PLDT, Inc. · PSE:TEL
PLDT — H1 2011 Earnings Presentation
33 slides from PLDT's earnings presentation, Aug 2, 2011
Slide 1: First Half 2011 Financial and Operating Results
First Half 2011 p g Results Financial and Operating August 2, 2011
Slide 2: PLDT Group: 1H 2011 Financial Highlights
PLDT Group: 1H 2011 Financial Highlights 1H 2011 1H 2010 % 1H 2011 2H 2010 % (Unaudited) (Unaudited) Change (Unaudited) (Unaudited) Change Service Revenues P69.6bn P69 6bn P72.2bn P72 2bn -3% 3% P69.6bn P69 6bn P70.1bn P70 1bn -1% 1% Expenses P42.5bn P43.3bn -2% P42.5bn P45.6bn -7% EBITDA P41.5bn P4
Slide 3: PLDT Group: 2Q2011 vs 1Q2011 and 2Q2010
PLDT Group: 2Q2011 vs 1Q2011 and 2Q2010 2Q2011 1Q2011 % 2Q2011 2Q2010 % (unaudited) (unaudited) Change (unaudited) (unaudited) Change Service Revenues P35.1bn P34.6bn 1% P35.1bn P36.2bn ‐3% Expenses P21.7bn P20.9bn 4% P21.7bn P21.5bn 1% EBITDA P20.6bn P21.0bn ‐2% P20.6bn P22.1bn ‐7% EBITDA Margin 59
Slide 4: PLDT Group: Capital Management
PLDT Group: p Capital p Management g Dividend Declaration Dividend Payments (PhP inbillions, except per share amount) Sp pe c ia l D iv ide nds Declaration Date 2 August 2011 R e gula r D iv ide nds 250 D iv ide nd P e r S ha re 40.7 41.4 350 37.5 200 Record Date 31 August 2011 34.6 300 14.6 14.6 12
Slide 5: PLDT Group: Core and Reported Net Income
PLDT Group: p Core and Reported p Net Income Core Net Income Reported Net Income (PhP in billions) (PhP in billions) -1% 1% -2% 15% -3% +3% ¾ Core net income for 1H11 decreased by 1% to P21.0bn P21 0bn with the decrease in consolidated revenues partly offset by a reduction in the provision for incom
Slide 6: PLDT Group: Service Revenues
PLDT Group: Service Revenues Consolidated Service Revenues Service Revenues per Segment (PhP in billions) (PhP in billions) Wireless Fixed Line ICT 72.2 -3% 46.0 - 69.6 70.1 -1% 69.6 45.7 - 23.5 36.2 -3% 35.1 23.4 3 8.2 - 37 .7 1% 5.4 5.4 1% 8% 3 2.4 31.4 3% 8% 2H10 1H11 2H10 1H11 2Q10 2Q11 1H10 1H1
Slide 7: PLDT Group: EBITDA and Free Cash Flow
PLDT Group: EBITDA and Free Cash Flow EBITDA Free Cash Flow (PhP in billions) (PhP in billions) 1H10 1H11 43.3 -4% 41.5 40.5 3% 41.5 31.9 9.7 97 34.6 22 1 -7% 22.1 7% 20.6 6.3 63 1.9 2.3 2.2 0.5 19.4 24.2 1H10 1H11 2H10 1H11 2Q10 2Q11 Margin 60% 60% Margin 58% 60% Margin 61% 59% Cash Cash Interest I
Slide 8: PLDT Group: Debt Profile
PLDT Group: Debt Profile Debt Balance Debt Maturities (US$ in billions) (as of 30 June 2011, US$ in millions) 2 .2 2 .1 2 .2 1 .8 1 .6 1 .6 1.2 1.3 1.3 1.3 915 0.8 0.8 0.8 0 .9 0.9 0.9 0 .5 0.7 453 448 2006 2007 2008 2009 2010 1H11 256 157 D bt B alance Debt l C h & Sh Cash Short-term tt Investments
Slide 9: Broadband: Regaining momentum
Broadband: Regaining momentum Broadband Subscribers Broadband and Internet Service Revenues (in thousands) (PhP in billions) +10% 2,231 2,036 2 036 +8% 9.0 90 WeRoam +8% 8.4 4.5 1,627 ICT 4.2 Smartbro 1 ,4 9 2 10% 4 .0 Fixed 1 ,3 5 6 5% 3 .8 Wireless* 2 .0 6% 996 1 .9 1 ,0 3 8 579 Fixed 547 4 .6 Lin
Slide 10: Wireless: Holding margins steady
Wireless: Holding margins steady Service Revenues EBITDA (PhP in billions) (PhP in billions) -4% -2% 47.9 45.7 45 7 29.7 29.0 29 0 1% -5% 15.3 -5% 14.5 24.2 23.0 7% 1% 10% 1% 1% 1H10 1H11 2Q10 2Q11 Margin 62% 63% Margin 63% 63% 1H10 1H11 2Q10 2Q11 ¾ Combined SMART, TNT and Red Mobile subscriber base
