DigiPlus Q2 profit: P3.2B (up 389% y/y)
![DigiPlus Q2 profit: P3.2B (up 389% y/y)](https://media.philstar.com/photos/2021/07/01/stock-commentary-thumbv3jpg_2021-07-01_08-58-57.jpg)
DigiPlus [PLUS 18.00, up 4.8%; 154% avgVol] [link] teased a Q2 net income of P3.2 billion, up 389% y/y from its Q2/23 net income of P0.7 billion, and up 60% q/q from its Q1/24 net income of P2.0 billion. PLUS attributed its skyrocketing profitability to the “robust performance of its digital retail segment”, as well as the “rationalization of revenue sharing with PAGCOR for electronic games implemented in April 2024.” PLUS reported a 295% increase in Q2 revenue to P18.9 billion, boosted by higher total user traffic on existing games and new traffic from “fresh” game offerings.
MB BOTTOM-LINE: PLUS’s stock is up over 86% since mid-April, and up 119% since the start of 2024. It’s a gambling stock, and it has some degree of political risk. You can see PLUS’s executives trying to address this risk in the press release with all of the talk about “contributing to the country’s economic growth and social development”. That’s basic image and reputation management, and a little more than a pinch of crisis management to distance itself as far as it can, as quickly as it can, from its radioactive PAGCOR cousins in the POGOsphere. PLUS’s operations are not subject to the POGO ban, but it’s possible to see some of the things the POGO industry once said about itself (particularly with respect to its tax payments being essential to the country’s growth) in what PLUS is trying to say now to push back against social conservatives that might want to take a closer look at everything under PAGCOR’s expansive kimono. Risk aside, I’m actually more interested to see what PLUS will do with all of the cash that it is generating. It’s a company that has relatively low overhead already and is now starting to benefit from PAGCOR’s April reduction in e-bingo fees. The company has made statements in the past that made it seem like it’s set its sights on becoming more than “just” a gaming company (it used the broader term “entertainment” last quarter), but that expansive language isn’t really on display in this press release. Just something I’m watching.
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