PLDT, Inc. · PSE:TEL
PLDT — H1 2013 Earnings Presentation
42 slides from PLDT's earnings presentation, Aug 7, 2013
Slide 1: First Half 2013 Financial and Operating Results
First Half 2013 Financial and Operating Results 7 August 2013
Slide 2: PLDT Group: First Half 2013 Financial Highlights
PLDT Group: First Half 2013 Financial Highlights * Excluding BPO business segment ** EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnect expenses) Foreign Exchange Rates (Php:US$1) 1H2013 1H2012 2H2012 %Y-o-Y %H-o-H Period-end P43.26 P42.28 P41.08 +2% +5% Period-ave
Slide 3: PLDT Group: Second Quarter 2013 Financial Highlights
PLDT Group: Second Quarter 2013 Financial Highlights * Excluding BPO business segment ** EBITDA margin calculated as EBITDA divided by service revenues (gross of interconnect expenses) Foreign Exchange Rates (Php:US$1) 2Q2013 1Q2013 2H2012 %Q-o-Q %Y-o-Y Period-end P43.26 P40.92 P42.28 +6% +2% Period
Slide 4: Capital Management
Capital Management Dividend Declaration PLDT’s dividend policy is the payment of a regular dividend representing 70% of core earnings, with a “look-back” at the end of the Declaration Date 7 August 2013 year to determine the possibility of a special dividend Record Date 30 August 2013 Consistent
Slide 5: PLDT Group: Core and Reported Net Income
PLDT Group: Core and Reported Net Income Core Net Income* PLDT anticipates a “return to growth” in 2013 with (Php in billions) core net income for the year expected to grow to P38.3bn +5% +6% Core net income for first half 2013 of P19.4bn is in +5% 19.4 -- 18.5 line with full year guidance and r
Slide 6: Subscriber Base: Cellular and Broadband
Subscriber Base: Cellular and Broadband Cellular Subscribers (in millions) At the end of June 2013, PLDT Group combined fixed, wireless and broadband subscriber base stood at 78.7mn +5% +3% +2% Combined cellular subscribers rose by 5% to 73.4mn at Sun Cellular 73.4 the end June 2013 from the end
Slide 7: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues * Consolidated service revenues for the first semester (Php in billions) 2013 rose by P1.4bn or 2% to P81.1bn as increases in revenues from the growing businesses outpaced the Mobile internet browsing Cellular SMS Cellular-Inter
Slide 8: Service revenues and outlook per segment
Service revenues and outlook per segment Broadband service revenues, now accounting for 16% of total Broadband Service Revenues consolidated service revenues, increased by P1.6bn or 14% year- (Php in billions) on-year to P12.7bn Mobile internet revenues of P2.1bn registered the strongest growth
Slide 9: Service revenues and outlook per segment
Service revenues and outlook per segment Wireless Service Revenues Wireless service revenues for the first semester of 2013 rose by (Php in billions) P1.0bn or 2% year-on-year to P57.7bn reflecting continued growth of non-SMS data and modest increases in cellular voice and data revenues SMS Cellul
Slide 10: Free Cash Flow and Capex
Free Cash Flow and Capex Free cash flow for 1H13 declined by 1% or P0.1bn to P20.7bn from Free Cash Flow (Php in billions) P20.8bn last year Higher cash from operations by P0.2bn 1H12 1H13 Net decrease in working capital of P4.6bn 41.9(0.9) (5.1) 42.1 (5.5) Lower capex by P4.5bn (9.3) (4.8)
Slide 11: PLDT Group: Debt Profile
PLDT Group: Debt Profile Debt Balance Net debt at end June 2013 reduced by US$0.2bn (US$ in billions) to US$1.7bn with net debt to EBITDA at 0.98x, both lower compared with end 2012 As of 1H13, gross debt was lower by US$0.2bn at US$2.7bn 51% of gross debt are US$ denominated Taking into acc
Slide 12: Updates on PLDT Group multi-media initiatives
Updates on PLDT Group multi-media initiatives Smart Communications Inc. and MCA Music Inc., a Universal Music Group International company, signed a three-year exclusive partnership to offer a “game-changing” online music services – Smart Music Smart Music is an online portal that will make avail
Slide 13: PLDT Group Guidance for 2013
PLDT Group Guidance for 2013 Core Net Income Core Net Inc P38.3bn P29.0bn Capex Core Net Income (P7.4bn or 20% lower than 2012) Capital Management Dividend Core Pay-out Policy: Net Income 70% of Core EPS + “look-back” approach 13
