First Pacific Co Ord

Good day, everyone. Thank you for joining this online briefing to discuss First Pacific, first 2025, first six months 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 webpage will be available on First Pacific website this evening in the investor relations session. For participants from the media, please note the Q&A session is open for investors and analysts only. If you would like to ask questions, please contact us after the briefing. 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 First Pacific Head Office. Over to you, Jean, for the presentation piece.

Okay, thank you, everyone. This format is all very familiar to you. Once we flick the page to page two, let me remind you that all of these numbers with an underline are clickable links. So if you're looking at the presentation on screen and you want to look at the Maya Digital Banking Unit of PLDT, which is a great story, you just click on that 23 down there. When we turn to the next page, that familiar picture of some of the more important investments that we have hasn't changed since the last time we had such a meeting together. What has changed, I suppose, is on page four. As of the end of June, our gross asset value was about $5.6 billion. And as you can see, Three of our four core holdings are billion-dollar companies, Indifood over two, MPIC and PLDT over a billion dollars. The way we count our valuation, let me remind you, is the listed assets like PLDT, Indifood, and PhilX. We mark to market at the end of every day an email that the finance department sends to senior management. And MPIC, I'm sure most of you recall, we value at the share price of 5.3, as it adds, when it was privatized fully in way back in October of 2023. Now briefly about our earnings for the first half of the year on page five. I'm sure you all expected that our recurring profit would rise to a record because you all saw mostly the 1Q numbers of our operating companies were good and there was momentum. Lo and behold, there it goes. Our turnover rose just a tiny bit with an increase at MPIC, offsetting declines at PLP. Contribution from operations, however, that was up 8%, not far off a double-digit increase, well over $400 million, and that's versus the previous record high of 391%. million dollars. And if you're counting the five previous first half results at First Pacific were successive record highs. So we had a sixth one just now. And you'll remember that our FY 2024 earnings were a fourth successive record high. Now, Indofood, PLDT, MPIC, as they have been doing lately, delivered record high revenues. Because let's not forget, they are located in the fastest growing part of the world. And they are working in defensive industries, providing essential services. So people are eating more noodles, driving more on the roads, and they're consuming more electricity, and so on. With the interest rates trending down, our interest bill was down 10% to $35 million in the first half. Corporate overheads were up just a little bit. And recurring profit, again, a record high, that's a double-digit rise, of 11% to over $275 million. And there were little changes in forex exchange, losses swung to a gain, and non-recurring losses of $3.4 million a year ago swung to a gain of over $5. A recurring EPS up 10% to $0.082 U.S. cents. And our board of directors this morning approved an interim distribution of 13 Hong Kong cents a share. And I believe that's going to be distributed on September 30. Don't hold me to it, but somewhere around then. As we've been saying for a good year, a couple of years, we are confident of continuing earnings growth in the medium term for the reasons mentioned. aforementioned. Now, looking at the middle chart on the right-hand side, you can see the big factors in the change in recurring profit. Clearly, MPIC was the big driver in that. They've had a tremendous first half of the year. Now, let's look on the next page to have a view of our balance sheet and cash flows and things like that. Our debt maturity profile here is as at the end of June. There's already refinancing in place for the 200 million falling due in January, 2026. So there's really nothing essentially falling due until our only outstanding bond comes due the following year. As you can see, it's a bit under a quarter of all of our borrowings. We have historically said we like bond borrowing to be about half of the total. And that's kind of reflected in a sort of proxy I chart on the right hand side where you got the red and the blue showing our fixed rate borrowing is a little over half of the total. So I guess sometime in the next year or two, we might be going out to the bond market, but that all depends on market conditions as you all well know. Our CFO Josephine can speak to that. Now we've got a chart here on the bottom left that you've seen already in March. We didn't put in the first half of 2025 dividend income because Quite frankly, a very important source of dividend income comes from Indofood, and that's not delivered in the first half of the year. So it would be misleading to show you the half. But you can see our interest coverage ratio is down to four times at the end of the year, and that stayed the same by the end of June, as these various bullet points on the right-hand side describe to you. Essentially, we've got two... credit ratings, which are investment grade. And we've been investment grade ever since we began getting rated a couple of years ago. And as you can see, both S&P and Moody's give us stable outlook. You can see there on the dividend income chart that we went over 300 million for the first time in about eight to 10 years in 2023. Did it again in 2024. And that looks like a pretty comfortable figure for us. Going forward to Indofood on the next page now, please. As you can see, the sales keep hitting record highs. Every year since 2014, their sales have reached successive record highs because they sell more and more instant noodles and dairy products and other packaged foods. Now, sales up again to a record high. EBITDA 1% core profit up 2%. And if you've become used to in recent quarters of seeing core profit grow much faster, the slowdown really is explained by that blue box down at the bottom. The margins on many of the biggest sellers like noodles, got a little bit worse, and that's because input prices went up. Which input prices can we look at? Well, let's look at the agribusiness EBIT margin. CPO went much higher in price, so the agribusiness delivered excellent growth, and that was offset to a certain extent by the consumer branded products division, which nevertheless did manage to eke out an increase in sales of 2%. Now, going forward, you can expect more of the same from Indofood. They're going to look at market share and profitability and decide what needs to go in order to keep things going forward the way they like. Now, let's flip over two pages to page nine, where we can see the change in sales. at Indofood and what's been driving that. There you go, you can see the greater profitability of the agribusiness is reflected