PLDT, Inc. · PSE:TEL

PLDT — Philippine Long Distance Telephone Company — 9M 2004 Earnings Presentation

37 slides from PLDT's earnings presentation, Nov 4, 2004

  1. Slide 1: Presentation to Investors and Analysts: Nine Months 2004

    Philippine Long Distance Telephone Company Presentation to Investors and Analysts Financial and Operating Results Nine Months 2004 November 4, 2004 75 YEARS OF PROVIDING COMMUNICATIONS SOLUTIONS TO ALL FILIPINOS

  2. Slide 2: 1. Financial and Operating Results

    1. Financial and Operating Results Nine Months Ending September 2004 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 2

  3. Slide 3: Nine Months 2004: Financial Highlights

    Nine Months 2004: Financial Highlights The PLDT Group’s financial results continue to demonstrate the Group’s commitment to improve its financial profile while sustaining growth momentum Nine Months Nine Months 2004 2003 % (in million pesos) Fixed Line Cellular Consolidated Consolidated Change No. o

  4. Slide 4: PLDT Group: Firing on All Cylinders

    PLDT Group: Firing on All Cylinders „ Consolidated revenues up by 19% to P87.5 billion (9M03: P73.5 billion) and EBITDA increased 34% to P55.8 billion (9M03: P41.6 billion) largely driven by the continued strong growth in our cellular business „ Consolidated net income grew to P20.0 billion in 9M04

  5. Slide 5: PLDT Group: Maximizing Cash Flows

    PLDT Group: Maximizing Cash Flows „ Consolidated capex spending in 9M04 of P16.2 billion was mainly due to the continued expansion of Smart’s GSM network „ Consolidated free cash flow in 9M04 reached P27.5 billion (9M03: P14.2 billion) as a result of the continued strong cash flow generation from Sm

  6. Slide 6: 2. Cellular

    PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 2. Cellular 6

  7. Slide 7: Cellular: Nine Months 2004 Financial Highlights

    Cellular: Nine Months 2004 Financial Highlights Cellular performance strengthened by consolidation as Smart and Piltel combined post healthy margins as a result of sustained revenue growth and efficient cost management 9M04 9M03 % Change Revenues 50,195 37,070 35% Operating Expenses 25,749 23,331 10

  8. Slide 8: Cellular: Sustaining Momentum

    Cellular: Sustaining Momentum „ Smart and Talk ‘N Text added 1.4 million subscribers in 3Q04 and over 4.5 million subscriber for 9M04 „ Cellular subscribers at 17.5 million as of 3Q04 (Smart 13.3 million, Talk ‘N Text 4.2 million), representing an estimated combined market share of 58% „ Cellular pe

  9. Slide 9: Cellular: Staying Ahead of Costs

    Cellular: Staying Ahead of Costs „ Continued reduction in prepaid subscriber acquisition costs and incremental capex/subscriber more than offset the decline in ARPU „ Payback period on prepaid subscribers has been reduced to 1.4 months in 9M04 compared to 1.9 months in 9M03 „ Prepaid churn rates now

  10. Slide 10: Cellular: Translating Growth into Profitability

    Cellular: Translating Growth into Profitability „ Growth in subscribers has translated to a 35% year-on-year increase in revenues to P50.2 billion (9M03: P37.1 billion) while cash operating expenses grew only 6% to P16.5 billion (9M03: P15.6 billion) „ EBITDA (before non-recurring items) grew signif

  11. Slide 11: Cellular: Generating Significant Cash Flows

    Cellular: Generating Significant Cash Flows „ Capex spending for 9M04 was P12.8 billion and is estimated to reach approximatelyP15 billion for FY04 „ Smart’s network currently consists of 36 switching centers and over 5,000 base stations covering 95% of the country’s total population; capital expend

  12. Slide 12: Smart Money: Pioneering the Mobile Wallet Concept

    Smart Money: Pioneering the Mobile Wallet Concept ƒ Introduced in December 2000 ƒ Cash Card linked to and controlled by the mobile phone ƒ Approximately 1 million active cards with average trade volumes of P2.5 billion/month ƒ Tie-up with MasterCard Electronic PHILIPPINE LONG DISTANCE TELEPHONE COMP

