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PLDT trims final dividend to ₱46 as cost and leverage pressures linger

 

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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.


PLDT’s board has approved a final cash dividend of ₱46 per share, bringing total dividends for 2025 to ₱94 per share and framing the payout as 60% of Telco Core EPS—a clear signal that management is prioritizing policy discipline over headline yield.

The adjustment comes as the telco’s operating story remains broadly stable, but the earnings quality underneath shows strain. For full-year 2025, PLDT reported net service revenues of ₱196.2 billion (+1%) and EBITDA of ₱111.2 billion (+3%) with a 52% EBITDA margin, reflecting resilience in data and broadband that now account for 85% of service revenues. Yet reported net income fell 7% to ₱30.0 billion, reflecting lower non-core gains and higher non-recurring charges—a reminder that headline stability is not automatically translating into stronger bottom-line momentum. 

The company’s 3Q 2025 SEC filing shows why a conservative dividend stance is defensible. For the nine months ended September 30, 2025, net income fell 11% to ₱25.1 billion, and EPS slid to ₱115.83 from ₱129.71 a year earlier. More importantly for dividends, telco core income—the key basis for payouts—declined 5% to ₱25.3 billion, reflecting pressure from higher depreciation and amortization, higher interconnection costs, and higher financing costs.

Wireless, traditionally the cash engine, showed the clearest operational friction: segment revenues declined 3%, the mobile base fell 2% to 59.3 million, and wireless segment net income dropped 36%—a combination that underscores a competitive, value-driven market and weaker monetization at the margin. Fixed-line revenues grew, but profitability still slipped as cost lines—particularly interconnection and financing—proved sticky. 

Balance-sheet optics also matter in dividend debates. As of September 2025, net debt-to-equity rose to 2.40x, and interest coverage weakened to 3.37x, while liquidity ratios remained tight—conditions that often nudge boards to preserve flexibility. By end-2025, PLDT reported net debt of ₱284.7 billion and net debt-to-EBITDA of 2.56x, reinforcing that leverage remains a key lens for capital allocation.

Investor sentiment: yield shock vs. credibility boost

In the near term, a lower dividend can pressure sentiment among income-focused investors, who anchor valuation on dividend certainty and may rotate to alternatives when payouts dip. At the same time, policy-consistent trimming—paired with stable EBITDA, disciplined capex, and stated free cash flow targets—can improve confidence among longer-horizon holders by reducing the risk of a sharper cut later and protecting credit metrics.

We’ve been blogging for free. If you enjoy our content, consider supporting us!

Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.

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