PLDT, Inc. · PSE:TEL
PLDT — Philippine Long Distance Telephone Company — H1 2007 Earnings Presentation
29 slides from PLDT's earnings presentation, Aug 7, 2007
Slide 1: Philippine Long Distance Telephone Company First Half 2007
Philippine Long Distance Telephone Company First Half 2007 Financial and Operating Results 7 August 2007 1
Slide 2: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA Service Revenues (billion pesos) • Consolidated service revenues grew by P6.4bn or 11% to P67bn in 1H07 as a result of: 67.0 60.6 +11% + Wireless service revenues up by 11% 32.4 Data & ICT(1) + ICT revenues increasing by 165% 25.8 Ï 25% - Fixed line revenues d
Slide 3: PLDT Group: Core and Reported Net Income
PLDT Group: Core and Reported Net Income Core net income (billion pesos) • Core net income in 1H07 up 13% to P17.2bn due to the combined impact of: 17.2 15.2 +13% + Increase in revenues and EBITDA + Lower interest on loans - Negative impact on core profit of about P1 bn due to the 9% appreciation of
Slide 4: PLDT Group: Capex and Free Cash Flow
PLDT Group: Capex and Free Cash Flow • PLDT Group’s capex in 1H07 reached P10bn and is expected to increase to P25bn for FY07 as a result of: – Better than expected cellular and wireless broadband take up requires additional capacity – Continued expansion of the wireless broadband network to support
Slide 5: PLDT Group: Common Dividends
PLDT Group: Common Dividends 1H 2007 FY 2006 • On August 7, 2007, PLDT Group declared Core EPS P89.75 P168.40 an interim dividend of P60 per share, Regular Dividend 70% 60% representing 70% of 1H07 core EPS Payout • On the same date, PLDT Group also declared a special dividend of P40 per Regular Div
Slide 6: The PLDT Group: 1H07 Financial Summary
The PLDT Group: 1H07 Financial Summary 1H07 1H06 % Y-o-Y Service Revenues P67.0bn P60.6bn 11% EBITDA P41.8bn P40.1bn 4% EBITDA Margin 62% 66% Income Before Tax P26.0 P18.6 40% Core Net Income P17.2bn P15.2bn 13% Core EPS P89.75 P82.48 9% Reported P17.0bn P15.3bn 11% Net Income 6
Slide 7: SMART: Propelling Revenues Upward
SMART: Propelling Revenues Upward • Service revenues grew 11% to P43bn in 1H07 driven by: + 15% increase cellular data revenues + 7% growth in voice revenues + 211% rise in wireless broadband revenues • EBITDA improved by 10% to P28.2bn in 1H07; EBITDA margin sustained at 66% • Cellular service reve
Slide 8: SMART: Driving Organic Growth
SMART: Driving Organic Growth • Smart and TNT added 2.9mn cellular subscribers in 1H07 resulting in a total combined subscriber base of 27.1mn as of the end of the period • In 2Q07, net additions reached 1.6mn benefiting from: • More aggressive and focused acquisition program coupled with better val
Slide 9: Smart: Leading the Way Anew
Smart : Leading the Way Anew • Commercial service launched on July 25, 2007 • 10 channels offering sports, news, entertainment, cartoons and documentaries • Free trial period until August 31, 2007 • Monthly fee of P488 (on top of MSF for postpaid and additional load for prepaid) • Mobile TV-enabled
Slide 10: Smart: Serving a New Market
Smart : Serving a New Market • Global merchant fleet - 46,000 vessels and growing by about 1000 ships a year • Approximately 1.2 million seafarers • The Philippines is the world’s largest supplier of Seafarers accounting for 40% • SMARTLink is a prepaid, satellite-based, fixed • World’s first global
Slide 11: PLDT Fixed Line: Managing Change
PLDT Fixed Line: Managing Change • Fixed Line revenues decreased 2% to P23.6bn in 1H07 due to the combined impact of: + increase in corporate data and DSL service revenues - decrease in LEC revenues as a result of the reduction in basic monthly fees due to the 7% appreciation of the average U.S. dol
Slide 12: Broadband: Establishing its Presence
Broadband: Establishing its Presence • PLDT DSL, SmartBro and PLDT WeRoam had a combined 422,000 subscribers as of 1H07, adding about 158,000 subscribers in 1H07 • SmartBro added 88,000 broadband subscribers in 1H07 and had more than 210,000 subscribers as of the end of the period, SmartBro is the m
Slide 13: ePLDT: Consolidating Resources
ePLDT: Consolidating Resources • ePLDT’s service revenues grew by 165% to P4.8bn on account of: + 24% increase in call center revenues + Consolidation of SPI, which contributed revenues of P2.6bn in 1H07 • About 85% of ePLDT’s revenues come from Ventus and SPI; ePLDT now contributes 7% of PLDT Group
