PLDT Inc.

Good afternoon and thank you for joining us today to discuss the company's financial and operating results for the first half of 2023. A copy of today's presentation is posted on our website. For those who have not been able to do so, you may download the presentation from the Investor Relations section of our website at www.pldt.com. Kindly note that this briefing is being recorded. A podcast of this event will be available on our website after the call. QR codes for the presentation, the MDNA, the financial statements, as well as the podcast are on the screen and in the confirmation notices emailed to you. For today's presentation, we have with us our Chairman, Mr. Manny Pangilinan, Mr. Al Panlilio, our President and CEO, Mr. Danny Yu, our Chief Financial Officer and Chief Risk Officer, Attorney Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel, Shailesh Baidwan, President of Maya Philippines and Co-Founder of Maya Bank, as well as other members of the PLDT Management Team. At this point, let me turn the floor over to Mr. Panlilio to begin the presentations.

Thank you, Melissa. Good afternoon, Chairman. Good afternoon. Good afternoon, our analyst friends here today, here in the hotel and online. Thank you for being here. Happy to report the first semester performance of PLDT-SMART. I just want to start by saying that I guess all the efforts that we've been doing as a company very proud to say in this chart that we will reaffirm our top position for brand value and sustainability perception value. That's critical because brand is always critical in the way we run business and trusting, it shows me a big trust in the brand and in the company that we have. So most valuable brand at 2.6 billion, that's up 2% actually from last year as done by brand finance and the highest number one highest sustainability perception value with all the sustainability initiatives that we have been doing all this time so again i think core to our business i'm happy to report that we have been awarded as the basically we are the undisputed fastest integrated network both smart and plet were recognized by ukla This happened about two weeks ago, three weeks ago here. They came over here. They did say that fixed broadband has been a leader for five years in this country. So that's a feat, I think, that has not been done by any entity, for sure in the Philippines, but I think even globally. Then also a feat that we achieved was SMART was rewarded with the best mobile network for three consecutive semesters. And I think that's also a feat according to UCLA. So very proud of that. So as we went through the year and we were able to reinforce even more our core infrastructure, homes passed now is up by 6%. We have 17.2 million homes that we passed, and we continue to obviously expand our fiber infrastructure. footprint up 4% compared to last year. And next page, please. Because of all this, I think it is still a solid performance for the first half. Obviously, we can do better on revenues, only growing at 1%. But I think we have a healthy bottom line. Telco Core at 17.6 billion, 3% up versus last year. And EBITDA, 52.1 billion, which is not only a semester high, but also a quarterly high in terms of EBITDA. And we're able to improve also our margin from 52% to 53% EBITDA margin. So our pillars remain to be focused on strengthening the businesses, the three pillars, but also driving steady growth. Individual, trying to solidify strength in key segments and services. I think what has happened, individuals were able to reverse the negative trend for individual and has been showing growth quarter on quarter, seven quarter higher than the first quarter. So their data revenue as of the first semester is up by 4%. Traffic is up 15%. Home continues to lead in the market despite the challenges, up 3% on fixed revenue, which includes all the legacy revenues. But if you just take a look at Fiber, It's still growing at the double-digit clip at 11%. And for enterprise, elevating companies by enabling transformation, and that's the focus for both enterprise and SMEs. Healthy growth, both on data center co-location and cloud. And I think we will continue to push this as we speak, as this has been the focus the past few months. We also obviously embed ESG in our company's DNA. We have a lot of initiatives across environment, social governance initiatives. For example, in environment, we have an e-waste program where we are disposing of old cell phones with lithium batteries. And I think proper disposal is what we intend to do and to make sure that we're able to do that responsibly. And also with social, a lot of diversity, inclusive, um advocacies that we that we cut across and of course our pld smart foundation continues to be active in across um pillars of education obviously disaster response always has been key not only for psf but for the entire mvp group and special projects in particular for example in this case philippine navy but all the other programs like school in the bag and the like are actually still going on. And just recently, next page please, again PLDT and the MPP group was involved in the response to the victims of Typhoon Egay. We sent relief packs. In fact, today there's a medical mission that's already working or is already in Ilocos Norte, not only Ilocos Norte, but also Bulacan and Pampanga. as these are a lot of victims of the recent rains. So just to say that, before I pass on the mic to Danny, just to say that we are pushing to still remain strong at 95, and we will plot out some growth initiatives in the next few months to ensure that we become resilient and also remain resilient until hopefully we can also, you know, we're planning out for 100 years in five years now.

