PLDT, Inc. · PSE:TEL
PLDT — Q1 2014 Earnings Presentation
35 slides from PLDT's earnings presentation, May 6, 2014
Slide 1: First Quarter 2014 Financial and Operating Results
First Quarter 2014 Financial and Operating Results Philippine Long Distance Telephone Company (PLDT) 6 May 2014
Slide 2: PLDT Group: 1Q14 Financial Highlights
PLDT Group: 1Q14 Financial Highlights 1Q2014 1Q2013 (PhP in billions, except EBITDA margin % Y-o-Y and core EPS) (unaudited) Service Revenues 41.2 40.0 3% • Wireless 28.9 28.4 2% • Fixed Line 16.1 15.3 5% EBITDA 19.7 20.1 -2% • Wireless 13.2 14.3 -8% • Fixed Line 6.4 5.6 13% EBITDA Margin* 48% 50% •
Slide 3: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues The on-going structural change in PLDT’s revenue mix continues (Php in billions) to temper consolidated service revenue growth rates and EBITDA 1Q14: P41.2bn 1Q13: P40.0bn Change: +3% margins Data and broadband revenues growin
Slide 4: PLDT Group: Core and Reported Net Income
PLDT Group: Core and Reported Net Income Core Net Income PLDT expects to be firmly back on the growth track, with (Php in billions) core income for 2014 estimated at P39.5bn, or 2% higher year-on-year 2% Core income of P38.7bn in 2013 was a 5% year-on-year increase following two consecutive year
Slide 5: Broadband revenues
Broadband revenues Broadband service revenues of P7.6bn in 1Q14 account for 18% of Consolidated Broadband Service Revenues consolidated service revenues and is 24% higher year-on-year by (Php in billions) P1.5bn, more than double the P0.6bn year-on-year increase in 1Q13 Mobile internet revenues
Slide 6: Wireless segment
Wireless segment Wireless service revenues for 1Q14 grew by P0.5bn or 2% year-on-year Wireless Service Revenues to P28.9bn due to the continued rise in broadband and voice revenues (Php in billions) Cellular voice revenues representing 45% of total wireless service (1) revenues were higher by P0
Slide 7: Fixed line segment
Fixed line segment Fixed line service revenues for 1Q14 of P14.0bn, net of Fixed Line Service Revenues* interconnection costs, were higher by P0.8bn or 6% year-on-year (Php in billions) primarily driven by growth in retail and corporate data revenues Data revenues were up by P0.8bn or 12% at P7.
Slide 8: Market opportunities and initiatives
Market opportunities and initiatives Opportunities Initiatives “Always-on” experience via low- Internet/social network habit among denomination prepaid data sachets, young, literate market mainly using PowerApps, “ring-fenced” sachet apps internet cafes, wi-fi Push SMS+voice+data bundles to part
Slide 9: PLDT Group: Debt Profile
PLDT Group: Debt Profile Net debt of US$1.4bn and net debt to EBITDA ratio of 0.8x Debt Balance as of 1Q14 were both lower compared with YE13 (US$ in billions) Net of approx. US$0.6bn or P25bn of dividend payments in April 2014, net debt and net debt to EBITDA to rise to US$2.0bn and 1.14x, resp
Slide 10: Free Cash Flow and Capex
Free Cash Flow and Capex Free cash flow for 1Q14 was higher by P2.9bn or 37% at P10.8bn from P7.9bn last Free Cash Flow year resulting from: (Php in billions) Higher cash from operations of P0.3bn Lower net decrease in working capital of P2.9bn 1Q13 1Q14 Decrease in capex by P0.8bn Reducti
Slide 11: PLDT Group Guidance for 2014
PLDT Group Guidance for 2014 Core Net In P39.5bn Core Net Income (P0.8bn or 2%(POc higher than 2013) P31-32.0bn Capex Core Net Income (18-20% of service revenues) Dividend Pay-out Policy: Capital Management 70% of CoreCore EPS Net Income approach + “look-back” 11 11
