Dennis Uy plans to sell stake in Dito Telecommunity

MANILA, Philippines — Dennis Uy’s Dito CME Holdings Corp. will explore every possible options, including reducing its stake in Dito Telecommunity Corp., to raise more funds and improve the company’s finances moving forward.

Dito CME yesterday informed the Philippine Stock Exchange (PSE) that Dito Telecommunity could hit profitability by 2026, as well as post positive earnings before interest, taxes, depreciation and amortization (EBITDA) by 2024.

“Please note that profit picture forecasted by 2026, as well as a positive EBITDA as early as end- 2024 are business projections made by the Dito Telecommunity management and conveyed as part of the business plan briefing updates periodically conveyed by the management,” Dito CME said.

However, it warned that such projections may change depending on how the economy performs. Further, the firm said that market conditions could affect business outlook, especially the target of becoming profitable in four years.

Also, Dito CME said it may reduce its stake in Dito Telecommunity to raise more funds to expand the telco’s network.

To keep its franchise, Dito Telecommunity is required to cover 84 percent of the population by 2024.

“The possibility of Dito CME’s sell down of its stake in Dito Telecommunity is always a business-driven option available to any investor desiring to raise liquidity,” Dito said, adding that “do note that these options are taken together with other options such as the long-term loan option and/or finding an ideal private placement partner.”

Dito CME, the communications unit of Uy’s Udenna Group, saw its net loss worsen by five times in the first semester on the depreciation of the peso against foreign currencies and the payment of loans taken from Chinese banks.

In its financial statement, Dito CME reported that its net loss quadrupled to P8.3 billion in the six months to June from P2.05 billion a year ago. Whereas revenue rose by tenfold to P3.03 billion, Dito CME’s expenses more than doubled to P9.82 billion.

Dito CME posted a forex loss of P7.26 billion due to the peso’s weakening against the dollar and Chinese yuan. Interest expenses also spiked to P1.47 billion, as the firm settled lease and interest-bearing liabilities.

Dito CME owns 53 percent of Dito Telecommunity in a joint venture with China Telecom Inc.

Dito Telecommunity has expanded its subscriber base of 12 million as of August, as it moves to reach 84 percent population coverage by 2024 as mandated by the government.