PLDT Inc.’s credit metrics are anticipated to remain stable over the next three quarters which will be supported by its expected full-year revenue, according to CreditSights.
“While we acknowledge the risks of hot domestic inflation and strong mobile competition, we think earnings growth could be buoyed by resilient consumer demand and inorganic contribution from the acquisition of Sky Cable,” the credit analyst said.
In March, PLDT announced its plan to acquire Sky Cable Corp. for P6.75 million which will cover 100% of the latter’s total issued and outstanding capital stock of around 1.38 billion.
During the company’s first-quarter briefing last week, PLDT said it was awaiting approval from the Philippine Competition Commission on the transaction.
“Until we get that, the transaction has not been completed,” PLDT President and Chief Executive Officer Alfredo S. Panlilio said.
“It will continue as a broadband provider because it is split into pay television and broadband. The pay television part of it goes to Cignal, so what we are talking about for PLDT is the Sky Cable broadband base,” he added.
Meanwhile, CreditSights said: “We also expect PLDT to receive a further P32.6 billion of tower sales proceeds through the rest of 2023, which would provide greater financial flexibility for capital expenditure and possible deleveraging.”
As of the end of April, PLDT has sold and leased back 5,182 towers for P67.6 billion. By August, the company is expecting the transfer of the balance of 725 towers.
CreditSights said the corporate governance uncertainties about the company have eased slightly.
Last month, PLDT announced that two of its investors filed separate motions to the court seeking to serve as the lead plaintiff for the US securities class action (SCA) lawsuit against the company.
“Seeing the small scale of the alleged losses and the low participation rate, we see a dim chance that the Court will allow a formal case to be officially launched. In turn, we see a limited impact of the US SCA lawsuits on PLDT’s financials and operations, in line with our expectation,” CreditSights said.
“The hearing for a lead plaintiff appointment is set for 8 May, and the entire court process could take 1-1.5 years if the plaintiffs elect to stay the course,” CreditSights said.
In the first quarter, PLDT reported an attributable net income of P9.02 billion, down by 0.7% from P9.08 billion in the same period last year when it booked nonrecurring gains.
On Monday, shares in the company declined by P50 or 4% to P1,200 apiece.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Justine Irish D. Tabile
