PLDT Inc.

Kindly note that this briefing is being recorded. A podcast of this event will be available on our website after the call. For today's presentation, we have with us our President, Mr. Al Panjilio, Mr. Annabelle Imchua, CFO and Chief Risk Officer, Mr. Shainesh Vaidwan, President of Voyager Innovations and Bay Maya Fisheries, as well as other members of the PMDT Management Team. At this point, let me turn the floor over to Mr. Panjilio to begin the presentation.

Thank you, Melissa, and good afternoon to everyone. Thank you for joining us today. I'm happy to start this full year 2021 financial operating highlights. I'll go to the first page. Again, I think it was extremely good performance for PLDT in 2001, record-breaking revenues, all-time high at $182.1 billion in revenues. For a growth of 6%, in peso terms, 10.6 billion incremental versus 2020. Annabelle will mention it later, but also an all-time high on EBITDA. Where we ended 2021 at 96.2 billion in EBITDA, 8% growth, or 7.4 billion increase versus 2020, and margins of 52% EBITDA margins. Cornet Income, we ended last year at $30.2 billion, ahead of guidance of $30 billion, 8% growth, or $2.1 billion. And among the three pillars of the business, home grew the most, 24%, a strong year for home, $38.5 billion last year, growing by $9.3 billion in best of terms, ending 2021 at $47.2 billion. Individual ended the year flat despite the major challenges of the lockdowns. Our customers opting to obviously to stay home and opting for a broadband service. So there was a shift in behavior because of the lack of mobility in the country. But having said that, So what were the drivers for the performance last year? Again, very resilient business across the three major pillars. We saw a 1.13 million new fiber subs traditional for last year. Home subscriber base is now at 3 million, an increase of 27%. And if we just focus on fiber revenues alone, it grew by 82%, or $14.9 billion, ending the year on fiber alone at $33 billion last year. For individual, we reached the 1 million mark for 5G, but we will continue to push adoption of 5G. We did grow in market share of 5.9% in fixed wireless, also reaching the 1 million level in terms of subs.

And the focus of... D.C., Cloud, and A2P.

