PLDT to reduce 2024 capex budget in cost-cutting drive

PLDT Inc. is cutting its capital expenditures (capex) by more than a tenth this year, as it implements cost-cutting measures to free up cash, executives said on Thursday.

Danny Yu, the company’s CFO, said the integrated telco is allotting between p75 billion and p78 billion in capex this year, or about 12 percent lower than last year’s p85 billion.

He said the amount will be “evenly distributed” in four areas: Mobile, port rollout, data centers, and submarine cables.

Manuel V. pangilinan, the company’s president and CEO, noted that the goal is to cut capex to below the p80-billion mark.

“We aim for total capex to be sub p80 billion,” he said. “We’ll likely be sub-40-percent capex-to-revenue intensity in 2024.”

This will enable the pldt Group to reduce its leverage and improve net debt-to-ebitda ratio, pangilinan added.

The budgeted capex for 2024 includes the estimated p15 billion to p18 billion carry over from the budget overruns in 2022.

“There’s a good chance that we can generate free cash flow for 2024,” pangilinan said.

On Thursday, pldt reported that its net income more than doubled to p26.6 billion in 2023 from last year’s p10.49 billion, on the back of strong revenue growth, managed costs, and one-time gains from the sale of its assets.

Service revenues increased slightly by 3 percent to p201.83 billion from p195.34 billion, while expenses decreased by 24 percent to p158.47 billion from p209.43 billion.

Telco core income was 3 percent up to p34.34 billion from p33.30 billion.

For 2024, pangilinan said the company aims to grow its revenues by “mid-single digit,” while telco core income is anticipated to be “north of p35 billion.”

To bankroll its network expansion, pldt secured a p1-billion green loan facility from HSBC philippines.

This is HSBC’S first green loan facility to a philippine-based telco.

According to a disclosure to the stock exchange, the amount will “partially fund the ongoing nationwide modernization and expansion of its fiber network supporting internet delivery platforms such as fiber fixed broadband, mobile data services, and carrier-grade Wifi.”

“The availability of sustainable financing facilities will help pldt’s commitment to ensuring longterm profitability by doing business responsibly. We are pleased to start this journey with HSBC and anticipate further expanding our sustainable financing portfolio with other sustainability projects,” Yu said.