PLDT, Inc. · PSE:TEL
PLDT — FY2010 Earnings Presentation
34 slides from PLDT's earnings presentation, March 2011
Slide 1: Full Year 2010 Financial and Operating Results
We’re changing lives. Full Year 2010 Financial and Operating Res Results lts 1
Slide 2: PLDT Group: FY 2010 Financial Highlights
PLDT Group: FY 2010 Financial Highlights FY 2010 FY 2009 (Audited) (Audited) % Y-o-Y Service Revenues P142 2bn P142.2bn P145 6bn P145.6bn -2% • Wireless P93.8bn P95.8bn -2% • Fixed Line P48.6bn P51.1bn -5% EBITDA P83 7bn P83.7bn P86 2bn P86.2bn -3% 3% • Wireless P58.9bn P59.4bn -1% • Fixed Line P22.
Slide 3: Core and Reported Net Income: Showing resiliency
Core and Reported Net Income: Showing resiliency Core Net Income (Php in Billions) ¾ Core Net Income for FY10 grew by P0.9bn or 2% to 2010 P42.0bn primarily from higher earnings 10.7 contributions from Meralco, ePLDT/SPi and a lower 2009 10.5 10.6 tax charge 10.6 10.2 – Core Net Income for all quart
Slide 4: PLDT Group: Capital Management
PLDT Group: Capital Management Dividend Declaration Declaration Date 1 March 2011 ¾ In line with the committed 70% dividend payout ratio, PLDT declared a regular cash Record Date 16 March 2011 dividend of P78/share bringing total regular Payment Date 19 April 2011 dividends to P156/share Interim Reg
Slide 5: Service Revenues and EBITDA: Changing Revenue Mix
Service Revenues and EBITDA: Changing Revenue Mix ¾Consolidated service revenues for 2010 declined by P3 P3.4bn 4bn or 2% year- year C Consolidated lid t d Service S i Revenues R (Php billions) on-year to P142.2bn in FY10 on account of: 2010 New revenue streams contributing to the decline in tradi
Slide 6: Free Cash Flow and Debt: Kept at manageable levels
Free Cash Flow and Debt: Kept at manageable levels Free Cash Flow ¾ FCF att FY10 off P43 P43.7bn 7b llower b by P0 P0.7bn 7b year-on-year (billion pesos) largely accounted for by: 2009 2010 + Higher cash from operations of P2.9bn 77.3 -28.8 – P0.7bn increase in capex 74.4 -28.1 – Higher net interest
Slide 7: Capex: Building network strength
Capex: Building network strength Capex ¾ Capex for 2010 was P28.8bn P28 8bn or approx. approx 20% of (Php billions) service revenues, and included: ICT Fixed Line Wireless – Increased capacity and coverage in support of 28.1 28.8 higher broadband and voice usage, including the 24.8 25.2 build out of
Slide 8: Broadband: Continuing to climb
Broadband: Continuing to climb ¾ PLDT combined broadband subscriber base grew 25% from Broadband Subscribers (thousands) 1.6 million to over 2 million subscribers at YE10 or over 406,000 net adds for 2010 ¾ SmartBro, the most widely available broadband service provider in the WeRoam/Others +25% 2,02
Slide 9: SMART: Managing the transformation
SMART: Managing the transformation ¾ Combined Smart Buddy,y, TNT,, and Red Mobile subscriber base grew g to Service Revenues 45.6mn as at end-December 2010 (Php billions) 10% growth in subscriber base, or 4.3mn net adds in 2010 with 1.9mn for TNT, 1.5mn for Buddy, and 0.9mn for Red mobile Others C
Slide 10: Fixed Line: Declining traditional revenues muting growth
Fixed Line: Declining traditional revenues muting growth ¾ Fixed line service revenues declined by 5% or P2.5bn to P48.6bn in 2010 compared p with P51.1bn in 2009 on account of: Service Revenues + stable corporate data and DSL service revenues, with non-group (Php billions) data and DSL revenues hig
