PLDT Inc. “could” increase its capital expenditure (capex) program from £ 3 billion to £ 88 billion by 2022, not thanks to the “tough and challenging” economic conditions prevailing in the Philippines.
During the company’s first-half financial results press conference, PLDT chairman Manuel V. Pangilinan said there is a “risk that we could exceed the P85 billion investment program” for the year due to the impact of the you change.
Nearly half or 45 percent of the telecommunications titan’s investment is made up of foreign spending. The Philippine peso closed at P55.67 against the greenback on Thursday, 11% higher than the close of the previous year.
When asked how much additional capital spending will be, Pangilinan replied: “Probably P2 billion to P3 billion.”
“Remember that we have already made a commitment to spend about half of our investments for the first half. So about half of the approximately P85 billion is at risk. “
He noted, however, that foreign exchange risk also has an advantage for the company’s overseas operations, which generate approximately $ 600 million in international revenue.
Its impact on profit and loss charts, therefore, is “more beneficial to PLDT,” said Pangilinan.
“Taken in the round, it’s probably more beneficial. We have enough money from the operations to be able to finance the entire capex. “
The president of the PLDT Alfredo S. Panlilio also characterized the year 2022, both for the first semester and for the second semester, as “challenging”.
Aside from the lingering effects of the pandemic, the industry, he said, is fighting for a share in customer portfolios.
“Economic situations are difficult; we are seeing the effect on portfolios, ”Panlilio said.
Indeed, said Francis Flores, senior vice president of the PLDT, the rising numbers of inflation have led Filipinos to “economize” with consumers “by extending their payload, trying to reduce the non-essential use of telecommunications”.
However, PLDT is confident of reaching its £ 33 billion revenue forecast by the end of the year.
PLDT posted net profits of £ 16.7 billion in the first half, a 30 percent increase from £ 12.9 billion the previous year, bolstered by the sale of its tower assets during the aforementioned period.
Its core telecom income, which also excludes the impact of Voyager arm innovations, also increased 12% to £ 17 billion from last year’s £ 15.2 billion.
Consolidated service revenues reached an all-time high of £ 94.3 billion, up 5% from £ 89.9 billion the previous year, driven primarily by data and broadband businesses.
Data and broadband, which now account for 79% of consolidated services revenues, grew 10% to £ 74.9 billion. The wireless business contributed £ 35.7 billion to revenues, while the home, £ 24.6 billion, businesses, £ 11.9 billion and ICTs with £ 2.6 billion.
Expenses remained stable at P43.8 billion.
“We expect stronger headwinds in the second half, with higher inflation impacting our clients’ pockets and our operating costs. With so much pressure on growth, it is imperative to stay focused on our strategic initiatives and cost management, ”said Pangilinan.
“Regarding the full-year earnings guide, we keep the telecoms main profit at £ 33 billion, although an upside may be possible as parts of the proceeds from the tower sales are used to pay off debts in the second half”.