Slide 14: Segment and Other Details
Segment and Other Details eN . A See = \Z PLDT smart =. YEARS
Slide 15: Broadband
Broadband Broadband service revenues, now accounting for 16% of total Broadband Service Revenues consolidated service revenues, increased by P1.6bn or 14% year- (Php in billions) on-year to P12.7bn Mobile internet revenues of P2.1bn registered the strongest growth Mobile Internet DSL Wireless Br
Slide 16: Wireless
Wireless Wireless Service Revenues Wireless service revenues for the first semester of 2013 rose by (Php in billions) P1.0bn or 2% year-on-year to P57.7bn reflecting continued growth of non-SMS data and modest increases in cellular voice and data SMS Cellular Voice Broadband (1) Satellite and Othe
Slide 17: Fixed Line
Fixed Line Fixed Line Service Revenues* Fixed line service revenues for 1H13, net of (Php in billions) interconnection costs, were higher by 3% or P0.7bn at P26.5bn as compared with 1H12 with the continued LEC NLD ILD Data Miscellaneous growth in DSL and corporate data revenues +3% +5% DSL reven
Slide 18: Meralco
Meralco Meralco’s revenues dipped by P1.9bn or 1% year-on-year to P141.7bn Energy Sales and Revenues due to the combined effect of a 4% growth in energy sales volumes, a (in ‘000 GWh and Php in Billions) 3% rise in customer count and higher distribution rates, offset by lower purchased power costs
Slide 19: Financial Investment in PDRs of MediaQuest
Financial Investment in PDRs of MediaQuest In May 2012, PLDT announced the financial investment by ePLDT of P6bn in Philippine Depository Receipts (PDRs) to be issued by MediaQuest MediaQuest, a wholly owned entity of the Beneficial Trust Fund, has investments in media assets that include TV5, C
Slide 20: PAS 19 Adjustments
PAS 19 ADJUSTMENTS Change in PAS19 affecting termination benefits (MRP costs): Old PAS 19 – allows for the recognition of termination benefits when the Company is demonstrably committed to provide termination benefits, which only entails an approved detailed, formal plan and that plan has no reali
Slide 21: Appendix
FS \G Appendix PLDT stvir = YEARS 21
Slide 22: Subscriber Data
Subscriber Data 1H13 vs FY12 1H13 vs 1H12 Net adds Jun-13 Mar-13 Dec- 12 Sept- 12 Jun- 12 Mar-12 Amount % Amount % 1Q2013 % 2Q2013 % CELLULAR Smart 25,458,569 25,360,446 25,744,933 26,036,774 27,492,175 28,370,594 (286,364) -1% (2,033,606) -7% (384,487) -1% 98,123 - Prepaid 24,631,062 24,593,169 25,
Slide 23: 1H2013: Consolidated Financial Highlights
1H2013: Consolidated Financial Highlights 1H2013 1H2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Continuing Operations Service Revenues 57,713 30,674 - 81,135 79,729 2% Cash operating expenses (1) 25,294 18,709 2 36,362 37,205 -2% Depr
Slide 24: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income 1H2013 1H2012 Difference (PhP in billions) Reported net income 19.7 19.3 0.4 Core net income 19.4 18.4 1.0 0.3 0.8 (0.5) Accounted for by: Forex gains (losses), net (1.9) 1.6 (3.5) Gains (losses) on derivatives, net 0.6 (0.3) 0.9 PAS 19 Adjusment (0.9)
Slide 25: Consolidated Service Revenues
Consolidated Service Revenues % Change 2013 2012 1H13 vs 2Q13 vs (in billion pesos) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H 1H12 2H12 1Q13 2Q12 SMS 11.9 11.9 23.9 12.0 12.2 24.2 11.9 12.2 24.1 -1% -1% - -2% Voice - Domestic 13.3 13.9 27.2 **13.4 13.4 26.8 13.2 13.6 26.8 2% 1% 4% 4% Voice - International 5.5 5.7
Slide 26: Revenues by Segment
Revenues by Segment 1H2013 1H2012 Consolidated Consolidated % Change Wireless Fixed Line (PhP in millions) (unaudited) (as adjusted) Service Revenues Wireless 57,713 Cellular 52,336 52,336 51,660 1% Broadband 4,680 4,680 4,215 11% Satellite and other services 697 697 800 -13% Fixed line 30,674 Local
Slide 27: Expenses
Expenses 1H2013 1H2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Operating expenses Compensation and employee benefits (1) 4,067 6,033 - 10,072 11,347 -11% Repairs and maintenance 3,941 2,935 - 6,534 6,407 2% Selling and promotions 3,48
