PLDT, Inc. · PSE:TEL
PLDT — H1 2009 Earnings Presentation
32 slides from PLDT's earnings presentation, Aug 4, 2009
Slide 1: First Half 2009 Financial and Operating Results
We’re changing lives. First Half 2009 Financial and Operating Results 4 August 2009 1
Slide 2: PLDT Group: 1H 2009 Financial Highlights
PLDT Group: 1H 2009 Financial Highlights 1H 2009 1H 2008 (unaudited) (unaudited) % Y-o-Y Service Revenues P72.9bn P70.3bn 4% • Wireless P48 P48.1bn 1bn P45 P45.8bn 8bn 5% • Fixed Line P25.4bn P24.6bn 3% EBITDA P44.1bn P43.9bn - • Wireless P30.2bn P29.7bn 2% • Fixed Line P13.3bn P13.7bn 3% EBITDA Mar
Slide 3: PLDT Group: 2Q2009 vs 1Q2009 and 2Q2008
PLDT Group: 2Q2009 vs 1Q2009 and 2Q2009 2Q2009 1Q2009 % 2Q2009 2Q2008 % (unaudited) (unaudited) (unaudited) (unaudited) Service Revenues P36.5bn P36.4bn - - P36 5bn P36.5bn P35 P35.4bn 4bn 3% * Wireless P24.2bn P23.9bn 1% P24.2bn P23.3bn 4% * Fixed Line P12.7bn P12.8bn 1% P12.7bn P12.2bn 3% EBITDA P
Slide 4: PLDT Group: Core and Reported Income
PLDT Group: Core and Reported Income ¾ Core net income for 1H09 increased by P2.1bn or 11% y-o-y to P20.8bn on account of: + 4% rise in service revenues + Lower provision for income tax largely due to the reduced corporate tax rate – 8% increase in cash opex ¾ Reported net income increased by P450mn
Slide 5: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA ¾ Consolidated service revenues increased by 4% to P72.9bn from P70.3bn in 1H09 on account of: + A 6% increase in data and ICT revenues which included a 27% growth in broadband revenues – Steady voice revenues ¾ Data and ICT revenues now account for 54% of tot
Slide 6: PLDT Group: Capital Management
PLDT Group: Capital Management ¾ Consistent with the committed 70% dividend payout ratio, PLDT declared an interim cash dividend of P 77 per share, a 10% increase over the P70 interim dividend in 2008 ¾ As part of our dividend policy policy, the company will undertake a “look-back” look-back approac
Slide 7: PLDT Group: Capex and Free Cash Flow
PLDT Group: Capex and Free Cash Flow ¾ Capex p guidance g for 2009 affirmed at P27bn • Capex at 1H09 amounted to P10.7bn, of which P5.1bn is capex for the fixed line – largely investments in NGN and outside plant rehabilitation • As of 1H09, we had 5,433 GSM cell sites and 8,742 base stations, which
Slide 8: PLDT Group: Debt Profile
PLDT Group: Debt Profile ¾ Net debt stood at US$900mn $ at the end of 1H09 and 1H08 ¾ As of 1H09, total group debt amounted to US$1.8bn compared to US$1.6bn in 1H08 – Our U. S. dollar debt has declined to 63% of our total debt portfolio – Outstanding hedge transactions of US$421mn represent 23% of t
Slide 9: PLDT Group: 1H2009 Segment Highlights
PLDT Group: 1H2009 Segment Highlights ¾ Wireless Wi l Business B i – Subscriber base at 38.5mn with 3.3mn net adds for 1H09 – Service revenues hit P48.1bn for the first half of 2009, a 5% increase – EBITDA of P30.2bn in 1H09 is 2% higher compared to 1H08 ¾ Fixed Line – Service revenues of P25.4bn in
Slide 10: SMART: Leading the pack
SMART: Leading the pack ¾ The combined Smart and TNT subscriber base reached 38.5mn as at end June 2009, registering a 16% growth year-on-year • 3.3mn net adds for 1H09, 3% higher than the 3.2mn net adds for 1H08 • Of the 3.3mn 3 3mn net adds adds, 2 2.3mn 3mn are TNT subscribers • In line with the
Slide 11: SMART: Continuing to climb
SMART: Continuing to climb ¾ Wireless service revenues g grew by y 5% % to P48.1bn and contributed 66% % to total service revenues in 1H09 on account of: + 29% increase in wireless broadband revenues + 5% growth in cellular voice revenues + 2% % rise se in ce cellular u a da data a revenues e e ues
Slide 12: SMART: Pursuing Growth
SMART: Pursuing Growth 9 Intensify efforts in the voice segment with multiple offerings including g unlimited and bucket type yp 9 Stimulate data usage with an all-in-one platform that unites social networking, music and video downloads and online shopping 9 Expand broadband activations with customi
Slide 13: Fixed Line: Sustaining momentum
Fixed Line: Sustaining momentum ¾ Fixed line service revenues grew by 3% to P25.4bn in 1H09 due to the combined impact of: + Increase in corporate data and DSL service revenues – Net decrease in LEC revenues where lower fixed charges resulting from bundling of voice was offset by increase in the num
Slide 14: Fixed Line: Expanding our offers
Fixed Line: Expanding our offers • Wireless landline offering free local landline calls within the ame calling area • tapping the Small and Medium • Affordable Enterprises market: 600 600,000 000 SMEs communication and • ARPU: P600 P600-850 850 hardware bundle for DSL and voice needs • ARPU: P3,200
Slide 15: Broadband: Scaling new heights
Broadband: Scaling new heights ¾ PLDT DSL, S ,S SmartBro a t oa and d WeRoam e oa added 219,000 9,000 subsc subscribers be s du during g 1H09, 09, representing ep ese t g a 22% %ggrowth o t from o the end of 2008 – SmartBro, today’s most widely available broadband service provider in the country, re
