Manila Electric Company

Hello. Hi. Good afternoon, everybody. Thank you for coming. Good afternoon, investors, analysts, fund managers, and key stakeholders. Welcome to Morocco's third quarter nine-month results briefing. I am PJ Ramos from the Investor Relations Office, and I will be moderating today's briefing here in the Morocco office building. We also warmly welcome our guest analysts and investors who are joining us in person, as well as those participating online for MS Teams conference facility. Before we proceed, please be advised that this session is being recorded. Okay, adhere to the ground rules which were sent to you prior to this meeting. Before we proceed, please be advised that this session is being recorded. Today, we will present the financial operating results of Morocco for the nine months of 2025 and then September. A copy of the presentation may be downloaded from our website at www.morocco.com.ph under the Investor Relations section. We are joined by members of Morocco's Senior Management Team. Presenting will be Mr. Rony Aperocho, Executive Vice President and Chief Operating Officer. Ms. Betty Siap, SVP and Chief Finance Officer. Mr. Emmanuel Rubio, President and CEO of Miralco PowerGen. Mr. Ferdinand Geluz, Senior Vice President, Chief Revenue Officer in OIC Subsidiary Businesses. Attorney William Pamintuan, SVP, Chief Legal Counsel and Head of Legal and Corporate Governance Office. Mr. Froylan Savit, First Vice President and Head of Networks. Attorney Jose Ronald Valles, SVP, Head of Regulatory Affairs and Head of DU Regulatory Management. Mr. Raymond Ravilo, Chief Sustainability Officer. We also would like to recognize our Deputy Chief Asia Officer, Mr. Hans Montenegro. Today's agenda will begin with the financial highlights, followed by the operating results of Peralta's distribution utility business, updates from regulatory, MGEN, and sustainability. We will open the floor for a Q&A session before concluding the presentation with remarks from our chairman. At this point, I would like to introduce our Chief Finance Officer, Ms. Betty Siap, who will present the financial results.

Thank you.

Okay, so up in your screen is a summary for the nine months of 2025. Our strong results for the year to date ended September 30, 2025. We're driven by robust performance of the power generation business and steady performance of the core distribution business. Following are the highlights. In the nine months ended September 30, 2025, the DU business continued to account for the largest share of our 40 billion consolidated core net income at 55%, or 21.9 billion pesos, up 8%. Contribution of power generation grew to 14.7 billion, 63% higher versus last year, and now at 37% of CC&I, while RES and the other non-electric businesses brought a combined 3.4 billion pesos, or 8% of CC&I. On the power generation results, MGEN's thermal plants continue to play a critical role in ensuring grid reliability with 128.9 megawatt capacity allocated to regulating and contingency reserves support. The LNG business contributed 10.9 billion pesos as Chromite Gas and Pacific Light delivered a total of 8,467 gigawatt-hours and 4,290 gigawatt-hours respectively. MGREEN delivered 557 gigawatt-hours, 15% higher with a contribution of the newly operational solar plants and more than 98% average plant availability. Dividends from unconsolidated investees totaled $7.2 billion, of which $4.5 billion came from Pacific Light and $1.6 billion from San Buenaventura. Following on your screen would be the financial summary. RCCNI for the first nine months of the year increased by 14% to $40 billion, from $35.1 billion in 2024. Consolidated reported net income increased by 9% to $36.8 billion from $33.8 billion last year. The gap between CCNI and reported net income represents accretion of day-one gain adjustment, foreign exchange loss, and gain on sale of various assets by Enged. Similar to our CCNI, our core EBITDA rose 14% to 67.2 billion from 59 billion pesos. Consolidated revenues increased by 5% to 371.8 billion from 355.4 billion pesos in 2024, mainly due to increase in pass-through generation and transmission charges. higher revenues from Mgen, the reserve market, and higher volume of the retail electricity sales business. Costs and expenses increased by 4% to $332.3 billion, the bulk of which is steel purchase power costs, which accounted for 85% of total costs and expenses. Capital expenditures totaled 78.8 billion largely for the development of the solar power plants and distribution network improvement projects. Cash and cash equivalents amounted to 88.2 billion pesos, while consolidated debts stood at 213.4 billion pesos. Okay, so this slide shows our segment business or segment results. The charts on the right show the contribution of each of the segments to our CCNI revenues and core EBITDA. The CCNI contribution of our regulated or distribution business was from consolidated energy sales volume of Meralco Clark Electric Shin Clark Power Corporation of 40,719 gigawatt-hours. Note that while CCNI contribution of DU declined to 55% in the overall share, CCNI contribution in terms of peso amount increased by 8% to 21.9 billion versus 20.3 billion pesos last year. For our unregulated businesses, the higher CCNI in terms of peso amount came from the growing power generation business, with its share now at 37% from 26% year ago. This is equivalent to $14.7 billion of the CCNI owing to its LNG investments and higher revenues from participation in the reserve market. The retail, electricity, supply business, and non-electric businesses