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Executives

Melissa Vergel de Dios – Head, IR

Manuel Pangilinan – Chairman

Napolean Nazareno – President and CEO

Christopher Young – Chief Financial Advisor

Ray Espinosa – Head, Regulatory Affairs and Policies

Anabelle Lim-Chua – SVP and Treasurer; CFO, Smart

Analysts

Luis Hilado

Arthur Pineda

Neeraja Natarajan

Chi Fan

Rama Maruvada

Philippine Long Distance Telephone Company (PHI) Q2 2013 Earnings Call August 7, 2013 3:00 AM ET

Operator

Good afternoon, everyone, and welcome to the PLDT Conference Call to discuss the Company’s Financial and Operating Results for the first half of 2013. This conference call is being recorded. Replay information will be provided at the end of the call.

At this point, I would like to turn you over to Ms. Melissa Vergel de Dios, Head of Investor Relations for PLDT for the introductions. Please go ahead.

Melissa Vergel de Dios

Good afternoon, and thank you for joining us today to discuss the Company’s financial and operating results for the first half of 2013. As mentioned in the conference call invitation, today’s presentation is posted on our website. For those who have not been able to do so, you may download the presentation from www.pldt.com.ph, under the Investor Relations section.

For today’s presentation, we have with us members of the PLDT Group management team; namely, Mr. Manuel Pangilinan, Chairman of the Board, Mr. Poly Nazareno, President and Chief Executive Officer of both PLDT and Smart; Mr. Chris Young, Chief Financial Advisor of PLDT; Ms. Anabelle Lim-Chua, SVP, Treasurer of PLDT and Chief Financial Officer of Smart; and Atty Ray C Espinosa.

At this point, let me turn the floor over to Mr. Nazareno for the presentation.

Napolean Nazareno

Good afternoon. Thank you for joining us this afternoon. We are pleased to share with you the financial and operating results for the first six months of 2013. When we announced our full year 2012 results earlier this year, we shared our views with PLDT will return to growth in 2013.

We also expected operating costs or the bulk of MRP or our reduction to over 20% was incurred last year. As you can see our first half results are largely in line with this anticipated. Service revenues for the first half of 2013 rose by 2% year-on-year and 1% half-on-half to $81.1 billion. Both our wireless and fixed line businesses registered growth comparing to the first half and the last semester of 2012.

EBITDA for the period grew to $40 billion reflecting a 2% increase versus the first half of 2012, which included a 1.7 billion manpower reduction program cost. Compared with the second half of 2012, EBITDA is 6% higher due to higher revenues lower cash operating costs partly offset by higher subsidy expenses in 2013 in line with our short-term strategy involving a rigor postpaid plans to seize smartphone ownership expenses to boost data revenues.

EBITDA margin was steadily at 49% first half of 2013 and first half 2012 and higher than 47% in the second half of 2012. Reported net income for the first half of 2013 was higher by 2% year-on-year and 17% compared to the second half of 2012.

Core net income was 19.4 billion, rose 12% for the first half year-on-year and compared with the last half of 2012. Core earnings per share is 89 pesos and 64. In the second slide, this slide shows how our second quarter results compared with the same period last year and with the first quarter of this year.

Service revenues in the second quarter were higher by 3% quarter-on-quarter and 4% year-on-year. EBITDA for the second quarter registered a 5% year-on-year improvement, but behind 4% quarter-on-quarter due to the higher subsidy expenses.

As a result, EBITDA margins for 2013 of 48% was more than 81% in the first quarter 2013, but better than 47% of the second quarter last year. Core income was 9.8 billion for the second quarter of 2013 this is 6% year-on-year and 2% quarter-on-quarter improvement.

Reported net income for the period of 10.5 billion was a 13% year-on-year and a 15% quarter-on-quarter increase mainly due to the two business gains from the sale of the BPO business in the quarter.

On the next slide in line with PLDT’s dividend policy, the Board of Directors today declared an interim regular dividend of 63 pesos per share representing 70% of core earnings for the first six months of 2013. The dividend per share is 3 pesos or 5% higher than the interim dividend of 2012.

The record date for the dividend is August 30 whereas the payment date is September 27. On the next slide, core net income for the first half of 2013 rose by 1 billion or 5% year-on-year to 19.4 billion and on track with full year guidance of 38.3 billion.

Our revenues and EBITDA and the lower depreciation contributed to the increase. This semester’s core income included the 900 million peso gain from the sale of the third tramps of Philweb shares while the first half of 2012 captured the 2 billion gain from the sale of VI Convertible preferred shares and 1.7 billion in Manpower Reduction Program or MRP expenses.

