PLDT Inc. — FY2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone 2022 fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB; amounts below are Philippine pesos (Php) unless stated otherwise.
Business context
PLDT is a Philippine telecommunications and digital-services group operating Wireless, Fixed Line and Others segments. It reported serving 74.1 million users at year-end. Its services include mobile, broadband, fixed-line, enterprise data, data-center, cloud and cybersecurity offerings.
Key financial metrics
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Revenue | Php205.245 billion | Php193.257 billion | Up 6% |
| Service revenue | Php196.227 billion | Php185.751 billion | Up 6% |
| Net income | Php10.735 billion | Php26.676 billion | Down 60% |
| Net income attributable to PLDT equity holders | Php10.485 billion | Php26.367 billion | Down 60% |
| Basic and diluted EPS | Php48.26 | Php121.76 | Down 60% |
| Adjusted EBITDA | Php93.945 billion | Php95.900 billion | Down 2% |
| Core income | Php30.567 billion | Php29.937 billion | Up 2% |
| Telco core income | Php33.116 billion | Php30.233 billion | Up 10% |
| Cash from operating activities | Php76.200 billion | Php91.970 billion | Down 17% |
| Cash capital expenditures paid | Php95.551 billion | Php103.977 billion | Down 8% |
| Interest-bearing debt | Php249.580 billion | Php252.557 billion | Down 1% |
The filing reports a consolidated Adjusted EBITDA margin of 50% in one table and 48% in another; the audited segment information shows 48%. Investors should verify the reported margin and its denominator. Cash and cash equivalents were Php25.211 billion and short-term investments Php0.383 billion at year-end. Current assets were Php81.329 billion versus current liabilities of Php247.002 billion. Lease liabilities, reported separately from interest-bearing debt, totaled Php42.435 billion.
Material changes versus FY2021
- Fixed Line revenue increased 10% to Php128.712 billion, led by home broadband revenue growth of 22% and data revenue growth of 15%.
- Wireless revenue declined 2% to Php104.274 billion; wireless service revenue fell 4%. Mobile subscribers decreased 7% to 66.3 million. Mobile data revenue rose 2%, while mobile voice revenue fell 20% and SMS revenue fell 11%.
- Reported profit fell sharply despite revenue growth. Depreciation and amortization increased to Php98.714 billion from Php52.169 billion, including Php51.204 billion of accelerated depreciation adjustments identified in the core-income reconciliation.
- Operating cash flow decreased Php15.770 billion. Investing cash outflow narrowed to Php33.006 billion, largely reflecting tower-sale proceeds; financing cash outflow was Php42.304 billion.
Outlook, management commentary, risks and unusual items
- Management estimated 2023 capital expenditures of approximately Php79 billion, focused on network maintenance and expansion, LTE coverage, broadband installations and IT projects. It expected available cash and operating cash flow to fund planned requirements, while noting external financing may be used.
- Management targets a dividend payout of 60% of core telecommunications income and describes a minimum liquidity objective of US$400 million. It stated that 68% of debt matures after 2026.
- The tower sale-and-leaseback generated Php60.492 billion of proceeds from 4,665 towers transferred in 2022 and a reported net gain of Php24.563 billion. The agreements include 10-year leasebacks. Further closings and separate tower transactions remained subject to conditions.
- PLDT recognized Php7.839 billion of income after the remaining preferred-share redemption trust balance was returned following expiry of the relevant payment obligations.
- The peso weakened about 10% against the U.S. dollar in 2022, increasing foreign-currency exposure. Approximately 17% of consolidated debt was U.S.-dollar-denominated; management reported an unhedged share of about 5% after hedges and allocated dollar cash.
- Key risks include competition, mobile subscriber and legacy voice/SMS declines, network investment needs, foreign-exchange and interest-rate exposure, debt covenants, vendor reliance, cybersecurity and data privacy, regulatory changes, and natural disasters. PLDT disclosed six reportable personal-data breaches in 2022 and said they had no material financial or operational impact.
- Legal matters include a February 2023 U.S. putative class action alleging misleading statements about capital expenditures from 2019–2022; PLDT could not estimate potential liability and plans to defend the case. Other pending matters include labor regularization proceedings, the PCC review dispute over the SMC transactions, and interconnection-related proceedings involving DITO. Smart also received a PCC subpoena in an industry investigation; the filing reported no further notice as of its date.
- The filing reports unqualified audit opinions on the IFRS financial statements and internal control over financial reporting. The auditor identified revenue recognition, pension-asset valuation, goodwill recoverability and useful lives of property and equipment as critical audit matters.
Most important facts for investors to verify
- Reconcile the reported Adjusted EBITDA margin figures of 50% and 48%, and assess reported net income separately from adjusted core measures.
- Review the scale, timing and cash effects of accelerated depreciation, tower-sale gains, the preferred-share trust income and other adjustments excluded from core income.
- Confirm 2023 capital expenditure plans, vendor commitments after settlement agreements, remaining tower-sale closings and leaseback obligations.
- Track operating cash flow, liquidity, debt maturities, interest costs, covenant headroom and sensitivity to further peso depreciation.
- Monitor subscriber trends and whether fixed broadband growth can offset wireless subscriber losses and ongoing voice/SMS declines.
- Follow developments in the class action, PCC and DITO matters, labor cases, and any subsequent regulatory or cybersecurity disclosures.