meanwhile brought a combined 3.4 billion pesos, or 8%, with combined energy delivered by the rest business of 5,524 gigawatt-hours as of the end of September. DO revenues accounted for 83% of the total, RES, and non-power subsidiaries and affiliates accounted for 11%, while power generation at 6%. DU contribution to consolidated core EBITDA amounted to 39.4 billion pesos, up 15% versus last year, and accounted for 59% of the total. Power generation was at 22.6 billion, up 40%, and comprised 33% of total, while RES and other non-power subsidiaries and affiliates accounted for the remaining 5.3 billion pesos of the consolidated amount. This chart shows our system-wide power sales volume, which is at 50,880 gigawatt-hours, slightly higher than the 50,641 gigawatt-hours last year. View volume, including sales of Pelco, which we manage and operate under an investment management agreement, was at 41,538 GWRs, including 4,482 GWRs sold by our RES units within the Moralco franchise area. RES volume was at 5524 GWRs, with 4,482 GWRs sold within and 1,482 1,042 gigawatt-hours sold outside our franchise area. Mgen volume was at 20,226 gigawatt-hours, with 15,936 gigawatt-hours sold within the Philippines, of which 11,746 gigawatt-hours were sold to Miralco Group, DNews, and RES. On your screen would be our revenues. Electric revenues of 362.2 billion accounted for 97% of the consolidated revenues of 371.8 billion pesos. Generation, transmission, and other pass-through charges were 6% higher at P288.4 billion due to the higher fuel costs of power plants using LNG and the Malampaya natural gas, which comprise about 55% of our total supply mix. Transmission charge also went up due to the higher service charges from the additional capacity sourced by the National Grid Corporation of the Philippines under its new Ancillary Services Procurement Agreements and capacities from the reserve market. Distribution revenue decreased to $53.9 billion with the implementation of the regulatory reset fee adjustment starting February of 2025. Energy fee, which totaled $19.8 billion, increased by 7% from $18.5 billion. to 19.8 billion with higher revenues from the reserve market. This were partially offset by the lower fuel costs charged to customers with a decline in fuel price and decrease in WESM sales in Panaym. Non-par subsidiaries' revenues were flattish as a decrease due to the deconsolidation of MIDC at the end of September 2024 was offset by Miescor's higher revenues from its EPC and telecoms project and Bayad with a higher transaction volume. Costs and expenses totaled P332.3 billion. Purchase power costs accounted for 85%, OPEX represents 10%, depreciation 4%, and combined costs and fuel and power plant O&M accounted for 2% of the total. Purchase power costs increased by 7% to P281.6 billion from P262 billion, consistent with the movement in pass-through revenues. OPEX increased to 13%. By 13%, with $32.5 billion primarily driven by expenses for repairs and maintenance of distribution facilities, upkeep of various IT-related equipment and software, cloud and online subscriptions. Also, Amgen continues to strengthen its workforce to support its growing portfolio of operating power plants and new projects, contributing to the rise in salary-related expenses. Depreciation and amortization were lower by 5% due to deconsolidation of MIDC at the end of September 2024. Combined coal and fuel and power plant O&M amounted to $8.3 billion, 23% lower with a decrease in maintenance costs and fuel and coal prices. With respect to our capital expenditures, this totaled $78.8 billion as of the end of September 2025. Of this amount, 75% or $58.8 billion were utilized for the development of Terra Solar, GreenerG, and GreenTech solar power projects. The DU accounted for $20 billion, of which $17 billion was spent for new connections, asset renewals, and load growth, as well as full relocation. For power generation, it continued its upward trajectory, posting a 63% increase in CCNI contribution for the nine-month period. This was fueled by earnings from LNG investments, which are both Cromite and Pacific Light, as well as strong revenue gains from the participation in B-Serve market. With a diversified portfolio across the Philippines and Singapore, Amgen reached a net saleable capacity of 5,079 MW year-to-date and delivered a total of 20,226 GWh of energy, a 75% improvement compared with the same period last year. The LNG business contributed $11 billion to MGEN CCNI as Cromart Gas and Singapore-based Pacific Light delivered a total of 8,467 GWh and 4,290 GWh respectively. Note that with respect to Pacific Light, the 100-megawatt PASSTART unit also began to deliver power on May 16, 2025. Meanwhile, the thermal plants contributed $5.4 billion to MGEN's core net income from $3 billion a year ago due to higher revenues from the reserve market and increased energy output. mgen renewable delivered 557 megawatt hours 15 more than a year ago our consolidated interest-bearing debt stood at 213.4 billion including 98.1 billion of debt of our subsidiaries as of end of september net debt stood at 123.7 billion with net debt to EBITDA of 1.5 times. Debt maturities are well spread through 2014. All of Miralco's consolidated debt are in Philippine pesos. Cash and cash equivalent amounted to 88.2 billion pesos, of which our short-term and long-term investments totaled 6.4 billion pesos. Our four EPS stood at 35.509 pesos a share, up 14%, versus 31.138 pesos a share last year. While our reported EPS was at 32.67 a share, up 9% compared with last year. And that ends my report.