Slide 12: Other Details
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Slide 13: Recap of PLDT Group multi-media initiatives
Recap of PLDT Group multi-media initiatives PLDT triple-play: Fibr (fiber-to-the-home) SPINNR, powered by Smart Music, is the Direct-to-home (DTH) CignalTV (PLDT + landline + CignalTV content through a biggest on-line music portal in the investment via Mediaquest PDRs) dedicated connection Philippin
Slide 14: MERALCO
MERALCO MERALCO’s consolidated revenues in 1Q14 of P55.1bn were lower by Energy Sales Volumes and Revenues P9.7bn or 15% year-on-year to due to the billing adjustment in the (in „000 GWh and Php in billions) WESM rate for December 2013 power purchases as ordered by the ERC, and the shift of contes
Slide 15: Financial Investment in PDRs of MediaQuest
Financial Investment in PDRs of MediaQuest PLDT, through ePLDT, made a P9.6bn investment in Philippine Depository Receipts (PDRs) of MediaQuest for a 64% economic interest in CignalTV (a 100% subsidiary of MediaQuest) Investment in Cignal TV equity accounted in PLDT‟s financials starting 4Q13
Slide 16: Appendix
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Slide 17: Subscriber Data: Cellular
Subscriber Data: Cellular Cellular Subscribers by category: 1Q14 vs 1Q13 1Q14 vs FY13 Mar-14 Dec- 13 Sept- 13 Jun-13 Mar-13 Mar-10 Net Adds % Net Adds % CELLULAR Prepaid 68,030,812 67,667,750 70,198,270 71,197,952 69,628,396 (1,597,584) -2% 363,062 1% Smart Prepaid 24,959,498 24,608,687 23,867,643 2
Slide 18: Subscriber Data: Broadband
Subscriber Data: Broadband 1Q14 vs 1Q13 1Q14 vs FY13 Mar-14 Dec-13 Sept-13 Jun-13 Mar-13 Net Adds % Net Adds % BROADBAND Wireless Broadband 2,551,882 2,453,826 2,378,607 2,322,416 2,238,979 312,903 14% 98,056 4% Smart Broadband 2,003,433 1,909,209 1,843,839 1,803,520 1,740,572 262,861 15% 94,224 5%
Slide 19: 1Q2014: Consolidated Financial Highlights
1Q2014: Consolidated Financial Highlights 1Q2014 1Q2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Service Revenues 28,868 16,082 - 41,217 39,968 3% (1) Cash operating expenses 13,002 9,630 1 18,800 17,806 6% Depreciation and amortization
Slide 20: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income 1Q2014 1Q2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net Income attributable to equity holder of PLDT 6,364 2,130 885 9,379 9,053 4% - continuing operations Add (deduct): Foreign exchange
Slide 21: Consolidated Service Revenues
Consolidated Service Revenues % Change 2014 2013 1Q14 vs (Php in billions) 1Q 1Q 2Q 3Q 4Q FY 1Q13 4Q13 SMS and VAS 10.8 ** 11.9 11.9 11.5 11.9 47.3 -10% -9% Voice - Domestic 14.0 13.3 13.9 13.7 14.3 55.2 5% -2% Voice - International 5.5 5.5 5.6 5.6 5.9 22.7 -1% -8% Non-SMS data 10.0 8.2 8.7 9.0 9.5
Slide 22: Expenses
Expenses 1Q2014 1Q2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Operating expenses Compensation and employee benefits (1) 1,940 3,225 - 5,160 4,965 4% Repairs and maintenance 2,153 1,496 - 3,484 3,301 6% Selling and promotions 1,706 416
Slide 23: Other Income (Expenses)
Other Income (Expenses) 1Q2014 1Q2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Gains (losses) on derivative financial instruments, net (2) 182 7 187 23 713% Interest income 52 75 77 192 296 -35% Equity share in net earnings of associates
Slide 24: Cellular and Broadband Net ARPU