Reported net income as of June 2013 was 400 million or 2% higher year-on-year at 19.7 billion, mainly due to the higher core net income, a 2 billion peso gain from the sale of our BPO business offset by higher ForEx and the resulting net losses of 2.7 billion and a 900 million adjustment of rights income PAS 90.

On the next slide, PLDT’s combined subscriber base stood at 78.7 million at the end of June 2013, our combined cellular base grew by 5% or 3.5 million, to 73.4 million from the end of 2012.

Talk N Text added 3.4 million subscribers, while Sun added 400,000 after a reduction in subscribers in the first quarter, Smart registered net adds of nearly 142,000 in the second quarter. Prepaid subscribers amounting for 97% of our total cellular subscriber reach, rose by 3.6 million or 5% year-on-year to 71.2 million.

We believe that the synergy is from our prepaid markets so we will continue to direct our efforts to growing our prepaid subscriber base. Compared with our efforts in the past seven years and as part of expanding our data business, we have in recent quarters increased initiatives on growing our postpaid subscriber base as you can see postpaid subscribers is likely to be digital.

As a result, our postpaid subscriber base increased to 2.2 million and we added nearly 115,000 subscribers in the second quarter alone. Following a decline in subscriber count in the previous quarter due to a clean-up of de-active products.

Our combined broadband reach on the other hand puts us first three points in the year of June 2013 consisting of 2.3 million wireless broadband subscribers and over 920,000 DSL subscribers. We have 2.1 million fixed line subscribers at the end of the first half of 2013.

Next slide, consolidated service revenues for the period grew by 1.4 billion or 2% year-on-year to 81.1 billion. 21% was service revenues are dollar linked and the peso remains stable consolidated service revenues would have been higher by another 1% or 700 million.

This semester, decreases from our growing business segments outpaced declines in the healthy revenues. Growing revenue streams from Non-SMS data services was 16.9 million, accounting for 21% of total revenues, were higher by 13% year-on-year or 2 billion pesos. This more than offset the 1 billion peso decrease in revenues from our Legacy businesses namely NLB, ILD, and LEC and satellite services.

Revenues from cellular voice, cellular SMS and LEC which account for 60% of total revenues were stable at 48.9 billion. Consolidated EBITDA grew by 2% or 900 million to 40 billion at the end of June 2013 where EBITDA margin was stable at 49%.

On the next slide, the highlights for our various segments starting with broadband. Broadband service revenues now contributing 16% of total service revenues, maintained their upward – with a 14% year-on-year growth to 4.7 billion for the first half of the year. This includes mobile internet browsing revenues of 2.1 billion which rose 49% from the same period last year.

Broadband ARPUs registered year-on-year increase in this semester compared with the same period last year. We anticipate growth in mobile internet browsing revenues to accelerate the increased smartphone ownership as smartphone prices are on the decline and there is an expanding second-hand smartphone market as early adopters upgrade their units. Also we are seeing more aggressive marketing initiatives from the distributors of Chinese made handsets challenging the local preference for branded handsets.

Smartphone penetration of our total subscriber base is above 10%. We guide for postpaid higher at 54%. To grow the broadband business further, our efforts are directed towards encouraging at increasing usage. These efforts include plumbing of and building contracts for multiple suites. I will provide you more updates on this later in the presentation.

We continue to spread offers that the best concerns of our user, such as affordable social network on the environment and postpaid down with price cuts.

Finally, key to growth of our data business is a reliable network that ensures quality experience. PLDT’s network quality of coverage remains unrivaled and more than fully supports the requirements of our data customers.

On the next slide, our wireless business registered a 2% or 1 billion pesos of revenue rise in service revenues. For the first six months of 2013 reflecting continued growth of non-SMS data and a modest increase in cellular voice services.

Efforts to further increase wireless revenues are directed towards mitigating the client and cellular voice and SMS ARPUs, but somewhat growing non-SMS data revenues. These include our short-term strategy of seeding smartphone ownership under postpaid plans.

Moving to the fixed line, this segment registered a 700 million or 3% year-on-year increase in service revenues to 26.5 billion in the first half of 2013, net of interconnection costs. Upward momentum in DSL, corporate data including data center revenues accounted for 1 billion pesos of the improvement while NLB, ILD and LEC revenues declined by 400 million including certain economic conditions, both are well for our home and enterprise businesses increased purchasing power and the growth in internet usage plus our ability to offer interesting content supports demand for PLDT DSL broadband and fiber.