Thank you, Ms. Betty. We will now move on to the operating results presentation to be led by our Executive Vice President, and Chief Operating Officer, Mr. Ronnie Perocho, followed by the heads of our different business segments.

Thank you, PJ. Good afternoon and thank you for joining us today. We are very pleased to present Miralco's Operational Performance Report, highlighting our headline numbers for the nine months that ended September 2025. Starting with energy sales, our energy sales slightly dropped by 0.4% at 40,719 gigawatt hours with the cooler weather compared with the hotter than normal temperatures last year driven by the El Nino as well as the one-day difference versus 2024 leap year. In addition, our energy sales growth was tempered by the elevated vacancies in office and condo spaces from Pogo exit, along with a muted demand during typhoon-related work and class suspensions, which increased this year. Similarly, the DU net system input or NSI was 42,199 gigawatt hours, posting a marginal decline of 0.7% compared with the same period in 2024. RALCO's year-to-date peak demand reached 9.13 gigawatts recorded last April 23 this year. 2% lower than last year's 9.32 gigawatts. The drop can be attributed to last year's unprecedented power demand surge which normalized this year. Our customer count is growing by 2.4% to reach 8.178 million customers by end of September. On the service performance of the DU, the 12-month moving average system loss for September was 5.78%, a notable 0.26 percentage point improvement over the same period last year. As a result of our intensified system loss reduction initiatives and a higher share of low loss to serve commercial and industrial customers in the sales mix. In terms of the system reliability, we recorded significant improvements for our performance indicators. PSYP and PSYD, translating to shorter and fewer power interruptions. Our total PSYP was better by 9.6% at 0.762 times, while our PSYD likewise improved by 8.3% at 80.576 minutes. We are on track to meet our year-end target of 1 PSI-P and 100 PSI-D, underscoring Meralco's commitment to deliver world-class electric service to its customers. The year-to-date average time to connect customers also improved by 3.4% at 1.41 days over 1.46 days last year, translating to better customer experience with faster energization of service applications. And lastly, our average electricity retail rate was 11.63%. pesos per kilowatt hour 11.3 percent higher versus the same reporting period last year primarily due to the following first it was due to higher generation charge 13.9 percent increase mainly from higher malampaya natural gas prices due to the implementation of new gas sale and purchase agreement or gspa of first gas plants recovery of previously deferred charges for first gas plants and depreciation of peso and finally and then plus due also to the increased transmission charges the 30.8 percent increase from higher ancillary services costs thank you and i'm spreading you over to ferdy hellos for the customer report thank you ronnie and uh again good afternoon uh

So, I think Roni already mentioned that our nine-month sales at 40,719 gigawatt-hours is slightly below last year, 0.4% negative or minus 153 gigawatt-hours, mainly attributable to cooler temperature and the impact of the typhoons as well as the vacancies brought about by the Pogo exit. So this decline is despite the robust energization efforts as we now serve 8.18 million customers. So this is actually 194,000 more customers compared to the same period last year. Well, residential and commercial segments declined as organic sales offset new energizations, while industrial sustained modest growth, sustained a modest positive momentum like uptick from both organic sales as well as new energizations. So, well, to give you an idea, Our newly energized customers actually contributed close to 2% additional sales of 772 gigawatt hours, only to be upset by... the decline of 2.3% of around 940 gigawatt hours for same store sales as well as terminations brought about by the Pogo vacancy. So this netted out a negative 0.4% decline. And Ronnie mentioned the typhoons. the impact of the typhoon already reached 250 gigawatt hours versus the 110 gigawatt hours from same period than last year. And in terms of government and class suspensions, Today, we're registering 25 days of suspensions of government and classes. Well, government is eight days versus two days, classes is 17 days versus 14 days last year, so an incremental of nine days. so on a quarter on quarter basis while we grew 1.5 percent in quarter one we're actually in