COL Financial believes PLDT (TEL) has been severely punished for the P48 billion overspend.
“Based on what was discussed, the problem does not seem bad enough to warrant the steep sell-off in its share price which erased more than P62 billion in market value,” said COL in its report.
TEL plunged by 19 percent on Monday, December 19, after it disclosed the huge overrun from 2019 to 2022 on Friday, December 16.
In a briefing Wednesday, December 21, bilyonaryo Manny V. Pangilinan reported that the P48 billion overrun was due to elevated orders and payment of 4G and 5G wireless equipment. He claimed that the investigation has so far not yielded any evidence of fraud or overpricing or unauthorized purchases.
COL said it was possible the P48 billion overrun could be reduced “because some of the equipment can be used for other purposes that are different from the original plan.”
TEL expects capex spending to normalize to P50 to P60 billion in 2024 from the original forecast of P88 billion.
BA Securities president Bryan Ang commended management for putting great importance on maintaining its 60 percent dividend policy.
“It is clear that PLDT is placing stakeholders interest as its highest priority. However as always we advice the investing public to continue exercising prudence and diligence,” Ang said.
ALSO READ:
Capex scandal fallout: S&P warns PLDT’s P48-B budget ‘overrun’ might pull down credit rating