In addition, the unabated growth of the BPO industry in SMEs, emerging demand for business sector and government services, provide rich growth opportunities for our enterprise business.

On the next slide, free cash flow as of June 2013 stood at 20.7 billion, higher than our core income of 19.4 billion for the period. Higher cash from operations and lower CapEx were up by certain improvement in working capital and cash from deconsolidated operations.

Our free cash flow was 14 billion on proceeds from the sale of our BPO business and the third tramps of Philweb shares reduced – for dividend payments amounting to 24.1 billion reported our media terms beating our subscription of 2.6 billion and repayment of 1.3 billion of debt.

PLDT Group CapEx for 2013 is expected to be 29 billion lower by 7.4 billion from previous year. At the end of June, PLDT Group CapEx stood at 4.8 billion, almost half of the CapEx in the first six months of 2012. The year’s CapEx will continue to fortify the PLDT Group’s unrivaled network which is in line to maximize the customers’ quality of experience especially in data.

Continued investments in expanding 3G and LTE progress are being made. At the end of June, our LTE coverage reached the market through the expansion to 1100 sites and present in over 170 cities and municipalities nationwide. Because backhaul and transport are keys to deliver data, our CapEx program includes further investments in extending our fiber footprint which now stands at 71,000 kilometers, with 27, 200 kilometers of international submarine fiber and 4000 kilometers of domestic submarine cable.

In support of our multimedia strategy, we recently commissioned our content delivery platform to support Smart Music, the country’s biggest music portal, online music portal and a delivery system which allows Signal customers to watch their favorite channels on their mobile phones and tablets.

On the next slide, net debt at the end of June 2013 was $1.7 billion US or 0.25 million lower than at the end of 2012. Net debt to EBITDA was also lower at 0.98 from over one times at the end of last year. 51% of gross debt is denominated in US dollars.

Taking into account our US cash closing and adjust only 36% of $975 million of our total debt is unhedged, 58% of our debt are fixed rate. PLDT’s debt profile remains healthy with maturities well spread out. PLDT’s credit ratings with Fitch, Moody’s, Standard & Poor’s remains at investment grade.

On the next slide, our strategic progression is thus far PLDT into our mobile media organization with the convergence of the world’s best communication media and the internet. In light of this we are pursuing significant number of initiatives a few of which I would like to update you on. The partnership with MCA Music, Smart recently launched Smart TV, a game changing online music portal which allows Smart and song subscribers to download music at very authentic prices as low as 50 pesos or 34 US cents per track.

Further to this alone Digital Music amounts for 40% of the 700 million peso domestic music business and for Signal TV, the Direct-To-Home or DTH business that PLDT is investing again by operating the growth authority receipts of more PDRs, each subscriber has grown from 457,000 at the end of March to nearly 515,000 today.

PLDT has also recently made available its first triple play offer which includes landline, fiber-to-the-home broadband of up to 100 megabytes per second and Signal TV content, because of our tie up with pure play, which allows our subscribers to access on-demand over 200 blockbuster movies from the cinemas like the Sony Pictures and Warner Brothers.

The latest launch is Signal TV – and Over-The-Top service that allows Smart and some subscribers who view real-time broadband feeds of Signal Channels on their smartphones or tablets.

Currently in its database the service is available on the Android OS but very soon be available on other operating systems. These are only a few and just the beginning as we continue to explore new ways of the voice and digi and comparing content to generate new revenue sources by – on our network and content strengths.

Lastly, we are encouraged by our first half results and continuing to see 2013 as the year we return to growth. Our goal remains to pursue growth in data while maintaining the equilibrium of our core businesses and managing the declines in our legacy services. So contribution for profitability will be modest this year. We will actively pursue our multimedia strategy as we offer more content to complement our access business while using our network strength as leverage to expand our customer base.

In this slide, we confirm our guidance of 38.3 billion of core net income for 2013. That captures the highlights of our first half results.

Again, thank you for joining us today and we are now ready to take your questions.

Melissa Vergel de Dios

We will first take questions from those who have joined to the content – operator could you give the instructions?

Question-and-Answer-Session

Operator

(Operator Instructions) Our first question is from Luis Hilado, your line is now open. You may go ahead.

