PLDT, Inc. · PSE:TEL

PLDT — H1 2014 Earnings Presentation

36 slides from PLDT's earnings presentation, Aug 5, 2014

  1. Slide 1: First Half 2014 Financial and Operating Results

    First Half 2014 Financial and Operating Results Philippine Long Distance Telephone Company (PLDT) 5 August 2014

  2. Slide 2: PLDT Group: 1H2014 Financial Highlights

    PLDT Group: 1H2014 Financial Highlights 1H2014 1H2013 2H2013 (PhP in billions, except EBITDA margin % Y-o-Y % H-o-H and Core EPS) (unaudited) Service Revenues 82.5 81.0 83.0 2% -1% • Wireless 57.9 57.6 59.1 -2% • Fixed Line 32.2 30.7 31.2 5% 3% EBITDA 38.2 39.8 37.7 -4% 1% • Wireless 25.5 28.1 26.6

  3. Slide 3: PLDT Group: Service Revenues and EBITDA

    PLDT Group: Service Revenues and EBITDA Consolidated Service Revenues  The on-going structural change in PLDT’s revenue mix continues (Php in billions) to limit consolidated revenue growth rates and EBITDA margins  Increasing contribution from growing data and broadband 1H14: P82.5bn 1H13: P81.0bn

  4. Slide 4: PLDT Group: Core and Reported Net Income

    PLDT Group: Core and Reported Net Income  PLDT expects to be firmly back on the growth track, with core income Core Net Income for 2014 estimated at P39.5bn, or 2% higher year-on-year (Php in billions)  Core income of P38.7bn in 2013 was a 5% year-on-year increase following two consecutive years o

  5. Slide 5: PLDT Group: Capital Management

    PLDT Group: Capital Management Dividend Declaration  PLDT has declared 100% of core earnings as dividends for the last seven years (2007-2013) P69 per share Interim Dividend for 2014 (75% of Core EPS)  On 5 August 2014, the PLDT Board approved the amendment of PLDT’s dividend policy Declaration Da

  6. Slide 6: PLDT Group: Broadband revenues

    PLDT Group: Broadband revenues Consolidated Broadband Service Revenues  Broadband service revenues for 1H14, representing 19% of total service revenues from 16% last year, grew to P15.4bn or by P2.7bn or 22% (Php in billions) year-on-year and P1.5bn or 11% from 2H13  Mobile internet revenues of P3

  7. Slide 7: PLDT Group: Wireless segment

    PLDT Group: Wireless segment Wireless Service Revenues  Wireless service revenues of P57.9bn in 1H14 were ahead by P0.3bn (Php in billions) year-on-year due to the sustained rise in broadband and mobile data (1) revenues  Broadband revenues rose by P1.9bn or 28% to P8.7bn, accounting for 15% of to

  8. Slide 8: PLDT Group: Fixed line segment

    PLDT Group: Fixed line segment Fixed Line Service Revenues*  Fixed line service revenues for 1H14, net of interconnection costs, (Php in billions) rose by 6% or P1.5bn year-on-year to P28.1bn underpinned by sustained growth in retail and corporate data revenues  Data revenues improved by P1.4bn or

  9. Slide 9: Market opportunities and initiatives

    Market opportunities and initiatives Opportunities Initiatives “Always-on” experience via low-  Internet/social network habit among denomination prepaid data sachets, young, literate market mainly using PowerApps, “ring-fenced” sachet apps internet cafes, wi-fi Push SMS+voice+data bundles to part

  10. Slide 10: Market opportunities and initiatives

    Market opportunities and initiatives Opportunities Initiatives  Sustained economic improvement PLDT Group has 5 data centers that offer: fuelling business expansions of colocation, server hosting/outsourcing, corporates, SMEs, BPOs creating disaster recovery, connectivity, and data demand for IT a

  11. Slide 11: PLDT Group: Debt Profile

    PLDT Group: Debt Profile  Net debt stood at US$1.8bn and net debt to EBITDA ratio Debt Balance (US$ in billions) at 1.05x as of end June 2014  Lower than net debt of US$2.0bn and net debt to EBITDA of 1.14x at the end of 1Q14, adjusted for approx. US$0.6bn 2.7 2.9 2.4 2.8 or P25bn of dividend paym

