Moody’s Investors Service has affirmed PLDT Inc.’s Baa2 investment grade as the Manuel Pangilinan-led company is seen keeping a tight grip on half of the revenue market share despite the further strengthening of industry competition following the entry of additional players.
Nidhi Dhruv, vice president and senior analyst at the credit-rating agency, said the decision reflects the telco giant’s dominant market position and healthy margins, among others. PLDT, in addition, was given a stable rating outlook.
Baa2—the ninth notch in the 10-scale investment grade rating—means the company has “moderate credit risk” and “good financial fundamentals.”
Moody’s noted that PLDT has 44-percent share of mobile subscribers and over 50-percent share of market revenues as of first quarter. The telco player also dominates the fiber subscription space, the company added.
The credit watcher, however, said that DITO Telecommunity and Converge ICT Solutions would “increase competition in the industry over time.”
“While competition can chip away at PLDT’s market share, Moody’s expects the company to maintain its stronghold with a revenue market share of over 50 percent through 2024, reflecting the quality of its services which allows for higher price points,” Dhruv said.
Moody’s projects the company will grow its revenues by about 6 percent in 2023 to 2024 on the back of better home broadband revenues following the consolidation of Sky Cable’s business, which it purchased earlier this year.
The credit-rating agency added that the company’s liquidity was “excellent” in the next year, especially with the inflow of the remaining proceeds from its tower sales. It said the company has sufficient liquidity to cover debt maturities, capial spending and dividend declarations.
“However, high capital spending levels and shareholder returns will continue to strain the company’s free cash flow over the next one to two years,” Dhruv said. INQ