Presentation for 2013 Annual General Meeting - First Pacific ...
Presentation for 2013 Annual General Meeting - First Pacific ...
Presentation for 2013 Annual General Meeting - First Pacific ...
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Copyright © <strong>First</strong> <strong>Pacific</strong> Company Limited May 30, <strong>2013</strong>. All rights reserved.
Infrastructure In January 2012, Beacon Electric Asset Holdings Incacquired an additional 2.7% interest in Meralco <strong>for</strong>₱8.85 billion. In November and December 2012, itacquired an additional 0.3% interest in Meralco <strong>for</strong> atotal consideration of ₱900 million. In January 2012, MPIC invested an additional ₱2.7billion in Beacon Electric. In December 2012, MPIC announced the acquisition of51% of De Los Santos Medical Center (“DLSMC”) inQuezon In August 2012, Maynilad acquired 100% of PhilippineHydro (PH) Inc. <strong>for</strong> ₱527 million In December 2012, MPTC invested Pesos 6.8 billion inCavitex, a toll road in southern Metro ManilaFoods/Consumer In August 2012, ICBP and Asahi Group <strong>for</strong>med twojoint venture companies to manufacture and to sellnon-alcoholic beverages in Indonesia In November 2012, ICBP signed a memorandum ofunderstanding with Tsukishima Foods Industry Co. toenter into value added oils and fats productsNatural Resources In May 2012, IndoAgri invested Rp138 billion in HeliaeTechnology Holdings and later invested an additionalRp33 billion in Heliae On 28 May 2012, <strong>First</strong> <strong>Pacific</strong> acquired 7.4% of PitkinPetroleum Plc <strong>for</strong> US$6.3 million On 6 June 2012, <strong>First</strong> <strong>Pacific</strong> acquired 3.3% in ForumEnergy plc <strong>for</strong> a consideration of US$3.6 million10,0009,0008,0007,0006,0005,0004,0003,0002,0001,0000Value of Assets (US$ mln)8,6791,2122003 2004 2005 2006 2007 2008 2009 2010 2011 2012PLDT MPIC IndofoodPhilex Petroleum Philex Net debt2
200Dividend Payments & Share Buybacks (US$ mln), Per<strong>for</strong>mance1506954216%10022500106 10480412009 2010 2011 2012<strong>First</strong> <strong>Pacific</strong>Hang Seng IndexDividendsShare Buybacks58%Three Pillars of Capital Allocation1. Policy to pay a minimum of 25% of recurringprofit to <strong>First</strong> <strong>Pacific</strong> shareholders from 2010going <strong>for</strong>ward• Record high 29% of 2012 recurring profit paidout to shareholders• Up from 26% payout ratio <strong>for</strong> 2011 earnings• 2012 full-year dividend unhanged in cashterms at HK 21 cents/share2. US$130 million program to repurchase and cancel FPCshares over 24 months to June 4, 2012• 138.2 million shares repurchased and cancelled• Share price up 52% over the two-year period, beatingindexes, and continues to rise• Replaced on expiration by an open-ended plan to devoteup to 10% of recurring profit to share repurchases3. Remaining capital reserved <strong>for</strong> M&A <strong>for</strong> growth3
Recurring Profit Reported Profit ContributionPLDTMPICIndofoodPhilexUS$360.3 mlnUS$348.8 mlnUS$463.1 mln-15%-39%-10%Contribution (US$ mln)2011215.068.2178.550.12012193.186.1170.113.8Change-10.2%26.2%-4.7%-72.5% Full-year dividend income US$320 mln vs.US$322 mln Consolidated gearing : 0.30x (end-2011: 0.26x) Head Office gearing: 0.67x (end-2011: 0.71x) Head Office gross debt: US$1.7 bln (end-2011:US$1.3 bln) Head Office net debt: US$1.1 bln (end-2011:US$1.2 mln)6005004003002001000-1004003002001000110Contribution & Recurring Profit (US$ mln)13 13141 143174Historical Dividend Income (US$ mln)46 62245166304335225 2214742775124632003 2004 2005 2006 2007 2008 2009 2010 2011 2012PLDT MPIC Indofood Philex Recurring profitHead Office GearingCash Interest CoverGAV/Net Debt322 3202003 2004 2005 2006 2007 2008 2009 2010 2011 2012PLDT MPIC Indofood PhilexHead Office Gearing & Cash Interest Cover20060.16x6.1x13.0x20070.35x5.4x9.6x20080.47x5.0x4.2x20090.36x9.6x8.9x20100.46x15.5x8.7x20110.71x4.5x6.6x2673921220120.67x4.0x7.2x4