Double-digit growth also versus same period last year. Moving forward, you will hear us more talk about one of the key pillar of transformation is sustainability. Just as an entry for this presentation, but as we move forward, we will have metrics that we will share. But at a high level, today the message here is really aiming for a reduction of 40% in scope 1, scope 2 by 2003. We will continue to show initiatives again for the rest of the year. We will have our baseline numbers and we will show you what our From deployment of carbon fiber towers to fuel technology for our gensets, making sure our data centers implement practices that are sustainable in design, supply, and operations. We have also blocked a record 279,000 illicit content. And we also have our hashtag safe and smart initiatives where we offer relief to about 25,000 families for free calling and charging Wi-Fi stations. As you know, we were badly hit by the typhoon last year, the most destructive storm in South Carolina. 700 kilometers of air fiber impacted by a few collapsed cell towers. 129 sites that had some form of damage. But having said that, I think our network team worked very hard to restore. So we were quick to action. We were the first to restore in a lot of these areas. In Palawan, Serigal City, Camiguin, Gapa, Siargao, Atinaga, Town Trapper. The PLDT, of course, through its PSF, PLDT Smart Foundation, brought much aid to the hardest hit portions of the country, distributed 8,000 relief goods. We have set up 48 levering towers and charging areas. We did distribute 400 sat phones at the onset where power was a problem and not to the end to use. All for one, through government RTIAP, needed SAD phones to be able to communicate with its people. We gave away generators, and we also implemented customer-related appeasement and also rebates for people who have been affected. Next page, please. This is just one sample of many of our employees' efforts in making sure to be able to restore service. PJ here, for one, spent his whole birthday trying to restore services in Palawan. So it showed the Another employee actually walked 50 kilometers just to be able to bring facilities to a base station that needed restoration. So again, showcasing our value of Malasaki. Next page. From a people point of view, it's a massive program on vaccination. I'm happy to report that 99.8% of our employees are now vaccinated and 52% have already received their booster shots. Thank you very much. Thank you very much. We continue to level up our customer experience to our digital platforms, pushing giga life even further. And we have been working very closely with Voyager as they launch Maya Bank by the end of the month, offering exclusive offers to our customer base in smart. We are seeing, since the start of the Alert Level 1 Monday, good results. Thank you very much. Our mission is to continue to lead and inspire Filipinos to create a better tomorrow. So our values that we want to share with everyone and push delivering awesome customer experience. We want to be more agile, fast, better than perfect. We will continue to take care of our people. Malasakit, as I said, it's our value. Collaborate to win and I guess we need to listen and learn internally, not only internally but also to our customers. Thank you very much. Change the way we work. Our ambitions will be bold. We want to be the best in every market that we serve, either it's connectivity, capital markets, or even ICT. We know our markets are changing, customer behavior is changing. We want to remain relevant to them despite the competition and really achieve full potential for the company by thinking differently and embracing this transformation. Really changing the way we work, changing the way we have to simplify the way we work. We need to Take a look at how we can lower a cost to serve. Next page, please. And this is really the vision for 2025. Focusing on five key strategic pillars. And we want to be met. We are building our baseline across all five pillars. We would want to be measured across five pillars. So what first is Customer Staticity, I've been talking about this since 2019, to radically simplify our customer interactions, eliminate the pain points, and really create all digital experiences for our customers. Second is to be the best place to work, simplifying our structure, the use of working, empowering our people, and really improving our culture moving forward. Excellent Interoperations, we want to reset our model, our operating model, streamline our operations and bringing down costs to serve and focusing really on delivering eventually a positive free cash flow for the company. Investing on new areas of growth or profitable new growth areas, grow our core businesses, even adjacencies, where we can create and build new capabilities and As I said earlier, focusing on ESG, doing business with you, how we can sustain our business and measuring ourselves on key ESG metrics and parameters. All these five pillars, again, we will continue to measure, share the performance with you as we progress. Thank you very much. We will continue to have to grow our revenues, sustainable revenue growth for the next few years. We need to expand our margins, improving margins, managing OPEX, decreasing depreciation. and and lastly uh rationalizing your account you've spent so much on complex and Annabel would show you the details of what you've spent but you want to make sure you're able to bring down the levels of complex moving forward and if we can do all this uh this will result into a growth in important income and as i said a measurement of how we are doing would be improving our free cash flow so at this point i'd like to will be over to Annabel for a more detailed discussion on our financials.

Thank you. Thank you, Al. So, as Al mentioned, we saw PLDT hit a record high of $182.1 billion in service revenues last year, notwithstanding it being a year of the Omicron, Typhoon Odette, and Steel Hybrid competition. So, in terms of our business segments, phone led the charge in terms of the revenue growth last If you zero in on the fiber-only subcomponent of home, that actually grew at an even higher and more impressive 82% last year. Individual, notwithstanding all the headwinds in terms of this business, was able to keep the revenue steady at $86.2 billion for whole Thank you very much. The next chart will show you the trajectory of our revenue improvement over the last couple of years. So after having grown 9% in 2020 and 6% in 2021, we have now achieved an all-time high in terms of our service revenues. Next, please. What drove the growth? It has been data broadband businesses that now account for 77% of our overall revenues and increased by a clip of 12% overall. Within that, we saw home broadband increased by 29%, ICT 14%, corporate data 6%, and mobile data as well 6%. Thanks, Charlie. This is the numbers for home revenues over Thank you very much. Thank you very much. Our pool in our home business roughly averaged out at about 1,300 per customer per month. We believe that demand will continue to be strong because of the large numbers of unserved market in this country where overall penetration is still limited to about over 20% compared to regional peers who are at 40% to 50%. So notwithstanding the easing of lockdowns, we believe that demand will continue to be strong because of the change in customer behavior and hybrid work and study arrangements will remain. Next chart. This shows in turn the quarterly performance of our individual business, which ended at $86.2 billion for the year, stable year-on-year. Traffic usage on mobile continues to grow. We see here that in 2021, we saw a 16% increase in data traffic. There are more data users, 42.6 million of our base are regular data users who are consuming something like 7.6 gigabytes a month. So with the easing of the alert situation down to alert level one and the return of mobility, we are poised to benefit from that from a mobile standpoint. And 5G will be the other factor as 5G adoption increases over time. Next slide. For enterprise, as you can see here, the 11.1 billion in Q4 was an all-time high on a quarterly basis. We're pleased to note that fourth quarter was up about 9% year-on-year. For full year, it was up 4%. So that's driven really by higher revenues on our data center co-location business, our cloud revenues, our wireless, A2P, and other corporate applications. And we are... Thank you very much. For international, the challenges remain because of the lack of travel and roaming, but we are able to limit the impact of international with respect to overall performance. We have 78.8 million subscribers that we serve, 71 million on mobile. On broadband, we have about 3 million in fixed broadband, another 1 million on fixed wireless, and another million as well using mobile broadband. Fixed line voice So proud to note that we have exceeded our net ads for the year, and you will see here that in the third and fourth quarter, we were able to ramp up our new connects for Fiverr at over 110,000 average per month. Our goal this year is to even outpace that. Migrations were also picking up towards the end of the year, but we Thank you very much. Thank you.