negative 0.3 quarter two and uh negative two percent quarter three uh with a worsening of weather conditions so residential incurred most of the impact uh with year-to-date decrease of 1.6 percent or minus 238 gigawatt hours so broken down into organic decline of more than 500 gigawatt hours uh but slightly upset by the 390 gigawatt hours or around two percent uh brought about by the newly energized services so accounts with zero consumption from mostly from condos in metro manila are up 15 percent so more than uh up 20 percent uh 20 20 000 uh more vacant uh condominiums uh due to the residual impact of the photo exit so this is mostly in the past area so in terms of uh uh decline metro manila burst brought up the decline at minus three percent laguna minus one percent while there was slight uh increase in bulacan one percent and cavity by 0.3 percent So for residential quarter on quarter, it grew 3% quarter one, negative 1% quarter two, and minus 6% quarter three. Commercial also felt the impact of the weather as well as public exit and office vacancies, as well as the slowdown in tourist arrivals. But the dip is actually just 0.2% or minus 23 gigawatt hours on the first nine months. The decline in organic sales of minus 400 gigawatt hours was upset by the almost 380 gigawatt hours or 2.5% increase from sales brought about by newly energized services. So real estate brunt of the negative decline at minus 2.4%. due to low office occupancy, while hotels also declined by minus 2%, affected by the downturn of tourist arrivals, mostly Chinese and Korean tourists. And I guess this is a residual impact of the Pogo exit. Well, later trade Partially offset those declined, cities up 1.5%, as well as restaurants are up 4.2%, with sustained increase driven by ramp up and expansions in malls for markets and convenience stores and quick service restaurants and cafes. Quarter on quarter, the same story. Commercial is actually up 1.5%, quarter one, and with the worsening weather, down 0.6%, quarter two, and 1.1% down, quarter three. Industrial, meantime, posted a modest growth of 1%, at plus 107 gigawatt hours, on back of steady upswings in semiconductor steel, cement and construction materials, which upset the declines in food and beverage and generator wheeling. Well, organic sales is slightly up at 15 gigawatt hours or 0.14% and new energizations both about plus 85 gigawatt hours or 0.8%. uh which actually contributed to the more than 100 gigawatt hours uh improvement so semiconductors uh actually improved two percent still uh still up back on the strong demand on storage devices and microchips still up 5.4 percent boosted by continuous uh a continued smelting activities now and the construction materials up 4.5 percent lifted by solid treatments a new product rather a production line in terms of quarter and quarter performance uh well uh it's an improvement uh quarter and quarter uh story for industrial exactly plantation plot plus 0.2% quarter one, up 1% quarter two, and up 2% quarter three. So that ends my report, and I now turn you over to Floyd for the networks report.

Thank you, Mr. Helus. Good afternoon, everyone. For networks project updates, last quarter we energized three electric capital projects, one capacity addition and two reliability improvement projects. On July 27, we completed the project upgrading of 115 kV circuit breakers at Gardner Substation. This project involved the installation of 14 units of circuit breaker and the associated . The project will provide sufficient capacity to accommodate the increase in safety issues due to the expansion of the transmission system in the area. as well as a complete future connection of embedded generators in the cities of Muntinlupa, Taguig, and Paranao. On August 19, we installed the third 300 MVA power transformer at Calamba 230 KB delivery point on substation. This will strengthen our system reliability. improve load distribution, and support the growing demand in the areas of Batangas Province and Laguna Province, particularly the industrial estates in the air. And last one, on September 25, we completed the Project Reliability Improvement of Binipon and Substantial. The project will strengthen system reliability, improve load distribution, and support the growing demand in Risal Province. Among the major beneficiaries are the Thunderbird Resort and Casino, Risal Province Hospital, Binangonan, Call of Justice, Binangonan Municipal Hall, Rizal Doctors' Hospital and Medical Center, Kalim Island, and the University of Rizal System. That's all for the Network Project Update. Here is Attorney Valles for the Regulatory Department.

