PLDT, Inc. · PSE:TEL
PLDT — Philippine Long Distance Telephone Company — Q1 2005 Earnings Presentation
28 slides from PLDT's earnings presentation, May 5, 2005
Slide 1: First Quarter 2005 Financial and Operating Results
Philippine Long Distance Telephone Company First Quarter 2005 Financial and Operating Results May 5, 2005 1
Slide 2: 1Q05: Consolidated Financial Highlights
1Q05: Consolidated Financial Highlights § Consolidated net income increases by 65% to P9.4 billion while core earnings before FX/derivative gains reach P7 billion § Consolidated service revenues grow by 4% to P29.4 billion mainly due to the 11% growth in Smart’s cellular service revenues to P17.4 bi
Slide 3: Cellular: Financial Highlights
Cellular: Financial Highlights (in million pesos) 1Q05 1Q04 % Change (As Restated) Service Revenues 17,406 15,679 11% Non-service Revenues 755 2,615 -71% Less: Cost of Sales 1,959 3,804 -49% 1,204 1,189 1% Other cash operating expenses 5,150 3,752 37% Total Cash operating expenses 6,354 4,941 29% No
Slide 4: Smart: Focusing on Service Revenues
Smart: Focusing on Service Revenues n Service revenues grew by 11% Y-o-Y to P17.4 billion (1Q04: P15.7 billion) n EBITDA increased to P11.1 billion (1Q04: P10.3 billion) and EBITDA margin stood at 64% (1Q04: 66%) n Pre-tax net income surged 52% Y-o-Y to P9.4 billion (1Q04: P6.2 billion) while net in
Slide 5: Smart: Leading the Market
Smart: Leading the Market n Cellular subscribers at 20.2 million as of end-1Q05 (Smart 15.5 million, Talk ‘N Text 4.7 million), representing an estimated combined market share of 58% n Activations for Smart and Talk ‘N Text reached 1.04 million in 1Q05 n As SIM-swapping activities wind down, net add
Slide 6: Smart: Maximizing Returns
Smart: Maximizing Returns n Capex spending for 1Q05 was P1.8 billion (1Q04: P3.5 billion) and is tracking below the P10 billion capex guidance for the year n Smart’s network currently consists of 36 switching centers and over 5,400 base stations, covering 97% of the population n Free cash flow impro
Slide 7: Fixed Line: Financial Highlights
Fixed Line: Financial Highlights 1Q05 1Q04 (in million pesos) (As Restated) % Change Service Revenues 11,805 12,085 -2% Operating Expenses 7,982 7,720 3% Cash operating expenses 4,328 4,425 -2% Non-cash operating expenses 3,654 3,295 11% Operating Income 3,823 4,365 -12% EBITDA(1) 6,824 6,841 - EBIT
Slide 8: Fixed Line: Staying the Course
Fixed Line: Staying the Course n Fixed Line revenues decreased by 2% to P11.8 billion (1Q04: P12.1 billion) reflecting the combined effect of the appreciation of the peso which dampened local exchange and ILD revenues, lower NLD revenues, partially offset by a 42% increase in data revenues n EBITDA
Slide 9: Fixed Line: Focusing on Costs and Cashflows
Fixed Line: Focusing on Costs and Cashflows n Cash operating expenses declined by 2% to P4.3 billion (1Q04: P4.4 billion) as focus on cash containment initiatives continued n PLDT incurred capex of P2.4 billion in 1Q05 in line with 2005 capex plans for the IP-network upgrade. Capex is expected to re
Slide 10: Fixed Line: Stepping Up Debt Reduction
Fixed Line: Stepping Up Debt Reduction n PLDT reduced debts by US$155 million in 1Q05, resulting in stand-alone debt balance to decline to US$1.8 billion n Accelerating debt reduction allows PLDT’s interest expense and other financing costs to decline as well as reduce foreign exchange and interest
Slide 11: ePLDT Call Centers: Growing Market Presence
ePLDT Call Centers: Growing Market Presence n Consolidated call center revenues grew by 53% to P408 million (1Q04: P266 million) as a result of continued growth in transaction volumes and increase in capacity utilization n ePLDT’s combined call center businesses reached 2,870 seats as of 1Q05 (1Q04:
Slide 12: Netopia: Offering Internet Access to the Mass Market
Netopia: Offering Internet Access to the Mass Market n Netopia is the largest internet café chain with over 140 branches in key cities in the country and about 6,600 PC terminals as of end-1Q05 n Netopia provides shared computer and broadband internet access to over 2.1 million distinct users per mo
Slide 13: 1Q05: Consolidated Financial Highlights
1Q05: Consolidated Financial Highlights 1Q 2004 1Q 2005 Consolidated % (in million pesos) Wireless Fixed Line Consolidated (As Restated) Change No. of Subscribers Cellular (Smart and TNT) 20,252,513 - 20,252,513 14,356,186 41% Fixed Line - 2,149,489 2,149,489 2,197,879 -2% Service Revenues 17,948 11
Slide 14: 1Q05: Consolidated Financial Highlights
