C09306-2022

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Dec 16, 2022
2. SEC Identification Number
PW-55
3. BIR Tax Identification No.
000-488-793
4. Exact name of issuer as specified in its charter
PLDT Inc.
5. Province, country or other jurisdiction of incorporation
PHILIPPINES
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
RAMON COJUANGCO BUILDING, MAKATI AVENUE, MAKATI CITY Postal Code 1200
8. Issuer's telephone number, including area code
(632) 8250-0254
9. Former name or former address, if changed since last report
NOT APPLICABLE
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
- -
11. Indicate the item numbers reported herein
-

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

PLDT Inc.TEL

PSE Disclosure Form 4-31 - Press Release References: SRC Rule 17 (SEC Form 17-C)
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Elevated CAPEX Spend
Background/Description of the Disclosure

OVER THE PAST FOUR YEARS (2019-2022), PLDT INC AND ITS SUBSIDIARY, SMART COMMUNICATIONS INC, EMBARKED ON A MASSIVE NETWORK TRANSFORMATION PROGRAM AND LAUNCHED LARGE MULTI-YEAR CAPEX PROJECTS—WHICH INCLUDED LTE AND 5G ROLLOUT, FTTH ROLLOUT, TRANSPORT NETWORK TRANSFORMATION, FIBER REBUILD AND FIBER TO THE BTS, SUBMARINE CABLE EXPANSION, CORE NETWORK TRANSFORMATION AND TOWERS UPGRADE, AMONGST OTHERS. THESE MULTI-YEAR INVESTMENTS WERE DESIGNED TO REGAIN AND SUSTAIN NETWORK AND TECHNOLOGY LEADERSHIP AS WELL AS PROVIDE THE BEST CUSTOMER EXPERIENCE.

WE HAVE SUCCESSFULLY ATTAINED THESE GOALS AS SHOWN BY:

(1) SMART’S NETWORK SUPERIORITY OVER THE LAST FOUR YEARS AS VALIDATED BY GLOBAL BENCHMARKING FIRMS, OOKLA AND OPENSIGNAL

(2) OUR FIBER FOOTPRINT OF OVER 1,000,000 KILOMETERS (INCLUDING INTERNATIONAL FIBER CABLE SYSTEMS) AND 16.78 MILLION HOMES PASSED (AS OF 3Q2022) IS THE WIDEST AND MOST EXTENSIVE

(3) SMART HAS RECOVERED 4% REVENUE MARKET SHARE—FROM 44% IN 2019 TO 48% AT THE START OF 2022

(4) HOME BROADBAND REVENUES HAVE RISEN FROM PHP 26.6 BILLION IN 2018 TO AN ESTIMATED PHP47.78

(5) FOR THE FIRST 9 MONTHS OF 2022, TOTAL TELCO INDUSTRY REVENUES GREW BY PHP 17.4 BILLION, OF WHICH 46% WERE GAINED BY PLDT. AND IN RECENT YEARS, PLDT HAS GAINED A SIGNIFICANT SHARE OF GROWTH IN TOTAL INDUSTRY REVENUE DESPITE THE ENTRY OF NEW PLAYERS.

(6) IN THE FACE OF THE PANDEMIC, AND ESPECIALLY AT ITS HEIGHT, PLDT AND SMART CONTINUED ITS CAPEX SPEND, RESULTING IN ENHANCED CONNECTIVITY FOR OUR PEOPLE, AND BETTER CUSTOMER EXPERIENCE

WHILE THESE SUBSTANTIAL CAPEX INVESTMENTS WERE KEY TO MEETING PLDT’S GOALS, THEY CAME AT A PRICE—CAPEX INVESTMENTS FOR THESE FOUR YEARS AGGREGATED PHP 379 BILLION, INCLUDING AN ESTIMATED BUDGET OVERRUN OF NO MORE THAN PHP 48 BILLION. WE MUST STRESS THAT THE MAXIMUM PHP 48 BILLION CAPEX BUDGET OVERRUN REPRESENTS ABOUT 12% OF TOTAL CAPEX SPEND OVER THE PERIOD. THIS BEST ESTIMATE IS SUBJECT TO: (A) ONGOING INTERNAL FORENSICS MANDATED BY THE BOARD AND ITS AUDIT COMMITTEE AND (B) DISCUSSIONS WITH PRINCIPAL VENDORS WITH A VIEW TO RECONCILIATION OF ACCOUNTS AND REDUCTION OF SUCH BUDGET OVERRUNS.

THE INVESTIGATION HAS, SO FAR, NOT UNCOVERED ANY FRAUDULENT TRANSACTIONS, PROCUREMENT ANOMALIES, OR LOSS OF ASSETS ARISING FROM THE CAPEX SPEND.

OUR VENDORS CONTINUE TO BE COMMITTED TO THEIR PARTNERSHIP WITH PLDT AND HAVE EXPRESSED FLEXIBILITY TO WORK WITH OUR COMMERCIAL REQUESTS INVOLVING REDUCTION OF OUTSTANDING WORK.

INSOFAR AS THE BUSINESS IS CONCERNED, WE EMPHASIZE THAT ALL THREE MAJOR REVENUE STREAMS OF PLDT—WIRELESS, HOME, AND ENTERPRISE—REMAIN HEALTHY AND ROBUST, WITH HOME AND ENTERPRISE MAINTAINING THEIR RESPECTIVE MARKET LEADERSHIP. THESE 3 BUSINESS UNITS ARE UNAFFECTED BY THE CAPEX OVERRUN REFERRED TO ABOVE. EBITDA FOR THE FULL YEAR 2022 IS WITHIN GUIDANCE LEVELS OF PHP 100.0 BILLION, AS IS CORE INCOME AT BETWEEN PHP 32.0 - 33.0 BILLION.

THE FIRST PHASE OF TOWERS SALE OF PHP 77.0 BILLION EARLIER THIS YEAR HAS PROVIDED SIGNIFICANT EXCEPTIONAL GAINS FOR PLDT. A FURTHER SALE OF TOWERS ARE CONTEMPLATED NEXT YEAR AT SIMILAR PRICING AS THE FIRST SALE, AND WILL CONTRIBUTE ADDITIONAL EXCEPTIONAL GAINS TO PLDT’S CORE INCOME IN 2023, THESE GAINS WILL ALSO REDUCE THE INCREMENTAL 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. CAPEX LEVELS ARE EXPECTED TO BE LOWER 2024 ONWARDS.

PLDT IS UNDERTAKING A MANAGEMENT REORGANIZATION PROCESS AND HAS INITIATED 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.
Other Relevant Information

1. This press release may contain some statements which constitute “forward- looking statements” that are subject to a number of risks and opportunities that could affect PLDT’s business and results of operations. Although PLDT believes that expectations reflected in any forward-looking statements are reasonable, it can give no guarantee of future performance, action or events.

2. Please refer to attached file
Filed on behalf by:
Name Abner Tito Alberto
Designation Assistant Corporate Secretary