expansion of its fiber network to reach the 4th and 6th class municipalities. This is in line with its commitment to narrow the digital divide and support the government's initiative to connect the unconnected. Our outlook for 2024 continues to be one of guarded optimism. We expect revenues from our data and broadband businesses to grow by mid-single digits, excluding the impact of legacy revenues. With our continued pursuit of operating efficiencies and cost rationalization, our EBITDA is anticipated to grow by mid-single digits. TelcoCorp for 2024 is expected to land worth of $35 billion In line with our commitment to lower the CAPEX headline number and CAPEX intensity over time, our CAPEX guidance for 2024 remains at 75 to 78 billion. We remain committed to a 60% dividend payout to bringing leverage back to our target 2.0 times net debt to EBITDA level and achieving positive free cash flow before dividends by 2025. Thank you.

So we're now ready to take your questions. You may type your questions in the Q&A box at the upper right side of the screen. You may also click the raise hand button and wait for your name to be called before you unmute your microphone. You may also send your questions via email to pldt underscore ir underscore center or pldt.com.ph. Please indicate your name and company name so we can get back to you for any additional information you may If I raise hand from Louie, you may unmute your microphone.