Next chart, please.

So, on the overall P&L, as Al mentioned, our 96.2 billion of EBITDA last year was an all-time high as well. That was achieved with the growth in revenues and managing our cash flow next increase only about 4%. So, the EBITDA margin was at 52%. Appreciation is, of course, higher because of the higher CAPEX investments that we have put into our network. So, Thank you very much. Next chart, please. Just a bit of commentary on the impact of the typhoon Odette which hit the country in December. This was a Super 5 typhoon and passed through quite a number of major cities and municipalities in the Visayas area. So from an overall P&L impact, our assessment in terms of the impact combination of revenue impact of about P500 million because of the rebates and appeasements and lack of top-up during those periods for the type of affected areas. And then another P350 million approximately for cost of repair and other operating costs. And then P170 million in terms of damaged assets that we had to write off. There are still some additional costs expected in the first two months of 2022, given that we have to continue the repairs and restorations even after year-end 2021. Next chart, please. On an overall reported income basis, the reported income for PLDT in the year 2021 was at $26.4 billion, 9% up or 2.5%. This includes the impact of the equity share of PLDP in the performance of Voyager, which SP will talk about it later, but of course, Voyager is still in the cash-for position. And then there are other items that we detailed out here in terms of the differences between core income and reported income from various one-off items. Next chart. We're also pleased to report that the PLDT Board of Directors approved this morning the final cash dividend of 42 pesos per share, payable April 4th to shareholders and record also March 17th. Together with the interim dividend, which was also at 42 pesos, the combined dividend and at the current share price, the yield is close to 5%. We will obviously continue to work on improving the free cash flow position of the company so that we can continue to support Just on our balance sheet, gearing perspective, we ended the year with 4.5 billion US dollars of net debt, 2.38 times net debt to EBITDA ratio. We'll continue to work on getting that closer to the two times level. On the debt side, pretty well spread out internationally. and something closer to 4%. And PLDT continues to remain at investment grade based on our ratings from both S&P and Goods. Next slide. CAPEX, we did spend within the CAPEX guidance last year. Our initial guidance was 88 to 92 billion. We came in at 89 billion of CAPEX last year. A lot of that, 65 billion went towards the network side and IT side as we completed several initiatives in 2021 for LTE rollout, more force rollout, fibrillation of base stations, migration of copper to fiber, and expansion of our transport and data payload capacities. 17.5 billion went directly to support the new installs that accounted for the Thank you very much. Thank you very much. From a usage standpoint, 5G handsets are about 2% of the overall base, predominantly 4G, 81%, and then 2G and 3G are down to 17% of overall users that we see. So next chart just kind of shows how 5G, while still relatively small from an overall standpoint, does continue to increase smarter and smarter. Now, at this point, let me turn over the presentation to Shailesh, who will talk you through the performance of PayMind.