Slide 16: ePLDT: Registering improvements
ePLDT: Registering improvements ¾ ePLDT’s service revenues increased by y 5% to P5.2bn in 1H09 due to: + 59% increase in data center revenues + 2% increase in call center (Ventus) revenues - 1% decrease in KPS/SPi revenues ¾ ePLDT contributed 7% of PLDT Group service revenues in 1H09 ¾ About 81% of
Slide 17: Meralco: Updates
Meralco: Updates ¾ PLDT/Piltel Investment in Meralco • Piltel made full payment of P20bn for 20% of Meralco on 14 July 2009 – Our 3Q09 results will include Meralco’s financial results using equity accounting • Three (3) PLDT nominees elected to Meralco Board at the 26 May 2009 AGM; PLDT-nominated CF
Slide 18: Regulatory Updates: New NTC Memorandum Circulars
Regulatory Updates: New NTC Memorandum Circulars ¾ Extended Prepaid Load Validity • Covers standard plans only; does not cover bucket plans • Amount of unused load not significant as subscribers’ usage usually “front- ended” • Effective 19 July 2009 • NTC deferred implementation of extended load val
Slide 19: PLDT Group: Affirming Guidance for 2009
PLDT Group: Affirming Guidance for 2009 • 4% growth over 2008 S i Revenues Service R P148 billion billi • P5 billi billion increase i • 3% growth over 2008 EBITDA P90 billion • P2 billion increase • 8% growth gro th o over er 2008 Core Net Income P41 billion • P3 billion increase Dividend Payout Rat
Slide 20: 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 21: Appendix
Appendix Appendix 21
Slide 22: 1H 2009: Consolidated Financial Highlights
1H 2009: Consolidated Financial Highlights 1H 2009 1H 2008 (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 48,076 25,417 5,213 72,871 70,349 4% Cash operating expenses 16,197 11,633 4,627 26,482 24,497 8% (1) EBITDA 30,209 13,279 512 44,080 43,901 - EBI
Slide 23: Revenues
Revenues 1H 2009 1H 2008 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 44,610 44,610 43,013 4% Broadband 2,518 2,518 1,948 29% Satellite and other services 948 948 819 16% Fixed line Local exchangeg 7,845 , 7,845 , 8,031 , -2% % Inte
Slide 24: Expenses
Expenses 1H 2009 1H 2008 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation and employee benefits 3,176 5,142 3,234 11,543 9,372 23% Repairs and maintenance 2,277 2,008 313 4,247 4,057 5% Selling and promotions 2,084 704 53 2,839 2,901 -2% P
Slide 25: EBITDA
EBITDA 1H 2009 1H 2008 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income before tax 24,346 3,983 44 28,317 30,069 -6% Add (deduct): Depreciation and amortization 6,520 6,171 386 13,133 12,722 3% Financing costs, net 1,203 1,861 68 3,117 3,222 -3% Asset impairment -
Slide 26: Other Income (Expenses)
Other Income (Expenses) 1H 2009 1H 2008 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Gains (losses) on derivative transactions, net (11) (1,297) 2 (1,306) 4,421 -130% Interest income 665 236 14 900 888 1% Equity share in net earnings (losses) of associates (70) (46)
Slide 27: Core Net Income
Core Net Income 1H 2009 1H 2008 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 16,887 2,868 4 19,720 19,270 2% Add (deduct): Foreign exchange losses (gains), net 64 254 (25) 292 3,555 -92% Losses (gains) on derivatives financail in 11 1,297 (2) 1,30
Slide 28: Cash Flows
Cash Flows 1H 2009 1H 2008 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Net cash from operations 29,311 12,475 929 42,728 40,386 6% Add(Deduct): Capital expenditures (5,345) (5,080) (241) (10,666) (8,684) 23% Other investing activities 185 319 5 825 381 128% Interest
Slide 29: Balance Sheet
Balance Sheet Consolidated (in million pesos) June 30, 2009 December 31, 2008 Total Assets 261,703 252,558 Nominal Value of Total Debt 86,729 78,487 in US$ $1,726 $1,647 Less: Unamortized Debt Discount 4,269 4,576 Total Debt 82 461 82,461 73 911 73,911 (1) Cash and short-term investments 43,635 40,3
Slide 30: Earnings Per Share
Earnings Per Share 1H 2009 1H 2008 Basic Diluted Basic Diluted Net Income attributable to equity holders of PLDT 19,720 19,720 19,270 19,270 Dividends on preferred shares (227) (25) (227) (227) pp Net Income applicable to common shares 19,493 , 19,695 , 19,043 , 19,043 , Outstanding common shares, b
Slide 31: Interest-bearing Liabilities
Interest-bearing Liabilities June 30, 2009 December 31, Unamortized 2008 (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $926 $7 $933 $822 $111 Smart 764 82 846 800 46 2014 Debt 203 77 280 280 - Others 561 5 566 520 46 Others 22 - 22 25 (3) Total Debt* $1,712 $89 $1
Slide 32: Consolidated Quarterly Financial Highlights
Consolidated Quarterly Financial Highlights % Change 2009 2008 2Q09 (in million pesos) 1Q 2Q 2Q vs. 2Q08 Service Revenues 36,249 36,509 35,446 3% Non-service Revenues 565 641 773 -17% Less: Cost of sales 1,182 1,380 1,519 -9% Operating Expenses Cash operating p g expenses p 13,320 13,049 12,361 6% N