Luis Hilado

Hi good afternoon. Thanks for the call. I had two questions. The first is regarding the ARPU trends in the quarter. It seems like for Smart and Talk n Text it’s flat whether it’s postpaid and prepaid, but there is movement in the Sun Cellular prepaid and postpaid in opposite directions. I just wanted to know if this is a conscious effort to shift the prepaid subscribers of Sun to postpaid and ARPU uplifted postpaid.

Second question is, I noticed the PLDT play on the slide, just wondering at a certain stage you will also put mobile as well as part of that bundled package and last question is if you could give us any update on the CURE frequency auction?

Napolean Nazareno

Hi, Luis, thank you for the questions. I think in case of ARPU, the ARPUs for the first quarter compared to the second graphically stabled. But there are certain adjustments at some sites when it comes to the postpaid ARPU.

Melissa Vergel de Dios

(Inaudible)

Napolean Nazareno

Right now it is not included affiliates becomes a – improved mobile. It is only included in terms of the connected speeds, because right now we have offers Signal – for Signal subscribers to be able to upgrade directly the – what we assign some channels for example CNN HD and all the rest.

On the CURE frequency, I think this is up to – it’s still with the NTC. We are waiting for action on their part, but it is already –

Luis Hilado

Okay, great. Just one follow-up on the triple play, thinking more of would you be able to bundle mobile with the whole package and get a discount for each of the services as a result or it’s more of as you mentioned is putting the front-end of Signal on to the mobile platform.

Napolean Nazareno

We are not there yet when coming to bonding mobile with the fixed. We’ve been looking at our platforms for a combined visibility between the fixed and the wireless subscriber base. But pretty soon, we should be able to do that.

Luis Hilado

Okay, great. Thanks.

Operator

Any follow-up questions, sir?

Luis Hilado

No, that’s all for now.

Operator

Thank you. Our next question is from Mr. Arthur Pineda, your line is now open. You may go ahead.

Arthur Pineda

Thank you for the call. Three questions from me. Firstly on the EBITDA margin, it seems to have softened owing to your postpaid focus. Is it a strategy that you’ll be pursuing for the remainder of the year and moving into 2014? Second question I had is with regard to multimedia, is there any guaranteed off-take for your exclusive partnership with MCA or a growth in margin expectations that we can put in on this one? Last question I had is a kind of media, if we look at PLDT from a two year perspective, where do you see your media contributions versus your traditional service? Is there any investment commitment for media as well that you are putting in? Thank you.

Napolean Nazareno

Right now for the music, it is still you can download free on the (inaudible) free views. There are further commitments as to the amount by which we pay and – but big part actually based on historical limits, based on our value-added services already. As I mentioned earlier, ROB 700 million spent on music over year something in the half of this is already on digital.

Melissa Vergel de Dios

(Inaudible)

Yes, we subsidize our – going to continue as they are because we are seeing new markets for postpaid – smartphone take up and that is going to continue after the rest of the year as we are trying to get our postpaid growing because in the second quarter our net adds on postpaid has been a historic high at 150,000 net adds combined Smart and Sun already. And that is on a base for future revenues. We will continue to be seeding this because we feel that postpaid based on the analysis that we have looked at, it’s now at over half or 54% penetration as far as smartphone services.

Melissa Vergel de Dios

(Inaudible) I think the media component is part of the whole multimedia ecosystem that we are putting together with expected auction be available with the increased data for smartphones. So, at the moment, the investment we have made is in the form of constructions and expect to be signaled especially the – investment in Signal to support the PC. So that’s what we have conferred in the last seven years.

Arthur Pineda

Fine, okay. So if I could just follow-up on the second question on the postpaid focus, I recall in the fact that Sun had a different accounting for subsidies, has that been fully aligned with PLDT i.e. the extent subsidies upfront at this stage?

Melissa Vergel de Dios

For accounting purpose subsidies are aligned with the PLDT Group ever since the acquisition.

Arthur Pineda

Got it. Thank you.

Operator

Any follow-up questions, sir?

Arthur Pineda

No, that’s all. Thank you.

Operator

You are welcome. We will now move to our next question, our next question is from Neeraja Natarajan. Your line is now open. You may go ahead.

Neeraja Natarajan

Hi, thanks very much. My question is, I mean in this first half you are obviously attending well in terms of core net income and obviously we’ve seen margins sort of improve, because you had the manpower reduction. So if you look at in the back half of the year in terms of cost, is a concern more because of the rise in subsidy expenses? Is that the big event to watch for and should it continue at 2Q level or do you think there will be a further step-up? Apologies if I – if this is already asked that’s my first question.

