PLDT, Inc. · PSE:TEL
PLDT — 9M 2010 Earnings Presentation
31 slides from PLDT's earnings presentation, Nov 4, 2010
Slide 1: Nine Months 2010 Financial and Operating Results
We’re changing lives. Nine Months 2010 Financial and Operating Results 4 November 2010 1
Slide 2: PLDT Group: 9M 2010 Financial Highlights
PLDT Group: 9M 2010 Financial Highlights 9M 2010 9M 2009 (unaudited) (unaudited) % Y-o-Y Service Revenues P106 7bn P106.7bn P108 3bn P108.3bn 1% • Wireless P70.4bn P71.2bn 1% • Fixed Line P36.8bn P38.2bn 4% EBITDA P63 8bn P63.8bn P65 7bn P65.7bn 3% • Wireless P44.3bn P44.5bn - • Fixed Line P18.2bn P
Slide 3: Core and Reported Net Income: Benefiting from Diversification
Core and Reported Net Income: Benefiting from Diversification Core Net Income (Php in Billions) ¾ Core Net Income for 9M10 increased by P0.4bn or 2% largely from higher earnings 10.7 contributions from Meralco, ePLDT and a 2010 10.5 2009 lower tax charge 10.6 10.2 10.2 10.2 ¾ Reported Net Income as
Slide 4: Service Revenues and EBITDA: Undergoing transition
Service Revenues and EBITDA: Undergoing transition ¾Consolidated service revenues of P106 P106.7bn 7bn as at 9M10 are 1% lower C Consolidated lid t d Service S i Revenues R (Php billions) year-on-year due to: Transition of telco revenues accelerating both the decline of 37.4 traditional sources an
Slide 5: Free Cash Flow and Debt: Remaining healthy
Free Cash Flow and Debt: Remaining healthy Free Cash Flow ¾ FCF att 9M10 lower l year-on-year largely l l ddue tto llower (billion pesos) 9M09 9M10 cash from operations and higher (net) interest 56.3 18.1 54.1 16.9 ¾ P40.7bn in dividends have been paid as at 9M10 25 2.5 3.2 0.4 1.2 35.3 32.8 ¾ Debt
Slide 6: Capex: Continuing to build network strength
Capex: Continuing to build network strength Capex ¾ Capex for the year includes investments for: (Php billions) – Increased capacity and coverage in support of higher broadband ICT ICT and voice usage, including the build out of our second network for Fixed Line Fixed Line low-cost voice delivery Wi
Slide 7: Broadband: Pushing ahead
Broadband: Pushing ahead ¾ PLDT combined broadband subscriber base crossed the Broadband Subscribers 2 million mark having grown 23% from YE09 representing (thousands) over 378,000 net adds for PLDT DSL, SmartBro, and +23% 2,005 WeRoam WeRoam/Others SmartBro, the most widely available broadband se
Slide 8: SMART: Managing the transformation
SMART: Managing the transformation ¾ Combined Smart Buddy, Buddy TNT, TNT and Red Mobile subscriber base stood at Service Revenues 44.1mn as at end-September 2010, an increase of 2.8mn from YE09 (Php billions) 3Q10 net reduction in subscribers due to expected post-election churn of Buddy subscribe
Slide 9: Fixed Line: Maximizing new revenues and managing the decline in traditional revenues
Fixed Line: Maximizing new revenues and managing the decline in traditional revenues ¾ Fixed line service revenues decreased by 4% or P1.4bn to P36.8bn i 9M10 compared in d with ith P38 P38.2bn 2b iin 9M09 as a result lt of: f Service Revenues (Php billions) + 4% growth in corporate data and DSL ser
Slide 10: ePLDT: Restructured for growth
ePLDT: Restructured for growth ¾ ePLDT service revenues, which accounts for about 7% of PLDT group service revenues, revenues declined by 1% to P7.9bn P7 9bn as ePLDT Service Revenues a result of: (Php billions) + 34% increase in data center revenues arising from increases in co-location and disaste
Slide 11: Meralco: Improving strongly
Meralco: Improving strongly ¾ Meralco Meralco’s s consolidated service revenues as at 9M10 increased by 32% to P188.9bn as a result of an 11% growth Energy Sales and Service Revenues in energy sales, an increase in customer count, higher (in ‘000 GWh and Php in Billions) average purchased power and
Slide 12: Outlook for 2010
Outlook for 2010 ‣ 2010 - 2012 will be the critical years in the Group’s Group s transformation from a traditional telecom provider to a “multi-media communications group” ‣ Transformation is being undertaken at a time when the operating environment has become increasingly price-competitive and mark
Slide 13: PLDT Group: Fine-tuning guidance for 2010
PLDT Group: Fine-tuning guidance for 2010 Service Revenues Up to 2% less than P145.6bn in 2009 EBITDA Up to 2% less than P86.2billion in 2009 Core Net Income P41.5bn (1% increase over P41.1bn in 2009) Dividend Payout Ratio: 70% of Core EPS Capital Management + “look back” approach Buyback of up to 2
Slide 14: 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 15: Appendix
Appendix Fast Forwar:
Slide 16: Subscriber Data