so danny uh good afternoon i'll be presenting the financial and operating highlights for the first semester of 23. service revenues for the first semester of 2023 rose by one percent to 94.5 billion opex including subsidies and provisions declined by two percent to 42.4 billion EBITDA grew by 3% to $52.1 billion, an all-time semestral high. EBITDA margin improved to 53% from last year's 52%. Telco core income, excluding the impact of asset sales and Voyager, rose to $17.6 billion, up 3% from last year. On segment basis... Home continued to be the main driver of growth with a 3% rise in revenue to 30.1 billion. Fiber-only revenues grew 11% to 25.7 billion. Our enterprise business grew by 2% to 23.2 billion. Our individual business remains stable year-on-year with revenues of 40.2 billion despite the absence of election-related benefits in 2022. Allow me now to go through the segments in greater detail. Home broadband revenues grew by 3%. Fiber revenues, which account for 85%, of the total home revenues rose 11%. The home broadband market remains underpenetrated, with unserved demand more at the lower market segments, thus more sensitive to price and inflation. Home ARPU is respectable at 1,488, Fibernet ads for the first six months of the year stood at 123,000. PLET's competitive advantages remain to be our superior network, strong brand equity, a portfolio of products at different price points using varied fixed and wireless technologies. Next, please. Data and ICT remain key drivers of our enterprise business, which was up by 2% to $23.2 billion from the same period last year. Corporate data rose 7% from higher fiber, managed IT, and IGATE revenues. EPLT ICT recorded 13% improvement in revenues, mainly from data center and cloud services. PLDT Global, on the other hand, grew 31% from IPLCs, data center, cross-connect, and carrier-hubbing. Opportunities for growth in enterprise will come from hyperscale data center business and increased focus on digital transformation by corporates, SMEs, and government. Next page. The capacity utilization of our existing 10 data centers stands at 71% versus practical capacity of 80%. Our 11 data center in Santa Rosa, Laguna is expected to go live in the first semester of next year. Next revenues for our individual business remains stable year on year, with the second quarter registering a 3% rise versus the first quarter. This was supported by a 2% increase in prepaid and a 7% increase in postpaid. Mobile data revenues were higher by 4% at $34.5 billion year-on-year, with active data users rising by 2%. Compared with the full year 2022, data usage per sub and data traffic continued to register improvements of 14% and 15% respectively. After the deadline for SIM registration on July 25 and the five-day extension, 52.5 million SMART and TNT subscribers had registered, representing about 99% of our active subscriber base and representing about 96% of revenues. To make up for the potential revenue shortfall, we will accelerate our efforts to optimize revenues and continue to make available great value promo offers supported by network expansion and superior customer experience. Thus, we expect the positive momentum in the first half to be sustained in the second half of the year. In the first half of 2023, 83% of consolidated service revenues were from data and broadband. By service type, mobile data grew 2% year-on-year, while home broadband and corporate data rose by 5% and 7% respectively. ICT revenues were 13% higher, which included an 11% rise in data service revenues. Consolidated EBITDA for the first semester hit an all-time high of 52.1 billion, up 3% or 1.6 billion compared with the same period last year. This was a result of the 900 million increase in revenues and an 800 million reduction in OPEX. Telco core for the first six months of the year rose 3% to 17.6 billion from last year. Higher EBITDA and lower depreciation fully offset increases in financing costs and income tax provision. On reported basis, PLDT income rose 10% to 18.6 billion, higher by 1.1 billion year-on-year. This was mainly from the gain of tower sales, forex and derivative gains, partly offset by MRP expenses. Last year, the company recorded a $7.8 billion gain from prescription of preferred shares redemption liability MRP expenses of $4.6 billion. Note that our share in Voyager losses stood at $1.2 billion, lower than last year's $1.6 billion. Today, the Board of Directors approved the payout of an interim cash dividend of 49 per share, representing a 60% payout of all of our first half telco core income per share of 81. Record date is August 17, with a payout date set for September 1. PLDT's balance sheet remains strong with net debt to EBITDA of 2.48 times as of June. We expect to reduce with the receipt of tower sales proceeds in the second half of the year. Gross debt amounted to $270.3 billion, of which 15% are dollar denominated and 5% unhedged. Interest costs for the first semester stood at 4.32%, while the average life of debt is 6.7 years. Total CAPEX for the first semester amounted to $40.8 billion, consisting of network and IT CAPEX of $34 billion and business CAPEX of $4.2 billion. Included in the CAPEX spend are investment in capacity to drive revenue growth and support continuing rise in network traffic as well as the construction of our Levin Data Center, among other projects. In line with our objective of bringing down CAPEX and aiming for positive free cash flow, CAPEX intensity for the first six months of 2023 has moderated to 41% from last year's 48%. In addition, the CAPEX of 40.8 billion is 11.3 billion lower than EBITDA for the period of 52.1 billion. The next page shows the usual network highlights. On the fixed network, we passed 17.2 million homes and cover 18,000 barangays, representing 43% of the total barangays in the Philippines. Total fiber ports stood at 6.1 million, excluding VDDSL of around 1 million. Utilization of these ports remain high as we carefully rationalize the rollout of new ports. PLDT's total fiber footprint remains unparalleled with a total of over 1.1 million kilometers. The population coverage of our 3G, 4G, 5G wireless network stands at 97%, about 83% of the total handsets on the network are LTE. The last page shows the number of unique 5G devices and 5G traffic increasing from end of 2022. As part of our network optimization to realize operational capex and spectrum efficiencies, we reduced the number of our 5G base stations from the end of 2022. Nevertheless, 5G speeds remain faster than the competition based on OCLA speed tests.

