LISTED telecommunications and information and communications technology (ICT) companies are expected to deliver higher results for the second semester on increasing demand for data and the growing adoption of digital transformation, analysts said.
“Our view in the short term is more of the same since telco companies are less susceptible to the inflationary headwinds the region is experiencing. However, sudden macro or geopolitical shocks could still revise our outlook for the remainder of the year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
For the first semester, most telecommunication companies posted gains compared with the same period last year mainly boosted by revenue growth for the second quarter of the year.
Pangilinan-led PLDT Inc. recorded an attributable net income of P9.44 billion for the second quarter, a 22.4% increase from P7.71 billion a year ago amid higher revenues and lower operational expenses.
PLDT saw its gross revenues increase by 1.4% to P51.68 billion from P50.96 billion previously.
“The outlook for Philippine telco and ICT companies is generally positive, with growth expected to continue in the coming years. The industry is being driven by a number of factors, including the increasing demand for data, the growing adoption of mobile internet, and the government’s efforts to promote digital transformation,” said Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc.
Converge ICT Solutions, Inc. reported a second-quarter net income of P2.11 billion, marking a 6.6% increase from P1.98 billion a year ago, which it attributed to subscriber growth and lower cost of services.
Globe Telecom, Inc. reported an increase of 17.7% in its attributable net income to P7.07 billion for the second quarter from P6.01 billion in the same period last year.
From April to June, the company’s gross revenues reached P44.49 billion, an increase of 1.7% from P43.76 billion in the corresponding period of 2022.
“As more people access the internet and consume digital content, there is a growing need for high-speed data services. Telecom companies that can offer reliable and affordable data plans are likely to see increased revenue,” Mr. Arce said in a Viber message.
Meanwhile, DITO CME Holdings Corp. trimmed its attributable net loss for the second quarter to P1.10 billion from P4.63 billion a year ago after it posted higher gross revenues for the period.
For the second quarter, DITO CME recorded P2.62 billion in gross revenues, 54.1% higher than the P1.70 billion a year ago.
Its telecommunications venture is via DITO Telecommunity Corp., which is considered the country’s third dominant telco player.
However, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort gave a somewhat bleak outlook for the sector after the deactivation of unregistered subscriber identity modules or SIM cards, which might drag companies’ revenues and earnings for the coming months.
To recall, mobile operators have started to deactivate SIMs that were unable to register after the July 25 deadline.
“However, this is offset by the economic reopening narrative that would further increase business and economic activities as well as telco revenues and net income,” Mr. Ricafort added. — Ashley Erika O. Jose