  13. Slide 13: Smart Load/Pasa Load: Sweeping the Market

    Smart Load/Pasa Load : Sweeping the Market ƒ Over 600,000 retailers – and still growing ƒ Traditional phone card sales outlets; Individual agents; Corner stores ƒ Over 3 million Smart Load and 2.5 million Pasa Load transactions daily; 98% of prepaid subs now reloading electronically ƒ Top-up revenue

  14. Slide 14: Smart Padala/1528 Smart: Breaking through Barriers

    Smart Padala/1528 Smart: Breaking through Barriers ƒ Smart Padala is a remittance service by text that taps into the US$8 billion being sent back to the Philippines by 6 million overseas Filipinos ƒ Smart Padala is quicker and cheaper than the traditional door-to-door services currently in use; syst

  15. Slide 15: 3. Fixed Line

    PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 3. Fixed Line 15

  16. Slide 16: Fixed Line: Nine Months 2004 Financial Highlights

    Fixed Line: Nine Months 2004 Financial Highlights Fixed Line remains focused on maintaining the stability of its revenues while rationalizing expenditures, improving operating efficiencies and reducing debt. (in million pesos) 9M04 9M03 % Change Revenues 35,319 34,830 1% Operating Expenses 24,665 24

  17. Slide 17: Fixed Line: Staying the Course

    Fixed Line: Staying the Course „ Fixed Line revenues increased by 1% to P35.3 billion (9M03: P34.8 billion) mainly due to positive impact of rate and interconnect changes on NLD and ILD revenues and higher data revenues „ PLDT Fixed lines per employee improved from 203 as of September 2003 to 218 as

  18. Slide 18: Fixed Line: Lightening Our Debt Load

    Fixed Line: Lightening Our Debt Load „ PLDT incurred capital expenditures of P3.2 billion in 9M04 versus full year estimate of P6 billion to finance the expansion of its fixed line data and network services „ Free cash flow reached P22.8 billion (9M03: P7.4 billion) on account of higher dividends fr

  19. Slide 19: Fixed Line: Preparing to Ride the Next Wave

    Fixed Line: Preparing to Ride the Next Wave My DSL is an advanced modem technology that converts an ordinary residential phone lines into an ultra-fast dedicated Internet access. 100,000 lines of DSL capacity in place; over 41,000 DSL subscribers as of September 30, 2004 PLDT Vibe is a residential i

  20. Slide 20: 4. Information and Communications Technology: ePLDT

    4. Information and Communications Technology: ePLDT PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 20

  21. Slide 21: ePLDT: Making Strides

    ePLDT: Making Strides ePLDT is well-positioned to enhance its leadership in the ICT market by maximizing resources and opportunities available to it as the ICT arm of the PLDT Group. in pesos millions 9M04 9M03 % Change Revenues 1,788 1,322 35% Call Centers 855 677 26% Internet 416 299 39% Vitro/Oth

  22. Slide 22: ePLDT: Aiming for the Next Level

    ePLDT: Aiming for the Next Level ƒ ePLDT’s call center businesses now contribute 55% of total ICT revenues • Parlance and Vocativ are expanding capacity to accommodate increased demand from existing and new clients; Parlance was adjudged as “Best Offshore Call Center” in Mitial Research Internationa

  23. Slide 23: PLDT: Outlook For The Year 2004

    PLDT: Outlook For The Year 2004 Sustaining Earnings Growth Momentum – Cellular’s strong performance will continue to drive the earnings of PLDT Group. Piltel now consolidated – Fixed Line expected to deliver stable earnings and cash flows – ePLDT to further strengthen operations and generate increas

  24. Slide 24: Appendix

    PHILIPPINE LONG DISTANCE TELEPHONE COMPANY Appendix 24

  25. Slide 25: Earnings Highlights

    Earnings Highlights Nine Months Nine Months 2004 * 2003 % (in million pesos) Fixed Line Cellular Consolidated Consolidated Change Revenues 35,319 50,195 87,519 73,524 19% Expenses 24,665 25,749 52,154 50,079 4% Operating income 10,654 24,446 35,365 23,445 51% Other expenses 11,478 2,473 10,061 22,70

  26. Slide 26: Reconciliation of Net Income

    Reconciliation of Net Income Net Income (in PhP millions) 1Q04 2Q04 1H04 3Q04 9M04 FY03 9M03 Net income as reported/restated 5,708 5,519 11,227 8,780 20,007 3,909 593 Non recurring charges (372) 1,337 965 (2,705) (1,740) 9,532 8,645 Gain on Piltel debt exchange (3,407) (3,407) - Manpower rightsizing