Slide 11: ICT: Pushing forward
ICT: Pushing forward ¾ ICT service revenues, which contributes about 7% to total PLDT group service revenues, revenues declined by 2% to P10.7bn P10 7bn ICT Service Revenues due to: (Php billions) + 25% growth in data center revenues on account of increases in co-location and disaster recovery contr
Slide 12: Meralco: Registering strong results
Meralco: Registering strong results ¾ Meralco’s consolidated service revenues for 2010 grew by Energy Sales and Service Revenues 33% to P245.5bn from P184.6bn in 2009 due to a 10% (in ‘000 GWh and Php in Billions) increase in energy sales, an increase in customer count, Electricity Sales Revenues hi
Slide 13: Backdrop for 2011 - 2012
Backdrop for 2011 - 2012 Global/Macro Environment: ‣ Unrest in the Middle East ‣ Possible sharp increases in oil prices Æ threat of inflation ‣ Impact on OFWs in the ME, deployments to the ME Æ reduced OFW remittances ‣ Strengthening of the peso ‣ Average forecast for 2011: P41.50/US$1 ‣ Lower peso
Slide 14: PLDT Strategic Response: 2011-2012
PLDT Strategic Response: 2011-2012 ‣ PLDT to fortify its position of having UNDISPUTED MARKET LEADERSHIP in terms of network quality, capacity and coverage, and focus on margins and profitability ‣ PLDT’s strategic response will include some adjustments in its operational model that will concentrate
Slide 15: Capital Expenditure Plan: 2011-12
Capital Expenditure Plan: 2011-12 ¾ In confirming its undisputed market leadership, PLDT will undertake a planned capex rollout amounting to approx. P67bn for 2011-12 ¾ Given market dynamics and the anticipated explosion in the demand for data, PLDT will accelerate the implementation of this rollout
Slide 16: PLDT Group Guidance
PLDT Group Guidance Service Revenues 2010 lower by 2% vs Fl t in Flat i 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 billion in 2012, 2010
Slide 17: 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 18: Appendix
Appendix Fast Forwar:
Slide 19: Subscriber Data
Subscriber Data y-o-y change Net Additions Dec-10 Sep-10 Jun-10 Mar-10 Dec-09 Amount % 4Q10 3Q10 2Q10 1Q10 CELLULAR Smart 25,715,018 25,594,008 26,204,136 25,479,359 24,198,357 1,516,661 6% 121,010 (610,128) 724,777 1,281,002 Talk 'N Text 18,967,381 18,136,858 18,008,072 17,445,697 17,050,713 1,916,
Slide 20: FY 2010: Consolidated Financial Highlights
FY 2010: Consolidated Financial Highlights FY 2010 Fy 2009 (Audited) (Audited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 93,830 48,609 10,677 142,242 145,567 -2% Cash operating expenses 31,844 25,729 8,874 55,029 53,643 3% EBITDA(1) 58,945 22,668
Slide 21: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income (in billion pesos) FY10 FY09 Difference Reported net income 40.2 39.8 0.4 Core net income 42.0 41.1 0.9 (1.8) (1.3) (0.5) Accounted for by: Forex Gain 1.8 0.9 0.9 Loss on Derivatives (1.3) (0.4) (0.9) Asset Impairment (1.5) (1.9) 0.4 Adjustment in equit
Slide 22: Consolidated Revenues
Consolidated Revenues Full Year Fourth Q Quarter (in billion pesos) 2010 2009 % Change 2010 2009 % Change Voice 66.8 66.8 - 16.5 17.1 -4% Data and ICT 75.5 78.8 -4% 19.1 20.2 -5% 142.3 145.6 -2% 35.6 37.3 -5% 22
Slide 23: Revenues by Segment
Revenues by Segment FY 2010 FY 2009 % (Audited) (Audited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 86,399 86,399 88,410 -2% Broadband 6,286 6,286 5,383 17% Satellite and others 1,145 1,145 2,036 -44% Fixed line Local exchange 15,3