I will now turn you over to our chairman for the guidance.

Thank you, Danny. Good afternoon, everyone. So we launched Maya Bank about 12 months back and put it at the heart of our payment ecosystem. And we've had fantastic response to the launch of the bank. And I'll share some of the statistics on that, along with, of course, recognition that we have got amongst not just the peers in Philippines, but globally. The launch of Maya Bank and deepening of financial services has, of course, helped us in the consumer business, where by virtue of having a single unified app, we are seeing the performance in terms of customers using us for multiple use cases, and the app continues to be rated the best finance app. And on the other side of the payments where we power enterprises to accept Visa, MasterCard, Banknet, QRPH, that business continues to grow in strength day by day. Today, we process more than 50% of all Visa, MasterCard, QRPH transactions in the Philippines. On the next slide, as I mentioned, our plan always was to launch an all-in-one digital banking solution, whether you're a consumer or whether you're an SME. On the consumer side of the house, we've already introduced saving products, like the Personal Goals and Maya Saving, high-engagement banking, and we launched Maya Credit, and we'll be introducing our Buy Now, Pay Later, which is already in test mode. And on the SME side, I'll talk in a minute, where on the back of providing Enabling them to accept payments from all kinds of digital means, we are now adding on other services to allow them to settle that money into a business deposit and on the back of that provide working capital loans. And of course, all of this underpinned by a payment network. On the next slide, if I can just give some color on the digital banking progress that we made at Maya. So the numbers as of first half, we have over 2.3 million depositors who have placed 25 billion pesos worth of deposit with us. And we've been able to disperse over 10 billion pesos worth of loans to our customers. And if you look at the statistics as published by the BSP as of end of first quarter, as of end March, the charts below the green is Maya's share as a percentage of the total share among the six digital banks. So I share 61% of total accounts, 71% of the total depositors, and 46% of the balances. Of course, we were the last one to receive the digital bank and the pretty much first one out of the door. This pie is expanding rapidly as the other banks continue to grow and launch new products. But our push, of course, will continue to make sure we keep a leadership position in this space with new innovative products. So as I mentioned, on the consumer side of the house, that was our first port of call where we were off to the races by providing services. Our next area where we are pushing on the next slide, please, is on the SME side of the house. So we've launched a bundle for this extremely large and important segment and deeply underserved segment in the Philippines, our 1-2-3 Grow bundle. What that allows you is to accept all forms of payments. So you can digitize your payments, which is number one. On the back of that, you can connect that to your Maya business deposit account where you earn interest rate. You can pay salaries of your employees. You can pay your suppliers through that bank account. And as we see the transactions at your end, over a course of 90 days, we can start lending you working capital on the back of that. This is our next thrust area. Even as we made good progress in the consumer side and continue to push, our next area, port of call, is really growing our SME business. And with that I will hand you over to the chairman on the guidance.