And secondly I guess, we would see Globe’s result which is quite strong. Do you see that as a bit of a mark, they have talked about some of the high end subscribers are turning over to them. Is there any strategy that we are doing to sort of adjust or protect the high-end subscribers? That’s my second question and thirdly, how do you see this MVNO arrangement that Globe has gone ahead with, which is going to launch in the back half of this year. How do you see that sort of impacting any of your segments, if at all? Thank you.

Melissa Vergel de Dios

(Inaudible)

Napolean Nazareno

I think when it comes to subsidies, it will depend on how the market will flow, it’s definitely we will see as a change leading to market for more smartphone data on the postpaid side. As far as the competitive situation is concerned the – exceeding – and that will continue to be sold. But the situation in the music to grow I think both the market growing subscriber base, we are growing after I think. In the postpaid the growing factor and therefore – that’s on update on future moving forward.

Melissa Vergel de Dios

Second question is market growth which was (inaudible) some of our high-end subscribers are showing to the Global subscriber base. Any strategy with respect to…

Napolean Nazareno

Yes, we have strategies, but we would like to keep it for – and we are not seeing any serious migration out of our high-end subscriber base. What we are seeing though is in – some areas our high-end prepaid base are migrating somewhat to our lower corporate pricing. And our own brands are staying within our efforts.

Melissa Vergel de Dios

(Inaudible)

Napolean Nazareno

Our strategy remains there. We have the multi-screen strategy in place already and we have launched – still to grow. And there will be more products that will be coming up in the next few months.

Neeraja Natarajan

Sorry, if I may just come back, you said that you are seeing some of your subscribers moved down to lower price packages, I mean, how are we going to address this? That itself is a risk, right, in terms of…

Napolean Nazareno

I just tell this, part of how the dynamics of the market moving, but what we are doing though is moving towards higher denoms or higher denominations and longer durations as far as market is concerned. And in terms of – our internet services are limited to Smart and which are now upgraded – for us.

Neeraja Natarajan

All right, thanks very much.

Operator

Any follow-up question ma’am?

Neeraja Natarajan

No, that’s it. Thank you.

Operator

(Operator Instructions) Our next question is from Chi Fan. Your line is now open you may go ahead.

Chi Fan

Hi, good afternoon everyone. Thank you for the opportunity to ask the questions. My question will be related to smartphones and your data revenue. And the first thing is what – do you have disclosed some statistics regarding smartphone penetration, may I confirm with you again how do you actually define smartphone in your definition?

And second question is regarding the 2.1 billion revenue from the mobile data would you be able to breakdown for us what’s the percentage of contribution from postpaid in that and if it’s materially postpaid or the portion that’s coming from postpaid, is it mainly from the monthly unlimited plan or what – how the users actually pay for the mobile internet right now?

And the third question is more on the CapEx side. I understand that you provide the CapEx return for FY ’13 anything you can share in terms of what to look at for FY ’14? Should we expect further decline or stabilized asset level? Thank you.

Melissa Vergel de Dios

Definition of smartphone.

Napolean Nazareno

The definition of smartphone, the smartphone is a device that everybody knows for definition, it is as well as OS or an operating system. It is a device where you can download apps for particular – and that’s basically….

Chi Fan

Right, so in that.. so that’s…

Napolean Nazareno

Sorry.

Chi Fan

Does it include like a feature phone can also like Nokia with Symbian operating system and also back…

Napolean Nazareno

(inaudible) from Symbian, I think Symbian 50 and later models that’s how they define. On behalf of the Symbian 50 we are seeing roughly in our network about a little over 6 million of this smartphone based on this definition in our system and roughly the penetration is – we estimate is about 10% overall and on postpaid subscribers it’s about 53%, 54%.

Melissa Vergel de Dios

The second question was on for the 2.1 million mobile data internet revenue, what is the contribution for – subscriber home based subscribers. At the moment we do not show the break-up of that. That’s what we see that in terms of the home based subscribers, there is a high penetration on smartphones obviously and higher for entities with this data revenues among the home based subscribers.

All the postpaid subscribers have the ability to go on a always on – the mid-end data plan to the months or some volume based type of plan. Prepaid subscribers have the option of going either package 5 pesos for 15 minutes or 10 pesos for 20 minutes. They can also go on a limited or that tends to be a little pricing for the prepaid end of the market.

Napolean Nazareno

Our guidance for the CapEx is, I think 29 million for this year was restated. I think initially it was about going into 2014 it was on about the same level. Longer term, we had – I think looking at 17%, 18% of consolidated revenues. As we move into 2014, we will continue to build out the company to be one points, I think what we described at some – and that’s an very important initiative for us.