there. The biggest increase in sales was the plantations business followed by the ever-growing noodles business. The blue box on the right-hand side shows you that noodles make up almost half of all sales at Indofood, and that's been a pretty steady number over the years. I think their capacity for noodle production is now around 37 billion packs a year globally, and if you were to claim they are the biggest maker of instant noodles in the world, I think a few people would challenge you. Now we're going to move over to Metro Pacific on page 11. This is a page we're all extremely familiar with. There has not been much change in the past six months since the last time we spoke to you. But as you can see, or as you will recall, the toll roads business has been getting a lot of growth in the past year and a half, mostly in Indonesia. Now at page 12, let's remind ourselves, what is the ownership structure of MPIC? We own just under half of that company and we valued it at the half year at a little over $1.3 billion. That $1.3 billion makes up almost a full quarter of First Pacific's gross asset value. Now let's have a brief discussion of their earnings on page 13. The contribution rose enormously, 18%, a record high. And that was driven, as you can see in the chart on the bottom, by the power and water businesses. The water business benefiting especially from tariff increases, I believe their volumes actually shrunk a tiny bit. And the toll road business did not grow very much because our stake in that business was lower than it was a year earlier, owing to the entry of Marabeni on the shareholder register of the toll roads business. The key contributors are in the pie chart there on the top right hand side. And the contribution there is, we're only showing positive contribution. There are a couple of loss making businesses like I believe Rail lost a tiny little bit of money, but as you can see, power is enormously important. Now, in the interest of time and efficiency, we'll go over the operating companies under MPIC in the Q&A. And you can always follow up with messages to Sarah or to me for a more detailed one-on-one conversation. So we're going to flip forward several pages to 21. where PLDT, again, keeps having record high revenues. EBITDA also is getting to be record highs, but telco core profit was down a little bit. The entire industry in the Philippines, albeit made up of a very small number of players, is ferociously competitive and competitive. That's the result that we see here. Now, if you're talking about ordinary core profit, which is a bigger number than telco core, ordinary core profit includes the FinTech digital banking arm of PLDT, Maya Innovation Holdings, I believe it's called, Stan. They showed profit for the first quarter and the second quarter and, of course, for the first half of the year. And their contribution to PLDT was about $400. million pesos. And my colleague Stanley Yang can talk more about that. It's a company I am personally very excited about. I think it's the most interesting thing happening in PLDT because it's growing like Toxie. And because I regard it so highly, we'll flick to page 23 and you can look at this stunning growth in all of those column charts. Bank depositors growing up sevenfold over the three and a half years or so. Deposit balances doubling and almost tripling. And then the loan dispersals have grown enormously, I think 20-fold or something over that period, 30-fold if you look at that bullet point there. And as you can see, it's making money. The ownership is described at the bottom of that page. First Pacific has a direct 1.4% stake. PLDT is the biggest shareholder at 38%. Now, Pacific Light Power on page 25 has joined the ranks of holdings we regard as core in recent years. Because as you can see, beginning in about five years ago or so, they've had pretty decent earnings growth, maxing out in 2023 when they gave us an enormous dividend payment along with giving it to their other shareholder, which is Moralco, the power company that we are invested in via MPIC. 2024, there were non-fuel margins were a bit lower. So The revenues were down a bit. Their market share was a bit under 10%. And an interesting thing is almost all of the electricity sold was via vesting contracts and contracted sales, which gives them a very confident outlook looking into the future, the shape and flow of their revenues. Now over to my favorite small gold and copper mining company, Philex. Pad Cal, the mine up in north of Luzon, did what you expect it would do. It made a little bit of money on ore grades that are declining a little bit more every year. This mine's been operating, I think, for about six decades, which, about like me, really. but it's still managing to turn out a profit, helped by gold price being up by more than a quarter and offsetting a decline in copper prices, worse grades and lower recoveries, notwithstanding the higher production. Now, the exciting thing about Philex is the Salangan Mining Company, which is on the next page. That is scheduled to open phase one commercial operations next year. I personally find it very exciting because you can compare the ore grades at Salangan, there in the top right blue box, and where you're looking at copper of, you know, half a percent or more in terms of percentage of volume. And then the grams per ton of gold is, you know, not far under one gram per ton, whereas over in tired old Petkal, The gold grade is less than a third of what you can get at Solangan. Solangan is in Mindanao, and it is a main topic of conversation when directors meet to plan towards the opening of that mine in the first half of next year. We've got two directors of the Philex board with us. You can ask them some questions about it. Now I'm going to wind up the introductory remarks with a glimpse at page 30. which shows our adjusted net asset value per share over the two and a half years, beginning at the end of December, 2022. And I'm focusing on here, the share price and discount to our net asset value on the line below. So at the end of 22, we were $2.33, 60% discount. A year later, the share price was 33% higher and the discount was down by almost five percentage points. Then we had a 44% increase in the share price to 451, discount down quite a bit to 38%. And at the end of June, the share price was up again. I think it was maybe 30 some percent there. to over 550, discount down to a shade under 30%. In trading this morning, while our directors met to go over the interim results, the share price was down in the market, and we released our results shortly after noon. Trading reopened at 1 p.m., and bang, I'm told we reached a high of 666 in intraday trading before closing at 651, which is a new 10-year high. I haven't seen the end-of-day email about the NAV discount, but I wouldn't be surprised if it was a number below 15%. It's come down quite a lot as our share price has increased. But how you count First Pacific's gross asset value? Well, that's an interesting question, which we'll probably address in the Q&A, which I think we could have now, Sarah.