Thank you, Annabel. So, to remind our analysts, we have two big businesses. We have the enterprise business and we have the consumer business. On the enterprise side of the business, which is the merchant acquiring business, we provide all payments for corporates, Thank you very much. At the same time, on the consumer side of the business, we expanded the number of registered users across our network to 44 million. This is split between our wallet business, where people get their own e-money wallet, and also, given that a number of people are not quite ready for their journey, we have an on-ground network of 63,000 agents, which we expanded through the length and breadth of the country, which allows people who are not ready for the digital journey to walk into one of these locations, Thank you very much. and as part of that, we procured the Maya Bank license from the Central Bank BSP. We were one of the six recipients and after that, the BSP has imposed a moratorium of three years for any further licenses. Also, we want to expand into crypto. Philippines is one of the most prolific users of crypto for buying, selling or for NFTs and we received the virtual asset service provider license from the BSP to be able to launch this service. I have to go to the next slide, please. Talking about an enterprise business, like I said, we've now pretty much the dominant provider of payment services. So whether you think of food stations, you think of quick service restaurants, think of government, think of any everyday category, and the chances are it's Paymaya as the acquirer who's enabling all kinds of payments for those locations. With the introduction of QRPH, we are expanding now to the long tail of MSME merchants and making sure that we process the dominant acquirer and processor for QRPH transactions, the unified QR standard in the Philippines as it rolls out through the course of 2022. On the consumer side of the ground, we continue to add on the wallet side a number of new services and I'll touch upon that. And of course, Converting our on-ground network as a key cash-in, cash-out channel. So even as digital wallets proliferate, one of the key requirements is to be able to add cash into that, given the paucity of ATMs and bank branches outside of some of the key metropolitan centers of the Philippines. So this on-ground network of 63,000 agents is now one of our key assets for allowing customers to cash in and cash out. And as we introduce Maya Bank and launch that through the course of 2022, this becomes and some very important aspect of us being able to provide the full set of financial services. On the Maya Bank side, if you go to the next slide, please, we are targeting to start testing the launch of the bank by the end of this month. We received our license from the BSP only on September 20th last year, and we are looking at being able to launch our first test products before the end of this month. We know that consumers in the Philippines absolutely like the fact that e-wallets are the technology and the convenience and the accessibility of it, including KYC-ing yourself, e-KYC-ing yourself. At the same time, in the Philippines, as per research, the trust that is there in banks because of the way they are regulated, because of the trust of BSP, because of the trust of PDIC Insurance, Bringing the two together really will help us create a really powerful asset for both the consumer and the enterprise side. So from payments, we will now be adding on deposit taking capability, offering credit and lending capabilities, investment capabilities like crypto and insurance. All these will roll out progressively through the course of the coming weeks as we keep testing, adding, hardening the infrastructure to get to a full rollout of the Maya Bank over the coming weeks and months. So that is our plan, our key play for the 2022. and closely with Al and the team across the consumer business, across the retail business, across the home business in really expanding the penetration of products by offering lending products, whether it's for device financing or to be able to provide payment facilitation for the Gigalife app. So that is another key part of our strategy for 2022 as we expand across the full payments plus financial services ecosystem. I'm going to hand this back to Al.

Thank you to everyone for joining us on this online call. In terms of outlook for the year 2022, service revenue growth is anticipated to be mid-single digit growth or very similar to the 6% percentage Thank you very much. Enterprise to register stronger performance under bid-buy services or solutions. Thank you very much. The economy will recover given the now that we're on alert level one. EBITDA will benefit from top line growth and post management that are being instituted starting this year. So we expect EBITDA to actually grow by high single digit in 2022 over 2021. And so we anticipate that EBITDA levels will be north of $100 billion in 2022. TelcoCorp, we're guiding at between $32 to $33 billion, so that's a growth between 8% to 10% for 2022, underpinned by a vast increase in EBITDA, principally because of that. CapEx, we're dropping down to between $76 to $80 billion. Thank you very much. Thank you. So that will help the company achieve positive free cash flows starting 2022. Higher revenues, cost optimization, significant manpower reduction program starting 2022, and of course the sale of the towers will help us achieve that. Our aim is to deleverage back to no more than two times that debt limit up. Maybe even some two times, depending on how much we hold, the tower proceeds to debt deduction. As well, this puts us in a position to pay a special dividend when we announce our interim results. So over and above the regular dividends, irregular interim dividends, which is 60% of core profitability, the intention is to pay a special dividend during the interim results. That's just about it, right? It covers the waterfront for guidance for 2022. Thank you, Melissa.