Cellular and Broadband Net ARPU Cellular Net ARPU 2014 2013 1Q 1Q 2Q 3Q 4Q Smart Postpaid 1,086 1,154 1,153 1,099 1,102 Smart Prepaid 132 141 141 142 153 Talk 'N Text 87 87 87 82 85 Sun Cellular Prepaid 67 57 58 60 68 Sun Cellular Postpaid 476 455 495 476 493 Cellular Prepaid and Postpaid blended Ne
Slide 25: Historical Consolidated: Service Revenues and EBITDA
Historical Consolidated: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 1Q 2Q 3Q 4Q FY Fixed line 12,792 11,997 12,275 12,220 12,589 49,081 Local exchange 4,087 4,008 4,066 4,042 4,057 16,173 International long distance 1,679 1,798 1,701 1,581 1,768 6,848 National long distance 1,006 1,0
Slide 26: Historical Wireless: Service Revenues & EBITDA
Historical Wireless: Service Revenues & EBITDA 2014 2013 (Php in millions) 1Q 1Q 2Q 3Q 4Q FY Wireless Gross Service Revenues Cellular services 26,078 25,709 26,529 26,040 27,597 105,875 Cellular Voice 12,868 12,187 12,869 12,733 13,595 51,384 Domestic 9,025 8,375 8,866 8,682 9,351 35,274 Internation
Slide 27: Historical Fixed Line: Service Revenues and EBITDA
Historical Fixed Line: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 1Q 2Q 3Q 4Q FY Fixed Line Gross Service Revenues Local exchange 4,111 4,036 4,092 4,066 4,080 16,274 International long distance 2,859 2,968 2,802 2,678 2,974 11,422 National long distance 1,099 1,155 1,189 1,137 1,102
Slide 28: Earnings Per Share
Earnings Per Share 1Q2014 1Q2013 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 9,379 9,379 9,178 9,178 Continuing Operations 9,379 9,379 9,053 9,053 Discontinued Operations - - 125 125 Dividends on preferred shares (14) (14) (14) (14) Ne
Slide 29: Cash Flows
Cash Flows 1Q2014 1Q2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net cash from operations 11,525 5,917 14 17,341 14,302 21% Add(Deduct): Capital expenditures (1,084) (1,137) - (2,221) (3,066) -28% Other investing activities 84 13,505 -
Slide 30: Balance Sheet
Balance Sheet Consolidated March 31, 2014 December 31, 2013 (Php in millions) (unaudited) (Audited) Total Assets 426,848 399,638 Nominal Value of Total Debt 123,691 104,472 in US$ $2,760 $2,353 Less: Unamortized Debt Discount 434 382 Total Debt 123,257 104,090 Cash and short-term investments 61,076
Slide 31: Debt Profile
Debt Profile (US$ in millions) 2008 2009 2010 2011(1) 2012(1) 2013(1) 1Q2014(1) Debt Balance 1,625 2,210 2,113 2,719 2,851 2,353 2,760 Cash and short-term investments 847 908 852 1,061 919 735 1,363 Net Debt 778 1,302 1,261 1,658 1,932 1,618 1,397 (1) Including Digitel Debt Maturities as of March 31
Slide 32: Interest-bearing Liabilities
Interest-bearing Liabilities March 31, 2014 December 31, (unaudited) 2013 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,578.4 $1.4 $1,579.8 $1,284.0 $295.8 Smart $924.3 $8.3 $932.6 $812.0 $120.6 DIGITEL $248.0 - $248.0 $2
Slide 33: Foreign Exchange Risk
Foreign Exchange Risk Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives Forex sensitivity for every P1 change (in US$ millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ millions) Conso Conso - net of Elim P1 movement in the Debt (net of L
Slide 34: Forward-looking statements
Except for historical financial and operating data and other information in respect of historical matters, the statements contained herein are “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchang
Slide 35: The future is in our Fiber
The future is in our Fiber. = a2 I Ooo )