Good afternoon, and welcome to the PLDT Conference Call. This conference call is being recorded. At this point, I would like to turn you over to Melissa Vergel de Dios, Head of Investor Relations of PLDT for the introductions. Please go ahead. Thank you..

Mr. Manny Pangilinan, Chairman and CEO; Mr. Al Panlilio, Chief Revenue Officer, and today appointed President of Smart; Ms. Anabelle Lim Chua, Chief Finance Officer; and Atty. Ray Espinosa, Senior Adviser to the Chairman and CEO. At this point, let me turn the floor over to Ms. Anabelle Chua for the presentation..

Thank you, Melissa. Good afternoon to everyone and welcome to our first half 2019 results review. The key highlights of our financial results for the first six months of 2019 are as follows. Our service revenues came in at PHP76.7 billion, which is 7% or PHP4.8 billion higher year-on-year.

Revenue growth was led by the wireless individual business, which saw a 20% boost in service revenues from PHP34.4 billion. Our Home segment grew at a more modest pace of 2% year-on-year to PHP18.3 billion due largely to the lingering impact of a disruption of our installed and repair activities.

On the other hand, our enterprise business posted a 6% increase over previous year to hit PHP19.4 billion. On a combined basis thus our consumer and enterprise segment revenues which account for 94% of our total revenues grew at a higher 11% year-on-year equivalent to a PHP7.3 billion increase.

Our consolidated EBITDA in the first half 2019 amounted to PHP40 billion up by 15% due to the combined impact of higher service revenues and lower cash OpEx. This figure also reflects the impact of PFRS 16, the new accounting standard for leases, which was adopted at the beginning of the year. EBITDA margins in the first half was 50%.

Our telco core income which excludes the Voyager results amounted to PHP13.2 billion, which is similar to the core income amount registered at the first half of 2018. Lastly and finally, our reported net income grew 4% year-on-year to PHP12.2 billion.

Now in line with our dividend policy our Board of Directors today approved an interim cash dividend of PHP36 per share for a payment on September 10. This represents a 60% payout of our PHP13.2 billion telco core earnings. On an annualized basis this resulted in a 6.4% dividend yield.

Now we show in the next slide our consolidated service revenues for the past five semesters. Our revenues have been trending higher every semester over the last 2.5 years and our revenues in the first half of 2019 are at a high of PHP76.6 billion up 7% compared to first half 2018.

We are also seeing the acceleration in growth when you compare the current 7% increase versus the revenue growth a year ago, which was at 2%.

Now when you take a longer historical perspective the first half 2019 revenues rose from a low of PHP70.6 billion in first half 2017 to be the highest semester since second half 2014 and is approaching the PHP77 billion plus levels we saw in second half 2013 and first half 2014.

In the next slide, we also show our revenue performance on a quarterly basis. Service revenues in the second quarter of 2019 rose 2% quarter-on-quarter and 7% year-on-year to PHP38.7 billion. Again, you will the see improving revenue performance of the company on a consistent basis over consecutive quarters in the last 2.5 years.

In 2Q our consumer wireless revenues in particular are higher by 22% year-on-year. Moving to slide 7 where we look at our consolidated service revenues by service. Data and broadband revenues at PHP49.6 billion for the semester are up 19% year-on-year and now comprise 65% or the largest portion of our consolidated revenues.

If we exclude our international segment data and broadband really account for 59% contribution in the consumer enterprise revenue. On a like-for-like revenue allocation basis, we saw mobile internet revenues up 47%, home broadband higher by 4%, corporate data rose by 5% and data center revenues grew by 23%.

So clearly data and broadband revenues drove the growth for PLDT during the first semester. The balance of 35% of our revenues consisted of 26% of domestic voice; 6% from SMS; and lastly 3% from international voice.

Now on the back of our higher service revenues our consolidated EBITDA came in at 15% higher to reach PHP40 billion, PHP 20.1 billion in Q1 and PHP19.9 billion in Q2. The adoption of PFRS 16 resulted in a PHP3.1 billion increase in EBITDA. But even on a pre forma PFRS 16 basis, our EBITDA is still higher by 6% year-on-year at PHP36.8 billion.

