Diversified telecommunications firm PT&T Corp. experienced slower growth in 1H as the impact of COVID-19 and the lockdowns took a toll on its SME/MSME segment. However, momentum on revenue growth should improve within the year, due in part to the rising rate of daily vaccination in the country.
In its latest disclosure, PT&T revenues grew by seven percent versus last year mainly driven by modest increase in its subscriber base by 15 percent and an eight percent revenue contribution from its IT Services portfolio. PT&T President and CEO James Velasquez hopes that the impact of this month’s reimposition of the lockdown measure against the Delta variant would be minimal, but said that the company will be ready with measures if the threat of the Delta variant or more lockdowns persists. Another ECQ has been implemented in the National Capital Region (NCR) since Aug. 6 until Aug. 20.
“We’re confident that in this time of pandemic, Telco and IT Services sector will thrive, as demand remains strong and steadily growing. This sector will also be essential to our country’s economic recovery as it provides invaluable help to SMEs and MSMEs that needs to restart their businesses.” he said.
The company’s core operating expenses grew by 11 percent to enable the company to adapt to the new normal brought about by the pandemic while investing in operations to support its growing business. With lower revenue growth in the first half, core EBITDA contracted by 16 percent. For the first half of the year, the company booked a net loss of 26.6m or -36 percent year-on-year due to lower revenue growth and booking of depreciation for CAPEX and other Rehabilitation related items.
Velasquez, a former head of IBM Philippines added that positive catalysts will give an upside to PT&T’s overall 2021 performance such as the 12 percent economic expansion in the second quarter of the year, a bolstered vaccination program by the government, an expected surge in spending from the 2022 election campaigns, and the start of the holiday season. PT&T’s board last month had approved a capital increase in the company’s authorized capital stock not exceeding P11.8 billion from the current P3.8 billion.
This in anticipation of the expansion and development of its business and compliance with the debt-to-equity conversion mandated under the Rehabilitation Plan. The Markets and Securities Regulation Department of the Securities and Exchange Commission (SEC) also lifted the suspension of PT&T’s Registration Statement in Aug. 4, 2021. The trading of PT&T’s shares with the Philippine Stock Exchange (PSE) remains suspended pending PSE’s evaluation of PT&T’s comprehensive corporate disclosure in relation to PT&T’s amended Registration Statement as approved by the SEC.
Currently, PT&T has a network reach of 22,800 fiber kilometers in high-growth areas and covering almost 40 percent of the total Philippine population. In 2019, the company forayed into the IT services space, offering accessible, enterprise grade solutions to complement their connectivity portfolio. PT&T holds a 25-year franchise which allows the company to establish, maintain, and operate both wired and wireless telecommunications systems for domestic and international communication in the country.