So I guess this is the outlook, so I just read through this in terms of services revenue growth. The outlook is low single digit growth for the full year. EBITDA is quite similar. Low single digit growth for the full year. Telco core is a range of 33.5 to 34 billion anticipated for the full year. CapEx between 80 to 85 billion. And let's focus on deleveraging. I think you saw the net debt to EBITDA ratio as of June 30th being 2.48. We should anticipate that that should drop to around 2.3 by year end, in part because of healthier EBITDA for the year and proceeds from the tar sales for balance of the year. Thank you.

So we're now ready to take your questions. For those online, you may type your questions in the Q&A box in the upper right side of the screen. You may also click the raise hand option and wait for me to call your name before you unmute your microphone. You may also send your questions via email to PLDT underscore IR underscore center at PLDT.com.ph. Don't forget to indicate your name and company name so we can get back to you for any additional information you may need. Allow me to take questions on the floor first before we go to those online. Anyone just raise your hand. No questions, so let's go to the questions that we received online. There's a question from CLSA Derek. There are three questions, so we'll start with the first one. What pulled down the growth in enterprise revenues when ICT revenues rose 13% year on year? I guess that question goes out to Mitch.

Thank you, Melissa. So we actually grew 13% in the first half, but that was pulled down by the decline of legacy services like our voice services. and discontinued services. Like, for example, the Department of Education load that we provide to all the teachers nationwide. And due to the face-to-face learning, they stop already the service. But all in all, we still grew by $600 million in the first half, bringing our revenues to $23.2 billion.

The next question from Derek is, can you give us updates on the Sky Cable acquisition?

We're still awaiting the approval of the PCC for the transaction. So I think there's a scheduled meeting sometime next week so that we can settle any outstanding issues with the PCC. But we've submitted a lot of documents that they requested. So that's the only thing basically that's outstanding, I believe, at this point in time.

The next question and the last question from Derek. For Maya, the loan book has tripled year to date. What are the names like now and is there a new timeline for profitability?

What was the first one, Melissa?

For Maya, the loan book has more than tripled year-to-date. What are the NIMS like now, and is there a new timeline for profitability? The NIMS?

Yeah, so at this stage, you know, We are very pleased with the way the loan book is performing. As you know, this was first we started with our existing customers for whom we had rich data on their transaction history and using our internally developed AI credit scoring models. We've been disbursing them loans and we're seeing over 80% of them coming back month on month for repeat So the NIMS, I won't be able to share the exact numbers, but they're extremely low. In fact, our margins are very, very healthy on the loan book. The idea is to keep expanding and adding newer products. Our first product is a short tenor line of credit. We are adding now on top of that installment loans and expanding to other segments like the SME. As regards the profitability, absolutely. The whole plan of introducing products like the loans products, these are high margin products. They help us to deepen the customer relationship. And we see that the usage of the loan customers, not just on the loan side, but then they use us for all the payments and other use cases. So we make a lot more ARPU per customer once they start taking loans from us. So the idea is as we expand the loan book to help us create higher margin products to push towards profitability, already all our businesses are segmented beta positive. Now our push is towards group beta profitability, which we are aiming for the second half of 2024.

Any questions from the floor before we take more from the online participants? If there are none, the next set of questions are from Rainier Yu of Abaco Securities. Were there any reversals in asset impairment in the second quarter, and what is the nature of it?

There's none.