Our EBITDA margin rose to 50% on a PFRS 16 basis. On a pro forma basis, our EBITDA margin would have been 46%. Our EBITDA of PHP40 billion here excludes the onetime expenses that we had with our rent power reduction program amounting to about PHP300 million in the first half 2019.

We do expect to recognize the higher MRT expense in the second half of the year. Now on a quarterly basis our EBITDA in the first two quarters of 2019 are at a higher level than the quarter EBITDA we saw in 2018. This is true both with and without the PFRS 16 changes. EBITDA in the second quarter is higher by 15% versus the same quarter last year.

Now turning onto the next slide. Our core income from telco operations hit PHP13.2 billion stable year-on-year. We had a PHP5.2 billion list EBITDA offset by higher noncash expenses of PHP4.1 billion and higher financing costs of PHP700 million.

Our telco core income excludes the impact of our share in the losses of Voyager of about PHP600 million and gains from sale of rocket shares of about PHP100 million. Now we expect our quarter net income of PHP12.2 billion which is actually up 4% from prior year.

Our reported income includes our Reva gain and our remaining rocket investment amounting to about PHP600 million based on a share price of €25.36. The core income of PHP13.2 billion was steady versus first half last year, did represent a 22% increase when compared to PHP10.8 billion core income in the second half of 2018.

Now looking at our balance sheet -- some of our balance sheet items, as of the end of June 2019 consolidated net debt stood at $2.8 billion, while net debt-to-EBITDA ratio was at 2 times. Our gross debt amounted to $3.38 billion only 7% of which is unhedged or exposed to the U.S.

dollar while 89% of our debt are fixed rate notes both are interest rate fluff. Average cost of our debt stood at 4.8% per annum. The first half of 2019 our cash flows were supplemented by about PHP680 million proceeds from the sale of 457,000 rocket shares.

So we still own about 2 million shares in Rocket equivalent to approximately PHP2.8 billion in market value. PLDT's credit ratings remain at investment-grade level. Looking now at slide 13. PLDT and Smart have accelerated the rollout of the group's fixed and mobile network providing a strong lift for revenue growth.

Our CapEx for first half 2019 came in at PHP32.7 billion putting us on-track with respect to our PHP78 billion CapEx guidance for the year. Of the PHP32.7 billion PHP24.9 billion was spent on the network and IT platforms.

The CapEx investment has been paid over the years and now PLDT's network to continues to be recognized for superiority in various third-party surveys such as the Ookla speed test awards and the OpenSignal survey result.

We recap here in this slide the most recent published speed latency and other results from Ookla and OpenSignal which show PLDT and Smart to have the fastest mobile and fixed broadband in the Philippines.

We continue to step up expansion of the reach of our fiber-optic cable network and fiber-to-the-home broadband network as well as the coverage and capacity of our LTE and 3G leverage to better serve the rising demand for data and video services.

So in addition to -- we expect -- in addition to what we spent in the first half that our CapEx allocated to widen PLDT leaving the network will hit the PHP48 billion for the full year.

And on top of that we expect that we would have higher business related CapEx in the second half of the year in association with rolling out our last miles to support the ports available for sale. So just -- as of June 2019, I showed you some stats on the network side.

PLDT increased the coverage of our fiber-powered fixed broadband network to 6.9 million home passed up from 6.3 million homes passed as of end 2018.

We boosted our port capacity to 3.22 million ports and we have ready 1.2 million ports that we intend to sell this year and next year in support to the higher revenue contribution from our whole business. In Mobile, Smart has installed over 19,200 LTE and 4G base stations and another 12,400 3G base stations.

So the step-up rollout of our LTE and 3G base stations have allowed Smart to meet our commitment to provide high-speed wireless data services in almost all of the country's cities and [indiscernible] and not only are we improving coverage in the country we're able to activate the LTE-Advanced which offers even higher data speed.

Now at this point, I'll turn over the presentation to Al Panlilio to be followed by Renren Reyes and Jovy Hernandez..

connectivity, mobility and security. On connectivity, just fortified leadership in the fixed data space; for -- actually number two, mobility, grow wireless beyond postpaid; and for ICT, really developing solutions, again, that address business requirements and not just really datacenter space.

So we want to make sure that we understand the business of our customers and we're able to address the requirements and how we can increase value for their own business. At this point, I'd like to bring in Ren to present in more detail our consumer business. Thank you..