Yeah, that's right. Thanks, John. We are now ready for the questions. You can send your questions to the chat room or you can raise your hand and we will just take it in order.

Okay, difficult question from Nick from Brookhaven. I do not have the insight to help with that. Who can help us with the internet bill?

Sure, the Connect Auto bill which has recently lapsed into law this past weekend, certainly changes the landscape. It opens the doors for new local players without involving the franchise. I think in terms of the impact, there's more study to do specifically, but the business of Gilded Tea, though, has a very strong base in terms of its network, its presence both in the mobile in the fixed and increasingly now into the digital space, you know, as John alluded to on the buyer front. And so there's multiple pillars which GLBT can drive growth. And it does have a strong focus around the consumer experience, the customers to differentiate the product. And so, look, despite this opportunity, I think it's one thing to open the market, but it'll take time for any new entrant to build up their platform and to compete and provide the quality of services that the customers would expect. And so from our perspective, the opportunity is there for PLDT to take advantage of their strong position to leverage the brand that they have built and also to continue to improve the network and services so that the customers will, you know, one, be sticky, but also to find new growth through the customer base.

Okay, thank you very much, Stan. Joseph, which first-pack companies are benefiting from the AI spending spring?

Well, there are a couple, well, not directly involved in the AI space per se, but there are quite a number of companies in the group like PLTT has the data centers. I think they have 11 data centers. They just launched a new one, quite a large-scale one in the Philippines. So 11 data centers down there, all within the PLTT, the enterprise operation. Of course, on the other hand, the power distribution company in Morocco and, of course, the power generation, because all these would span quite a bit of time. a lot of power per se, a lot of AI training, a lot of power. So companies involved in the power sector in the so-called Morocco role, including both the distribution side as well as generation side will benefit from that. I think it's also helpful for the power generation company in Singapore as well from that angle because they're also involved. It's not a secret that they're going to build a new plant, something like a water plant in Singapore to meet the growing kind of electricity and power demand in Singapore and one of the major driver for the increase in the electricity demand in Singapore is actually more and more. And data centers are operating in Singapore based on the EMA's kind of focus of demand there. So quite a number of companies are actually enjoying the benefit there, but not directly. that directly or indirectly through the so-called data center space or the power generation or distribution space.

