PLDT, Inc. · PSE:TEL
PLDT — Q1 2008 Earnings Presentation
29 slides from PLDT's earnings presentation, May 6, 2008
Slide 1: Philippine Long Distance Telephone Company First Quarter 2008 Results
Philippine Long Distance Telephone Company First Quarter 2008 Financial and Operating Results 6 May 2008
Slide 2: PLDT Group: 1Q 2008 Financial Highlights
PLDT Group: 1Q 2008 Financial Highlights 1Q 2008 1Q 2007 (unaudited) (unaudited) % Y-o-Y Service Revenues P34.9bn P33.1bn 6% EBITDA P21.8bn P20.5bn 7% EBITDA Margin 63% 62% Income Before Tax P16.2bn P13.4bn 21% Reported Net Income P10.4bn P 8.6bn 21% Reported Net Income $250mn $179mn 40% Core Net In
Slide 3: PLDT Group: Core and Reported Net Income
PLDT Group: Core and Reported Net Income ¾ Core net income grew by P0.9bn or 11% to P9.3bn in 1Q08 on account of : • Increases in revenues and EBITDA of 6% and 7%, respectively • Decrease in financing costs by 32% ¾ Reported net income up by 21% to P 10.4 bn due to P 1.7bn gain from forex and deriva
Slide 4: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA ¾ Consolidated service revenues grew 6% from P 33.1bn to P34.9bn in 1Q08 due to: – 14% growth in data and ICT which now accounts for 53% of total service revenues, and which includes a 51% growth in broadband revenues – 2% decline in voice revenues resulting f
Slide 5: PLDT Group: Capex and Free Cash Flow
PLDT Group: Capex and Free Cash Flow ¾ Capex spend for 2008 guided at P 25.4bn • 59% or P 15.2 bn for wireless, 35% or P 8.8 bn for the fixed line, and 6% or P 1.4bn for ICT • Major capex: capacity provisioning for wireless and broadband subscriber take-up, transmission and outside plant upgrades, a
Slide 6: SMART: Continuing to Grow
SMART: Continuing to Grow • Smart and TNT subscriber base grew to 31.6mn as at end-March 2008 reflecting a 24% growth year-on-year, and net adds of 1.5mn cellular subscribers in 1Q08 • Net adds for the quarter are 17% higher than the 1.3mn for the 1Q07 • Of the 1.5mn net adds, 1.25mn are TNT subs, n
Slide 7: SMART: Sustaining Momentum
SMART: Sustaining Momentum ¾ Wireless service revenues are up 8% to P22.5bn and contributed 60% to total service revenues in 1Q08 driven by: + 11% increase in data revenues + 122% rise in wireless broadband revenues ¾ Data services made up 55% of cellular service revenues up from 53% ¾ EBITDA improv
Slide 8: SMART: Leading the Way
SMART: Leading the Way Product Launches •Above-the-line campaigns generating growth −TNT Thematic campaign further strengthened the brand equity as 1Q08 subs base grew by 48% −Prepaid Bro Plug-It: close to 12,000 subs to date −iMode: more than 300 registrations Acquisition Efforts •Acquisition effor
Slide 9: Fixed Line: Registering Modest Growth
Fixed Line: Registering Modest Growth Service Revenues ¾ Fixed line service revenues increased 4% (Php billions) to P12.4bn in 1Q08 due to the combined impact of: 11.9 4% 12.4 Miscellaneous Data + Increase in corporate data and DSL 3.6 4.4 NLD service revenues ILD 1.6 1.7 Local Exchange + Higher LEC
Slide 10: Fixed Line: Offering New Products
Fixed Line: Offering New Products • A fixed-wireless telephone line that serves as an alternative basic voice communication for business customer in areas with limited or no available PLDT fixed facilities − Runs on PLDT’s fixed and wireless networks − Capable of inbound/outbound calls, DDD, SMS − W
Slide 11: Broadband: Expanding our Reach to All
Broadband: Expanding our Reach to All ¾ PLDT DSL, SmartBro and WeRoam Broadband Subscribers added about 82,000 subscribers (thousands) during the first three months of 2008 661 WeRoam 579 14% – SmartBro, the most widely SmartBro available broadband service Fixed 302 348 provider in the country today
Slide 12: ePLDT: Holding Steady
ePLDT: Holding Steady ¾ ePLDT’s service revenues increased by 6% to P2.6bn due to: + 11% increase in Customer Interaction Service (CIS)/Ventus revenues + 4% increase in Knowledge Processing Solutions (KPS)/SPi revenues ¾ ePLDT contributed 7% of PLDT Group service revenues in 1Q08 ¾ About 85% of ePLD
Slide 13: ePLDT: Managing the Many Challenges
ePLDT: Managing the Many Challenges ¾ Combined number of employees for Ventus and SPi at nearly 14,000 ¾ Number of sites stands at 22: 15 for KPS and 7 for CIS ¾ CIS/voice business has promising pipeline of new contracts and expansion of existing contracts ¾ Outlook for the various KPS/non-voice bus
Slide 14: PLDT Group: Monitoring Key Metrics