2012 Earnings Highlights Service revenues up 10% vs. year-earlier period largelyowing to Digitel acquisition from October 2011 Core income down 4% amid intense competition andhigher spending and promotional expenses Decline in core income reflects challenging operatingenvironment and higher selling and promotions costs Revenue mix is evolving with declines in legacybusinesses such as SMS and international voice, partlyoffset by double-digit growth in broadband revenuesLaying the Foundation <strong>for</strong> Growth Two-year accelerated investment program <strong>for</strong> thenetwork is now complete with total capex of ₱31.2 billion<strong>for</strong> 2011 and ₱36.4 billion <strong>for</strong> 2012, inclusive of Digitelcapex and net of ₱8.0 billion capex avoidance Opex savings already being booked following Digitelacquisition (e.g. 18% headcount reduction at Digitel)Outlook <strong>2013</strong> core income seen reaching ₱38.3 billion <strong>2013</strong> capex seen down to ₱29.0 billion Capex plan to result in permanent reductions inoperating costs and push future capex needs down tomaintenance level below 20% of service revenues Agreed to sell 80% of BPO business in February <strong>2013</strong> tofocus on core telecom and media businesses in atransaction completed on 30 April <strong>2013</strong>50,00045,00040,00035,00030,00025,00020,00015,00010,0005,0000US$ mlnCore IncomeDividendsGearingEBITDA MarginService Revenues & Core Income (Pesos mln)1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12Service Revenues20066175120.6x64%20077667540.4x61%Core IncomeCore Income, Gearing & EBITDA Margin20088528390.4x61%20098608510.6x59%Digitel Contribution20109339190.5x54%20119038930.5x52%20128878820.5x46%5
2012 Earnings Highlights Core income rose 32% in US$ terms to US$155million vs. US$118 million Revenues rose 30% to US$661 million vs. US$510million Double-digit contribution growth from water andelectricity while healthcare contribution doublesOutlook <strong>2013</strong> earnings seen continuing rise to new record Maynilad sees continuing strong growth after 7%volume growth and 9% effective tariff increase in2012, seeking further concessions Continuing strong economic growth heralds newrecord earnings at Meralco in <strong>2013</strong> as powerprojects move ahead Healthcare Group aims <strong>for</strong> 3,000 beds Majority stake in JV <strong>for</strong>med with JG Summit <strong>for</strong>Cebu airport redevelopment bid Further infrastructure investments sought in lightrail, electricity generation , toll roads, waterdistribution and othersCore Income & GearingUS$ mln2008Core income7.8Reported net income 11.8Head Office gearing 0.38xHead Office net debt/(cash) 140200942.848.10.31x318201085.663.70.23x2572011118.0117.0n/a(53)2012155.2151.80.15x2377006005004003002001000113MeralcoUS$39 mln(26%)8MPTCUS$34 mln(22%)Revenues & Core Income (US$ mln)3374341251086 1186612008 2009 2010 2011 2012Revenues Core IncomeSources of Contribution Evolving2011Healthcare 4%MayniladUS$72 mln(48%)MeralcoUS$52 mln(28%)MPTCUS$37 mln(20%)2012155Healthcare 6%MayniladUS$84 mln(46%)6Note: Pie charts are to scale by area. Rounding may affect totals.