1Q05: Consolidated Financial Highlights 1Q 2004 1Q 2005 Consolidated % (in million pesos) Wireless Fixed Line Consolidated (As Restated) Change Cash flow from Operations 10,018 4,933 15,250 18,103 -16% Capex 1,755 2,351 4,263 4,316 -1% Free Cash Flow(3) 9,365 8,027 11,337 9,714 17% Debt Reduction (i
Slide 15: PLDT Group: Financial Targets and Outlook for 2005
PLDT Group: Financial Targets and Outlook for 2005 Ø Utilize free cashflows to continue deleveraging as well as increase dividends to common shareholders • Target debt reduction in 2005: US$500 million • Target leverage ratio: Consolidated debt-to-EBITDA ratio of below 1.5x by 2006 • Target common d
Slide 16: PLDT Group: Ahead of the Curve
PLDT Group: Ahead of the Curve § PLDT Group is taking the lead in redefining the telecommunications environment by harnessing the N strengths of our individual businesses to achieve the W E benefits of an integrated network and a convergent business model. S § PLDT Group is uniquely positioned to in
Slide 17: PLDT Group: Ahead of the Curve
PLDT Group: Ahead of the Curve The Way Forward: • Optimize 2G/2.5G/EDGE network and complete geographic coverage • Implement next generation DSL in preparation for higher broadband data speeds • Prepare for a 3G program • Pre-launch wireless broadband service • Pursues opportunities to drive PC and
Slide 18: Forward-looking statements
This presentation may contain some statements which constitute “forward- looking statements” that are subject to a number of risks and uncertainties that could affect PLDT’s business and results of operations. Although PLDT believes that expectations reflected in any forward-looking statements are r
Slide 19: Appendix
Appendix 19
Slide 20: PLDT Group: Pulling in One Direction
PLDT Group: Pulling in One Direction n Consolidated service revenues up by 4% Y-o-Y to P29.4 billion (1Q04: P28.1 billion) and EBITDA increased by 6% to P18.5 billion (1Q04: P17.5 billion) largely driven by the performance of our cellular business n EBITDA margin improved to 63% in 1Q05 from 62% in
Slide 21: PLDT Group: Maximizing Cash Flows
PLDT Group: Maximizing Cash Flows n Consolidated capex spending in 1Q05 stood at P4.3 billion mainly driven by the IP-network upgrade being undertaken by fixed line. Consolidated capex estimated at P18 billion in 2005 n Consolidated free cash flow in 1Q05 reached a high of P11.3 billion (1Q04: P9.7
Slide 22: Revenues
Revenues 1Q 2004 1Q 2005 Consolidated % (in million pesos) Wireless Fixed Line ICT Consolidated (As Restated) Change Service Revenues Wireless services Cellular 17,406 17,406 15,679 11% Others 542 542 436 24% Fixed line services Local exchange 5,155 5,155 5,295 -3% International long distance 3,010
Slide 23: Expenses
Expenses 1Q 2004 1Q 2005 Consolidated % (in million pesos) Wireless Fixed Line Consolidated (As Restated) Change Operating expenses Compensation 844 1,934 3,086 2,984 3% Maintenance 782 810 1,544 1,312 18% Selling and promotions 1,035 354 1,452 1,125 29% Rent 967 391 630 549 15% Taxes and licenses 3
Slide 24: EBITDA Calculation
EBITDA Calculation 1Q 2005 1Q 2004 % Wireless Fixed Line Consolidated Consolidated Change (in million pesos) (As Restated) Income before tax 9,649 3,247 12,926 7,716 68% Add back: Financing costs (575) 629 67 4,418 -98% Other income (19) (53) (75) (85) -12% Depreciation 2,460 3,001 5,556 5,337 4% As
Slide 25: Financing Costs
Financing Costs 1Q 2005 1Q 2004 % (in million pesos) Wireless Fixed Line Consolidated Consolidated Change (As Restated) Interest on Loans and related items 456 2,470 2,935 3,248 -10% Accretion on financial liabilities 628 89 717 712 1% Hedge cost - 241 241 203 19% Dividends on CPS 67 - 67 58 16% Fin
Slide 26: Statement of Cash Flow
Statement of Cash Flow 1Q 2005 1Q 2004 % Wireless Fixed Line Consolidated Consolidated Change (in million pesos) (As Restated) Net cash from operations 10,018 4,933 15,250 18,103 -16% Less: Capital expenditures (1,755) (2,351) (4,263) (4,316) -1% Investments 1,485 1 1,425 (1,260) -213% Interest, net
Slide 27: Balance Sheet
Balance Sheet Consolidated March 31 December 31 (in million pesos) 2005 2004 Total Assets 261,403 265,472 Nominal Value of Total Debt 145,973 159,528 in US$* $2,665 $2,829 Less: Unamortized Debt Discount 9,959 10,440 Total Debt 136,014 149,088 Cash and short-term investments 31,924 31,194 Net Debt 1
Slide 28: Interest-Bearing Liabilities
Interest-Bearing Liabilities as of March 31, 2005 December 31, Unamortized 2004 (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $1,815 - $1,815 $1,970 ($155) Smart $525 $126 $651 $654 ($3) 2014 Debt $154 $126 $280 280 $0 Others $371 - $371 374 ($3) Piltel $93 $34 $1
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