First Pacific Company Limited

Good afternoon, everyone. Thank you for joining this online briefing to discuss First Pacific's 2023 First Powerful Financial and Operating Results. The results presentation is available on First Pacific's website, www.firstpacific.com, under the Investor Relations Session presentation page. This results briefing is being recorded, and the replay will be available on First Pacific's website in the Investor Relations Session. For participants from the media, please watch the Q&A session. It's open for investors and analysts only. If you would like to raise questions, please contact us when the briefing finishes. Today we have with us our Executive Director, Mr. Chris Yang, our Chief Financial Officer, Mr. Joseph Ng, Associate Directors, Mr. John Ryan and Mr. Stanley Yang, and other senior executives from the head office of First Pacific. Over to you, John, for the presentation.

Thank you, Sarah.

A brief overview of our assets, which I'm sure you're all familiar with. There hasn't been any real change here since the last time we spoke with you back in March earlier this year. Now let's go straight into the numbers. Our recurring profit is up 14%. It's a record high for the interim period. Turnover likewise was a record high. And our contribution from operations also record high. We've received, looking at the cash flow down on the bottom right, our first ever dividend from Pacific Light Power. And our dividend income for the first half of the year was double what it was a year earlier, more than double. The benefit of this to us will be discussed in a bit by our CFO, Joseph Ng. But as you can see from the recurring profit chart on the top right, All our main holdings, Indofood, MPIC, now PLP and PLDT, they all delivered stronger earnings. The head office numbers were pushed down a bit by an increase in net interest expense up by about 40% to almost $35 million. Corporate overheads, I'm sure you'll be glad to hear, were down by about 15%. And recurring profit was a nice round $300 million. Non-recurring gains were down just a bit from the earlier year to $7.2 million. And as you can see, our recurring earnings per share up 15%. And with the stronger numbers, we've felt confident to deliver an interim distribution of 10.5 Hong Kong cents per year. per share. And looking ahead, recurring profit is on track to a third consecutive record high after 21 in 2022. Now, a brief word about our balance sheet. Gross and net debt are little changed from the last time we spoke with you. As ever, our borrowings are unsecured and light on covenants. Our interest coverage ratio is quite high at the end of the half year, at four and a half times. And as was implied by the previous slide, our blended interest cost is up a little bit to 5.3%. Fixed rate borrowings are just over half of the total at $750 million. And if you look at our debt maturity profile in the bottom left, you can see what we've got outstanding and their term. We've got $210 million of bank borrowings maturing next year. and our Treasury team is already in discussions to roll those over. We've only got one bond outstanding, notwithstanding our investment rate credit rating, and that's in 2027. As you can see, it's the blue chart. Now, the interest coverage ratio and dividend income are portrayed in the top right here. There's the four and a half times, up from 3.8 times a year earlier. And there you can see the increase in our dividend income from one half to the next. You can see it's well over double. And the big contribution there, as you can see, is from PLPs. Now, a very quick glance at our gross asset value. The ratios are pretty much steady into who the biggest, followed by PLD, TMP, IC, and the others. Please note that we are now valuing our stake in PLP at $370 million. That's our investment costs, and up from $150 million when we reported our full-year earnings back in March. Now, a very brief word about the MPIC delisting initiative. If you don't know, First Pacific shareholders voted by 99.99% to approve our participation in that delisting. That is underway after MPIC shareholders earlier this month also gave the go-ahead, I think 77% approval rate there with a minuscule opposition and a bunch of abstentions. Now, pro forma, after all the tendered shares are counted up on the 7th of September, the shareholding would look something like what you see on the right-hand side here. We would be just under half of the whole, but that's not terribly material because you've got voting control if you're counting preference shares. New shareholder, Mid-Pacific, a joint venture from Japan, as described in the note. GT Capital would be a little increased as well. And then there's the management investment group led by our chief executive, Manny Pangilin. And we can talk more about this in the Q&A. There's some discussion of this delisting proposal here. But let's move very quick word on ESG matters. The Hong Kong Stock Exchange is introducing a new – Section D in Appendix 27 of the Listing Rules requiring Hong Kong listed shares to follow the new S1 and S2 ESG reporting requirements imposed by the IFRS. That was announced back in late June. We've had extensive discussions with our operating companies, and we feel we'll be able to manage this new reporting requirement when it comes with fiscal 2024.