PLDT boosting capex to R50 billion up

PLDT, Inc. is boosting its capital expenditure (capex) to over R50 billion in 2018 to “future-proof” itself, PLDT and Smart Communications Chairman and CEO Manuel V. Pangilinan told reporters.

Earlier, he has announced, “Our full year capex guidance remains at R38 billion in 2017, with about another R15 billion committed already this year, but which we forecast will be finished in 2018.”

Next year, “We are spending north of R50 billion,” he confirmed.

But the telco does need to resort to borrowings. “Our marching order is to reduce net debt to no more than $2 billion.”

PLDT’s consolidated net debt amounted to $2.8 billion as of this third quarter. Gross debt totaled $3.5 billion, of which 21 percent is US dollar- denominated. Only 9 percent of total debt is unhedged, taking into account available US dollar cash and hedges allocated for debt.

As for the capex, he said, “We can handle R40 billion. The incremental capex of R10 billion, we will fund via sale of assets and receivables from Metro Pacific Investments Corporation (MPIC).”

So far, 2017 was “a challenging year but a good year for the fixed line business,” Pangilinan pointed out. Next year, the telco will likely rely on the growth of its fixed line business with data as the new frontier.

“We want to keep on pushing the envelope,” he has noted earlier. It will be a “better year” in 2018, Pangilinan predicted, although “not significantly better.” PLDT will “continue to recover.” Revenues will not improve until 2019, he predicted.

At present, the mobile business is “not out of the woods yet” but he is confident it can recover. They are addressing the problem by improving network speed and coverage as well as brand definition.

Our Wireless Individual business, while stabilizing, requires more effort towards operational improvements and efficiencies. We are mindful that progress in this space will take some time,” he explained earlier.

Overall, “We continue to produce better financial metrics, in particular, our EBITDA and Net Income margins. This ability to remain financially efficient is a must as we await the resurgence of our Wireless business.”