Thank you, Joseph. I'll take the next question and looking at page 48 will help. It's about consumer confidence being pretty weak in Indonesia and what does this mean for Indofood going forward? Now, I think it can be very useful to look at outside information, particularly macroeconomic forecasting by reputable institutions. And we've got the IMF's World Economic Outlook, which is published every October and revised every April. And from the April revision, we've got the chart here you see on the bottom right. And essentially it says, Indonesia, Philippines, they're in Southeast Asia. It's the fastest growing part of the world. And as you can see from these two lines where we reset their GDP in US dollars to 100 at 2018, these countries are doubling the sizes of their economies over the course of the following 12 years. Now, you do have FX weakness going on and you can see that on the left-hand side where over the past six years, and now this is historical information, of course, on the left, and it's projections on the right. So historically, we can see the exchange rates of these rupiah and peso have declined, oh, by I think 9% and 11% in the six years shown here. But this, we've also got the profit of First Pacific. And as you can see, which is a US dollar figure. So as you can see in U.S. dollars, our contribution is in these currencies. We convert it to U.S. dollars when we're reporting our results. And you can see we're striking off FX. So we've got these economies growing very, very rapidly. Absolutely, positively, confidence in Indonesia is currently rather low. But nevertheless, the forecasts remain what they are and we're very confident going forward. What have we got now, Alex?

We may have... Three of them. Okay. Let's, let's, let's ask Jeffrey.

Yeah.

Hey, thanks, Sarah. Thanks, John. Thanks for taking my question. So just maybe two questions from me first before I jump back to the queue. Just the first one is about the holding company cash flow, which the dividend income was down 11% worldwide in the first half. So just trying to check whether there are any timing difference on the decline in the first half. And if any would love to understand what is it. And my second question would be about PLP. So just trying to understand how many cost savings that we achieve in the first half can sustain into the second half. Thank you.

Richard, could you help with that number?

That first question? I mean, the dividend?

Yeah, we better ask Joseph.

Hi, John. It's Joseph here. Yeah, I mean, it dropped a little bit. Like what you say, it's mainly due to the timing difference element because of the higher comparative base in 2024. The main reason for that is that in first half 2024, we collected the final dividend from NPIC and NPIC kind of adjusted upward the dividend payout to 30%. And then it's also the bulk of that is actually payable and collected by us in first half 2024. So that actually created kind of a timing difference. And back to the first half of 2025, we are kind of back to the normal situation. Of course, I mean, for 2025 first half, they are sticking to a kind of lower dividend payout of 25% rather than 30%. But we expect that because of the growth in profitability of NPIC going forward, we expect that that will be kind of picking up the growth chain of dividend income from NPIC going forward. So the outlook, I mean, we can't say specifics about the full year, but I think we are quite comfortable about the full year kind of dividend income stream because we got the announced dividend payout by PLDT. We got the announced NPIC interim dividend payout. We have collected the final end of the dividend for 2024 and clearly managed closely the dividend distribution from a Singapore power operation. So we're quite confident about a four-year dividend income level.

Thank you.

PLP?

Sure. On the question around PLP, the profit performance, as you mentioned, in terms of what happens going forward, the reason for the continued strong performance is not so much in terms of cost reduction, but through the non-fuel margin, which is effectively the spread, spark spread between what the selling prices of the electricity and most of that is contracted versus the cost of the fuel and so forth. And because the retail team of the company was able to secure rates that were, I think, above what we had expected, then that has continued to provide a strong support for the profit. Now, having said that, over the long term, as you go forward, the margins where we are today are still well above what is the long-run marginal cost, the vesting margin, which is what the government, the EMA would set if they were to give vesting contracts. So it's still a very, very robust margin. And so that is continuing. I think one thing that is helpful for Pacific Light is that over the past few years, they've moved their sort of time horizon of retail contracts from mostly one year and now quite a number are two years and three years and beyond. And so because of the multi-year nature of the contracts in the portfolio, then that helps give some clarity in terms of the continued performance beyond just the next one, two years.

Thank you, Stan. Though it wasn't asked, can you just say a couple words about the new power project?