YouTube grew by plus 43%; NBA League Pass grew plus 113%; iWant TV grew 189%; and iflix grew by 244%. Beyond video, our big play in mobile gaming is also starting to pay off. Our focus on Mobile Legends is delivering significant gains in data users and traffic.

Our unique subscribers using Mobile Legends grew 381% since Q3 of 2018, while data traffic has increased 12x over the same period.

Furthermore, I'm happy to share that our very own PLDT-Smart Omega esports team was recently crowned champion in the National Mobile Legends Tournament for Conference 1 further building our awareness and influence in mobile gaming.

I'm also happy to announce that Smart together with MMI will be bringing in U2 to the Philippines on December 11, which will be our big music event and tentpole event for the year. So watch out for details soon on how to win tickets with Smart. So moving on now to Consumer Home.

PLDT Home Business grew modestly in the first half of 2019 to PHP 18.3 billion, a PHP 363 million incremental growth or plus 2%. These first half numbers still there. The lingering impact of the disruption of our install and repair system from the second half of 2018.

We had to rethink our approach to installation and repair, and took the opportunity to focus on building a best-in-class CX model for home. So in the first half, we had to hire new people, train them, pilot new models and adjust processes really with the aim of delivering the best home broadband service in CX.

I'm happy to share and present to you that these changes are now bearing fruit. After fully rolling out this new service delivery model in June, PLDT Home has hit a record 90-year high for Fixed Line installs this July 2019, at a rate that is 44% higher than the previous quarter.

This new high is a proof that our new service delivery model is more productive. Moreover, it sets us up for a strong ramp up in delivery for the second half of the year and beyond. Beyond the numbers, we are also launching this month key programs to further improve fixed wired CX.

First, we are launching our new zero backlog campaign as mentioned by Boss Al. This is a journey to the improve service delivery for quick installation and repair. We will also be increasing broadband speeds this month at no extra cost to our subs.

And number three, we are -- we will be launching our instant broadband service connection using fixed wireless for immediate service delivery when customers apply. On top of our record high fixed wire installs, July is also a high for fixed wireless activations growing 67% versus our Q2 average.

This acceleration comes from the lack of CX enhancements on our prepaid home WiFi experience, when we launched number one, the new fan load packages; and number two, the new app which makes checking usage loading promos and getting help much simpler for our consumer.

Seeing our July numbers and with the new programs in place, we're looking at a much better second half performance for the Home business. Thank you and I'll now pass on to Jovy for PLDT enterprise..

Thank you, Renren. Pleasant good afternoon to everybody. I'm pleased to present the first half 2019 results of the Enterprise business. The Enterprise business continues to grow fast. As of the first half of 2019, net service revenue stood at PHP 19.7 billion growing PHP 1.5 billion or 8% versus same year last year.

The implementation of IFRS 16 has tempered that number to PHP 19.4 billion for a growth of PHP 1.2 billion or 6%. Nonetheless the performance headlines of our lines of business has remained unfazed. First, fixed line revenues continue to grow, fueled by the sustained demand for data.

Second, our wireless revenue sustained its double-digit growth performance and is growing beyond just postpaid. Last but not the least, our ICT business is now growing more than two times of market pace, and is growing beyond just data center.

To simplify the complexity of the B2B space, we have defined a framework we termed the Future of Work, which will guide us on how we serve our enterprise customers moving forward. And we said the Future of Work is going to be connected. The Future of Work is going to be mobile and the Future of Work must be secure.

These three elements are required for businesses of all sizes to achieve success. Allow me now discuss each one. First, the Future of Work is going to be connected, and our Fixed Line business is going to be the one to enable that. Our Fixed Line business continuously is being fueled by the demand for data.

Fixed data revenues increased by 9% by almost PHP 1 billion for the same period last year. And again, the implementation of IFRS that stood at PHP 10 billion by the first half of 2019 growing by 6%. Nonetheless our Fixed Line remains to be the biggest contributor of growth in terms of absolute peso growth.

As enterprise will be expander branch networks both domestically and internationally, networking solutions will continue to grow. Our domestic networking solutions category grew by 11% or PHP 220 million over the same period last year. Our global enterprise operations grew by 62%.