PLDT Group: Monitoring Key Metrics ¾ The Philippine inflation rate for March 2008 stood at 6.4% bringing the 2008 average to 5.6% -- similar to 2006 inflation levels; April inflation hit 8.3% • Impact on our wireless business may be somewhat mitigated because: – The cost of a SIM card is now as low
Slide 15: PLDT Group: Affirming Guidance for 2008
PLDT Group: Affirming Guidance for 2008 • 7-8% growth over 2007 Service Revenues P 145 – 146 billion • P 10-11 billion increase • 5% growth over 2007 EBITDA P 87 billion • P 4 billion increase • 5% growth over 2007 Core Net Income P 37 billion • P 1.8 billion increase Dividend Payout Ratio: 70% of C
Slide 16: 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, and Section 21E of the U.S. Securities Exchange Act of 193
Slide 17: Appendix
se ZS &g@PLDT Appendix
Slide 18: 1Q 2008: Consolidated Financial Highlights
1Q 2008: Consolidated Financial Highlights Consolidated Statement of Income 1Q 2008 1Q 2007 (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 22,465 12,367 2,575 34,933 33,071 6% Cash operating expenses 7,488 5,203 2,218 12,391 11,743 6% EBITDA(1) 14,481
Slide 19: Revenues
Revenues 1Q 2008 1Q 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 21,147 21,147 19,923 6% Broadband 919 919 414 122% VSAT and other services 399 399 474 -16% Fixed line Local exchange 4,085 4,085 3,964 3% International long dist
Slide 20: Expenses
Expenses 1Q 2008 1Q 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation 1,242 1,916 1,383 4,539 4,781 -5% Repairs and maintenance 1,056 997 133 2,049 1,846 11% Selling and promotions 1,108 409 89 1,605 1,296 24% Professional and other co
Slide 21: EBITDA
EBITDA 1Q 2008 1Q 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income before tax 11,048 5,119 18 16,167 13,370 21% Add (deduct): Depreciation 3,154 2,993 216 6,363 5,448 17% Financing costs 497 842 50 1,389 2,053 -32% Asset impairment - - (6) (6) 1 - Amortizatio
Slide 22: Financing Costs
Financing Costs 1Q 2008 1Q 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Interest on loans and related items 347 923 9 1,279 1,858 -31% Accretion on financial liabilities 210 14 41 265 269 -1% Dividends on CPS 2 - - 2 5 -60% Financing charges 1 26 - 27 35 -23% Ca
Slide 23: Core Net Income
Core Net Income 1Q 2008 1Q 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 6,906 3,520 38 10,446 8,614 21% Add (deduct): Foreign exchange and derivative losses (gains) 143 (1,892) 42 (1,688) (277) 509% Asset impairment - - (6) (6) 2 -400% Tax ef
Slide 24: P&L Impact of Derivative Transactions
P&L Impact of Derivative Transactions ¾ PLDT’s US$ 2009, 2012 and 2017 bonds had been hedged using derivative instruments, namely: principal only (PO) currency swaps and long-term foreign currency options • Changes in the mark-to-market (MTM) valuation of these derivatives resulting from movements i
Slide 25: P&L Impact of Derivative Transactions
P&L Impact of Derivative Transactions ¾ Significant gains from derivatives for 1Q08 largely driven by the widening of US$ and Php interest differentials during the period: • US interest rates decreased due to a series of rate cuts by the US Fed as a result of recession worries and the fall in global
Slide 26: Cash Flows
Cash Flows 1Q 2008 1Q 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Net cash from operations 15,253 6,610 306 22,169 25,189 -12% Add(Deduct): Capital expenditures (1,766) (1,146) (139) (3,051) (5,937) -49% Other investing activities (18) 31 1 14 21 -33% Interest,
Slide 27: Balance Sheet
Balance Sheet Consolidated (in million pesos) March 31, 2008 December 31, 2007 Total Assets 253,496 240,158 Nominal Value of Total Debt 67,855 65,112 in US$ $1,625 $1,572 Less: Unamortized Debt Discount 4,356 4,472 Total Debt 63,499 60,640 Cash and short-term investments 50,891 30,862 (2) Net Debt 1
Slide 28: Earnings Per Share
Earnings Per Share 1Q 2008 1Q 2007 Basic Diluted Basic Diluted Net Income 10,446 10,446 8,614 8,614 Dividends on preferred shares (114) (114) (114) (114) Adjustments for preferred shares deemed dilutive Dividends on preferred stock subject to mandatory redemption charged to expense for the period -
Slide 29: Interest-bearing Liabilities
Interest-bearing Liabilities March 31, 2008 December 31, Unamortized 2007 (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $851 $9 $860 $830 $31 Smart 627 95 723 702 21 2014 Debt 190 93 283 283 - Others 437 2 440 419 21 Others* 42 - 42 40 2 Total Debt $1,521 $104 $1,
Philippine Long Distance Telephone Company (PLDT) — Q1 2008 Earnings Presentation on 6ix