We're now ready to take your questions. You may ask your questions in either one of these I'll read the first question to present by email.

Can management provide cover on top-line trends? As mobile recovery started to pick up given the sustained easing of restrictions

Let me repeat that. Can management provide color on top-line trends? And has mobile recovery started to pick up given the sustained easing of restrictions? And is the company still providing rebates to its own customers in the first quarter of 2020? That's from Rod of BDO Securities.

I think as MVP indicated, we're seeing mid-single-digit growth for the year. We take a look at our January numbers despite the issues with Omicron and Odette. I think we're on track on our budget. We have given appeasements to our home customers, but that's tapering off also now. We were able to recover them quickly, but on fiber links, it's really just the last mile that's a problem. But we're able to already, we're hoping by April that we will resolve all the restoration issues on fiber. We have given appeasement programs in the past rebates, but that's slowing down also as service is restored.

So we will raise hand from Husseini of UPS. Husseini.

Thank you for the opportunity and congratulations on the good set of numbers. Just a couple of questions from me. First is on the mobile side. So some concerns being raised in 2022 growth. So I just want to understand, like, you know, is it because of consumer spending or is it because the cautiousness is because of the competition from the third operator? That's question number one. The second question is on the fixed broadband growth, the expectation for strong growth. But just want to understand that, you know, don't you see any pressure linked to ARPU on that side, given that, given the strong, means everyone is adding capacity. So is there a concern of ARPUs going into 2022? Thank you very much.

I'll have Jane answer your first question, and then Jeremiah on the second.

Jane.

Hello. Hello. We did see a softening in our... We did monitor the activities of our competitors, but primarily we Thank you.

I want to understand that going into 2022 what should be the factors for the relative cautiousness on wireless growth? Is it competition or is it that you still see some softness in consumer spending?

There's still quite a lot of uncertainties, right? January was actually a close start for us because we didn't expect that the Omicron surge will stretch into January and will result in the alert levels that were called all the way through February. But the first few days of March are showing very healthy growth trends. We're seeing the trend, particularly for today, even significantly higher comparing it to seven days ago and 28 days ago. So we're very optimistic, we're very cautiously optimistic, but signs are there that as soon as mobility improves and it is improving, and as soon as the economy improves, then we should be able to bring back the business into a healthier growth trajectory.

So from the competition standpoint, you are not very much concerned, is that right?

We are monitoring them. We do respect the two competitors, Ito and Globe, but we want to make sure that our subscribers see value to the brand that we offer. We're very confident in this service that we sell. We have a very strong brand. We do have a competitive advantage when it comes to our network. We still offer the fastest LP and data network and constantly review the offers that we to make sure that we continue to create value for our customers amidst a highly competitive environment.

Understood.

Thank you.

Jeremiah. It's Jeremiah here. I might pick up your second question, which was around fixed broadband. And if I understand your question correctly, it was around the expectation of pressure on our food. Is that correct?

Yes, correct. Yeah.

So the short answer is we are anticipating some pressure from an ARPU perspective. I think that's going to be expected when you look at some of the pricing moves in the market and increased competition. We do have many initiatives underway. We are prepared to be able to meet that pressure and ensure that we're able to mitigate that risk as much as possible. What I can share with you is what we have seen so far is we've not only been able to hold ARPU, but we have actually been able Thank you very much. Thank you very much.

Is there a risk of, you know, opening up of tower and, you know, giving access to the competitor? And what kind of rental lease back we are looking in the Philippines?

Yeah, I think the first question maybe Annabel can take the second one.