It is note worthy to mention that our Asia PAC operations, specifically Hong Kong and Singapore together, grew by 423% year-on-year and now accounts for 40% of global enterprise revenues. That being said, our vision of connectedness is one that is inclusive.

All businesses of all sizes, including SMCs must be connected and will be strong in our results enough in enabling that future. In our clear comparative advantage in this regard is Fibr. Fibr is still the preferred connectivity solution for enterprises as it provides a reliable, robust and secure connectivity platform.

Next we said the Future of Work is going to be mobile. Mobility allows us to take a state of connectedness wherever we go for us to use whenever we need. And when we talk about mobility for us, it is more than just postpaid corporate lines. It is also becoming increasingly about connecting machines and devices.

The Internet of Things has enabled new interactions between people and machines. And in line with this, our strategy has been very, very clear from the very start. We must grow our wireless business beyond just postpaid and you are seeing just that.

Net service revenues for the first half stood at PHP3.1 billion growing 12% year-on-year with an incremental growth of PHP300 million. Our postpaid business grew by PHP100 million versus same period last year on account of new corporate subscriptions won over competition close to 100,000 net new subs.

But it's also worthy to note that our IoT portfolio has grown by 43% and has delivered an absolute peso growth of PHP230 million. We continue to focus on developing solutions by way of launching the Smart 5G lines.

This alliance is focused on developing 5G solutions that will deliver real value to enterprises and not just depend on the speed proposition of 5G in terms of access. Lastly, the future of work must be secure.

As we are physically and socially joined by connections and mobility enables this to spread and scale, we can be both massively successful and dangerously vulnerable at the same time. Security, both physical and cyber, is no longer optional and this is where our ICT business comes in.

We are pleased to know that we have been able to improve the growth trajectory of our ICT business. Our ICT business grew by 20% year-on-year, delivering an incremental growth of PHP400 million and we are growing more than two times the pace of the market.

We continue to leverage on our indisputable leadership position in the data center space with 9,000 capacity of broadband 10 data centers nationwide which now include disaster recovery facilities that enable business continuity solutions for our customers. Data center revenues grew by 12% year-on-year.

More importantly we continue to aggressively strengthen our ICT capabilities and we've been able to diversify where our growth is coming from. Aside from data centers, our cloud solutions, cybersecurity solutions, and managed IT services, respectively are now contributing significant incremental growth to the business.

The relevance of our ICT business and the capabilities we have built on data centers, cloud, cybersecurity, and managed IT, while very complicated is very simple when it comes to its purpose. We take care of the complexities of IT, so our customers can focus on their core business.

But beyond just technology, our success is hinged on our ability to really understand the business of our customers for us to be able to provide best solutions of real value that will make them succeed. Our customers' success is our success.

And in line with what Boss Al has mentioned in terms of customer centricity moving forward, we will not focus on competition, but our new obsession is really understanding our customers. That's it for Enterprise, and I hand over now the mic to our Chairman, Sir MVP..

Thank you and thank you, Jovy, and good afternoon to all of you. I'll be brief. My job is to look at the guidance for second half and for the full year 2019. Focusing first on our revenues, particularly for the second half. For the wireless side, so far trend for July and August are showing similar quantum as manifested in the first half.

So the first half as Ren indicated was about PHP5.8 billion growth in wireless revenues. So, we'll likely to replicate that if not a bit more in the second half. For the Home, we did lag behind in the first half. Revenues rose by only about PHP400 million.

We should expect to improve significantly in the second half with the reorganization that Al described to you. So, we should see a growth in revenues north of PHP1 billion for the second half. Similarly, for Enterprise, typically the Enterprise revenues are significantly higher in the second half than compared to the first half.

So the growth in revenues for the first half -- for the second half should be north of PHP2 billion. When you sum it up, it will be PHP10 billion to PHP12 billion growth for -- about PHP9 billion sorry PHP9 billion -- currently sum it up north of PHP9 billion. Now, the impact of international revenues in the first half was a negative PHP2.4 billion.

In the second half, we anticipate the negative impact to dwindle down to as slow as PHP400 million. So, you're seeing that the negative impact of international revenues significantly declined.

So, with that kind of growth that you're seeing for the second half across the three revenue suites, most of those would be -- will flow to the revenue line and down to EBITDA and to the bottom-line. So, I think we've seen the worst of the negative impact of international business on the revenue line of PLDT.