Slide 11: Fixed Line: Managing the downward trend
Fixed Line: Managing the downward trend Service Revenues EBITDA (PhP in billions) (PhP in billions) 25.2 -7% 23.5 23 5 12.7 -10% 11.4 -3% -14% 6% 12.4 11.9 6.4 5.5 5.7 5.6 2% 13% 11% 1.2 1.0 16% 1.2 1.2 3% 4% 3.8 3.7 3% 1H10 1H11 2Q10 2Q11 1H10 1H11 2Q10 2Q11 Margin 50% 49% Margin 51% 46% ¾ Fixed li
Slide 12: ICT: Sustaining improvements
ICT: Sustaining improvements ICT Service Revenues ICT EBITDA (PhP in billions) (PhP in millions) Vitro Data Center +3% +29% 979 5.3 53 5.4 15% 0.8 0.7 Internet and On- 756 0.5 0.5 Line Gaming 2.6 +3% 2.7 +36% 525 12% 387 10% 2.5 2.7 Kno wledge P ro cessing So lutio ns (SP i) 11% 9% 1.5 1.4 Custo mer
Slide 13: Meralco: Improving steadily
Meralco: Improving steadily Energy Sales and Service Revenue Core and Reported Net Income (PhP in billions) (PhP in billions) Energy Sales Revenues Core Income Reported Income 35% 7.8 -2% 2% 6.1 61 127.2 124.8 26% 15.0 -1% 14.8 5.8 4.9 1H10 1H11 1H10 1H11 1H10 1H11 1H10 1H11 ¾ Meralco’s consolidated
Slide 14: Investment in Digitel: Status Update
Investment in Digitel: g Status Update p PLDT Investment • Digitel’s equity value of P74.1bn* (US$1.7bn) on a 100% basis Subject of PLDT’s • Controlling interest in Digitel from J. G. Summit (“JGS”) and Investment certain other parties for P69.2bn (US$1.6bn) • PLDT will announce later its intention
Slide 15: Creation of Voting Preferred Shares
Creation of Voting Preferred Shares ¾ On 5 July 2011, the Board of Directors approved the amendment of the Seventh Article of PLDT’s Amended Articles of Incorporation to sub‐classify the company’s authorized preferred capital stock into Non‐voting and Voting Preferred Shares ¾ The capital structure
Slide 16: PLDT Group Guidance (without Digitel)
PLDT Group Guidance (without Digitel) Service Revenues 2010 lower by 2% vs Lower by 4%in 2011 vs 2010 2009 2010 lower by 3% vs EBITDA Flat in 2011 vs 2010 2009 P40.5 billion in 2011 and 2012, 2010 higher by 2% vs Core Net Income back to 2010 levels starting 2013 2009 P34 billion in 2011 and P33 bill
Slide 17: Forward-looking statements
Except for historical financial and operating data and other information in respect of historical matters, the statements contained t i dh herein i are “forward-looking “f d l ki statements” t t t ” within ithi the th meaning i off Section S ti 27A off the th U.S. U S Securities S iti A Actt off 193
Slide 18: Appendix
18 CHANGING THE GAME Appendix <> PLDT
Slide 19: Subscriber Data
Subscriber Data 1H11 vs FY10 Net adds Jun-11 Mar-11 Dec-10 Sep-10 Jun-10 Mar-10 Amount % 1Q11 2Q11 CELLULAR Smart 26,509,537 26,165,500 25,715,018 25,594,008 26,204,136 25,479,359 794,519 3% 450,482 344,037 Buddy 26,079,785 25,735,090 25,293,443 25,175,430 25,764,292 25,033,946 786,342 3% 441,647 34
Slide 20: 1H 2011: Consolidated Financial Highlights
1H 2011: Consolidated Financial Highlights 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Service Revenues 45,738 , 23,481 , 5,415 , 69,641 , 72,156 , -3% % Cash operating expenses 15,210 11,576 4,376 26,055 26,460 -2% EBITDA 29,
Slide 21: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income 1H11 1H10 Difference (in billion pesos) Reported net income 21.3 21.7 (0.4) Core net income 21.0 21.2 (0.2) 0.3 0.5 (0.2) Accounted for by: Forex Net 0.4 (0.1) 0.5 Gain on Derivatives 0.7 1.2 (0.5) Asset Impairment - (0 1) (0.1) 01 0.1 Adjustment in equ