  12. Slide 12: PLDT Group: Free Cash Flow and Capex

    PLDT Group: Free Cash Flow and Capex  Free cash flow of P18.1bn for 1H14 was lower by P2.6bn or 13% from Free Cash Flow same period in 2013 due to: (Php in billions)  Higher capex by P3.3bn  Increase in income taxes paid by P1.1bn 1H13 1H14 offset by:  Higher cash from operations of P0.4bn 42.1

  13. Slide 13: PLDT Group Guidance for 2014

    PLDT Group Guidance for 2014 P39.5bn Core Net Income (P0.8bn or 2% higher than 2013) P31-32.0bn Capex (18-20% of service revenues) Dividend Pay-out Policy: Capital Management 75%* of Core EPS + “look-back” approach * Regular dividend payout updated from 70% on 5 August 2014 13

  14. Slide 14: Other Details

    Zs <> PLDT LIVE DIGITAL! Other Details 14

  15. Slide 15: Subscribers

    Subscribers Wireless Subscribers  PLDT Group registered 74.7mn subscribers at the end of June (in millions) 2014  Cellular subscriber base stood at 68.9mn, of which 96% or 2% 66.3mn were prepaid subscribers 70.0  Smart subscribers of 25.6mn or about 82,000 net adds from 69.9 68.9 63.7 end 2013 41

  16. Slide 16: MERALCO

    MERALCO  MERALCO’s consolidated revenues in 1H14 of P132.2bn were lower by P9.5bn or Energy Sales Volumes and Revenues 7% year-on-year despite 3% rise in electricity volumes, due to the P9.3bn (in „000 GWh and Php in billions) downward adjustment on MERALCO’s purchases from the WESM billed by PEMC

  17. Slide 17: PLDT Group: Appendix

    Zs <> PLDT LIVE DIGITAL! PLDT Group: Appendix 17

  18. Slide 18: Subscriber Data: Cellular

    Subscriber Data: Cellular Cellular Subscribers by category: 1H14 vs 1H13 1H14 vs FY13 Net Adds Jun-14 Mar-14 Dec- 13 Sept- 13 Jun-13 Net Adds % Net Adds % 1Q14 % 2Q14 % CELLULAR Prepaid 66,339,954 68,030,812 67,667,750 70,198,270 71,197,952 (4,857,998) -7% (1,327,796) -2% 363,062 1% (1,690,858) -2%

  19. Slide 19: Subscriber Data: Broadband

    Subscriber Data: Broadband 1H14 vs 1H13 1H14 vs FY13 Net Adds Jun-14 Mar-14 Dec-13 Sept-13 Jun-13 Net Adds % Net Adds % 1Q14 % 2Q14 % BROADBAND Wireless Broadband 2,598,920 2,551,882 2,453,826 2,378,607 2,322,416 276,504 12% 145,094 6% 98,056 4% 47,038 2% Smart Broadband 2,052,107 2,003,433 1,909,20

  20. Slide 20: 1H2014: Consolidated Financial Highlights

    1H2014: Consolidated Financial Highlights 1H2014 1H2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Service Revenues 57,888 32,236 - 82,530 81,037 2% Cash operating expenses (1) 27,308 19,546 2 39,105 36,264 8% Depreciation and amortization

  21. Slide 21: Reconciliation of Core and Reported Net Income

    Reconciliation of Core and Reported Net Income 1H2014 1H2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net Income attributable to equity holder of PLDT 12,226 4,150 3,647 20,023 17,844 12% - continuing operations Add (deduct): Foreign exc

  22. Slide 22: Consolidated Service Revenues

    Consolidated Service Revenues 2014 2013 % Change 1H14 vs 2Q14 vs (Php in billions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY 1H13 2Q13 SMS and VAS 10.8 10.5 21.3 11.9 11.9 23.9 11.5 11.9 23.4 47.3 -11% -12% Voice - Domestic 14.0 14.4 28.4 13.3 13.9 27.2 13.7 14.3 27.9 55.2 4% 4% ** Voice - International 5.5 5.2

  23. Slide 23: Expenses

    Expenses 1H2014 1H2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Operating expenses Compensation and employee benefits (1) 4,004 6,450 - 10,443 9,931 5% Repairs and maintenance 4,326 3,095 - 7,111 6,534 9% Selling and promotions 3,998 944

  24. Slide 24: Other Income (Expenses)

    Other Income (Expenses) 1H2014 1H2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Gains (losses) on derivative financial instruments, net (32) (139) 7 (164) 448 -137% Interest income 109 156 155 395 485 -19% Equity share in net earnings of