In fact the number as I said is negative PHP400 million and I think in the fourth quarter fact that it would be a slightly positive as far our projection. So, overall, the second half last year our revenue was something in the order of about PHP74 billion, when you -- when you based on these assumptions, the projected revenues for the second half.

Most likely, the revenue we're seeing for the second half this year will be north of PHP80 billion this year. Our revenue for the first half was up like PHP76 billion right? So, that's the picture of the revenue, I think a significant increase on the revenue line, of PLDT.

Now, of course, there are certain expense items that are challenged, with the growth of our network and increasing coverage. There will be pressure and depreciation, maintenance and rental, that which are probably quite expected. So we will have to contain costs in other areas principally, in compensation and benefits.

And in fact there is a ongoing campaign to reduce headcount across the board, across PLDT, across the fixed and the wireless side and in other areas of expense, and because we would like to see, a growth in EBITDA. And I think we'll see a growth in EBITDA of about 10%, in the second half, compared to the first half.

The first half EBITDA was about PHP 40 billion. So you'll see around 10% growth in EBITDA for the second half. So you'll see a, growth in EBITDA for the full year, north of PHP 80 billion. Now we've guided the full year profitability slightly upwards.

Where I think, when we guided in March this year, we said that telco core would be around PHP26 billion. I think we're prepared to say that, the telco core should be 10% of what we did last year, which was PHP24 billion. So we're guiding to a slightly higher number of PHP26.4 billion, for the full year, I think that's about it.

There's not too much left to say..

We're now ready to take your questions.

As in the past, we'll take questions from those who joined us, through the conference facility, before we take questions from the floor, Operator?.

Thank you. [Operator Instructions] Our first question comes from the line of Luis Hilado. Your line is now open..

Hi. Good afternoon. And thanks for hosting the call. I have three questions and just in relation to the focus on your customer service, both installation and repair, but reconciling it with also the manpower reduction plan.

How do you intend to do the former, while also executing the latter? Will it require more outsourcing or will there be some aspects of insourcing? Second question is regarding, -- yeah to clarify on international. What is the -- what are the factors that are driving the moderation in the decline.

And even expectations of growth in the fourth quarter? And last question is on, if you can get an update on mobile number portability.

And what your plans are in that space, once it's already available for consumers?.

Hi good afternoon. Let me take the first question with customer service. So -- in relation to, MRP, so, the whole new business model that we filed in the first half= is really to increase productivity. So, if you ask me look at without citing specific numbers.

But versus the productivity that we did in the first half of last year, compared to the productivity we did in July, each team almost has doubled the level of productivity, let's say July versus last year. So that's really with the new processes and systems in place. We have improved productivity. And therefore it's still in line with MRP.

And number two, I think within the organization, a new trust that Boss Al has described. We are looking to further increase even more, hopefully by another 30% within the coming months. So that's, I think, the path towards continued and better service delivery, installations and repair, while keeping costs at a manageable basis..

Thanks..

Thank you. Next question comes from the line of ….

Sorry. Hello. I have two questions. I have two questions still, one on international and one on the MNP..

Your question is on international is why we did it moderate?.

And will it recover even to growth yes?.

I guess it's just a natural state of decay. I suppose at some point we had expected to make -- that explanation I could give. At some point, we had expected international revenues to reduce to a level of stasis right? Like what we're seeing on our voice business. So it's leveling off. And its not growing, slightly and same with SMS.

It will drop to that level of consistency and we're seeing that on the international voice side, because I think 2010, was it? The kind of revenues we're seeing on the international side was a PHP5.43 billion, and now it will be anywhere between PHP8 billion to PHP9 billion this year.

So there was a huge effort at replacing what was naturally occurring losing significant amounts of revenues, as we did on the voice side particularly the wireless voice and the wireless SMS. I don't offhand know the numbers in terms of the replacement. The revenues are needed to be addressed.

So, if you combine that with the international effect and the voice and SMS not to brag about it, but it's been a huge effort within this organization to replace a huge amount of revenues that are being lost, as a result of technological change. And now data accounts for about 60% or 70%, of our total revenues.

And now you're seeing, I think signs of growth in the business. I don't think we're completely there yet.