The second question, given the slight sequential decline in quarter two service revenues, where do you expect the bottom line growth to come from moving forward? Given the slight sequential decline in second quarter service revenues, where do you expect bottom line growth to come from moving forward?

Well, I think the target for us is higher in the second half. as we expect a lot of the long cycle contracts, for example, or contracts with enterprise. We expect that to happen in the second half. We're also seeing a positive trend in wireless that has grown from first quarter to second quarter. 3%, and I believe that growth will continue in the second half. And I think for home, showing 11% growth in fiber, that will remain to be the focus on revenues for home. So just a bit of catch-up for home installation as we are able to roll out more ports in Greenfield, and that's also supposed to happen in the second half.

There's a raised hand from JP of JP Morgan. You may unmute your mic.

Am I audible? Hi.

Hi, am I audible?

Yeah, we can hear you.

Yeah, so my first question is on the increase in finance costs around 20%. So what is really driving this? on the accretion of lease liabilities arising from our sales okay got it and the other thing is are there any one of course that are impacting the EBITDA um and also if you could share the accelerated depreciation that's recorded in second quarter could you repeat your question you were saying if there are any one of costs impacting EBITDA after that yeah that Yeah, the second part was, is there any accelerated depreciation that is recorded in the second quarter?

For the second quarter, there's none. There's no accelerated depreciation for the second quarter. What was your first question? Again, sorry, I didn't get it.

Any one of... Oh, yeah.

Well, the only non-recurring items I think I mentioned earlier is the gain on sale of Stratosphere. That's around $3 billion. then partly offset by the MRP costs of around 1.8. There was also a gain on forex hedging and derivatives of around 1.2 billion. That's for the first semester.

Okay, but would the gain on sale of stratosphere impact the EBITDA?

Yes, in a sense that with stratosphere, there will be a reduction in depreciation, right? But there's also an increase in financing costs arising from the accretion of lease liabilities. Is that your question?

No, I actually meant if anything that is impacting the operating expenses.

Whether stratosphere impacts operating expenses, the sale of towers impacts operating expenses. Is that your question?

Yes. Yeah.

Do you have any other follow-up questions? No, that's it. Thank you. Thank you. Hosseini, you have your hand raised.

Yeah. Okay. Hi. Good afternoon, and thanks for the call, and thanks for the opportunity. Several questions from me. First is on guidance. Now, as the revenue, sorry, the EBITDA growth guidance is lowered from mid to low single digit i just wanted to understand what is driving then the lift in code telco you know net income guidance uh the second question is on the end on the mobile side uh i see uh that uh the guidance for the mobile in the second half uh is or the The outlook in second half is better than the first half. So what is driving that? Are we seeing any price increase efforts in the market? And how are your competitors, especially the new player, responding to that? And on the enterprise side, I read in the press release, VLDT is going for the 12th data center. So just wanted to understand that are we already seeing customer traction for the 11th data center? And are there any plans to monetize data center in the coming years? Thank you.

The first question's on the EBIT guidance from mid to low.

Well, we're expecting better revenues in the second semester, combined with reduction of operating expenses. So that will drive EBITDA for the full year of 2023.

So Francis on the mobile, the second question is the second half outlook looking better than what it was in the first?

Okay. For the second half, there are a few factors that we're looking at. That's why we're more optimistic. The first one, during the first half, because of SIM registration, we have seen our churn rates reduced by around as much as 35%. So we expect that to continue in the second half, second semester. We've also seen our ARPU grow by at least 7.5%, also because we're getting more quality subscribers because of SIM registration. And we did a lot of revenue optimization initiatives to maximize the revenue for subscribers. So expect that to continue in the second semester. Third point, we're going to, to further invest on and improving our network experience that's going to happen, that's resuming in the second semester. So we expect some revenue definitely to come from that one. And lastly, I think there's an opportunity now to further drive activation because not only did we lose or we have unregistered subs, more so from our competition. So there's a big sea of REMNAT unregistered subs in the next few months. And finally, if I may add, from a macro perspective, the inflation is also, the outlook, the forecast of the inflation is much better as compared to the same period last year, and even better than the first semester. So those are the key pieces why we're more confident in the second half.

