PLDT, Inc. · PSE:TEL
PLDT — Philippine Long Distance Telephone Company — 1H 2005 Earnings Presentation
27 slides from PLDT's earnings presentation, Aug 4, 2005
Slide 1: First Half 2005 Financial and Operating Results
Philippine Long Distance Telephone Company First Half 2005 Financial and Operating Results August 4, 2005 1
Slide 2: 1H05: Consolidated Financial Highlights
1H05: Consolidated Financial Highlights § Consolidated net income increased by 35% to P16.8 billion from P12.4 billion in 1H04 § Core earnings before FX/derivative gains grew by 9% to P15 billion in 1H05 from P13.8 billion last year § Core earnings reached P8 billion in 2Q05, 15% higher than 1Q05 an
Slide 3: Smart: Focusing on Service Revenues
Smart: Focusing on Service Revenues n Service revenues grew by 8% Y-o-Y to P35.4 billion (1H04: P33.0 billion) while 2Q05 revenues increased by 4% Q-o-Q to P18.0 billion (1Q05: P17.4 billion) n EBITDA in 2Q05 grew to P11.7 billion compared to the average quarterly EBITDA in 2004 of P10.6 billion; EB
Slide 4: Cellular: Financial Highlights
Cellular: Financial Highlights (in million pesos) 1H05 1H04 % Change (As Restated) Service Revenues 35,448 32,973 8% Non-service Revenues 1,279 4,235 -70% Less: Cost of Sales 3,130 6,478 -52% 1,851 2,243 -17% Other cash operating expenses 10,383 7,755 34% Total Cash operating expenses 12,235 9,998 2
Slide 5: Smart: Still Leading the Market
Smart: Still Leading the Market n Cellular subscribers at 20.8 million as of end-1H05 (Smart 15.8 million, Talk ‘N Text 5 million), representing an estimated combined market share of 58% n Net adds for Smart and Talk ‘N Text in 2Q05 lower at almost 537,000 as a result of terminating SIM-swapping act
Slide 6: Smart: Maximizing Cash and Returns
Smart: Maximizing Cash and Returns n Capex spending for 1H05 was P3.6 billion (1H04: P8.8 billion) as capex guidance for FY05 is lowered to P8 billion from P10 billion n Smart’s network currently consists of 36 switching centers and over 5,600 base stations, covering 98% of the population n Free cas
Slide 7: Fixed Line: Staying the Course
Fixed Line: Staying the Course n Fixed Line revenues improved Q-o-Q by 5% to P12.4 billion (1Q05: P11.8 billion) as the increase in data and ILD revenues was offset by declines in NLD and Local Exchange n EBITDA decreased by 1% Q-o-Q to P6.7 billion (1Q05: P6.8 billion) mainly due to higher selling
Slide 8: Fixed Line: Financial Highlights
Fixed Line: Financial Highlights 1H05 1H04 (in million pesos) (As Restated) % Change Service Revenues 24,214 24,108 - Operating Expenses 16,359 15,423 6% Cash operating expenses 9,124 8,855 3% Non-cash operating expenses 7,235 6,568 10% Operating Income 7,855 8,685 -10% EBITDA(1) 13,559 13,685 -1% E
Slide 9: Fixed Line: Renewing Capabilities
Fixed Line: Renewing Capabilities n PLDT incurred capex of P3.1 billion in 1H05 (1H04: P2.7 billion), in line with the ongoing upgrade of our existing facilities to a Next Generation Network; Capex is expected to reach P7 billion this year n Fixed Line capex over the next 2-3 years is dedicated to e
Slide 10: Fixed Line: Stepping Up Debt Reduction
Fixed Line: Stepping Up Debt Reduction n PLDT reduced debts by US$251 million in 1H05, resulting in stand-alone debt balance declining to US$1.7 billion; an additional US$110 million of 2005 PLDT bonds were paid on August 1 n Interest on loans decreased by 15% to P4.7 billion (1H04: P5.6 billion) as
Slide 11: ePLDT Call Centers: Growing Market Presence
ePLDT Call Centers: Growing Market Presence n Consolidated call center revenues grew by 52% to P836 million (1H04: P551 million) as a result of increased capacity utilization n ePLDT’s combined call center businesses reached 3,179 seats as of 1H05 (1H04: 1,583 seats) making ePLDT one of the largest
Slide 12: ePLDT: Financial Highlights
ePLDT: Financial Highlights in pesos millions 1H05 1H04 % Change (As Restated) Service Revenues 1,328 953 39% Call Centers 836 551 52% Internet 287 276 4% Data Center 173 100 73% Others 32 26 23% Non-Service Revenues 215 161 34% Operating Expenses Cash operating expenses 1,323 903 47% Non-cash opera
Slide 13: Quarterly Comparative Earnings
Quarterly Comparative Earnings Core Net Income(1) 2Q04 = P7.7 billion + 4% 2Q05 = P8 billion 1Q05 = P7 billion + 15% Reported Net Income 2Q04 = P6.7 billion + 10% 2Q05 = P7.4 billion 1Q05 = P9.4 billion - 21% 13 (1) Net income before certain adjusting items incurred in 2004 and excluding gains/losse
