PLDT Inc. on Friday said that it was investigating an estimated P48 billion in capital expenditure overrun or unexpected incurred budget costs, which triggered the company to undertake management reorganization.
In a disclosure to the Philippine Stock Exchange, PLDT said that from 2019 to 2022, it poured P379 billion in capital investments to meet its goals, particularly in improving customer service.
However, the telco said its capital spending “came at a price” as it incurred an estimated budget overrun of P48 billion, representing 12.7% of the total CAPEX spent over the four years.
The estimated budget overrun is the subject of an “ongoing internal forensics mandated by the Board and its Audit Committee and discussion with principal vendors with a view to a reconciliation of accounts and reductions of such budget overruns.”
Nevertheless, PLDT said, “The investigation has, so far, not uncovered any fraudulent transactions, procurement anomalies, or loss of assets arising from the CAPEX spend.”
With this, the telco said it is undertaking a management reorganization process and initiating “improvements on its processes and systems to address weaknesses that allowed such budget overruns to occur.”
“A separate announcement will be made once the reorganization is implemented,” PLDT said.
Despite the budget overrun, the company said that all three of its major revenue streams — wireless, home, and enterprise — “remain healthy and robust.”
“These three business units are unaffected by the CAPEX overrun,” it said.
Meanwhile, PLDT said the first phase of its tower sale of P77 billion provided gains for the company, and further sales of towers are being looked into next year to contribute to the company’s core income in 2023.
It said that the expected gains from the tower sales are expected to reduce the depreciation expenses in PLDT’s financial accounts arising from the CAPEX overrun.
“CAPEX for 2023 will continue to be elevated as the CAPEX overruns enter the financial statements this year and next, cushioned however by significant gains on tower sales,” PLDT said.
“CAPEX levels are expected to be lower 2024 onwards,” it added. —NB, GMA Integrated News