Thanks, Francis. Maybe if I can just have one follow-up over here. So based on all the points you enumerated, is the Growth in second half will be driven by market share or you are of the view that the oral industry will grow at a healthy pace?

I think a lot of it will be driven by maximizing the revenue per subscriber from our end. Because of same registration, I think driving stealing sub share. uh will be more challenging from both parties from both players so i think the key to driving the further group let's say we're not going to still share because i guess i think that's where the network experience would come in at the end of the day consumers choose the better tell with a better network experience but i think a huge part of the growth now unlike before where we rely a lot on driving activation would be driving retention and driving the arpu of our current subscribers

Husaini, are you okay with that? We'll go to the data center question.

Yeah, sure.

This is very helpful.

Thank you.

Thank you.

Hi, Husaini. Thank you for the question. So with regards to Data Center 11, which is the first true hyperscaler data center in the country, we are on schedule. We're on track. We expect customers to be able to move in by the first quarter with full facility readiness by the second quarter of 2024. There's been a lot of interest. We've actually entertained some customers to come in and do a due diligence already on the site, and we are entertaining these as we speak. With regards to data center 12, you know, we want to build ahead of demand, and we're in the process now of going through a very rigid site selection process to ensure that the 12th data center that we're planning to build fits all of the requirements for both hyperscalers and enterprise customers that we intend to target. Thank you.

And there was a question on the monetization of our data center business.

Yeah, I guess I can take that. As you said on the data center, in terms of monetization of the data center, we are exploring, looking for a partner to bring in into EPLDT data center business only. Maybe three factors. One is We believe if we can bring a partner, we can actually drive top line even more if we can be part of the platform of this partner that we're looking at. Second is to really improve also operations in terms of, you know, they're more used to operating hyperscaler data centers. And that's something we can learn from, be more efficient, be more cost effective. and lastly of course capital um as as we continue to build out 12 there are 12 and maybe in the future 13 and 14. so that's something that i think we we are able you know we want to have a partner come in and address the three those three factors for us sure thanks uh i have some more questions thank you very much thank you thanks are there any questions from people who are here

There's a hand raised.

Hello, Zorin from Security Bank. Do you expect any one-offs in the third quarter regarding this typhoon or this weather? That's all for me.

One-offs due to the typhoon? We actually don't see any yet.

I don't think it's going to be as bad as Odette last year, so there might be a few areas affected, but I think restoration is not as difficult as the one in Odette. Jeremiah, did you want to add something?

Just to add to that, Al, Al is actually spot on in terms of the number of households that have been impacted. So today we currently have about 16,000 households that we are still in the middle of actually restoring services to. So when you look at the size and the scale of that versus a debt or other calamities that we've had in the past, it's significantly lower. So this is something that we will do as a matter of, I guess, a regular operation. We don't necessarily see any large one-off costs associated with it.

I just want to clarify something, though, because earlier there was apparently a question whether there was or there are one-offs items on the EBITDA. My answer is no, there's none, because any one-off or non-recurring gain is shown after telco core income before reported net income. Thank you.

Any other questions from the floor? There's a mic in the middle. Thank you.

Hi, Stephen here from China Bank Securities. I just wanted to ask if you could provide more color on the lower depreciation charges for the first half. And for my second question, is PLDT planning to venture into prepaid fiber similar to what competitor has been doing? Thank you.

Why was there lower depreciation in the first half?

Last year, we had an accelerated depreciation of certain assets such as 3G, VVDSL, transport equipment. About $51 billion were written up in 2022. That had an impact on our depreciation this year.

Another prepaid fiber?

Sure. Just in terms of prepaid fiber. So we are looking at all of our options, and prepaid fiber includes one of them when it comes down to our fiber monetization strategy. As you know, we actually have a slightly different strategy to what our competition is doing. We currently sit at about the 60% port utilization level, very, very different to what our competition is doing, much significantly lower. So one of the things we're doing in looking at prepaid is actually being very, very targeted in our approach to ensure that we're using the prepaid offering as something to better utilize in a specific area to ensure that we don't necessarily drive further commoditization of the sector and that we are able to actually extract as much value from the existing assets we've already put out there.

