PLDT, Inc. · PSE:TEL
PLDT — H1 2010 Earnings Presentation
30 slides from PLDT's earnings presentation, Aug 3, 2010
Slide 1: First Half 2010 Financial and Operating Results
We’re changing lives. First Half 2010 Financial and Operating Results 3 August 2010 1
Slide 2: PLDT Group: 1H 2010 Financial Highlights
PLDT Group: 1H 2010 Financial Highlights 1H 2010 1H 2009 (unaudited) (unaudited) % Y-o-Y Service Revenues P72 2bn P72.2bn P72 9bn P72.9bn 1% • Wireless P47.9bn P48.1bn - • Fixed Line P25.2bn P25.4bn 1% EBITDA P43 3bn P43.3bn P44 1bn P44.1bn 2% • Wireless P29.7bn P30.2bn 2% • Fixed Line P12.6bn P13.3
Slide 3: PLDT Group: 2Q2010 vs 1Q2010 and 2Q2009
PLDT Group: 2Q2010 vs 1Q2010 and 2Q2009 2Q2010 1Q2010 % 2Q2010 2Q2009 % (unaudited) (unaudited) Change (unaudited) (unaudited) Change Service Revenues P36 2bn P36.2bn P36 0bn P36.0bn - P36 2bn P36.2bn P36 5bn P36.5bn 1% • Wireless P24.2bn P23.7bn 2% P24.2bn P24.2bn - • Fixed Line P12.4bn P12.9bn 4%
Slide 4: PLDT Group: Core and Reported Income
PLDT Group: Core and Reported Income Core and Reported Net Income ¾ Core net income for 1H10 grew by 2% or (Php in Billions) P400mn to P21.2bn on account of: Core Income Reported Income + P1.0bn of equity share in net earning of affiliates, principally from our share in Meralco’s +2% +10% 21.7 earni
Slide 5: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA ¾ Consolidated service revenues of P72.2bn as at 1H10 were Consolidated Service Revenues P715mn or 1% lower than P72.9bn in 1H09 as a result of: (Php billions) Data and ICT + 3% growth in voice revenues particularly in cellular as a result of Voice the recent
Slide 6: PLDT Group: Capex and Free Cash Flow
PLDT Group: Capex and Free Cash Flow ¾ Capex for 2010 estimated to be P28.6bn or approx. 19% of Capex projected service revenues (Php billions) ICT 1H10 capex stood at P9.7bn compared with P10.7bn last Fixed Line year Wireless Capex to Svc Rev (%) Of the P9.7bn: P5.0bn for wireless (P5.3bn in 1H
Slide 7: PLDT Group: Debt Profile
PLDT Group: Debt Profile * Net of cash Debt Balance earmarked for (US$ billions) dividends paid in April 2010 ¾ Net debt stood at US$1.5bn at the end of 1H10 ¾ Net debt/EBITDA as at end of June 2010 at 0.8x ¾ As of 1H10, total group debt amounted to US$2.1bn Net Debt/EBITDA 49% is in US$ 0.8x 0.4x
Slide 8: PLDT Group: Capital Management
PLDT Group: Capital Management Dividend Declaration ¾ Consistent with the committed 70% Declaration Date 3 August 2010 dividend payout ratio, PLDT declared an interim cash dividend of P 78/share, an Record Date 19 August 2010 increase over the P77 interim dividend in Payment Date 21 September 2010 2
Slide 9: Broadband: Soaring to new heights
Broadband: Soaring to new heights ¾ PLDT combined broadband subscriber base grew 21% to 1.96mn 1 96mn from YE09 with PLDT DSL DSL, SmartBro, SmartBro and WeRoam Broadband Subscribers having added about 340,000 subscribers in 1H10 (thousands) SmartBro, the most widely available broadband service +2
Slide 10: SMART: Expanding our reach
SMART: Expanding our reach ¾ Combined Smart, TNT, and Red Mobile subscriber base grew by 18% year-on-year to 45 45.3mn 3mn as at end-June 2010 Combined Smart Subscriber Base (millions) ¾ Net adds of 4.0mn cellular subscribers were registered in 45.3 1H10 41.3 43.2 36.9 38.5 39.1 • Of the 4.0mn net a
Slide 11: SMART: Nurturing new growth areas
SMART: Nurturing new growth areas ¾ Wireless service revenues were stable year-on-year at P47 9bn for the first half of 2010; excluding the satellite P47.9bn Service Revenues business, revenues were higher by P0.2bn year-on-year (Php billions) + 27% increase in wireless broadband revenues Others + 1
Slide 12: Smart: Recent Marketing Initiatives
Smart: Recent Marketing Initiatives • Text in promo with ABC5 is Text‐in generating significant number of hits and entries RED Mobile usage showing marked a ed increase c ease aafter e thee opening of the Unli service to all SMART brands. • Increased Traffic from giving Friday o Lower cost of delive
Slide 13: Fixed Line: Holding steady
Fixed Line: Holding steady ¾ Fixed line service revenues declined by P200mn or 1% to P25.2bn in 1H10 compared p to 1H09 due to the combined effect of: Service Revenues + 11% increase in corporate data and DSL service revenues (Php billions) Miscellaneous • Domestic data service revenues grew by P738
Slide 14: Fixed Line: Finding more ways to serve