Slide 14: Six Month Comparative Earnings
Six Month Comparative Earnings Core Net Income(1) 1H04 = P13.8 billion + 9% 1H05 = P15 billion 2H04 = P13.8 billion + 9% Reported Net Income 1H04 = P12.4 billion + 35% 1H05 = P16.8 billion 2H04 = P15.6 billion + 8% 14 (1) Net income before certain adjusting items incurred in 2004 and excluding gains
Slide 15: 1H05: Consolidated Financial Highlights
1H05: Consolidated Financial Highlights 1H 2004 1H 2005 Consolidated % (in million pesos) Wireless Fixed Line Consolidated (As Restated) Change Cash flow from Operations 20,540 13,846 34,619 38,080 -9% Capex 3,577 3,129 7,012 11,575 -39% (3) Free Cash Flow 20,206 21,100 27,399 18,039 52% Debt Reduct
Slide 16: PLDT Group: Financial Targets and Outlook for 2005
PLDT Group: Financial Targets and Outlook for 2005 Target for FY 2005 Accomplished as of 1H 2005 Debt reduction US$600 million US$312 million Leverage ratio Below 1.5x by 2006 2.0x (Total Debt/EBITDA) P21 initial dividend Dividend Payout 30% of 2005 EPS paid in July 2005 16
Slide 17: Forward-looking statements
This presentation may contain some statements which constitute “forward- looking statements” that are subject to a number of risks and uncertainties that could affect PLDT’s business and results of operations. Although PLDT believes that expectations reflected in any forward-looking statements are r
Slide 18: Appendix
Appendix 18
Slide 19: 1H05: Consolidated Financial Highlights
1H05: Consolidated Financial Highlights 1H 2004 1H 2005 Consolidated % (in million pesos) Wireless Fixed Line Consolidated (As Restated) Change No. of Subscribers Cellular (Smart and TNT) 20,789,469 - 20,789,469 16,028,407 30% Fixed Line - 2,137,813 2,137,813 2,201,257 -3% Service Revenues 36,703 24
Slide 20: Revenues
Revenues 1H 2004 1H 2005 Consolidated % (in million pesos) Wireless Fixed Line ICT Consolidated (As Restated) Change Service Revenues Wireless services Cellular 35,448 35,448 32,973 8% Others 1,255 1,255 1,010 24% Fixed line services Local exchange 10,227 10,227 10,591 -3% International long distanc
Slide 21: Expenses
Expenses 1H 2004 1H 2005 Consolidated % (in million pesos) Wireless Fixed Line Consolidated (As Restated) Change Operating expenses Compensation 1,890 3,977 6,492 5,996 8% Maintenance 1,617 1,718 3,320 2,776 20% Selling and promotions 1,702 866 2,770 2,386 16% Rent 2,255 860 954 1,060 -10% Taxes and
Slide 22: EBITDA Calculation
EBITDA Calculation 1H 2005 1H 2004 % Wireless Fixed Line Consolidated Consolidated Change (in million pesos) (As Restated) Income before tax 17,592 4,850 22,511 16,259 38% Add back: Financing costs 1,214 3,127 4,349 9,901 -56% Other income (57) (122) (194) (147) 32% Depreciation 4,970 5,704 10,861 1
Slide 23: Financing Costs
Financing Costs 1H 2005 1H 2004 % (in million pesos) Wireless Fixed Line Consolidated Consolidated Change (As Restated) Interest on Loans and related items 905 4,737 5,656 6,503 -13% Accretion on financial liabilities 1,303 134 1,437 1,496 -4% Hedge cost - 557 557 567 -2% Dividends on CPS 132 - 132
Slide 24: EPS Computation
EPS Computation 2005 2004 Basic Diluted Basic Diluted Net Income 16,785 16,785 12,423 12,423 Dividends on preferred shares (756) (24) (765) (25) Adjustments for preferred shares deemed dilutive Dividends on preferred stock subject to mandatory redemption charged to expense for the period - 44 - 41 A
Slide 25: Statement of Cash Flow
Statement of Cash Flow 1H 2005 1H 2004 % Wireless Fixed Line Consolidated Consolidated Change (in million pesos) (As Restated) Net cash from operations 20,540 13,846 34,619 38,080 -9% Less: Capital expenditures (3,577) (3,129) (7,012) (11,575) -39% Investments (238) - (238) (147) 62% Interest, net (
Slide 26: Balance Sheet
Balance Sheet Consolidated June 30 December 31 (in million pesos) 2005 2004 Total Assets 263,189 265,473 Nominal Value of Total Debt 141,524 159,528 in US$* $2,518 $2,829 Less: Unamortized Debt Discount 9,913 10,440 Total Debt 131,611 149,088 Cash and short-term investments 35,656 31,194 Net Debt 95
Slide 27: Interest-Bearing Liabilities
Interest-Bearing Liabilities as of June 30, 2005 December 31, Unamortized 2004 (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $1,704 $15 $1,719 $1,970 ($251) Smart $479 $123 $602 $654 ($52) 2014 Debt $157 $123 $280 280 $0 Others $322 - $322 374 ($52) Piltel $94 $33
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