  27. Slide 27: Operating Revenues

    Operating Revenues Nine Months Consolidated % (in million pesos) 2004 2003 Change Fixed line services Local exchange 15,752 15,930 -1% International long distance 9,532 9,300 3% National long distance 5,260 4,957 6% Data and other network 4,549 4,381 4% Miscellaneous 226 263 -14% PHILIPPINE LONG DIS

  28. Slide 28: Operating Expenses

    Operating Expenses Nine Months Nine Months 2004 2003 % (in million pesos) Fixed Line Cellular Consolidated Consolidated Change Cash Compensation 5,200 2,657 8,483 8,198 3% Selling and promotions 964 6,730 7,951 8,746 -9% Maintenance 2,331 1,803 4,298 3,950 9% Rent 594 1,898 2,279 2,245 2% Profession

  29. Slide 29: Cash Flow Highlights

    Cash Flow Highlights Nine Months Nine Months 2004 2003 % (in million pesos) Fixed Line Cellular Consolidated Consolidated Change Net cash from operations 23,348 29,912 54,541 37,353 46% Less: Capital expenditures (3,175) (12,792) (16,238) (11,232) 45% Investments - (746) (999) 40 - Interest, net (7,

  30. Slide 30: Balance Sheet Highlights

    Balance Sheet Highlights (in millions) Sept. 30, 2004 Dec. 31, 2003 Total Assets 305,978 301,042 (In million pesos) Total Condolidated Debt 168,644 186,493 in US $ * $2,994 $3,355 Less: Unamortized debt discount (9,519) (5,881) As reported 159,125 180,612 Net debt 141,128 167,121 PHILIPPINE LONG DIS

  31. Slide 31: Piltel: Nine Months 2004 Financial Highlights

    Piltel: Nine Months 2004 Financial Highlights Combined 63.2% ownership of Smart and PLDT in Piltel has resulted in consolidation of Piltel’s financial results beginning this period; Talk ‘N Text remains the key to improving Piltel’s financial position % (in million pesos) 9M04 9M03 Change Talk 'N Te

  32. Slide 32: IAS Changes

    PHILIPPINE LONG DISTANCE TELEPHONE COMPANY IAS Changes 32

  33. Slide 33: IAS – Consolidation of Piltel

    IAS 27 – Consolidation of Piltel ƒ IAS 27 supersedes previous SFAS 28/IAS 28 and removes basis for exclusion of Piltel from consolidation due to severe long-term restrictions that significantly impair Piltel’s ability to transfer funds to PLDT ƒ As a result of the adoption of IAS 27, Piltel has been

  34. Slide 34: IAS - Piltel Debt Restructuring – June 2001

    IAS 39 - Piltel Debt Restructuring – June 2001 ƒ As a result of the adoption of IAS 39, Piltel’s restructured debt issued in June 2001 has been recorded based on fair market values (in millions) 2001 in PHP in USD Face Value of Restructured Piltel Debt (50% of original face value) 20,527 397 Discoun

  35. Slide 35: IAS and Piltel Debt Exchange by Smart – July 2004

    IAS 32 and 39 – Piltel Debt Exchange by Smart – July 2004 ƒ Smart issued new debt of US$283.3 million (2007/2008/2014 Facilities) and paid cash of US$1.5 million to Piltel creditors in exchange for approximately US$289 million or 69.4% of Piltel debt Consideration paid ( in millions) Carrying value

  36. Slide 36: IAS and PLDT Series V, VI, VII CPS

    IAS 32 and 39 – PLDT Series V, VI, VII CPS ƒ As a result of the adoption of IAS 39, PLDT has recognized on its balance sheet the Series V, VI and VII CPS issued in June 2001 - Debt portion representing the put option liability on Series V, VI and VII CPS recorded as Preferred Stock Subject to Mandat

  37. Slide 37: Impact of Piltel Transaction under IAS

    Impact of Piltel Transaction under IAS 27 and 39 in PHP millions 9M 2004 Piltel EBIT (Jan to September 2004) 1,840 Cash items: Interest expense on new Smart debt (from July 2) (99) Interest expense on total Piltel debt (from Jan 1) (551) - Interest due to Smart (from July 2) 66 Interest expense on P

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