Slide 24: Wireless Net ARPU
Wireless Net ARPU 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Postpaid 1,364 1,278 1,307 1,304 1,286 1,257 1,229 1,256 Smart Prepaid 216 212 197 203 184 179 163 171 TNT 144 138 122 127 115 116 112 116 Red Mobile 14 10 12 15 8 3 5 19 24
Slide 25: Expenses
Expenses FY 2010 FY 2009 % (Audited) (Audited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation and employee benefits 6,385 11,692 6,000 24,070 23,100 4% Repairs and maintenance 5,058 4,527 752 9,434 8,631 9% Selling and promotions 3,809 1,3
Slide 26: Other Income (Expenses)
Other Income (Expenses) FY 2010 FY 2009 % (Audited) (Audited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Foreign exchange gains (losses), net 865 1,008 (66) 1,807 909 99% Equity share in net earnings of associates and joint ventures 1,222 - 186 1,408 2 87924% Interes
Slide 27: EBITDA
EBITDA FY 2010 FY 2009 % (Audited) (Audited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income before tax 46,790 7,260 (365) 53,685 54,839 -2% Add (deduct): Depreciation and amortization 13,243 12,292 742 26,277 25,607 3% Financing costs, net 2,683 3,856 176 6,698 6,
Slide 28: Core Net Income
Core Net Income FY 2010 FY 2009 % (Audited) (Audited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 35,326 5,197 (306) 40,217 39,781 1% Add (deduct): Foreign exchange losses (gains), net (877) (1,008) 66 (1,819) (908) 100% Losses (gains) on derivativ
Slide 29: Earnings Per Share
Earnings Per Share FY 2010 FY 2009 (Audited) (Audited) Basic Diluted Basic Diluted Net Income attributable to equity holders of PLDT 40,217 40,217 39,781 39,781 Dividends on preferred shares (458) (458) (457) (457) Net Income applicable to common shares 39,759 39,759 39,324 39,324 Outstanding common
Slide 30: Cash Flows
Cash Flows FY 2010 FY 2009 (Audited) (Audited) % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Net cash from operations 55,496 20,454 1,327 77,259 74,386 4% Add(Deduct): Capital expenditures (16,959) (11,057) (751) (28,766) (28,069) 2% Other investing activities 454 986
Slide 31: Balance Sheet
Balance Sheet Consolidated December 31, 2010 December 31, 2009 (in million pesos) (Audited) (Audited) Total Assets 277,815 280,148 Nominal Value off Total Debt 92,590 92 90 102,587 102 8 in US$ $2,113 $2,210 Less: Unamortized Debt Discount 2,944 3,858 Total Debt 89,646 98,729 (1) Cash and short-term
Slide 32: Debt Profile
Debt Profile (in million US$) 2006 2007 2008 2009 2010 Debt Balance 1,756 1,585 1,625 2,210 2,113 Cash & Short-term Investments 514 745 847 908 852 Net Debt 1,242 840 778 1,302 1,261 Debt Maturities as of December 31, 2010 (in million US$) 2011 318 2012 443 2013 254 2014 445 2015 onwards d 653 2,113
Slide 33: Interest-bearing Liabilities
Interest-bearing Liabilities December 31, 2010 December 31, (Audited) 2009 Unamortized ((Audited)) (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $1,119 $5 $1,123 $1,205 ($81) Smart $924 $63 $987 $996 ($9) 2014 Debt $223 $57 $280 $280 - Others $ $701 $ $6 $ $707 $
Slide 34: Consolidated Quarterly Financial Highlights
Consolidated Quarterly Financial Highlights 2010 2009 % Change (Audited) (Audited) 4Q10 (in million pesos) 1Q 2Q 3Q 4Q 4Q vs. 4Q09 Service Revenues 36,005 36,151 34,560 35,526 37,290 -5% Non-service Revenues 508 543 505 661 734 -10% Less: Cost of sales 1,170 1,219 1,172 1,210 1,561 -22% Operating Ex