  25. Slide 25: Cellular and Broadband Net ARPU

    Cellular and Broadband Net ARPU Cellular Net ARPU 2014 2013 1Q 2Q 1Q 2Q 3Q 4Q Smart Postpaid 1,086 1,074 1,154 1,153 1,099 1,102 Smart Prepaid 132 134 141 141 142 153 Talk 'N Text 87 89 87 87 82 85 Sun Cellular Prepaid 67 66 57 58 60 68 Sun Cellular Postpaid 476 467 455 495 476 493 Cellular Prepaid

  26. Slide 26: Historical Consolidated: Service Revenues and EBITDA

    Historical Consolidated: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Fixed line 12,792 12,717 25,509 11,997 12,275 24,272 12,220 12,589 24,809 49,081 Local exchange 4,087 4,107 8,194 4,008 4,066 8,074 4,042 4,057 8,099 16,173 International long distance 1,67

  27. Slide 27: Historical Wireless: Service Revenues & EBITDA

    Historical Wireless: Service Revenues & EBITDA 2014 2013 (Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 1H FY Wireless Gross Service Revenues Cellular services 26,078 26,190 52,268 25,709 26,529 52,238 26,040 27,597 53,637 105,875 Cellular Voice 12,868 13,049 25,917 12,187 12,869 25,056 12,733 13,595 26,

  28. Slide 28: Historical Fixed Line: Service Revenues and EBITDA

    Historical Fixed Line: Service Revenues and EBITDA 2014 2013 (Php in millions) 1Q 2Q 1H 1Q 2Q 1H 3Q 4Q 2H FY Fixed Line Gross Service Revenues Local exchange 4,111 4,132 8,243 4,036 4,092 8,128 4,066 4,080 8,146 16,274 International long distance 2,859 2,843 5,702 2,968 2,802 5,770 2,678 2,974 5,652

  29. Slide 29: Earnings Per Share

    Earnings Per Share 1H2014 1H2013 (unaudited) (unaudited) Basic Diluted Basic Diluted Net income (loss) attributable to equity holders of PLDT 20,023 20,023 19,707 19,707 Continuing Operations 20,023 20,023 17,844 17,844 Discontinued Operations - - 1,863 1,863 Dividends on preferred shares (29) (29)

  30. Slide 30: Cash Flows

    Cash Flows 1H2014 1H2013 Consolidated Consolidated % Change Wireless Fixed Line Others (Php in millions) (unaudited) (unaudited) Net cash from operations 20,114 11,604 (16) 31,656 31,798 - Add(Deduct): Capital expenditures (3,615) (4,489) - (8,104) (4,787) 69% Other investing activities (51) 13,019

  31. Slide 31: Balance Sheet

    Balance Sheet Consolidated June 30, 2014 December 31, 2013 (Php in millions) (unaudited) (Audited) Total Assets 411,152 399,638 Nominal Value of Total Debt 123,521 104,472 in US$ $2,830 $2,353 Less: Unamortized Debt Discount 528 382 Total Debt 122,993 104,090 Cash and short-term investments 43,926 3

  32. Slide 32: Debt Profile

    Debt Profile (US$ in millions) 2008 2009 2010 2011(1) 2012(1) 2013(1) 1H2014(1) Debt Balance 1,625 2,210 2,113 2,719 2,851 2,353 2,830 Cash and short-term investments 847 908 852 1,061 919 735 1,006 Net Debt 778 1,302 1,261 1,658 1,932 1,618 1,824 (1) Including Digitel Debt Maturities as of June 30,

  33. Slide 33: Interest-bearing Liabilities

    Interest-bearing Liabilities June 30, 2014 December 31, (unaudited) 2013 Unamortized Debt Change Carrying (Audited) Discount/Debt Face Value Value Face Value (US$ in millions) Issuance Debt PLDT $1,675 $5 $1,680 $1,284 $396 Smart 920 8 928 812 116 DIGITEL 223 - 223 257 (34) Total Debt $2,818 $13 $2,

  34. Slide 34: Foreign Exchange Risk

    Foreign Exchange Risk (for update) Forex Impact on Core Income Forex Impact of B/S Revaluation Forex Impact on Derivatives Forex sensitivity for every P1 change (in US$ millions) Forex sensitivity for every P1 change on B/S Revaluation (in US$ millions) Conso Conso - net of Elim P1 movement in the D

  35. Slide 35: 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

  36. Slide 36: CSPLOT =

    YN WF CSPLOT = PLDT LIVE DIGITAL! o ,%0 fee wee CeEtruLtar

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