Yeah, and I think the other point is around, there's a 670 megawatt CCGT, which is a gas turbine that is under construction. And it's really starting the process to build up because EMA awarded the hydrogen ready project. And so the timetable of that, as the market continues to grow and as mentioned earlier, by John in terms of the growth in the market and so forth for the power that this would come on stream in early part of 2029. And so that will continue to add to the existing portfolio of 830 megawatts with the additional 670.

And Joseph, our participation in terms of financing this, is that that's all in hand?

Well, yeah. There will be certain equity requirement by PLP from the shareholders, but at the same time, there will be timing difference. So on one hand, I think we still continue to collect the regular kind of dividend stream from PLP. On the other hand, when we needed to put equity into the project, then we also need to then put into PLP share of some of the equity requirement. So in our own projected cash flow, yes, we continue to receive dividend, but over time, then we also need to chip in a little bit into PLP to help to fund this equity requirement to have the 670 megawatt project built out. But that will be spread over a couple of years.

Thanks, Joseph. Let's now turn to Timothy Chen who has a question.

Hey. Hi, management. Thank you for taking my questions. Can you hear me clearly?

Yes.

Thank you. Thank you. So I got a couple of questions as well. It's quite similar also on PLP. We see that the average selling price at PLP declined, which is, I believe, being largely in line with Benjamin's previous comment on the pressure on power tariff in Singapore as well. But I'm just wondering if this kind of trend, how long should we be expecting the power tariff to be continuing declining? And how resilient is our current EBITDA margin? That's the first question about PLP. And the second one is also on the power plant CapEx. Can you please remind us whether or not the $564 million regarding the budget with the consortium, including Mitsubishi, will be most of the project CapEx? And how much on top shall we be expecting? on this project. Thank you.

On the question around the margin, so as I mentioned earlier, the nature of the contract, the fact that the retail market, which is one year and beyond, so some are one year, some are two up to three plus years, provides a guidance in terms of what the EBITDA margins will be in the near term, the next one, two, and even three years. There's some certainty around that because, for instance, the balance of this year and next year is effectively fully contracted at the levels that give a clarity in terms of the margins. And so it's that non-field margin that represents the fixing in the margin, and hence we have a pretty good visibility on how that will be. Now, over the long term, then it's a function of also market supply and demand as the demand curve continues to grow as expected by EMA, the Energy Market Authority in Singapore, along with the additional supply, along with the fuel arrangements in terms of the gas supply in Singapore. And these will be the factors that lead to the understanding of where the margins will be. But as I said earlier, because the margins today are well above where the vesting levels were in terms of mega dollars per per megawatt hour in terms of the profitability, then we expect that there would be some decline, but at the moment it is a very high level that is above the vesting levels.

Thank you, Stan. And the second question.

funding for the equity? Timothy, are you the second question?

Yeah. The 670 megawatt CCGT plant. So I recall during last earnings call there, the 560 million project, like the contract is not representative of the entire project costs. So I'm just wondering if we have a better understanding of how much we are expecting to spend on this project.

Well, maybe I could give a kind of quick recap on that one. I mean, our very rough estimate, nothing is finalized as well because we're still ongoing discussions with Mr. Bishi about the major EPC contracts and the likes. The important part, let's say the whole thing is about 900 million US there about. And then clearly that we apply certain that equity ratio to arrange the so-called project financing for it. Let's say conservative assumes a kind of on the high side in respect of that equity mix. Let's say it's very conservative, 40% equity, 60% debt, that sort of ratio, then you probably need to have equity of roughly 360 million US. And then we have 42% in PLP. So simple calculation, and that's roughly 150 million that I mentioned earlier, spread over a number of years. So that's the amount of equity we need to put it back into PLP to help to build this new 670 megawatt company brand. But as I said, it's over a few years until the whole thing is up and running by, I think, 2029, as kind of agreed with the regulator EMA in Singapore.

Thank you very much, Joseph. Let's ask Tony Watson to unmute and ask his questions.

Thanks, guys. A couple of sets of questions. First one has to do with Maya. Can you give some kind of rough overview of the loan portfolio, secured, unsecured, also distribution by industry or type of borrower? And in addition, some rough indication as to asset quality, not performing loans, recoveries, that kind of thing. So that's the first set of questions. The last question, just very specific, what was the latest date of your meeting with rating agencies?

When's the last time you met rating agencies?

I don't know. A couple of months ago, I think. We have two credit rating agencies at the S&P and Moody's. I think the last one was with Moody's.

Three months ago? Before they published the paper to say they confirm our investment grade rates.

