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 2024. 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 www.pldt.com under the Investor Relations Center. Kindly note that this briefing is being recorded. A podcast of the event will be available on our website after the call. The QR code for the presentation is on the screen and in the confirmation notices emailed to you. For today's presentation, we have with us our Chairman and CEO, Mr. Manny Pangilinan, Mr. Danny Yu, our Chief Financial Officer and Chief Risk Management Officer, Attorney Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel, as well as the business unit heads led by Mr. Jeremiah de la Cruz of HOME, Mr. Giorgio Hendrano of Enterprise, Ms. Christine Goh for the Individual Business, and our Head of Network, Mr. Butch Jimenez. At this point, let me turn the floor over to Mr. Danny Yu to start the presentation.

Good afternoon, everyone. Please allow me to present PLDT's financial and operating highlights for the first semester of 2024. Consolidated service revenues for the first half reached another milestone at $96.9 billion, or 3% higher than last year. On gross basis, service revenues were higher by 4% compared to the same period last year. Operating expenses marginally grew by 1% to $43 billion. Consolidated EBITDA rose by 3% to $53.9 billion, a semestral high with EBITDA margin at 52%. Telco core income, excluding the impact of asset sales in Maya expanded by 3% to 18 billion. On segment basis, our individual business registered a 1.7 billion or 4% growth in revenues to 41.9 billion. The enterprise segment recorded a 4% revenue upswing to 24 billion. While our home revenues were marginally lower by 177 million, or 1% at 30 billion, fiber only revenues were higher by 7% or 1.8 billion compared to the same period last year. Now on these slides, while it may appear that the headline service revenues rose by 3%, revenues have actually grown by 7%, excluding the drug from legacy businesses. Thus growing segment now contribute 87% of our total business from last year's 83%. For the individual business, mobile data accounting for 89% of total segment revenues grew 8% year-on-year. This doubles the segment growth of 4%, which reflected the drag from the legacy SMS invoice. While the overall home segment showed a marginal decline of 1% year-on-year, Fiber-only revenues, which now represent 92% of the segment, rose 7%. Unlike other telcos, PLTT voice continues to contribute, albeit at a declining trend. Corporate data and ICT, which were 72% of the total enterprise revenues, were higher by 7% compared to the overall segment revenue increase of 4%. Now, for more details of the respective business segments. Service revenues for the individual business grew by 4% in the first semester of the year, mirroring the same improvements in postpaid and prepaid. Mobile data underpinned the growth. Blended ARPU was higher by 14%, mainly due to the 11% rise in average usage and data traffic. The second quarter saw a 4% rise in service revenues compared with the same period last year. However, it saw a dip versus the previous quarter due to limited customer mobility from school holidays and the rise in hit index. Notable for this segment is the increase in active mobile data users to 40.5 million from 39.4 million at the end of March. Usage per sub grew to 11.6 GB, up 11% year on year. Among the initiatives to accelerate the mobile growth momentum are best value offers and geo-targeted campaigns. We are complementing site rollouts and capacity expansions with programs to transform our customer care into a tech-driven center of excellence to enhance customer service. Next, please. 92% of our home revenues are from fiber business, which registered a 7% year-on-year growth. As we mentioned last quarter, we started to accelerate port rollouts this year. In tandem with this, we focus on improving the pace of our fiber installations. This should translate to higher gross ads moving forward. we're happy to report that from May to June, we saw a 20% increase in fiber installs. Home fiber ARPU remain at around 1,500 level with lower price plans offered selectively in areas where we have spare capacity. PLDT Home has fiber plans that cater to a wide range of economic segments enabled by its integrated fixed and wireless network. These include gigabit fiber at the higher end, Fiber only all bundles for the mainstream and prepaid fiber and fixed wireless for the low end. Our increased focus on quality of service and quality acquisitions are driving significant improvements in churn. From 1.82% in the first quarter, fiber churn declined to 1.52% in the second quarter. PLDT continues to enjoy strong brand equity and superior network quality, making it a formidable competitor in the market. Next, please. Our enterprise business operated against a backdrop where the overall industry experienced a slowdown, as customers were more deliberate with their IT and data transformation decisions as they considered the impact of global trends, the fear of cloud, and cyber threats. Nonetheless, the enterprise segment recorded a 4% revenue rise with corporate data and ICT being the underlying growth drivers, having grown 7% in the first semester. Among the revenue streams that registered improvements were core connectivity and higher ICT revenues from managed IT services, cybersecurity solutions, and cloud services. Included in our enterprise offers are differentiated SD-WAN, managed networking, IoT platform, and a portfolio of services. We also continue to expand our capabilities in AI and cloud. The Santa Rosa Data Center was energized in July with 20 megawatts of IT load capacity expected to be available by the end of 2024. This makes Vitro Santa Rosa well-positioned to capture growth from hyperscale and AI data center demand ahead of other operators. Despite cost pressures from inflation and high cost to operate, total OPEX was marginally higher by only 1% or 600 million in the first semester, reflecting our continuing pursuit of operational efficiencies and cost rationalization. Consolidated EBITDA for the six months of 2024 grew 3% to $53.9 billion, a semestral high driven by higher revenues. EBITDA margins stood at 52%. Telco core income for the first half of 2024 rose by 3% to $18 billion, reflecting the impact of higher EBITDA, partly offset by higher depreciation and financing costs. PLDT income was stable at $18.4 billion. Note that our share in losses from Maya continues to decline as Maya remains on track to achieve bottom-line break-even in the last quarter of this year. The Board of Directors approved the payout of an interim dividend of $50 per share, representing 60% of our telco core income for the first half of 2024, consistent with our dividend policy. Record date is set for August 27, while payment is scheduled for September 11. PLD disbalance sheet remains healthy with net debt to EBITDA of 2.38 times at the end of June. We continue to target taking leverage to the 2.0 times level, which we expect to attain with anticipated increase in EBITDA, reductions in CAPEX, and with the balance of tower sales proceeds. We also remain actively engaged in discussions with potential investor for our data center business. Gross debt stood at 265.4 billion, of which 15% are dollar denominated and 5% unhedged.

The average interest costs for the period stood at 4.9 pre-tax,