Slide 22: Consolidated Revenues
Consolidated Revenues First Half (i billion (in billi pesos)) 2011 2010 % Ch Change Voice 31.4 34.0 -8% Data and ICT 38.2 38.1 0% 69.6 72.1 -3% 22
Slide 23: Revenues by Segment
Revenues by Segment 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Service Revenues Wireless Cellular 42,192 42,192 44,076 -4% Broadband 3,186 3,186 3,203 -1% Satellite and other services 360 360 597 -40% Fixed line Local exchang
Slide 24: Wireless Net ARPU
Wireless Net ARPU 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Smart Postpaid 1,286 1,257 1,229 1,256 1,205 1,206 Smart Buddy 184 179 163 171 163 162 Talk 'N Text 115 116 112 116 106 105 Red Mobile Prepaid 8 3 5 19 27 37 Red Mobile Postpaid - - - - 133 413 24
Slide 25: Expenses
Expenses 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Operating expenses Compensation and employee benefits 2,943 4,710 3,004 10,649 11,247 -5% Repairs and maintenance 2,592 2,064 354 4,676 4,512 4% Selling and promotions 1,993
Slide 26: Other Income (Expenses)
Other Income (Expenses) 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Gains G i (l(losses)) on dderivative i ti fifinancial i l iinstruments, t t nett - 663 - 663 11,189 189 -44% 44% Interest income 383 245 21 645 612 5% Equity
Slide 27: EBITDA
EBITDA 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Income before tax 22 498 22,498 4 878 4,878 718 28 094 28,094 29 377 29,377 -4% Add (deduct): Depreciation and amortization 6,758 5,989 371 13,118 13,054 0% Financing costs, n
Slide 28: Core Income
Core Income 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Reported net income 17,129 3,505 665 21,299 21,679 -2% Add (deduct): Foreign exchange losses (gains), net (281) (145) 3 (423) 59 -817% Losses (gains) on derivatives finan
Slide 29: Earnings Per Share
Earnings Per Share 1H 2011 1H 2010 (Unaudited) (Unaudited) (in million pesos) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 21,300 21,300 21,679 21,679 Dividends on preferred shares (228) (25) (228) (25) Net Income applicable to common shares 21,072 21,275 21,4
Slide 30: Cash Flows
Cash Flows 1H 2011 1H 2010 (Unaudited) (Unaudited) % Change (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Net cash from operations 22,237 11,177 1,219 34,629 31,848 9% Add(Deduct): Capital expenditures (1,838) (1 838) (4 186) (4,186) (311) (6,335) (6 335) (9,700) (9 700) -35%
Slide 31: Balance Sheet
Balance Sheet Consolidated June 30, 2011 December 31, 2010 (in million pesos) (Unaudited) (Audited) Total Assets 271,484 277,815 Nominal Value of Total Debt 96,645 92,590 in US$ $2,229 $2,113 Less: Unamortized Debt Discount 2,492 2,944 Total Debt 94,153 89,646 Cash and short-term investments 39,258
Slide 32: Interest-bearing Liabilities
Interest‐bearing Liabilities June 30, 2011 December 31, (Unaudited) 2010 Change Unamortized Debt (Audited) Carrying Value Face Value (in millions) Discount Face Value Debt PLDT $1,212.6 $3.7 $1,216.3 $1,123.4 $92.9 Smart $941.3 $53.7 $995.0 $987.4 $7.6 2014 Debt 230.9 49.2 280.1 280.1 - Others 710.4
Slide 33: Debt Profile
Debt Profile (in million US$) 2006 2007 2008 2009 2010 1H11 Debt Balance 1 756 1,756 1 585 1,585 1 625 1,625 2 210 2,210 2 113 2,229 2,113 2 229 Cash and short-term investments 514 745 847 908 852 905 Net Debt 1,242 840 778 1,302 1,261 1,324 33