They regularly review and first to say that pretty much every six months. I think the last time we met, we had to call. with the Moody's team somewhere around April, May, that sort of time frame. Right before they put up the update report and be confirming their BAA-free credit rating with a stable outlook on this decision. So we're talking about three to four months.

Okay, great.

And now on your first set of questions, Tony, Maya holds its cards a little bit close to its chest because it's privately held. And also, if you look at the board of directors of PLDT, many of those people are bankers who are potentially competitors of the company they are directors of. So it doesn't tell you much more than what you got here. Now, in terms of loan quality, they claim to be leading the industry in the credit worthiness of their borrowers overall. I hope that helps you a little bit.

Okay. And just my last question I forgot to ask on Maya. Any plans to partially divest or spin it off?

Yeah, maybe I'll just add a little bit more color, Tony, to what John had mentioned. And so you were asking us about the nature of the customers and the portfolio. And so it's a mix. And Maya, as you may recall, started actually as a consumer wallet along with a merchant acquiring business. the terminals that you see in the retail stores. And as they got their bank license and started to build, you know, today it's quite diversified, as John mentioned earlier, over 8 million bank customers, 2 million borrowers. These are very small loans. You know, these are not what you would see in the traditional banks, you know, mortgages and the like. These are short-dated and catering to younger customers. borrowing base. 85% of customers, for example, are millennials and Gen Z, many having the first time as a bank holders. And so they're signing up for the loans. Now, because it has a wallet, there's also some, quite a bit of data that Maya can, you know, in terms of assessment on timeliness, the credit scoring, their own algorithms that they can determine the quality of the customers. And so that's one key component metric that they could use to ensure that they try to keep the NPLs, the non-performing levels, quite low. And I don't know if the levels are published, but really the target is being able to maintain at a sort of a mid-single or low-single, low to mid-single digit NPL level. And up until now, the management have been able to deliver on keeping a good quality and keeping the MPLs low. And so that's very helpful. You know, they did build the loan book slowly and now they're seeing the benefit of that in terms of the quality of their loan book.

Thank you, Stan.

Timothy from Citi has a follow-up question. Go ahead, Timothy.

Oh, yeah, thank you. Thank you for your time. I actually have four questions, but it's actually on other assets under First Pacific. Firstly, I'm just wondering if I can ask some questions about the Manila IPO. Please bear with me if it's a little bit too sensitive. So, May I actually understand a bit of the change of the date from being set to be as early as July and then later on change to end October? And does management actually have a hard reference of what kind of, you know, the lowest valuation of mainland that you will be willing to accept?

I'll take the first part and then I guess, Stan, you take the second. Simply on the first part, there are cornerstone investors whose internal decision making processes couldn't be compressed to allow them a July listing. And so got pushed out by another couple of months just to give everybody time to go through their committee meetings and so on. Now, with regard to the listing price, I think all the public documentation says up to 20 pesos a share. And Stan will try to give you what little color he can on how else this might be described.

Well, just to add to John, the Manila IPO, the delay in June, if you were to take the clock back a few months, in April, tariffs hit. There was market disruption in the global equity markets. And whilst it continued to recover in June, there were still some ongoing discussions with some potential large cornerstone investors, and those had not concluded yet. And so there was a decision at that time, let's pause these, allow these cornerstone discussions, which are critical, to continue to develop. And then, you know, as appropriate then to seek, you know, let's say in the third quarter, another opportunity a chance to go on the roadshow and to really focus on getting the IPO done. Now, what has happened since then is that Manila continues to perform very well. And the sector, as you've seen a rebound in the equity markets across the ASEAN region have been helpful. And there is a listed company, a water utility, Manila Water, which is on the east zone while ours, Manila is on the west zone. And they're a listed company and their share price this year is up 57% and in the last couple of months continue to rise. And that gives us confidence, especially as management are still engaging with the cornerstones and potential anchor investors. And we're seeing strong demand, but also on the back of their first half performance, their earnings growth and the outlook for the balance of this year. we feel that the environment now is a good one and as the cornerstones get through their own internal approvals, I think we'll be ready hopefully within the next month plus to get this done.

Okay, thank you very much. We'll scroll down now to look at some other questions. What does this say? Margins of Indofood CBP under pressure? OK.

What more have we got scrolling down?

