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PLDT budget overrun reduced to P33B after agreements with vendors

PLDT Inc. on Thursday announced a reduction in its earlier announced budget overrun, as the company entered into settlements with major vendors.

In a filing to the local bourse, PLDT said its estimated capital expenditure budget overrun of P48 billion was cut down to P33 billion, net of advances paid to the firm’s vendors.

The capital expenditure overrun or unexpected incurred budget costs were disclosed late last year, saying that this was caused by the COVID-19 pandemic and emerging competitions.

This came as the company completed discussions with major vendors, representing 80% of its outstanding capex commitments as of the end of 2022, resulting in agreements with major vendors this month.

Such agreements, PLDT said, effectively reduced its outstanding commitments to the vendors on the acquisition of property and equipment to approximately P33 billion.

The company said it plans to engage in similar discussions with non-major vendors to achieve similar results.

PLDT Chief Legal Counsel Atty. Marilyn Victorio-Aquino, the settlements with the major vendors have been closed, as she said the overruns were “synonymous to the carry over of capex.”

For his part, PLDT Chairman Manuel Pangilinan welcomed the lower budget overrun, as he expressed relief over the recent development.

“We’re relieved that that is the case, and it’s now incumbent upon the management and the board to get back on the saddle and move on, move forward, and demonstrate that despite this big hump on the road, the financial and operating conditions of the company remain strong and robust,” he told reporters in Makati City.

The company earlier announced that several officials, including Chief Finance Officer Annabelle Chua, have been placed “on leave,” while it conducted its own internal investigation into the matter.

Moving forward, Pangilinan said “just be patient… We will address these issues,” as he said the status of the executives will be addressed on Friday, March 24.

The company reported its full-year telco core income up by 10% to P33.116 billion in 2022, while its net income fell 60% to P10.485 billion from P26.367 billion.

“Our core business remains to be sound, and continues to show solid EBITDA numbers,” PLDT and Smart President and CEO Alfredo Panlilio said, with the consolidated EBITDA up 4% to P100.5 billion.

“We still have one of the highest EBITDA margins in the region, a good indicator of how well the core telco business is performing,” he added.

Pangilinan said mid-single digit growth is expected in its revenues and EBITDA for the year.

Revenues climbed 6% to P205.245 billion, including P82.0 billion from the Individual business, P57.4 billion from Home,  and P47.5 billion from Enterprise.

“We have an excellent network, strong brands, and attractive products. Wireless is simplifying its portfolio, Home continues to expand beyond connectivity, and Enterprise is pursuing its digital transformation initiatives,” Panlilio said. 

PLDT also said it plans to borrow some P19 billion this year, which will be focused on bilateral loans provided to them by its bankers.  —VAL, GMA Integrated News