telecommunications companies

Auditors raise concerns over Dennis Uy’s Dito 

Ralf Rivas

This is AI generated summarization, which may have errors. For context, always refer to the full article.

Auditors raise concerns over Dennis Uy’s Dito 

Sit down interview with Phoenix Petroleum President and CEO Dennis Uy on July 12, 2017. Photo by LeAnne Jazul/Rappler

LeAnne Jazul

Dito CME’s liabilities in 2022 exceed its current assets by P196.6 billion, a condition which indicates the 'existence of a material uncertainty that may cast significant doubt' on the company's financials

MANILA, Philippines – The independent auditors of Dennis Uy’s Dito CME raised concerns on the company’s ability to make enough money to stay afloat for the foreseeable future, given its massive liabilities.

Punongbayan & Araullo Grant Thornton (P&A) underscored Dito CME’s liabilities in 2022, including exceeding its current assets by P196.6 billion, comprehensive losses reaching P25.6 billion, and capital deficiency hitting P27.9 billion, as conditions which indicate the “existence of a material uncertainty that may cast significant doubt on the ability of the Group to continue as a going concern.”

Dito CME is the publicly listed corporate vehicle of Uy’s Dito Telecommunity

As of December 2022, Dito Tel had spent P230.5 billion for its capital expenditures.

In 2022, Dito CME posted a net loss of P25.6 billion, more than the P17.95 billion in 2021.

Revenues stood at P7.3 billion, more than the P2.2 billion from 2021. Costs and expenses ballooned to P20.6 billion in 2022 from the P12.88 billion in 2021.

In response to P&A’s concern, the group said that it continues to “heighten its commercial operations through targeted subscriber acquisition and promotional activities aimed at increasing revenue.”

“Also, the Group will continue to efficiently implement its network roll-out plan and cost-saving measures to improve the results of operations,” the audit report reads.

Uy’s companies also noted that it was able to secure loans amounting to P217.4 billion, which is expected to be closed in 2023. It has also entered into a shareholder loan agreement amounting to P5.2 billion, which can be drawn any time to address operating expenses and maturing obligations.

Dito CME also intends to do various fundraising activities in 2023, including a follow-on offering to fund telco and digital business funding requirements. (READ: How to grow a business, according to Dennis Uy)

The group also plans to convert all outstanding advances of Udenna to equity in 2023. Minority shareholders also committed to provide additional capital.

From a massive buying spree during the Duterte administration, Uy has been selling off assets and companies to pay up debt. In July 2022, Uy reached an agreement with lenders over a $4-million obligation to state-controlled Clark International Airport Corporation, avoiding a possible series of corporate defaults fueled by his debt-driven buying spree.

Uy was one of the largest donors to the 2016 presidential campaign of then-Davao Mayor Rodrigo Duterte. He turned over P30 million, based on Duterte's Statement of Contributions and Expenditures (SOCE) submitted to the Commission on Elections. –

[Vantage Point] Quo vadis, Dennis?

[Vantage Point] Quo vadis, Dennis?

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.