Fixed Line: Finding more ways to serve • PLDT KaAsenso isi an initiative of PLDT to empower and enable progressive micro‐ businesses (aptly called “Minigosyos”) with the right communcation and information tools to increase their profits and maximize savings. • Convergent offer which bundles the wire
Slide 15: ePLDT: Positioning for growth
ePLDT: Positioning for growth ¾ ePLDT service revenues, which accounts for about 7% of PLDT ggroup p service revenues, improved p by y 1% to P5.3bn as a result of: + 52% growth in data center revenues arising from ePLDT Service Revenues increases in co-location and disaster recovery contracts (Php b
Slide 16: Meralco: Highlights
Meralco: Highlights ¾ Meralco’s consolidated service revenues as at 1H10 grew byb 35% 3 % to P124.4bn P124 4b driven di by b a 14% increase in energy sales, an increase in customer Energy Sales and Service Revenues count, higher average purchased power and (in ‘000 GWh and Php in Billions) transmiss
Slide 17: PLDT Group: Re-affirming guidance for 2010
PLDT Group: Re-affirming guidance for 2010 ¾ Service revenues are expected to grow by 2% to P148bn from P145.6bn in 2009: Strong growth in fixed/wireless broadband, corporate and SME business for the fixed line, and improvements in the BPO business Cellular growth challenged by 80% market penetr
Slide 18: Forward-looking statements disclaimer
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 19: Appendix
Appendix 19 19
Slide 20: 1H 2010: Consolidated Financial Highlights
1H 2010: Consolidated Financial Highlights 1H 2010 1H 2009 (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 47,876 25,237 5,262 72,156 72,871 -1% Cash operating expenses 16,665 11,805 4,447 26,460 26,482 - (1) EBITDA 29,704 12,668
Slide 21: Revenues
Revenues 1H 2010 1H 2009 % (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 44,076 44,076 44,610 -1% Broadband 3,203 3,203 2,518 27% Satellite and other services 597 597 948 -37% Fixed line Local exchange 7,764 7,7
Slide 22: Expenses
Expenses 1H 2010 1H 2009 % (Unaudited) (Unudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation and employee benefits 3,210 5,020 3,024 11,247 11,543 -3% Repairs and maintenance 2,450 2,152 366 4,512 4,247 6% Selling and promotions 1,940
Slide 23: Other Income (Expenses)
Other Income (Expenses) 1H 2010 1H 2009 % (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Gains G i (losses) (l ) on derivative d i ti financial fi i l instruments, i t t nett (1) 1,189 1 189 1 1,189 1 189 (1,306) (1 306) 191% Interest income 354 2
Slide 24: EBITDA
EBITDA 1H 2010 1H 2009 % (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income before tax 22,817 6,274 286 29,377 27,271 8% Add (deduct): Depreciation and amortization 6,781 5,896 377 13,054 13,133 -1% Financing costs, net 1,344 2,029 88 3,451 3,1
Slide 25: Core Net Income
Core Net Income 1H 2010 1H 2009 % (U (Unaudited) dit d) (U dit d) (Unudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 16,822 4,544 313 21,679 19,720 10% Add (deduct): Foreign exchange losses (gains), net 105 (51) 5 59 292 -80% L Losses (gains) (
Slide 26: Cash Flows
Cash Flows 1H 2010 1H 2009 (Unaudited) (Unaudited) % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Net cash from operations 22,439 8,858 561 31,848 34,348 -7% Add(Deduct): Capital expenditures (5,000) (4,479) (221) (9,700) (10,666) -9% Other investing activities 86 186
Slide 27: Balance Sheet
Balance Sheet Consolidated June 30, 2010 December 31, 2009 (in million pesos) (Unaudited) (Audited) Total Assets 264,316 280,148 Nominal Value of Total Debt 96,890 102,587 in US$ $2,087 $2,210 Less: Unamortized Debt Discount 3,534 3,858 Total Debt 93,356 98,729 (1) Cash and short-term investments 29
Slide 28: Earnings Per Share
Earnings Per Share 1H 2010 1H 2009 (Unaudited) (Unaudited) Basic Diluted Basic Diluted Net Income attributable to equity holders of PLDT 21,679 21,679 19,720 19,720 Di id d on preferred Dividends f d shares h (228) (25) (227) (25) Net Income applicable to common shares 21,451 21,654 19,493 19,695 Ou
Slide 29: Interest-bearing Liabilities
Interest-bearing Liabilities June 30, 2010 December 31, (Unaudited) 2009 Unamortized (Audited) (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $1,090 $5 $1,095 $1,205 -$110 Smart $914 $71 $985 $996 -$11 2014 Debt $216 $64 $280 $280 - Others $698 $7 $705 $716 -$11 Ot
Slide 30: Consolidated Quarterly Financial Highlights
Consolidated Quarterly Financial Highlights 2010 2009 % Change (Unaudited) (Unudited) 2Q10 (in million pesos) 1Q 2Q 2Q vs. 2Q09 Service Revenues 36,005 36,151 36,509 -1% Non-service Revenues 508 543 642 -15% Less: Cost of sales 1,170 1,219 1,381 -12% Operating Expenses Cash operating expenses 13,612