- FY2011 CONSOLIDATED CORE NET INCOME AT P39 BILLION, DOWN 7% Y-O-Y
- REPORTED NET INCOME AT P31.7 BILLION AFTER PROVISIONING
- 5th CONSECUTIVE YEAR OF 100% DIVIDEND PAYOUT - TOTAL DIVIDEND OF P189 PER SHARE
- EBITDA AT P80 BILLION, LOWER BY 4%
- FREE CASH FLOW UP 8% TO P47.2 BILLION
- COMBINED CELLULAR SUBSCRIBER BASE AT 63.7 MILLION
- TOTAL BROADBAND SUBSCRIBERS OVER 2.9 MILLION
- TOTAL FIXED LINE SUBSCRIBERS OVER 2.2 MILLION
- ACQUISITION OF DIGITEL COMPLETED IN OCTOBER 2011,
- INTEGRATION UNDERWAY
- Consolidated Core Net Income of P39.0 billion for 2011, 7% lower than the P42.0 billion in 2010
- Consolidated Reported Net Income for 2011 at P31.7 billion, from the P40.2 billion recorded in 2010
- Total dividends of P189 per share, representing 100% payout of 2011 core net income, inclusive of final and special dividends of P63 and P48 per share, respectively, and previously paid interim dividend of P78 per share
- Consolidated service revenues decline 1% year-on-year to P154.0 billion
- Consolidated EBITDA margin dips to 52% of service revenues; consolidated EBITDA declines 4% to P80.0 billion
- Consolidated free cash flow at P47.2 billion for 2011, up 8% year-on-year
- Cellular subscriber base at 63.7 million, net additions of 3.4 million for the year
- Total broadband subscribers at 2.9 million; aggregate revenue contribution from broadband and internet services of P18.8 billion for 2011, 18% higher than last year
- Total fixed line subscribers at over 2.2 million, including Digitel’s
MANILA, Philippines, 6th March 2012 –– Philippine Long Distance Telephone Company ("PLDT”) (PSE: TEL) (NYSE: PHI) today announced its audited financial and operating results for 2011 with consolidated Core Net Income declining to P39.0 billion, or 7%, from the P42.0 billion recorded in 2010. Reported Net Income for 2011, after exceptional items including significant provisioning, declined 21% to P31.7 billion, from P40.2 billion in 2010. These results reflect the consolidation of the operating performance of Digital Telecommunications Philippines, Inc. ("Digitel”) from its acquisition which closed on 26th October 2011.
The decline in Core Net Income was a result of lower service revenues and higher operating expenses, partially offset by a higher equity share in the earnings of the Manila Electric Company ("Meralco”). Reported Net Income was impacted by (i) the decline in Core Net Income, (ii) a one-time asset impairment charge arising from the ongoing network modernization program and (iii) lower net foreign exchange gains this year.
EBITDA margin dipped to 52%, from 54% in 2010. To align more closely with global accounting standards, service revenues have been restated to reflect the change in the presentation of our outbound revenues from net to gross of interconnect expense, which in turn is included in our expenses. Although EBITDA does not change, EBITDA margins are calculated against the adjusted service revenues. On this basis, 2010 EBITDA margin of 59% would have been 54%.
Consolidated EBITDA was lower by 4% at P80.0 billion compared with 2010. Digitel EBITDA stood at P1.1 billion; its lower EBITDA margin contributed to the decline in overall EBITDA margin.
Overall consolidated service revenues decreased by 1% to P154.0 billion, including the P3.8 billion revenue contribution from Digitel from its acquisition on 26th October 2011, and reflecting the combined effect of a 2% decline in wireless revenues, 1% decrease in fixed line revenues, and a 6% rise in BPO revenues.
In addition, approximately 30% of consolidated service revenues are directly or indirectly linked to the US dollar, which weakened against the peso in the course of the year. Had the peso remained stable, service revenues would have been higher by P1.9 billion and remained at similar levels to 2010.
For the fifth consecutive year, PLDT will pay out dividends equivalent to 100% of its core earnings. Earlier today, the Company’s Board of Directors declared a final dividend of P63 per share, fulfilling the Company’s commitment to pay out a minimum ratio of 70% of core earnings. In addition, the Board, consistent with its year-end "look back” approach, approved a special dividend of P48 per share thus making for a total of P111 per share to be paid on 20th April 2012 . Added to the interim dividend of P78 per share paid in August 2011, total dividends for the year will amount to P189 per share, representing a payout of 100% of 2011 core earnings.
Consolidated free cash flow reached P47.2 billion, a P3.5 billion or 8% improvement from last year. Consolidated capital expenditures for the year amounted to P31.2 billion for 2011, 8% higher year-on-year. 2011 marked the first year of the Group’s P67 billion modernization program, which is expected to be completed by the end of 2012. Capital expenditures for 2011 were utilized on the following:
On the Mobile Network:
- Increasing 3G population coverage to 70%
- Completing 40% of access modernization
- Completing core network upgrade
- Upgrading transport network covering up to 82% of Metro Manila sites
On the Fixed Network:
- Continuing migration to NGN
- Upgrading transport network with over 54,000 km of fiber assets rolled out, and able to carry up to 10 times more data on the DFON network
- Modernizing core network with migration to IP-IGF
- Building out of a third cable landing station
On IT Modernization:
- Technology refresh and group-wide optimization of IT systems and platforms for Customer Relations Management, Operations Support, Billing Support, Business Intelligences, Enterprise Resources and Settlements
The Group’s consolidated net debt was US$1.7 billion as at 31st December 2011. Gross debt at the end of 2011 stood at US$2.7 billion, with the inclusion of Digitel’s debt amounting to US$0.5 billion. Net debt to EBITDA was at 0.9x. The Company’s debt maturities continue to be well spread out, with over 66% due in and after 2014. The percentage of US dollar-denominated debt to the Group’s total debt portfolio is at 48%, up from 45% at the end of 2010. Taking into account our peso borrowings, our hedges and our U. S. Dollar cash holdings, 32% of total debt remains unhedged. The Group’s cash and short-term securities are invested primarily in bank placements and Government securities.
"This is the fifth year in a row that we have paid out 100% of Core EPS, a significant achievement when taken in the context of our increased investment levels and heightened competition,” stated Manuel V. Pangilinan, PLDT Chairman.
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