Slide 14: ePLDT: Expanding its outsourcing businesses
ePLDT: Expanding its outsourcing businesses • Ventus’ revenues grew by 24% to P1.5bn in 1H07 driven by an increase in billable minutes and improved capacity utilization, offset in part by the effects of the appreciation of the peso: – Ventus’ 2Q07 revenues were impacted by seasonality factors • SPI
Slide 15: PLDT Group: 2007 Outlook
PLDT Group: 2007 Outlook • PLDT Group’s financial results in 2007 will continue to be impacted by a number of factors, including movements in the US dollar/Peso exchange rates • Capital expenditures are expected to increase to P25bn • PLDT Group to provide a regular dividend payout of 70% of core ea
Slide 16: Philippine Long Distance Telephone Company First Half 2007
Philippine Long Distance Telephone Company First Half 2007 Financial and Operating Results 7 August 2007 16
Slide 17: 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 18: Appendix
Appendix 18 SPLOT starr ePLDT
Slide 19: 1H07: Consolidated Financial Highlights
1H07: Consolidated Financial Highlights Profit and Loss 1H 2007 1H 2006 (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 42,964 23,590 4,806 67,022 60,640 11% Operating expenses 16,024 10,637 4,549 26,748 22,198 20% (1) EBITDA 28,167 13,042 536 41,792 40
Slide 20: Revenues
Revenues 1H 2007 1H 2006 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 41,082 41,082 37,076 11% Others 1,882 1,882 1,515 24% Fixed line Local exchange 7,822 7,822 8,587 -9% International long distance 4,562 4,562 5,051 -10% National
Slide 21: Expenses
Expenses 1H 2007 1H 2006 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation 2,456 4,817 2,583 9,854 7,616 29% Selling and promotions 1,795 578 130 2,499 2,460 2% Professional and other contracted services 1,083 849 607 2,325 1,239 88% Rent 4
Slide 22: EBITDA
EBITDA 1H 2007 1H 2006 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income before tax 22,562 3,463 (35) 25,990 18,625 40% Add (deduct): Depreciation 5,893 6,508 475 12,876 15,485 -17% Financing costs (274) 3,459 (8) 3,177 6,135 -48% Asset impairment - - 21 21 5 Amort
Slide 23: Financing Costs
Financing Costs 1H 2007 1H 2006 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Interest on loans and related items 812 2,809 15 3,636 4,355 -17% Accretion on financial liabilities 449 94 19 562 1,823 -69% Hedge cost - 645 - 645 746 -14% Loss (gain) on derivative transa
Slide 24: Core Net Income
Core Net Income 1H 2007 1H 2006 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 14,857 2,120 25 17,002 15,306 11% Add (deduct): Foreign exchange and derivative losses (gains) (999) 222 (34) (811) 218 -472% Additional depreciation - 1,013 1,013 3,881
Slide 25: Cash Flows
Cash Flows 1H 2007 1H 2006 % (in million pesos) Wireless Fixed Line Consolidated Consolidated Change Net cash from operations 24,749 11,073 37,977 33,595 13% Add(Deduct): Capital expenditures (4,103) (5,586) (9,966) (12,430) -20% Other investing activities 141 289 417 119 251% Interest, net (323) (2
Slide 26: Balance Sheet
Balance Sheet Consolidated June 30 December 31 (in million pesos) 2007 2006 Total Assets 239,171 241,892 Nominal Value of Total Debt 73,402 86,107 in US$ $1,587 $1,756 Less: Unamortized Debt Discount 5,280 5,953 Total Debt 68,122 80,154 Cash and short-term investments 29,971 25,197 Net Debt 38,152 5
Slide 27: Earnings Per Share
Earnings Per Share 1H07 1H06 Basic Diluted Basic Diluted Net Income 17,002 17,002 15,306 15,306 Dividends on preferred shares (227) (227) (228) (228) Adjustments for preferred shares deemed dilutive Dividends on preferred stock subject to mandatory redemption charged to expense for the period - 9 -
Slide 28: Interest-bearing Liabilities
Interest-bearing Liabilities June 30, 2007 December 31, Unamortized 2006 (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $860 $10 870 1,080 ($211) Smart $676 - 676 627 $49 2014 Debt $280 - 280 280 - Others $396 - 396 347 $49 Piltel - - - 1 ($1) Others $42 - 42 48 ($
Slide 29: Quarterly Consolidated Financial Highlights
Quarterly Consolidated Financial Highlights % Change 2007 2006 2Q07 (in million pesos) 1Q 2Q 2Q vs. 2Q06 Service Revenues 33,012 34,010 30,662 8% Non-service Revenues 613 703 722 12% Less: Cost of sales 1,220 1,413 1,325 37% Operating Expenses Cash operating expenses 11,749 11,432 9,352 22% Non-cash
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