BNP Paribas Peregrine Securities Inc. has also upgraded its rating for PLDT as a result of reduced credit risk and improving margins.
From P5.5 billion last year, PLDT’s net income is expected to grow 25 percent to P6.88 billion this year.
In the same report, BNP Paribas anticipates profits for the country’s largest telecommunications company to hit P8.707 billion in 2004 and P10.2 billion in 2005.
Operating revenues are projected at P81.44 billion this year compared to P78.8 billion in 2002 or a modest 3.3-percent increase. Earnings before interest, taxes, depreciation and amortization (EBITDA) during the same comparative period is seen growing 2.6 percent, from P46.3 billion to P47.57 billion.
In its January report analyzing the company’s performance in 2002, BNP Paribas upgraded its rating for PLDT to "outperform" from "market perform."
BNP Paribas explained that PLDT’s successful completion of its debt restructuring plans in 2002 has been overlooked by the market.
"The company has successfully executed some of its promised plans and we think that this has not been fully appeciated by the market. PLDT has successfully restructured its debt and substantially reduced credit risk. The company will also continue to de-gear by retiring 50 percent of its maturing loans," BNP Paribas reported.
Aside from managing credit risk concerns, PLDT was also able to increase the efficiency of its fixed-line business, with cashflows predicted to reach P22 billion by end-2003 from the estimated P17 billion in 2002.
Beginning 2002, it expects internally generated cash flows to be sufficient to cover maturing debts.
"Sustained reduction in cash operating expenses and minimal capex are the main factors for such improvement," said the securities firm.