So, that’s something we will incorporate in 2013, 2014 numbers. But longer term we will continue to build up the fiber network to address the retail subscriber than to provide the wholesale capacity through the network. So slightly higher 2013, 2014 and then what we said 17%, 18% of earnings as we go into 2015 and beyond.

Chi Fan

Right, thank you very much.

Operator

Any follow-up questions, sir?

Chi Fan

No, that’s it. Thank you.

Operator

You are welcome. Our next question is from Rama Maruvada. Your line is now open you may go ahead.

Rama Maruvada

Hi, good afternoon. Three questions from me please. Firstly, with regards to your overall cash OpEx, would you be – it is turning somewhere around 18 billion to 19 billion at the moment per quarter, just wondering how do you – how should we think about this in the longer term in terms of its evolution?

And also with regards to this, could you just provide an update on how you think the Digital acquisition is going in terms of cost savings, especially on the network side and also do you expect to see further reduction in personnel expenses going forward?

So that will be one, number two is on the fixed line side again, looking at the IVD revenues, it has been very volatiles in the past couple of quarters. Just wondering if you could provide some idea of what the basic drivers are and how this should trend going forward?

That will be the second one, third one is really with regards to your tax rates, it seems to be very low in the first half, just wondering what is going to be for this year and what we should assume going forward? Thank you.

Napolean Nazareno

On the tax rate, the – if you look at the recurring revenues it’s at about 20%, 21%, 22% and we are anticipating that that will be the case on the core. Obviously some of the non-recurring nature taxable – some are not. But on the recurring, I think it was 21% 22%.

But they are already even in practice, of the exchange rate, I think it’s in peso spent that will be – the month of either in June on the BPS, the two of our major trends are negatively the IVD traffic moving to wireless and then lastly, services such as site and other services.

So you are right, they are volatile, but the different I think in short to medium term is actually a decline, I think will be about something looking about something in the region of 8% to 10% basis. I think the good thing, if you look at it from the big – the two major items of the legacy revenues such as NOV and the ILD which are respective two businesses are getting significant – less significance than they were a few years ago, I think they are less than 25% of the total.

So, as we see growth robustly across the business, I think it might at 9%. That leg business sustaining fairly stable. The fix is able to effectively absorb the reductions in I think the whole business and so showed some growth. So we are investing excluding interconnect items that we are going to see the 4% with a possibility that 90% weighted as we go into 2014 and 2015.

Melissa Vergel de Dios

The question regarding cost benefits of the Digital acquisition, I think, relating to broadband come back, we have certainly indicated that first half that will take two three years journey in terms of putting together and apply for the network. That has benefited to go all the way to the end of next year.

We continue to look at how your calculation should spec sort of put together. So that’s continuing towards for the revenue generating, go to the network and to the – so there is the network in that respect.

Rama Maruvada

Maybe if I can just clarify in that regard, in terms of the overall OpEx, again are they – should we expect further significant reduction in the cost base or are the attempts to maintain the current cash levels going forward?

Melissa Vergel de Dios

The cost side is just – are coming at fairly low overall decreases levels you can see. So that continuing on the efforts, now it’s first more than how we build a network, activity with respect to the past exercise benefits that we will get on this integration for a period we can maintain the expense growth at a lower provision level.

Rama Maruvada

Okay, thank you very much.

Operator

Any other questions?

Rama Maruvada

No, that’s fine. Thank you.

Operator

Thank you.

Melissa Vergel de Dios

Any other questions operator?

Operator

As of the moment, we don’t have any other questions on queue.

Melissa Vergel de Dios

We’ll take questions from the floor.

Operator

As of the moment, there are no other questions on queue.

Melissa Vergel de Dios

If there are no we will turn the call back to you operator for the replay information.

Operator

Thank you. I would like to give everyone the instant replay information for today’s call. This conference will be available on a 24-hour instant replay starting today daily on through August 20, 2013. Replay information for the CPM call, international caller number, is 852-3018-4302. U.S. toll-free is 1-203-369-4575. Passcode is 8780. Conference leader is Ms. Melissa Vergel de Dios. I will now turn the conference back to PLDT for any additional or closing remarks.

Napolean Nazareno

(inaudible)

Melissa Vergel de Dios

See you on November 5th with our next with our presentation. Thanks for your questions and thank you.

Operator

And that concludes today’s conference. Thank you for your participation. You may disconnect your line in your own time.

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