Now, what's happening? And why are we optimistic about positive growth in the fourth quarter is because the folk's over there at international led by Cargill [ph] who is in this hall as well is that they're also transforming their business from the traditional voice and carrier business into more data right? And more Filipino content that the OFWs want.

And I think that's done a good job. Who would ever think that international voice international business whatever see a positive growth. It's not going to be huge, but at least it will grow moderately in the coming years. And as I said, the worst about this international business looks like it's over. It's starting to head that way.

And I think by the fourth quarter, we should be able to report to you some positive growth in revenues..

I just like to add the comments of MVP. Just on international I think he would have done good job. There are three areas where the stabilizer even growing the carrier like MVP said aside from voice, a growth which I think is stable volume anyway still. And people still want to talk to somebody, I hope. And the other one is repatriating the data.

So they're able to sustain that and even grow that carrier business. The other one that's growing is roaming. It's also growing. So that business is growing and the third arm is PLDT Global which is the international retail entity. That's also driving data services or revenues for the group.

Not significantly, but again it's a positive contribution to international.

And third question, Vic?.

On mobile number portability, the PLDT Group Smart in particular is taking steps to comply with the law and the regulation. The first step is to form the mobile number portability service provider and we are doing this together with Globe Telecom. And eventually the third player the Infotel Community will be part of this service provider.

So the service provider company becomes key to the mobile number portability compliance. Internally, as far as the group is concerned steps are being taken measures are being taken already by the network group to prepare for the implementation of mobile number portability..

Thanks, all. It’s very clear..

Next question comes from the line of Arthur Pineda..

Hi. Thanks for the opportunity. Just two questions, please. Firstly, if you look at the net subscriber ads in the mobile space, it's been strong for both operators 30 million net adds this quarter, 26 million for the first half. It seems to be far sharper versus the prior quarters.

Just wondering what's driving this for the sector? Is there bigger push towards acquisitions as compared to let's say top ups within the industry? Second question, I had is with regard to the headcount reduction charges any time you're looking 0.3 billion for MRP in the first half.

How much more can we expect in the second half? Is there a budget for that in terms of headcount reductions? Any color on the number here so we can estimate maybe the savings going forward? Thank you..

Arthur, Renren here. On the subspace actually now we're seeing it's quite difficult to really understand what's happening in the subspace, and really it has to do with last year September to October there was a change in the way one recognizes active subscriber base. It used to be based on a 90-day total zero balance validity.

So that was in the first half of the year. By September/October, the NPC changed that to a one-year validity of total zero balance. And therefore, you change the rules of when to recognize churn.

So in that case, it's kind of shifting the view and if you have to total the subspace of the two operators, it's amounting to 160 million, which is not really reflective some of the true picture of active subscriber base.

So I think with that it kind of gives you -- we're now kind of focused more on really active subspace and number to revenues of having metric because the subspace, it's hard to compare even the way we treat the one-year validity versus the way our competitor treats one-year validity.

There might be a difference as well and that's why they're showing quite a sharp increase in the sub count. So that's for the first question..

And in our case at least we could say we do churn our sub-base. So in any event we think, that the metric the more important metric is revenues rather than subspace as we speak especially because the NTC rule which simply just inflates the number I don't know why they do that for the sake of inflating I don't know.

The other thing is that there is -- while there is still a subscriber acquisition ongoing, we're still focusing obviously on top ups, because again the focus is on revenues and I think the quantum of top ups for Smart for the total wireless brands the three brands have risen significantly more than 20%..

I think that relates to your question Arthur that how does the subspace compare to the top ups. Actually there is -- well there is real growth I can say for Smart in terms of subspace. It needs converting to top up. But beyond that even our existing subs are actually growing in terms of data usage and therefore growing in terms of top ups.

So our ARPUs actually increased for a bit..

Arthur with respect your second question in manpower reduction program. To be perfectly honest about it, we are still -- it is actually ongoing at the moment so therefore we do not have the numbers that you are asking for as we speak.

But certainly the expectation that it will be a higher expense that we will have the book in the second half of the year compared to what we had because this is a more focused and directed program that we have this quarter at PLDT and Smart. So we would be able to give better color on that I guess when we announce our third quarter results.

And we said that the general approach that we have had to our MRT program is really look for efficiencies and rightsizing.

