PLDT Inc. is expected to enhance its credit metrics throughout the year, according to CreditSights. The Fitch Group unit projects a growth in revenue, a slowdown in capital outlays, and cash inflow from the sale of communication towers. CreditSights predicts a decrease in PLDT’s net leverage ratio from 2.8x to 2.5x to 2.6x in the next two quarters. Net leverage, which measures a company’s borrowing capacity, is computed as net debts divided by earnings before interest, tax, depreciation, and amortization (EBITDA). A lower net leverage ratio indicates more earnings than borrowings. The positive outlook is supported by the expectation that PLDT’s EBITDA will experience low single-digit growth in 2023, driven by resilient broadband growth, robust enterprise data growth, and cost efficiencies that offset challenges in the mobile operating environment. In the first half of the year, PLDT’s EBITDA increased by 3 percent to P52.1 billion due to higher topline contributions and lower operational expenses. CreditSights also highlights that the reduction in capital expenditures and the collection of approximately P29 billion from tower sales will contribute to PLDT’s deleveraging. PLDT’s capex guidance for this year is set at P80 billion to P85 billion, lower than the P96.8 billion spent in 2022. The Fitch Group unit acknowledges strong mobile competition from market leader Globe Telecom and new entrant DITO but believes that the industry dynamics will improve due to easing domestic inflation and the normalization of the subscriber identity module (SIM) registration law. PLDT wireless unit Smart Communications recently announced plans to regain mobile market leadership following the implementation of the SIM card registration, which has narrowed the market share gap with rival Globe Telecom. PLDT’s President and CEO, Alfredo Panlilio, states that they plan to achieve this through offering better products that cater to market needs. Following the SIM listup deadline on July 25 and a five-day grace period, Smart reported nearly 80 percent compliance with 52.5 million users, only 1.2 million fewer than Globe’s 53.7 million. Prior to this, Globe held 84.75 million SIM cards, significantly more than Smart’s 66.3 million.
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