I'll quickly help you with the PLP dividend question. Has been paying close to 100% payout with new project of heavy capex and so on. Answered already. I just want to address the dividend question. which is gonna be on page 38, please, Fioren. On page 38 shows you historical dividends by the companies that we are invested in. And I'm just pointing out that the PLP, where you can say around 100% is kind of, kind of, sort of. So they do pay close to 100% year-in and year-out. You can expect that going forward, I think. And what else have we got now? There's a rumor that MPIC could buy a stake in the Metro Pacific Health. Stan, you're an executive director of MPIC. I know you're doing all the talking, but this really can only get good.

So on MPH, the hospital business is a fantastic business. It's a business that is growing quickly. It has been built. from hospital number one through acquisitions and turning them, improving them and delivering a long-term track record of growth. And we believe that that growth will continue. Now, MPIC today has 20%. It started the company and over the years in 2014 and subsequently in 2019, it sold down to the 20% where it is today. Now the other shareholders, are looking at a potential exit, this being KKR and GIC. I think for MPIC, we do believe that the hospital space has a lot more room to grow as a long-term. We are evaluating our strategic options, including a prospect of increasing our shareholding in this business. But this is not our process. This is driven by the exiting sellers. And so At this point, I think it's probably too early to give much more color other than there's certainly interest. We believe that this is a business that has significant value, both that has been delivered, but also what we think going forward.

Okay. Thank you, Stan. The solar import project that we had at PLP involving some other partners that we know, like Medco and Gallant Venture, That was announced a couple of years ago, but it's been a little bit slow. Eliza, are you well equipped to give Stan a break and give us some color on that?

Yeah, sure. So the project is still ongoing. It's a bit slow right now because there's a lot of sovereign to sovereign issues that need to be sorted first before all the different parties can move forward. So we're not the only project that's slowing down a little bit. There's a few other projects as well. provided that the sovereign level discussions can move forward. There's a potential that all the projects can, we can have some certainties maybe towards the end of this year.

Okay, thank you very much. All right, we'll go back to a question about Indofood where we've got IndoAgri. where we're told that the Warren Buffett of Indonesia took a stake of more than 5% of the SIMP, although it's got a low free flow. I might direct this question to Chris. It's got a, you know, four and a half EBIT and London, Sumatra the same. Why don't we buy out the minorities? This seems a huge opportunity right now. Well, in terms of buying out minorities, the focus there has been in recent years, Not so much on the two Jakarta-listed plantation companies, but on their parent, Indoagri. And you will see over time that our own economic interest in Indoagri has increased a little bit as we've managed to buy out some minorities. So if you're going to see any kind of taking private, you'd probably like to see something incremental happening over at Indoagri.

Chris, any more color to add there? Nothing to add. I think it's something I'm sure Indofood are looking at very closely. Okay.

Now, if we scroll up and we look at the previous question from Mada, we've got... He's actually getting very specific. Mada, we'll get back to you in more detail about this. But briefly, government subsidies likely? I don't think so.

In fact, it's the opposite. It's trying to bring in more private sector investors.

Okay, now, are there questions here, Fionn, that we have not addressed?

Stan, the outlook for electricity generation competition over the next few years, more supply coming on, but demand is also going up?

Yeah, there's no new entrance in the market. There is some new supply from the same group of existing power producers.

Okay, thank you, Stan. Timothy Chow has raised his hand. Could you give him a voice?

Sorry, management, it's me again. I actually want to ask a little bit about NPIC as a whole as well, because I understand that over the past couple of years, I think one major driver for the profit growth would be the water tariff adjustment and also the toll increase. So I'm just wondering if there's any color at this point of time regarding if any adjustment for water tariff and toll coming into fiscal year 2026.

