PLDT, Inc. · PSE:TEL
PLDT — FY2008 Earnings Presentation
30 slides from PLDT's earnings presentation, Mar 3, 2009
Slide 1: Philippine Long Distance Telephone Company Full Year 2008 Results
Philippine Long Distance Telephone Company Full Year 2008 Financial and Operating Results 3 March 2009 1
Slide 2: PLDT Group: FY 2008 Financial Highlights
PLDT Group: FY 2008 Financial Highlights 2008 2007 (audited) (audited) % Y-o-Y Service Revenues P142.9bn P135.5bn 5% • Wireless P93.6bn P86.5bn 8% • Fixed Line P49.3bn P48.6bn 1% EBITDA P87.6bn P82.9bn 6% • Wireless P60.6bn P55.3bn 10% • Fixed Line P25.8bn P26.4bn 2% EBITDA Margin 61% 61% – Core Net
Slide 3: PLDT Group: Core and Reported Income
PLDT Group: Core and Reported Income ¾ Core net income grew by P2.9bn or 8% to P38.1bn for FY08 as a result of: • Increases in service revenues and EBITDA of 5% and 6%, respectively • Decrease in financing costs by 14% ¾ Reported net income decreased by P1.4bn or 4% to P34.6bn due to: • Asset impair
Slide 4: PLDT Group: Cash Dividend Declaration
PLDT Group: Cash Dividend Declaration ¾ In line with 2008’s solid performance and strong cash position, PLDT declared dividends as follows: – Regular Dividend: P70 per share, in line with the 70% dividend payout policy – Special Dividend: P60 per share, representing additional 30% payout ¾ 100% divi
Slide 5: PLDT Group: Service Revenues and EBITDA
PLDT Group: Service Revenues and EBITDA ¾ Consolidated service revenues increased by 5% to P142.9bn from P135.5bn in FY08 due to: – 12% growth in data and ICT revenues which accounted for 53% of total service revenues, and which included a 45% growth in broadband revenues – 1% decline in voice reven
Slide 6: PLDT Group: Capital Expenditure
PLDT Group: Capital Expenditure ¾ Capex for FY08 amounted to P25.2bn (approximately 18% of service revenues), higher by close to P400mn compared with prior year but lower than the P27bn guidance due to rescheduling of some capex ¾ Capex spend reflects continued investment in the business: • Incremen
Slide 7: PLDT Group: Cash Operating Expenses
PLDT Group: Cash Operating Expenses ¾ Cash operating expenses for FY08 increased by 4% to P50.4bn but constituted only 35% of service revenues in 2008 compared to 36% in 2007 ¾ Except for costs directly associated with expanded operations and serving more subscribers (R&M, rent, taxes and licenses),
Slide 8: PLDT Group: Free Cash Flow
PLDT Group: Free Cash Flow ¾ Free cash flow increased by P1.3bn to P47.9bn in FY08 + Higher cash from operations by about P900mn compared with FY07 + Net reduction in interest expense by P1bn – Capex for FY08 up by close to P400mn y-o-y ¾ Utilization of free cash flow included capital management ini
Slide 9: PLDT Group: Debt Profile
PLDT Group: Debt Profile ¾ Net debt stood at US$800mn as of December 31, 2008 and Net Debt/EBITDA at 0.4x ¾ Debt profile: • 78% of total debt is denominated in US$ • 33% of total debt is hedged, 62% taking into account US$ cash holdings • 70% of debt are fixed-rate loans, while 30% are floating-rate
Slide 10: SMART: Pushing back the barriers
SMART: Pushing back the barriers ¾ The combined Smart and TNT subscriber base grew to 35.2mn as at end December 2008, reflecting a 17% growth year-on-year • Net adds of 5.2mn subscribers for FY08, higher than guidance of 4-5mn net adds • Of the 5.2mn net adds, 4.6mn are TNT subscribers • With 14.3mn
Slide 11: SMART: Rising to new heights
SMART: Rising to new heights ¾ Wireless service revenues were up 8% to P93.6bn and contributed 65% of total service revenues in FY08 driven by: + 8% increase in cellular data revenues + 81% growth in wireless broadband revenues + 3% improvement in cellular voice revenues ¾ Growth in revenues achieve
Slide 12: SMART: Major Initiatives in 2008
SMART: Major Initiatives in 2008 Cellular •Major above-the-line (ATL) campaigns for cellular − Thematic campaigns for Buddy (Me na Me) and TNT (Super Friends) − Red – Flanker brand offering cheap voice on 3G − GoldLite – SIM only plan with P2/min on-net voice call − Usage campaigns- Buddy: Unli 25 &
Slide 13: Fixed Line: Gaining Subscribers
Fixed Line: Gaining Subscribers ¾ Fixed line subscribers up 3% to 1.8 million mainly from new initiatives and programs being undertaken ¾ Re-organized with teams focusing on retail, corporate and SMEs Local Service IDD NDD Landline Plus DSL Retail 46% TelePresence Electronics & Semi-con Corporate Re
Slide 14: Fixed Line: Maintaining Momentum
Fixed Line: Maintaining Momentum ¾ Fixed line service revenues increased by 1% to P49.3bn in FY08 due to the combined impact of: Service Revenues (Php billions) + Increase in corporate data and DSL service revenues 48.6 +1% 49.3 – Declines in LEC and NLD revenues Miscellaneous – Decrease in ILD reve