And typically, there is an upfront cost to it, but we make up for it by way of savings over time, basically is 1.5 years to two years then you sort of equalize what you spent upfront vis-à-vis the savings you have from a running basis..

Understood.

Is there a number in terms of head that you reduced in the first half?.

First half I think that's about 300-or-so people..

Great. Okay. Thank you very much..

Operator any other questions in the queue?.

No questions over the phone. You may proceed..

We'll take questions from the floor. There are microphones in the center of the room. No questions? Last chance. There are none..

Hello. I'm [indiscernible] from Build Securities [ph]. This is regarding the Voyager. A while ago you said there's a PHP600 million plus for Voyager.

So can you give us a guidance or the timeline for the turnaround of Voyager? And in the short-term, can you expect Voyager losses for EBIT and how does Voyager get into the overall strategy of the group?.

Great question and very opportune because we like to introduce to you the new CEO of Voyager please? He wants to answer the question. Okay. Anyway, well we need to [Indiscernible] for the first time with the PLDT board this morning and he did give a short presentation of what his first impressions are.

Could you give them more about the month? I thought it was a very clear and cogent presentation to the board.

And basically, he spoke about the three lines of business of Voyager the principal ones anyway, which are the merchant acquisition, the Smart Padala which is the domestic remittance business basically and the Digital Wallet, the PayMaya business.

And I think on the remittance side and on the merchant side, there's been significant progress made by Voyager for the past few months and, of course, now on the [indiscernible] who's got experience on the payment side with AMEX and with Visa. And I think we're getting traction on the PayMaya side of the business.

So I think we've introduced an app already for PayMaya. We'd still see losses albeit slightly lower than what we had budgeted for the full-year, but the shareholders take ourselves and Tencent are pushing management to raise the level of the business. In other words raise the level of expenditure through the rights.

We don't know if we haven't seen that 2020 budget of Voyager. But let me just say that already just talk internally amongst the shareholders a new funding round for Voyager. Not so much for this year, but for part of 2020 and beyond. So we don't have the details yet and how the quantum is going to raise the money, in due course we will let you know..

Any other questions? There are none. We'll turn the floor back over to MVP for final remarks..

Thank you, Melissa, and thank you to everyone for listening to us in the presentation. Let me just maybe in a way recapitulate what I said earlier namely, I would say a bullish outlook for the balance of the year for the second half this year. We will have revenues that are slightly in the region of PHP160 billion.

And I think that's our service revenues. So that's unhistoric high for PLDT and I think that will flow down to the EBITDA, not quite to the profitability then. It should be with a -- maybe in the second.

So I think we have to get our act together on the Home side on the FTTH we have about 3.2 billion fiber to the curve, 1.3 million ports that need to be sold. Remember the ARPU of that is about 3 times what fixed wireless hedges. So we need as well to get going on the fixed wireless side of the home broadband.

So we're doing that in the second half this year. If we couldn’t get our act together on FTTH, we think the impact will be more in 2020 or starting 2020 and beyond. The enterprise is a consistent business under Jovy and we're quite certain that he will deliver the numbers that he is undertaking to the Board. Under pain of death, I suppose.

So I did ask him whether we could show the higher numbers. He said no problems. So they're committed. So I think -- so I think 2019 would be a rather good year for PLDT. Now the question is really I guess when we report our third quarter results, we have to give you an indication of how 2020 would look like and that's a very interesting question.

Because despite -- and I've raised this entirely many times, despite the continuing growth of our revenues, it's not much by the income what not -- well it should be clearly but the question for 2020 is our ability to match the growth in revenues the growth in the bottom line.

Heretofore on previous years the margins we experienced on the international side, which was about 90% and on SMS was tremendous. We're not seeing that on data. So it begs the question as to what we can do with 5G, whether it opens new business for revenues. We hope it does.

When it does get going and at the same time we have to be able to not only contain our costs, but to reduce our cost. We didn't pause for a basic look at what is the future mode of organization of a data company like PLDT. We probably have to look at how we're organized the kind of things we need and the number of people that we will need.

We suspect that we probably need a fewer number of headcount in the future. That's the only way to -- for the bottom line to grow. So thank you again and we hope to see all of you in the third quarter period roughly September November? Thank you..

And that concludes today's conference. Thank you for your participation. You may disconnect your lines at your own time..