MANILA (UPDATE) — PLDT Inc on Thursday said its EBITDA (earnings before interest, taxes, depreciation, and amortization) is on track to meet P100 billion for the year and remains unaffected by a P48-billion capital expenditure (capex) overrun.
PLDT held a special briefing on Dec. 21 to provide more information on the overrun which was disclosed to the Philippine Stock Exchange on Dec. 16.
"Chairman Manuel Pangilinan, President and CEO Alfredo Panlilio and Chief Legal Counsel Marilyn Victorio-Aquino assured the audience present, consisting of fund managers, investment analysts and bankers, the PLDT's business overall remains healthy and robust even as it continues to address its elevated capex spend and undergoes a comprehensive process review," the telco told the stock exchange.
Pangilinan said PLDT's EBITDA is unaffected and is on track to hit P100 billion as originally indicated, with its telco core net income expected to reach between P32.6 billion and P33 billion.
PLDT also expects to be able to pay the balance of the regular dividend for the full year 2022 estimated at P45 per share, and the remaining special dividend of P42 per share, it said.
Pangilinan also shared that no fraud, anomalies or overpricing was discovered so far in the ongoing investigations.
"The bulk of the P48 billion capex overspend involves the procurement of network equipment necessary to provide stronger connectivity to subscribers, specifically 5G cell sites for our mobile network and fiber rollout," he said.
The PSE earlier said there were no indications of fraud in the trading of PLDT shares based on its initial investigations. Both the PSE and the Securities and Exchange Commission have launched an independent probe on the issue.
When asked about the context within which the overspend was made, Panlilio said a confluence of factors occurred, including the catch-up after years of underinvestment, the threat from former President Rodrigo Duterte for telcos to shape up, intense competition with the anticipated entry of DITO as well competition in the fiber space, which is Converge.
Factors also include speedy installations during the COVID-19 lockdowns, he added.
"However, to the extent of the Capex ordered, we plan to reduce fresh capex starting 2023. Thereafter, we expect capex to reduce steadily. 2023 will be a year of consolidation as we continue to strengthen and grow the business. We strive to be better," Panlilio said.
Meanwhile, credit rating agency S&P Global in a statement said it is expecting more clarity regarding the overrun by early 2023. PLDT is eyeing the completion of its internal investigation by the end of 2022.
"PLDT can only tolerate a small amount of additional cash outflow from the budget overrun before it erodes all leverage headroom at the current rating (BBB+/Stable/--). That's because the Philippines-based telecom company's balance sheet has already been worn thin from capex and working capital cash drain in the past two years," it said.
"We estimate the company can withstand no more than an incremental Philippine peso (PHP) 10 billion excess spending over our base case cash capex of PHP75 billion-PHP80 billion in 2023. After this, its debt-to-EBITDA ratio could deteriorate to beyond the downgrade trigger of 2.5x," it added.
S&P said PLDT is contemplating the sale of more towers up to 1,350 in 2023 which could mitigate the hit to its credit standing.
The telco giant this year announced the sale of over 5,900 towers worth P77 billion.