By Ashley Erika O. Jose, Reporter
DITO CME Holdings Corp. announced its plan to lift as much as P26.53 billion by yearend to ramp up the operations of its telecommunications unit DITO Telecommunity Corp.
In a disclosure to the stock exchange on Tuesday, DITO CME said it plans to convert the present shareholder advances of Udenna Corp. and China Telecommunications Corp. in DITO Telecommunity into equity.
“This approach could help the corporate mitigate immediate liquidity pressures and facilitate its ongoing network expansion. By leveraging equity as an alternative of accruing more debt, DITO could reduce its interest burden and improve financial sustainability,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.
Nevertheless, this strategy comes with potential downside, Mr. Arce said, adding that share conversion might dilute existing shareholders’ equity, which could erode investor confidence and market valuation within the short term.
DITO CME also said it’s targeting to lift an extra P28.83 billion over the subsequent five years through private placements.
As of end-2023, the corporate had raised P1.59 billion through private placements made by third-party investors comparable to Xterra Ventures Pte. Ltd., Summit Telco Corp. Pte. Ltd., and Summit Telco Holdings Corp.
To recall, in 2024, DITO CME’s board of directors approved a possible investment from Summit Telco Corp. Pte. Ltd.
“The success of this plan hinges on DITO’s ability to convert these funds into tangible growth — expanding its user base and enhancing its service offerings to compete effectively in a highly saturated telecommunications market dominated by incumbents like Globe and PLDT,” Mr. Arce said.
For the primary quarter, DITO CME Holdings, operator of DITO Telecommunity, reduced its attributable net loss to P1.66 billion from P4.11 billion a yr earlier.
In accordance with the corporate’s regulatory filing, DITO CME incurred a complete comprehensive lack of P41 billion in 2024, leading to a capital deficiency of P73.39 billion as of December 2024. The corporate’s capital deficiency increased to P78.04 billion as of March this yr, DITO CME said.
The corporate attributed its losses to the pre-operating and start-up costs related to the rollout of its telecommunications network, adding that DITO Telecommunity must fulfill its investment commitment of roughly P256.54 billion for the primary five years of its rollout.
“Furthermore, DITO Tel’s operating at a loss at the start of its operations on account of large initial capital expenditures is a component and parcel of the telecommunications industry… DITO Tel will still should make continuous capital expenditures in its network with a view to maintain its current network dominance,” it said.
Based on its internal projections, DITO Telecommunity expects to generate positive earnings before interest, taxes, depreciation, and amortization (EBITDA) inside this yr.
To recall, DITO CME has executed several financial strategies, including a follow-on offering that raised as much as P2.05 billion and personal placements that generated as much as P14.5 billion in capital.
“In the long term, if executed efficiently, this plan could strengthen DITO’s position and profitability by fostering infrastructure development, reducing financial risk, and supporting operational stability,” Globalinks Securities’ Mr. Arce said.
On the stock exchange on Tuesday, shares in the corporate closed 10.74% lower at P1.08 apiece.