2012 Earnings Highlights Core income up 3% in Rupiah terms to record highRp3.27 trillion vs. Rp3.16 trillion on higher sales, offsetby higher costs as A&P rises 32% to Rp835 billion Revenues up 10% to Rp50.1 trillion vs. Rp45.3 trillion EBIT margin decreased to 13.7% vs. 15.1%, driven bylower CPO prices and continued strong competition Per<strong>for</strong>mance by Consumer Branded Products businessheld back by Ramadan during 3Q 2012Outlook Non-alcoholic beverage partnership with Asahi and oil& fats venture with Tsukishima will diversify revenuesand increase income Aim to meet dairy demand growing from current 11liters/year (ASEAN average: 20 liters/year) Aim to meet growing wheat consumption, currently at26 kg/year and among the lowest in the world (globalaverage 95 kg/year) Leveraging 1,100 stock points serving 350,000 retailoutlets to protect and expand market share Kalimantan palm oil mill completed in 2Q 2012 withcapacity of 40 tonnes of fresh fruit bunches per hour Similar facility to open South Sumatra in <strong>2013</strong> Bottling and margarine plant added at Jakarta CPOrefinery in 1Q 2012 Central Java sugar mill and refinery expanded toincrease capacity to 720,000 tonnes of cane per year6,0005,0004,0003,0002,0001,000025%20%15%10%5%0%US$ mlnCore incomeNet incomeDividendNet debtGearingEBIT Margin7Revenues & Core Income (US$ mln)1,923 2,399 3,04051 841293,99315.1% 13.7% 13.7% 13.2%3,589149 1676.6%4,2288.4%5,174 5,328328 360 3462005 2006 2007 2008 2009 2010 2011 2012Revenues (LH axis) #REF! Core Income (RH axis)EBIT Margin of Business Groups23.6%Core Income, Gearing & Margin20068472296050.98x8.9%2007129107438330.72x10.3%2008149107431,3071.09x11.2%2009167201801,3620.83x13.4%20103283251304320.16x16.4%17.2%2011360351176700.02x15.1%60050040030020010003.6% 3.7%2011 2012 2011 2012 2011 2012 2011 2012 2011 2012Indofood CBP Bogasari Agribusiness Distribution20123463461742050.05x13.7
2012 Earnings Highlights Core income down 69% in US$ terms at US$41million due to suspension of output from August 12012 following a leak in Tailings Pond 3 Revenues down 42% to US$217 million vs. US$373million Realized gold price US$1,638/oz. vs. US$1,536/oz. Realized copper price US$3.99/lb. vs. US$3.70/lb. Gold provided 54% of revenue , copper 42%, silver1%, petroleum and others 3%2012 Production Highlights Ore milled at 25,997 tonnes/day in 2012, up 0.8%on-year from 25,794 tonnes/day Operating data impacted by absence of production infinal five months of 2012 following Padcal shutdown Gold production 71,297 oz., down 49% as gradedeclined to 0.507 gram/tonne from 0.564gram/tonne Copper production 22.3 million lb., down 41% whilegrade improved to 0.224% from 0.221%Outlook Padcal returned to production March 8, <strong>2013</strong> afterseven-month shutdown Silangan Project and its funding continue unaffected Acquisition(s) sought to bring increase in copper andgold production ahead of Silangan mining projectopening in 2017 as greenfield exploration continues Rights offering to raise ₱12.3 billion seen in 2H <strong>2013</strong>to help finance loan repayment, capital expenditures4003503002502001501005002,0001,5001,0005000-5008Revenues & Core Income (US$ mln)373297266218189217112129926048412007 2008 2009 2010 2011 2012Revenues Core IncomeHistorical Gold Production Cost & Price (US$/oz.)1,6381,4751,0561,1498238521,08240421092 1142162007 2008 2009 2010 2011 2012(232)Be<strong>for</strong>e copper credits After copper credits Avg. Realized PriceNote: Production was suspended on August 1, 2012.
Share Price Per<strong>for</strong>mance to May 21Since 1 Jan 2003Since 31 May 2012<strong>First</strong><strong>Pacific</strong>+1,623%+51%Hang SengIndex+150%+25%Blue Chip Assets in the Philippines,Indonesia and Singapore Core businesses offering essential servicesand products with strong cash flows Fund-raising possible at holding andproject levels Positive trend of dividend inflow fromthese assetsActive Management to Ensure: Per<strong>for</strong>mance improvement at recentlyacquired assets Solid, stable growth at portfoliocompaniesLeveraging Existing Core Sectors toFind Undervalued Opportunities60%50%40%30%20%10%0%-10%40%30%20%10%0%Share priceHK$8.00HSI: 18,63012%Share Price vs. HSI Last 12 Months17%Hang Seng Index22%15%<strong>First</strong> <strong>Pacific</strong>Dividend Yield & Payout Ratio1.0% 1.4% 1.7%3.3%20%2.5%25%26%Share priceHK$12.06up 50.8%HSI: 23,366Up 25.4%29%2.8% 2.7% 2.5%2005 2006 2007 2008 2009 2010 2011 2012Payout ratioDividend yield9
<strong>First</strong> <strong>Pacific</strong> Company Limited24 th Floor, Two Exchange Square8 Connaught Place, CentralHong KongTel: +852 2842 4374info@firstpacific.comwww.firstpacific.com
Change language