Subscriber Data y-o-y change Net Additions % Sep-10 Jun-10 Mar-10 Dec-09 Sep-09 Amount % 1Q10 2Q10 3Q10 9M Growth CELLULAR Smart 25,594,008 26,204,136 25,479,359 24,198,357 22,521,882 3,072,126 14% 1,281,002 724,777 (610,128) 1,395,651 6% Talk 'N Text 18,136,858 18,008,072 17,445,697 17,050,713 16,5
Slide 17: 9M 2010: Consolidated Financial Highlights
9M 2010: Consolidated Financial Highlights 9M 2010 9M 2009 (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 70,445 , 36,777 , 7,904 , 106,716 , 108,277 , -1% Cash operating expenses 23,971 17,673 6,669 39,600 38,876 2% (1) EBITDA
Slide 18: Reconciliation of Core and Reported Net Income
Reconciliation of Core and Reported Net Income (in billion pesos) 9M10 9M09 Difference Reported net income 32.0 32 0 30.0 30 0 2.0 2 0 Core net income 31.4 31.0 0.4 0.6 (1.0) 1.6 Accounted for by: Forex Gain 1.7 0.2 1.5 Loss on Drevatives (0.1) (0.1) - Asset Impairment (0.2) (1.7) 1.5 Adjustment in
Slide 19: Consolidated Revenues
Consolidated Revenues Nine Months Third Quarter (in billion pesos) 2010 2009 % Change 2010 2009 % Change Voice 50.3 49.7 1% 16.0 16.4 -3% Data and ICT 56.4 58.6 -4% 18.6 19.0 -2% 106.7 108.3 -1% 34.6 35.4 -2%
Slide 20: Revenues by Segment
Revenues by Segment 9M 2010 9M 2009 % (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 64,819 64,819 65,844 -2% Broadband 4,781 4,781 3,899 23% Satellite and others 845 845 1,459 -42% Fixed line Local exchange 11,5
Slide 21: Wireless ARPU
Wireless ARPU 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Postpaid 1,364 1,278 1,307 1,304 1,286 1,257 1,229 Smart Prepaid (Net) 216 212 197 203 184 179 163 TNT (Net) 144 138 122 127 115 116 112
Slide 22: Expenses
Expenses 9M 2010 9M 2009 % (Unaudited) (Unudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation and employee benefits 4,815 7,497 4,533 16,834 17,149 -2% Repairs and maintenance 3,651 3,159 549 6,723 6,238 8% Selling and promotions 2,862
Slide 23: Other Income (Expenses)
Other Income (Expenses) 9M 2010 9M 2009 % (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Foreign exchange gains (losses), net 800 922 (55) 1,667 232 619% Equity share in net earnings of associates and joint ventures 1,285 - 134 1,419 311 356% Inte
Slide 24: EBITDA
EBITDA 9M 2010 9M 2009 % (Unaudited) (Unaudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income before tax 35,580 7,082 370 43,032 41,903 3% Add (deduct): Depreciation and amortization 10,127 9,267 559 19,953 19,266 4% Financing costs, net 1,992 2,941 132 5,051 4,
Slide 25: Core Net Income
Core Net Income 9M 2010 9M 2009 % (Unaudited) (Unudited) (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 26,518 5,063 407 31,988 30,018 7% Add (deduct): Foreign exchange losses (gains), net (811) (922) 55 (1,678) (232) 623% Losses (gains) on derivative
Slide 26: Earnings Per Share
Earnings Per Share 9M 2010 9M 2009 (Unaudited) (Unaudited) Basic Diluted Basic Diluted Net Income attributable to equity holders of PLDT 31,988 31,988 30,018 30,018 Dividends on preferred shares (348) (348) (347) (347) Net Income applicable to common shares 31,640 31,640 29,671 29,671 Outstanding co
Slide 27: Cash Flows
Cash Flows 9M 2010 9M 2009 (Unaudited) (Unaudited) % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change p Net cash from operations 36,161 , 16,776 , 1,102 , 54,026 , 56,326 , -4% Add(Deduct): Capital expenditures (9,137) (7,278) (508) (16,923) (18,064) -6% Other investing ac
Slide 28: Balance Sheet
Balance Sheet Consolidated September 30, 2010 December 31, 2009 (in million pesos) (Unaudited) (Audited) Total Assets 265,096 280,148 Nominal Value of Total Debt 96,619 102,587 in US$ $2,200 $2,210 Less: Unamortized Debt Discount 3,159 3,858 Total Debt 93,460 98,729 (1) Cash and short-term investmen
Slide 29: Debt Profile
Debt Profile (in million US$) 2006 2007 2008 2009 9M10 Debt Balance 1,756 1 756 1,585 1 585 1,625 1 625 2,210 2 210 2,200 2 200 Cash & Short-term Investments 514 745 847 908 689 Net Debt 1,242 839 778 1,302 1,511 Debt Maturities as of September 30, 30 2010 (in million us$) 2010 60 2011 283 2012 454
Slide 30: Interest-bearing Liabilities
Interest-bearing Liabilities September 30, 2010 December 31, (Unaudited) 2009 Unamortized (Audited) (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $1,164 $5 $1,169 $1,205 ($36) Smart $962 $67 $1,029 $996 $33 2014 Debt $220 $60 $280 $280 - Others $742 $7 $748 $716 $
Slide 31: Consolidated Quarterly Financial Highlights
Consolidated Quarterly Financial Highlights 2010 2009 % Change (Unaudited) (Unudited) 3Q10 (in million pesos) 1Q 2Q 3Q 3Q vs. 3Q09 Service Revenues 36,005 36,151 34,560 35,406 -2% Non-service Revenues 508 543 505 486 4% Less: Cost of sales 1,170 1,219 1,172 1,308 -10% Operating Expenses Cash operati