I think the government came up with a policy to Actually, we have a common tower implementation in the country. So I think that competitive advantage of having your own towers is slowly disappearing. In fact, we know our competitors have expanded their tower base by working with common towers. So I think it's not going to be an issue anymore in terms of competition. And plus the fact that what we are engaging in terms of this sale and lease back, it's only 50% of our existing towers. So it's really, we feel that it's not going to impact anymore our tower strategy.

If I understand the question correctly, I guess today when we own our towers, We, of course, have certain running OPEX numbers, right? Basically, the rental you pay the landowner, the electricity, the security costs, the running maintenance costs, et cetera, et cetera. So when you do these, Thank you very much. Running OPEX into the rental payment streams that we give the tower companies. That's the construct under which we asked for them to essentially name what price they are willing to pay upfront for the sale of those towers. Did I answer your question correctly?

Yes, Annabel, so if I understand correctly that, you know, the maintenance and the landless cost will be, you know, you will save on that cost and in turn you will pay lease rentals to the tower co and that will be equal to the, all right, this is great. Thanks for the comment.

Pass-through will be the electricity expense, that one will be a pass-through.

Understood. This is great. Thanks for all the comment. Thank you.

There's a hand raised by Arthur Pineda of Citi. Arthur, you can unmute your mic.

Hi, thanks for the opportunity. Three questions, please. Firstly, on Voyager, are you able to share what your targets are for the digital bank? How does this impact its trajectory on profitability and fundraising? Second question I had is with regard to 5G targets and broadband deployment targets. Are you able to share details on this? It also seems that your competitor, Ditto, launched 5G FWA option. Do you see this as a viable opportunity for your broadband deployment, at least as a beachhead until you're rolling out on your fiber? Last question I have is with regard to the balance sheet. You've mentioned potential for special dividends following the power sale. What is the philosophy behind the gearing? Because it seems to be still elevated at around 2.4 times. And presumably, if you sell the powers, you'll have to book significant lease life with the fees as well. Thank you.

On the first point on YGR, Arthur, With the launch of the bank, what we want to do is use the data and the customer base that we have built on the payment side of the company and really monetize the higher margin products around lending in particular. And using the model of the bank that helps us both in terms of the brand, the anchoring of that, the trust that its credibility carries, but also a very efficient way of deploying the balance sheet because we will also be taking deposits Thank you very much. Thank you. On the second part, as part of our expansion into the bank, we are talking to our existing investors and also as one of the foremost fintechs in the Philippines, we are constantly being reached out by potential investors. So we are talking about additional capital that we will be needing as we roll out the bank. We will have more details. When we have more details, we will share that with you. As regards to the point on targets, For us, as we said, we have a very large customer base today of about 44 million registered users. We have a large enterprise base that we can access today from our business plus along with our close partnership with Smart and PLDT. And at this stage, really, for us, it is going out to that customer base to provide more and more wallet, grow our wallet business, but at the same time, Thank you.

Allow me to answer your question on 5G. We've actually been pushing the 5G adoption of our subscribers, both on the mobile wireless side and the wireless broadband side. And when I refer to wireless broadband, I refer to both the pocket Wi-Fi and the fixed wireless access devices. In 2021, we have successfully grown our 5G mobile subscriber base to more than 1 million, and we're looking at growing that to more than double this year. In terms of 5G innovations, I'd like to think that we are ahead. We were the first ones to launch 5G service commercially, the first ones to make it available as a 5G plan on post-fade. We were also ahead in launching the first 5G pocket Wi-Fi and in fact ahead of Tito in launching the first 5G fixed wireless access device. We did launch that service as a prepaid service in November of 2021. We are looking to launching the postpaid version of our 5G FWA service in the coming two months, the next two months.

All the different types of technologies to serve customers for the home. As Jane mentioned, we have already deployed some of the fixed wireless 5G devices. We're also looking at opportunities to potentially use them, and we have actually used it in certain areas as an insurance step as we connect customers up to Fiverr. Ultimately, we do provide our customers with the choice to Thanks.