Thanks, Jeremiah. Any other questions on the floor? We'll entertain questions that were emailed. This one is from Arthur Pineta of Citi. What is driving the reduction in revenue and EBITDA guidance for the year? I guess it was similar to what Husseini asked, that the initial guidance for the year set out at mid-levels, and then our updated guidance is on low single digits.

So the guidance for growth of revenue in EBITDA is similar to the first semester. The bottom line is higher.

Then the second question from Arthur, fiber broadband net ads remain relatively soft. How do you see this as changing into the second half? Are you seeing your competitors gain from prepaid fiber?

Okay. Thanks for the question. It was Arthur, I think it was, right? Yes, it was. So our focus in the first half has really been around sweating our assets. We have 6.1 million ports and we've been very much focused in monetizing as much of that as we possibly can. That's seen us take two approaches. Number one is switching. So really looking at how do we have compelling switching plans for our customers so that they move over from our competition. And the second one is also looking at prepaid fiber. So we are looking at prepaid fiber as an alternative in a way for us to be able to help drive improvement in their ads moving forward. In terms of Are we seeing any impact from competition with regards to prepaid fiber? Competition has also been very, very selective with their prepaid fiber offering. So it's not something that they've been offering nationally. From what we've seen on the ground, they've been very, very selective in the areas that they do offer prepaid as well. And they've been very, very targeted nationally. prominently targeted at areas where they have capacity. Now they have, admittedly, they have actually a lot more capacity than PLDT because they're currently sitting on average about 20% and we are sitting at about the 60% level. So whilst we will be venturing into the prepaid space, we are just looking very selectively at these particular areas.

The next question from Arthur. Voyager's loss has narrowed further quarter and quarter. I guess it's similar to the earlier question. What are your expectations on the timing for profitability and what milestones need to be achieved?

As I mentioned, all the businesses are now segmented a bit positive, so we are now trying to make sure that the The whole company is EBITDA positive, which, as I mentioned, the second half of 2024. We will get there as we continue to launch and scale up new products with high margin, especially products like lending as we expand into other segments. At this stage, the loan book is growing, but as we can see, the deposits have grown very fast. The good news is these customers are transacting, so they're giving us a lot of rich data on them, which helps us in our credit scoring model in turn to start lending to them. So that's one part. And the second is by helping to grow the deposit base. It continues to provide us with a very healthy cost of fund base on which, as we grow the lending book over the period of the next 12 months, that helps us the balance sheet that we need. So that is the plan in second half 2024.

Thanks SP and his final question. How should we look at the manpower related charges reduction charges into the second half? This is actually declined quarter and quarter. Is this done and dusted or are there still more in the second half of 23?

I love Gina, our head of people group.

We don't expect for the balance of year any additional, but what we're doing is really focusing on the upskilling and reskilling of our workforce, primarily in areas that are relevant now and very much aligned to the business needs. So far, if ever we have, that will not be as significant as previous year.

Thanks, GPO. There's one on the queue from Georgia Gonzalez of PEP. Any further update to the capex overrun? Has the total sum been pared down further from what was indicated in the first quarter? How much of the first half capex is from the overrun?

What we're going to do is to just announced to you when everything has been completed because we need to reflect in our financials any additional settlements that we enter into. So until then, we prefer not to say anything more.

Thanks, Attorney Mava. Any last questions from the floor? There are none on the queue. Last chance. So if there are no further questions, we will now turn the floor back to Mr. Pangilinan for his closing remarks.

Thank you. Thank you for joining us for this briefing. And we'd like to invite you for the FIBA World Cup starting August 25. Am I correct? First game of GILAS is against the Dominican Republic at 8 p.m. Broadcast live nationwide and globally. So look forward to one or two Philippine victories, we hope. So thank you, and we look forward to seeing you again on the third quarter briefing.

And that concludes today's briefing. As always, should you have any further questions or clarifications, please reach out to PLDT Investor Relations. Thank you for your participation. Stay safe.