Slide 28: Other Income (Expenses)
Other Income (Expenses) 1H2013 1H2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PHP in millions) (unaudited) (as adjusted) Gains (losses) on derivative financial instruments, net 4 444 - 448 (437) 203% Interest income 226 227 40 485 619 -22% Equity share in net earnings (losses)
Slide 29: Wireless and Broadband Net ARPU
Wireless and Broadband Net ARPU Wireless Net ARPU 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Smart Postpaid 1,269 1,237 1,252 1,248 1,154 1,154 Smart Prepaid 153 145 141 150 141 141 Talk 'N Text 102 100 93 93 87 87 Sun Cellular Prepaid 65 66 69 77 80 69 Sun Cellular Postpaid 411 422 413 416 497 518 Prepaid and P
Slide 30: EBITDA
EBITDA 1H2013 1H2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Income before tax 16,501 3,955 1,936 22,538 25,240 -11% Add (deduct): Depreciation and amortization 8,144 6,388 - 14,532 15,289 -5% Financing costs, net 1,512 1,823 - 3,327
Slide 31: Historical Consolidated: Service Revenues and EBITDA
Historical Consolidated: Service Revenues and EBITDA 2013 2012 (PhP in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H Consolidated Gross Service Revenues (1) Fixed line 11,911 12,361 24,272 12,067 11,835 23,902 11,765 11,964 23,729 Local exchange 4,009 4,065 8,074 4,146 4,089 8,235 4,058 4,064 8,122 Internati
Slide 32: Historical Wireless: Service Revenues & EBITDA
Historical Wireless: Service Revenues & EBITDA 2013 2012 (PhP in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H Wireless Gross Service Revenues Cellular services 25,795 26,541 52,336 25,884 25,776 51,660 25,428 26,517 51,945 Cellular Voice 12,273 12,880 25,153 12,493 12,207 24,700 12,175 12,751 24,926 Domesti
Slide 33: Historical Fixed line: Service Revenues and EBITDA
Historical Fixed line: Service Revenues and EBITDA 2013 2012 (PhP in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H (1) Fixed Line Gross Service Revenues Local exchange 4,037 4,087 8,124 4,175 4,113 8,288 4,088 4,092 8,180 International long distance 1,108 1,200 2,308 1,211 1,149 2,360 1,134 1,114 2,248 Natio
Slide 34: Core Net Income
Core Net Income 1H2013 1H2012 Consolidated Consolidated % Change Wireless Fixed Line Others (PhP in millions) (unaudited) (as adjusted) Net Income attributable to equity holder of PLDT 12,652 3,183 1,863 17,844 19,036 -6% - continuing operations Add (deduct): Foreign exchange losses (gains), net 1,3
Slide 35: Earnings Per Share
Earnings Per Share 1H2013 1H2012 (unaudited) (as adjusted) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 19,707 19,707 19,283 19,283 Continuing Operations 17,844 17,844 19,037 19,037 Discontinued Operations 1,863 1,863 246 246 Dividends on preferred shares (27)
Slide 36: Cash Flows
Cash Flows 1H2013 1H2012 Consolidated % Change Consolidated (as adjusted) Wireless Fixed Line BPO Others (PhP in millions) (unaudited) Net cash from operations 21,747 8,326 144 1,624 31,798 35,920 -11% Add(Deduct): Capital expenditures (2,753) (2,034) - - (4,787) (9,298) -49% Other investing activit
Slide 37: Balance Sheet
Balance Sheet Consolidated June 30, 2013 December 31, 2012 (PhP in millions) (Unaudited) (Audited) Total Assets 395,611 405,815 Nominal Value of Total Debt 118,798 117,115 in US$ $2,746 $2,851 Less: Unamortized Debt Discount 903 1,323 Total Debt 117,895 115,792 Cash and short-term investments 43,518
Slide 38: Debt Profile
Debt Profile (US$ in millions) 2006 2007 2008 2009 2010 2011(1) 2012(1) 1H2013(1) Debt Balance 1,756 1,585 1,625 2,210 2,113 2,719 2,851 2,746 Cash and short-term investments 514 745 847 908 852 1,061 919 1,006 Net Debt 1,242 840 778 1,302 1,261 1,658 1,932 1,740 (1) Including Digitel Debt Maturitie
Slide 39: Interest-bearing Liabilities
Interest-bearing Liabilities June 30, 2013 December 31, (Unaudited) 2012 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,409 $2 $1,410 $1,440 ($30) Smart $955 $19 $974 $957 $16 2014 Debt $267 $13 $280 $280 $ - Others $688 $
Slide 40: 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 41: 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 42: BLN
BLN \Z ow = b YEARS