August 13, 2023 | 12:00am
MANILA, Philippines — Telco giant PLDT Inc. is projected to stay liquid for the rest of 2023 supported by an improving credit outlook, monetization of passive assets and tightening on capital expenditures.
Fitch Group unit CreditSights believes that PLDT would enhance its credit metrics in the latter half of the year assuming that it cashes in tower sale proceeds and reduces capex along the way.
“Looking ahead, we expect PLDT credit metrics to improve slightly from current levels over the next two quarters, with net leverage at 2.5 times to 2.6 times,” CreditSights said.
For this year, CreditSights expects PLDT to grow its earnings before interest, taxes, depreciation and amortization (EBITDA), although within the low single digit range.
The Pangilinan-led telco should be able to do this by expanding its subscriber base in the broadband segment.
CreditSights said PLDT is set to receive another P29 billion from the turnover of passive assets as part of its tower sale by the close of the year.
PLDT has sold more than 7,500 towers for a cash consideration of over P98 billion since it began signing sale and leaseback agreements with infrastructure builders.
Likewise, CreditSights also believes that PLDT would spend within its capex guidance of P80 billion to P85 billion for 2023 to ensure the stability of its fiscal position.
“Management affirmed its full year 2023 capex guidance at P80 billion to P85 billion driven by the ongoing network, fiber and data center investments and the spillover of its P33 billion capex spread over 2023 to 2025,” CreditSights said.
PLDT is dealing with the lingering impact of a P33 billion budget overrun suffered from 2019 to 2022.
The firm has settled P19.2 billion of that capex overspend as of the first semester and aims to clear the full amount by as early as 2024.
PLDT, in its financial report, reported a 10 percent surge in its profit to P18.45 billion in the first half, from P16.79 billion a year ago. Core income, measured as net income less the impact of the non-telco segment, inched up by three percent to P17.57 billion.
During the period, PLDT grew its earnings by three percent to P104.04 billion and coupled this with a 19 percent cut in expenses to P78.34 billion.
Moving forward, PLDT wants its wireless unit Smart Communications Inc. to retake market lead in the mobile segment after trimming the subscriber gap with current leader Ayala-led Globe Telecom Inc. in the aftermath of SIM registration.