Slide 15: Broadband: Covering wider ground
Broadband: Covering wider ground ¾ As of year-end 2008, combined broadband subscribers Broadband Subscribers just shy of the 1mn mark (thousands) ¾ PLDT DSL, SmartBro and WeRoam added around 417,000 subscribers during FY08, a 72% increase from WeRoam the end of 2007 SmartBro 996 Fixed – SmartBro, th
Slide 16: ePLDT: Coming to terms
ePLDT: Coming to terms ¾ ePLDT service revenues, 7% of PLDT group service revenues, increased 4% to P10.4bn due to: + 4% increase in call center (Ventus) revenues + 29% increase in data center revenues - KPS/SPi revenues flat y-o-y ¾ Review and rationalization of operations have resulted in: – Legal
Slide 17: Guidance and Outlook for 2009: Factors to Consider
Guidance and Outlook for 2009: Factors to Consider ¾ Global financial crisis V most of the world economies are in recession: business downscaling/closures, increasing unemployment, low business/investor confidence, tight credit, overall uncertainty ¾ OFW Remittances and deployment 9 2008 remittances
Slide 18: PLDT Group: Guidance for 2009
PLDT Group: Guidance for 2009 • 5% growth over 2008 Service Revenues P150 billion • P 7 billion increase • 5% growth over 2008 EBITDA P92 billion • P 4 billion increase • 5% growth over 2008 Core Net Income P40 billion • P 2 billion increase Dividend Payout Ratio: 70% of Core EPS Capital Management
Slide 19: 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 20: Appendix
Appendix 20
Slide 21: FY 2008: Consolidated Financial Highlights
FY 2008: Consolidated Financial Highlights Consolidated Statement of Income FY 2008 FY 2007 (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated % Change Service Revenues 93,593 49,266 10,417 142,873 135,478 5% Cash operating expenses 29,342 22,588 9,244 50,370 48,343 4% (1) EBITDA 6
Slide 22: Revenues
Revenues FY 2008 FY 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Service Revenues Wireless Cellular 87,518 87,518 82,334 6% Broadband 4,327 4,327 2,389 81% Satellite and other services 1,748 1,748 1,776 -2% Fixed line Local exchange 15,923 15,923 16,205 -2% Inte
Slide 23: Expenses
Expenses FY 2008 FY 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Operating expenses Compensation and employee benefits 5,433 9,093 6,131 20,709 20,470 1% Repairs and maintenance 4,230 4,634 573 8,569 7,310 17% Selling and promotions 3,781 1,715 203 5,695 5,541 3
Slide 24: EBITDA
EBITDA FY 2008 FY 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Income (loss) before tax 45,368 11,477 (2,285) 54,491 53,257 2% Add (deduct): Depreciation 11,975 11,901 833 24,709 28,613 -14% Financing costs 2,030 3,903 172 6,104 7,088 -14% Asset impairment 596 -
Slide 25: Other Income (Expenses)
Other Income (Expenses) FY 2008 FY 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Gains (losses) on derivative transactions, net (241) 4,960 (59) 4,631 81 5617% Interest income 1,197 448 22 1,668 1,503 11% Equity share in net earnings(losses) of associate (119) (7
Slide 26: Core Net Income
Core Net Income FY 2008 FY 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Reported net income 28,458 8,215 (1,968) 34,636 36,004 -4% Add (deduct): Foreign exchange losses (gains), net 1,771 4,513 (93) 6,170 (2,976) 307% Losses (gains) on derivatives, net 241 (4,96
Slide 27: Cash Flows
Cash Flows FY 2008 FY 2007 % (in million pesos) Wireless Fixed Line ICT Consolidated Consolidated Change Net cash from operations 42,723 33,851 1,752 78,302 77,418 1% Add(Deduct): Capital expenditures (16,671) (7,708) (824) (25,203) (24,824) 2% Other investing activities 269 674 (489) 480 333 44% In
Slide 28: Balance Sheet
Balance Sheet Consolidated (in million pesos) December 31, 2008 December 31, 2007 Total Assets 252,558 240,158 Nominal Value of Total Debt 78,487 65,112 in US$ $1,647 $1,572 Less: Unamortized Debt Discount 4,576 4,472 Total Debt 73,911 60,640 Cash and short-term investments 40,354 30,862 (2) Net Deb
Slide 29: Earnings Per Share
Earnings Per Share FY 2008 FY 2007 Basic Diluted Basic Diluted Net Income 34,636 34,636 36,004 36,004 Dividends on preferred shares (456) (456) (457) (457) Adjustments for preferred shares deemed dilutive Dividends on preferred stock subject to mandatory redemption charged to expense for the period
Slide 30: Interest-bearing Liabilities
Interest-bearing Liabilities December 31, 2008 December 31, Unamortized 2007 (in millions) Carrying Value Debt Discount Face Value Face Value Change Debt PLDT $815 $8 $822 $830 ($7) Smart 712 88 800 702 98 2014 Debt 200 83 283 283 - Others 512 5 517 419 98 Others* 25 - 25 40 (15) Total Debt $1,552 $