PLDT Inc. — FY2020 Form 20-F Summary
Business context and reporting period
This is PLDT’s audited annual report for the fiscal year ended December 31, 2020, not a standalone fourth-quarter filing. The Philippine telecommunications and digital-services group reports under IFRS and has Wireless, Fixed Line and Other segments. COVID-19 restrictions shaped demand and operations during the year.
Key financial metrics
| Metric | 2020 | 2019 | Change |
|---|---|---|---|
| Revenue | Php181.0bn | Php169.2bn | +7% |
| Service revenue | Php173.6bn | Php161.4bn | +8% |
| Expenses | Php144.8bn | Php129.8bn | +12% |
| Net income | Php24.6bn | Php22.8bn | +8% |
| Net income attributable to PLDT equity holders | Php24.3bn | Php22.5bn | +8% |
| Adjusted EBITDA | Php86.2bn | Php79.8bn | +8% |
| Operating cash flow | Php85.1bn | Php69.4bn | +23% |
Adjusted EBITDA margin was 50% of service revenue, versus 49% in 2019 on the segment table; management’s discussion reports 44% for 2019, so the comparable margin presentation is not fully consistent in the filing text. Wireless margin rose to 61% from 58%; Fixed Line margin fell to 34% from 38%. Core income increased 8% to Php27.1bn and telco core income increased 4% to Php28.1bn. Basic and diluted EPS were Php112.12, up from Php103.97.
Cash and cash equivalents were Php40.2bn; cash plus short-term investments totaled Php41.2bn. Total debt was Php222.8bn, including Php17.6bn due within one year, up from Php192.6bn in 2019. Total assets were Php575.8bn, total liabilities Php456.2bn and equity Php119.7bn. Cash used in investing was Php68.7bn and cash from financing was Php0.5bn; cash increased Php15.9bn during the year. Property and equipment purchases, including capitalized interest, were Php78.1bn; reported capital expenditure additions were Php71.9bn.
Changes versus the prior year
- Growth was led by data: wireless mobile data revenue rose 26% to Php66.7bn, while mobile voice revenue fell 12% and SMS revenue fell 30%.
- Fixed Line revenue rose 10%, with home broadband revenue up 16% and corporate data and ICT revenue up 6%.
- Expenses grew faster than revenue, driven in part by higher depreciation and amortization, selling and administrative expenses, and provisions. Depreciation and amortization rose to Php47.5bn from Php39.7bn.
- Net income and EBITDA increased, while net cash from operations improved. Long-term debt increased amid new financing and capital investment.
- Mobile subscribers edged down to 72.9m from 73.1m; fixed-line subscribers rose to 3.0m and broadband subscribers to 3.0m.
Outlook, commentary, risks and unusual items
PLDT forecasts 2021 consolidated capital expenditures of Php88bn–Php92bn, funded through operating cash flow, borrowing and asset-sale proceeds. The filing gives no specific company revenue or profit guidance. Management said pandemic-related online activity boosted mobile and broadband demand, while the ultimate duration of that uplift is uncertain. COVID-19 measures cost Php903m in 2020, and network rollout delays contributed to capital spending below budget.
Unusual items include a Php1.451bn gain from the sale and leaseback of Smart’s headquarters; Smart may occupy the property for up to five years. PLDT also recognized Php1.877bn of Sun trademark amortization after rebranding Sun Prepaid as Smart Prepaid. The group’s share of Voyager Innovations losses was Php2.393bn. The CREATE Act, enacted after year-end on March 26, 2021, lowers the standard corporate tax rate from 30% to 25%, retroactive to July 1, 2020.
Principal risks include intense competition, including Dito’s commercial launch in March 2021; foreign-exchange exposure; substantial network investment needs; possible subscriber spending pressure from the Philippine downturn; cyber and data-privacy incidents; and regulatory, licensing and litigation uncertainty. PLDT reported three reportable personal-data breaches in 2020, without material financial, legal or regulatory impact. Pending matters include the PCC proceedings relating to the SMC transactions and the DOLE contractor-worker regularization case. PLDT said it complied with debt covenants and expected available cash and operating flows to cover the next 12 months’ requirements. The auditor issued an unqualified opinion on the financial statements and internal controls.
Important facts for investors to verify
- Reconcile the filing’s differing 2019 consolidated EBITDA-margin presentations and the distinction between total net income and income attributable to PLDT shareholders.
- Confirm the scale and returns of the Php88bn–Php92bn 2021 capex plan, and the funding and debt implications.
- Track whether mobile-data growth offsets continuing declines in voice, SMS and international revenues, and monitor subscriber churn and ARPU.
- Review the sustainability of cash generation and dividends, including the 60% telco-core-income payout policy and the filing’s different presentations of 2020 dividends.
- Monitor the Smart headquarters leaseback, tax effects of CREATE, and outcomes of the PCC, DOLE and other disclosed legal or regulatory matters.