I mean, I think actually when you look at the profit of NPIC, the biggest contributor is actually in the power space. I think it's important to recognize that the volumes of power that's being distributed continues to grow, but also it's the growth into the generation business. There have been some very large investments made in the gas. This is the Chromite Gas Holdings, which was formerly of the San Miguel Power that Energen invested in. These initiatives have really driven the strong increase in the profitability of Mgen, which of course then benefits Moralco overall. And there's additional growth drivers in the generation space. For instance, the solar project of Terra Solar, which is a 3,500 megawatt peak, project on a single site in Nueva Ecija is, once it's completed, going to be the largest single-site solar project anywhere globally. And in the case of both the gas project, Chromite, that I mentioned, as well as with TerraSolar, these are long-term contracted power purchase agreements that, based on the rates that have been contracted, will deliver that incremental and very positive growth to Morocco and so that will be helpful in terms of the profitability. Now, in terms of the water, yes, there have been benefits in terms of the tariffs, but beyond the tariffs, there's also the underlying demand, both for water as well as the vehicle volumes in the toll road space. that are separate from what are the periodic adjustments in terms of the tariffs of these businesses. These businesses have been getting their adjustments, but I think in terms of the toll roads, there's quite a number of new projects, for instance, in Indonesia, but even the Philippines are new projects. that have been developed that will be coming on stream. And these will also be contributors for the top line as well as the profitability of these businesses. And then finally in the water, one of the areas as a operating benchmark has been on non-revenue water. The amount of losses that are in the system through the pipes And that is a target that when we looked at it about a year, year and a half ago, the non-revenue water was over 40%. That's the percentage of losses through the system. And the management over the course of the first half have been able to lower it below 40%, it's trending towards the 35% level. And so these are efficiencies that allow more water to be sold and hence that will have a positive impact on the bottom line. And so taking those all into consideration, it's really the power, the water, the roads that are the main drivers of the profitability and will give the positive outlook for NPIC going forward.

Thank you very much, Stan. We've got another question, I believe, from Tony Watson.

Yeah, thanks, guys. Just on the Maya again, any plans to spin that off?

You did ask that earlier. And I think if you look at the shareholder base of it, it'd be tough to say there are no plans and nobody's ever thought of it. Stan, can you provide any detail?

Yeah, I mean, look, at some point, we think that the business is very attractive. It's very strong growth. It IPO could be an option that would make a lot of sense for the business, especially in the space. It's really turned the corner, though, this year in terms of now delivering the profitability. I think it still has some more runway to show. And we want to see not just this year, but also heading into next year, how this momentum continues and carries. But we think that based on what we're seeing, that this trend is definitely a positive for for the group and for the investments of PLTT. And so let's see what the timetable is. I think it's premature to think, but certainly not this year, but as we head into sometime in next year, I think we just take stock in terms of where the profitability and the business has developed at that point.

Okay. Are you all right there, Tony? Yes. We have a written question about... ISPO certification of the palm oil over at the plantations business, and would Indoagri consider rejoining RSPO? Indoagri left RSPO certification for its palm oil business, I think, a decade ago. They felt that it is a biased and unfair system, whereas ISPO has the same sort of ecological and social standards like treating your workers fairly and not cutting down old growth forests and so on. And in fact, when you're audited for ISPO, you're audited by the same auditors that audit you for RSPO. So in terms of demonstrating the quality of your business practices, there's not a lot of difference between RSPO and ISPO. Whereas under ISPO, Indoagri has felt again for the past decade or so that it's a fair and balanced system. And it's one that I think, well, every single plantation company in Indonesia adheres to ISPO standards, but only a fraction adhere to RSPO. When we come visit Europe in October, we can perhaps reopen that topic. And while it's on my mind, we're in New York City next week, and we'll be making a quick trip to California. In late October, we will be visiting Europe, beginning with the UK on October 20. We will be in Singapore October 8, 9, I believe. If you would like us to meet with us during these trips, drop us an email. Now, let me see. There's another question about Indoagri. What can you share with respect to Indoagri's position in the government land reviews related to palm oil? I don't think any of us are familiar enough with this question to get back to you. So I'll get back to you by email on that one. And the biggest challenges we face in the next one to five years. Chris Young, Executive Director, can you please help us with that?

I think the biggest challenge we face is really to continue what we've achieved over the past few years, which is growing our earnings, growing our dividends, and maintaining a pretty solid financial position. So that really is the focus of management here, to work with the operating companies, Indofood, Metro Pacific, PLDT, PLX, PLP, to continue to see that growth. And that really is what we are focused on day in, day out. We think we have good businesses in sectors which will benefit from the growth which John referred to in the Philippines, Indonesia, and Singapore. And I think we are in a good position to deliver on that.

Well, Chris, thank you very much for that summary of where we sit at the moment and how we look at the future. Again, folks, if you've got more follow-up, please drop an email to Sarah Jung or John Ryan. We'll be happy to get back to you promptly and thoroughly. I believe we've addressed all the questions that we can here.

I think so. I don't think we have any outstanding questions.

Over to you, Sarah.

Yeah. Okay. Thanks again for joining today's online briefing. Bye.