PLDT Inc. — FY2021 Form 20-F summary
Reporting period: Fiscal year ended December 31, 2021, with 2020 and 2019 comparatives. This annual filing does not provide a separate Q4 income statement or Q4 financial results. Financial statements are audited and prepared under IFRS; the auditor issued an unqualified opinion.
Business context
PLDT is a Philippine telecommunications and digital-services provider operating Wireless, Fixed Line and Others businesses. It reported 78.8 million users at year-end. Growth increasingly relies on mobile data, fiber broadband and enterprise ICT, while traditional voice and SMS face substitution from over-the-top services.
Key financial metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | Php193.257bn (+7%) | Php181.004bn |
| Service revenue | Php185.751bn (+7%) | Php173.634bn |
| Income before tax | Php34.154bn (+3%) | Php33.021bn |
| Net income | Php26.676bn (+9%); Php26.367bn attributable to PLDT equity holders | Php24.580bn; Php24.284bn attributable to PLDT equity holders |
| Basic and diluted EPS | Php121.76 (+9%) | Php112.12 |
| Adjusted EBITDA | Php95.900bn (+11%); 52% margin | Php86.158bn; 50% margin |
| Core income / telco core income | Php29.937bn (+10%) / Php30.233bn (+8%) | Php27.129bn / Php28.087bn |
| Cash from operating activities | Php91.970bn | Php85.076bn |
| Cash used in investing activities | Php103.640bn | Php68.669bn |
| Cash used in / provided by financing activities | Php4.904bn used | Php0.463bn provided |
| Cash and short-term investments, year-end | Php26.148bn | Php41.226bn |
| Interest-bearing debt, year-end | Php252.557bn | Php222.765bn |
Consolidated capital expenditures, measured as gross additions to property and equipment, were Php88.983bn, versus Php71.904bn in 2020. Cash payments for property and equipment, including capitalized interest, were Php103.977bn, versus Php78.100bn. The filing reports these measures separately. Year-end total assets were Php626.328bn and total equity Php127.465bn; current liabilities were Php224.274bn.
Wireless mobile data revenue grew 6% to Php70.644bn, while mobile voice revenue fell 17% and SMS revenue fell 5%. Fixed-line data revenue rose 17% to Php78.576bn, including home broadband growth of 20%. Fixed-line segment profit rose 80% to Php26.146bn; Wireless segment profit fell 38% to Php9.434bn. Segment revenues are reported before intersegment eliminations.
Material changes and unusual items
- Revenue growth was led by broadband and data services; consolidated expenses rose 5% to Php152.496bn, including 10% higher depreciation and amortization, partly offset by lower provisions.
- Foreign-exchange losses were Php3.890bn, compared with gains of Php1.488bn in 2020, reflecting peso depreciation. The peso closed at Php50.97 per U.S. dollar, versus Php48.02 a year earlier.
- Other expenses, net, increased to Php6.607bn from Php3.161bn. The 2021 results included a Php1.372bn gain on debt modification and Php0.884bn gain on property and equipment sales; 2020 included a gain on the Smart headquarters sale-and-leaseback.
- CREATE tax reform reduced the corporate income-tax rate from 30% to 25%, retroactive to July 1, 2020. FY2021 income-tax provision was Php7.478bn, down from Php8.441bn.
- Typhoon Odette’s estimated 2021 impact was approximately Php1bn from rebates, lost revenue, free load and network repair or replacement. Insurance claims were pending review. COVID-related expenses were Php942m, versus Php903m in 2020.
- Common dividends declared for 2021 earnings totaled Php84 per share, including Php42 per share declared in March 2022. FY2021 cash dividend payments were Php17.712bn. The stated regular payout policy is 60% of core telecommunications income.
Outlook, risks and contingencies
Management estimated 2022 capital expenditures of Php76bn–Php80bn, funded through operating cash flow, borrowing and potential asset sales. Priorities include network maintenance and expansion, LTE/5G rollout, fiber and broadband installations, submarine cable capacity and IT projects. The filing provides no numerical revenue or earnings guidance. Management said operating cash flow and available cash should fund projected requirements, while noting external financing may be used.
Key risks include stronger competition from Globe, Dito and fiber providers; pricing pressure and customer switching; peso weakness and foreign-currency exposure; substantial investment needs and debt covenants; regulatory and licensing uncertainty; cyber and data-privacy risks; and the pandemic’s uncertain effects. PLDT reported four personal-data breaches requiring notification in 2021, with no material financial, legal, reputational or regulatory impact reported. Significant pending matters include the PCC litigation concerning the SMC transactions and the DOLE contractor-worker regularization case. The Public Service Act amendments signed in March 2022 remove telecommunications from the public-utility definition, potentially easing foreign investment while also increasing competitive risk. Management disclosed no significant change in financial position after year-end.
Important facts for investors to verify
- Reconcile reported net income, core income and telco core income, including the non-GAAP adjustments and their tax effects.
- Review cash conversion and the distinction between Php88.983bn of capital-expenditure additions and Php103.977bn of cash equipment payments; assess funding needs against lower year-end cash and higher debt.
- Verify debt maturities, interest-rate exposure, hedging and covenant headroom, particularly under further peso depreciation or increased capital spending.
- Assess whether fixed-line and mobile data growth can offset declining voice/SMS revenues, subscriber losses and competitive pricing.
- Track Odette insurance recovery, PCC and DOLE proceedings, and the implementation and competitive consequences of the Public Service Act amendments.
- Confirm execution of the 2022 capex plan and the sustainability of dividends under the stated payout policy.