Are there any rollout targets in terms of number of ports to be rolled out in 2022?

Yes. So the target we have that we've shared is 1.7 million ports for 2022. I will probably add to that is a real focus is really around our net ads position and making sure that we serve as many of our customers as We have a look at our performance over 2021, and I think after we've had a couple of these conversations before, we've actually been able to monetize a lot of our investments in the fixed space quite well, but we see utilization actually sitting quite high. So whilst the port count rollout for 2022 is actually still continuing the momentum with 1.7 million for the year, we will ensure that the momentum and growth in the home business is continuing to be Let me take the Towers question. Let me start first with the strategic backdrop to all of this.

First of all, as Al mentioned, the government encouraged the entry of common towers in the Philippines. We started by engaging with the tower companies, first of all, with respect to our new build requirements. So instead of building on our own, we engaged the tower companies so that that effectively The second step of our engagement is this current transaction that we're talking about, the sale of roughly about $6,000. Thank you very much. will be used to pay down our debt. As indicated, we would want to bring down our leverage back to the two times it's not better. And the other part of it is we will also still deploy some portion of the money that we receive by way of rewarding our shareholders with a special dividend. So getting to your specific question in terms of the Thank you very much. From a rent perspective, the lease liability that we have, what we're trying to achieve is effectively something that equalizes what we would have spent anyway by way of expenses running OPEX in the normal course, right? The accounting, I reckon, is a bit different because in that situation, we don't have to recognize a liability for all of those OPEX. But once you do a sale and lease back, there is a difference in terms of the accounting by way of the under-balance sheet side. But for me, there's no real difference other than the accounting in the sense that I would have to pay those expenses anyway on a running basis. It's just that in the lease back, Transactions, it's crystallized in my balance sheet. So that's kind of the discussion we've had about the accounting impact from the sale and expat. From a cash perspective, it's really in a way no different, but we do get a significant upfront monetization that we can to help pay down debt, reduce our interest expense, and do other things to improve the balance sheet position of the company. Just to also what Al said, part of the arrangements that we have with the tower companies, obviously from the tower company, their perspective is they would... Thank you very much. Thank you very much. and by then we can give you further flavor in terms of the specifics of the arrangements that we have.

Great here. Thank you very much. Thank you, Arthur.

The next raise hand is from Rachel of Maybank. Rachel, you may unmute your mic.

Hi. Hi, everyone. So I'm Congratulations on the results. So just two short questions for me. First one, could you share with us some update on your agreement with Telesat, which is the low Earth orbit satellite? So when are you expecting this to start being commercially available? And when do you expect this to start? contribute largely to your income. And the second question, I might have missed it earlier. I'm just curious how much percent restoration are you in in Visayas and Mindanao after the typhoon Odette?

I'll have Mar answer both questions. Good afternoon. We tested the low Earth orbit together with Telesat in February 11 to February 19. We were able to achieve Thank you very much. This is a very interesting scenario for us because now we have tested that this will work and we can go into the rural areas and provide high-speed data. At this point, we are still in the testing stage and we will just update you when it will be commercially available. On the installation, there are certain parts, for example, Samarlete, Panay, Negros, that's already 100% restored. And parts of Cebu, Almost 80% restored. Our main focus now is Surigao. It's still about 30% restored. So what we're seeing is by April, we will be fully restored all the circuits. But we will go progressively, starting from Cebu, which is already about 80% restored.

Do you have a sort of estimate as to how much this will cost in terms of repairs and main repairs, specifically?

Yes, I think it was reported by Annabel earlier, it's about 1.1 billion.

I'm sorry, for the remaining Surigao and Cebu.

So the 1 billion I indicated earlier was the impact that we booked last year. So for the first quarter, additional repairs, restoration costs may be somewhere in the 500 million to 600 million area. Thank you very much.

Next questions were emailed by John of PNB. Can you provide more color on the company's plan to rationalize CAPEX? How will this pan out in the next several years and in the long term? And which segments will see a reduction in CAPEX in mind?

So as indicated in terms of our First of all, we did spend $89 billion last year and $518 billion over the last 10 years. So that's huge investments we've made in terms of our infrastructure in order to ensure the quality of our service and to serve our customers very well. So as we look into the This year, our guidance is for 76 to 80 billion, and we believe that we have a chance to ramp down our topics to somewhere below the Thank you very much. Thank you very much. Skimp on that should the demand start picking up. But broadly in terms of our direction, financially speaking, we would have to ensure that the company delivers positive free cash flow. And by that, we have to always ensure that our EBITDA will be more than enough to cover our CAPEX as well as our interest expense, working capital requirements, and at the end of the day, Thank you. Thank you. Thank you.

The next set of questions are from Sherwin and they're related to Voyager.

We are not positive on the net income side.

Given we have many different businesses, we have the merchant acquiring business, which is a very different kind of business versus the water business versus the on-ground. So they all have different profiles of revenue and profitability. What we are making sure is that each of the businesses' unit economics are aligning towards a sustainable business and then continue to invest in terms of growth of the business, which on a go-forward basis is sustainable. So we did have, in the course of 2021, one of the key metrics for us of success was to get to positive contribution profits so that we can, our unit economics are stable and are sustainable on a long-term basis, and we did achieve that milestone. And then we will continue as we go forward. Now we do have investments at this stage as we launch Maya Bank in particular. You will appreciate that that will take in a significant amount of OpEx and CapEx from us through the course of 2022 and 2023. But then thereafter, the creation of margin that will come from providing high margin products and services with an efficient balance sheet will help us to get towards As far as the DTP targets are concerned, again, coming back to the question of our point of DTP profile is extremely different. A merchant business where day in, day out we're processing Visa, MasterCard, Domestic Debit, Banked In transactions for, let's say, a pharmacy like Mercury Drug has a very different profile than a DTP for a wallet. So for us, you know, it is not a single report. It's DTP numbers that we share. For us, it is really different profiles of the current DTP versus some The next set of questions are for our data center business. This is from Germán de la Paz of Habaco Securities.

are not very familiar with data centers. Can you please briefly discuss what it is, its purpose, and why the growing investment in increasing?

So thanks very much for that, Herman. So think of a data center as a key part of the digital ecosystem. And what's driving the growth in data centers now is everything that requires compute, which can be cloud, which is the main theme for the enterprises that transform digitally during the pandemic. and content also drives data center expansion. For example, the explosion of traffic on TikTok, all of that content has to be stored somewhere and you normally have a better user experience if you cache that content somewhere and that content is usually cached in a data center. So both the explosion and the demand from an enterprise perspective and having a nation of Philippines with a high digital Thank you very much. Investments in our current 10 data centers. Plus, we are very excited to launch our 11th data center, which will ground-break very, very soon.

The next question comes from Rod of BDO Securities. Does management expect to maintain EBITDA margins at current levels?

Yes, I think we're even trying to improve that further in terms of margin. Maybe for 54% margin for 2022. As MVP in Germany indicated, over a hundred million.

Finally from Rod, is Voyager looking to have additional funding rounds this year? Can management provide insights on the potential incremental sales contribution of Maya Bank to pay Maya?

Yes, we will be having incremental funding rounds. That is to fund the expansion of the overall Voyager business, including the Maya Bank. At this stage, as I mentioned, we have a very rich base on the payment side, not only in terms of the registered customer base, but on the MSME side and also the data set that we have acquired on the payment side. And for Maya Bank, really, that becomes an asset for it to look at to provide lending on the back of those data assets to that customer base. and many more. So those are the pieces that we'll be adding on and adding towards both in terms of products use cases. At this stage, we are not sharing further details in terms of numbers.

Once you turn the floor over to Mr. Pangilinan.

Again, thank you for joining us this afternoon on this online call with respect to our four-year 2021 results. And we look forward to speaking with you again when we release early May. Hopefully, some of you in person at the new media room here at

That concludes today's meeting. As always, should you have any further questions or clarifications, please feel free to reach out to P&P Investor Relations. Thank you for your participation. Stay safe.