Good afternoon. So for the Regulatory Update, Last October 16, there was an open commission meeting by the ERC where the commission adopted the following actions in relation to the de-use reset process. First, it approved the rationalized rules for setting distribution billing rates for privately owned de-use under PBR. It also approved the issuance of a resolution directing all private de-use to file the respective AWAT applications for the lapse period. and it adopted a trending method as a new valuation methodology for the regulatory asset base of Meralco's unbundling application in compliance with the Supreme Court decision in Nasikore versus PRC. So shown on the table in your screen is a summary of the distribution rate screw up that we have already refunded to the consumers The RTU 1, 2, 3, and 4 covers the seven-year original lapse period with a total refund of around 40.5 billion pesos. And then this was followed by AWAT 1, which covers July 2022 to December 2024. And the amount approved by the Commission for Refund was 19.96 billion. And we are already refunding around, we have already refunded around 3.33 billion pesos. We have filed the AWAT 2, covering the period January 2025 to June 2025, or a period of six months, for a total refund of 4.69 billion. But we have yet to receive the action of the Commission on this recent filing. And the last AWAT that we are going to file pursuant to the rules of the ERC will cover the period July 2025 to June 2026. uh and uh since we haven't uh the period has not started yet we cannot calculate the exact amount of the refund next slide please so under the rationalized rules for setting distribution willing rates although the erc has not released the official resolution or the rules today the based on the open commission meeting the highlights of the rrdwr are as follows It decoupes the issues on the lapse period enabling all privately used to have a fresh start to proceed with a rationalized and streamlined process. So the Commission also adopted the RAG roll forward handbook and applicable provisions of the position paper. That is that application for the approval of the ARR and the PIS will now include the proposal for the first regulatory year translation of the map into distribution rates. and all PDUs or Private Distribution Utilities will begin with the first regulatory period under the RRDWR. So it's not any more fit regulatory period for Meralco. So under Group A are Meralco, Sepalco, Decorp, and Cotabato Light. And the first regulatory period under the RRDWR shall cover July 1, 2026 to June 30, 2027. We are expected to file our first RP ARR application or annual revenue requirement application by January of 2026. Next slide please. so next is the doe department circular of the dc 20 2509 0013 which is the guidelines for the prioritization in the procurement and utilization of ing or indigenous natural gas so this took effect last september 3 and the guidelines on prioritization will apply only to procurement and utilization of ing over imported lng and this will not apply to the prioritization of electricity produced from ING over other conventional energy sources such as coal. This will be covered by a separate guideline. As a guiding principle in the circular, ING shall be prioritized to help attain energy security without impairment of contracts. So the policy applies to new ING volumes so that all existing arrangements under the current gas sale and purchase agreements and the PPA will not be affected slightly. The all users of natural gas shall first utilize available quantities of ING. So today this is only first gas. Natural gas users have the option to temporarily purchase LNG in lieu of ING for a period not more than three consecutive months. subject to any contractual obligations under the respective GSPAs. And when the ING price is higher than the six-month weighted average of the landed cost of LNG purchased from the spot market, including all taxes and the gasification costs. So the DOE will evaluate and review this purchase with due regard to the government share in the production of the ING. And subject to the rules that will be promulgated, by the DOE on prioritization of electricity from ING, an ING supplier shall offer its gas at a uniform price to all qualified gas customers. Upon acceptance, the available gas shall be allocated on a pro-rata basis according to the respective power generation capacities of purchasing customers. Next slide, please. So as you may be aware, we have extended the Power Purchase Agreement with FGPC Santa Rita Plant. So the original PPA has a 25-year term beginning August 17, 2000, or until August 17, 2025. This was subsequently extended by the parties by reason of an event, of course, Maduras provided in the PPA. And the extension was until August 28, 2025. After August 28, there was another extension, and this was the interim extension by mutual agreement of the parties, again, as provided for under the PPA. And the extension was for five months from August 29 to January 31, 2026. So the parties commenced the implementation of this interim extension on the basis of the ERC order dated August 27, which approved the interim extension condition on the dispatch of FGPC Santa Rica plant at its minimum level only and the pass-through rate to Meralco for fixed fish shall be the previously approved rates equivalent to or computed at 83 percent plant capacity factor. However, given the different interpretation by First Gas and Meralco, Meralco filed a very urgent motion for a consideration seeking confirmation that given this patch of plant is limited to minimum level only, equivalent to 644 megawatt, then it follows that the MEQ under the Meralco PPA, first-class PPA, is also reduced from energy equivalent to 83% plant capacity factor to the pin-in of 644 megawatt for all hours. ERC promulgated the clarificatory order last September 10, confirming that the MEQ is reduced to PMIN of 644 megawatt for all hours or actual dispatch whichever is slower, and the pass-through rate shall continue to be computed at 83%, and the fixed fees accordingly shall be proportionately reduced based on the actual dispatch of the plan capped at PMIN or 644 megawatt. Next slide. So we received several orders from the ERC granting interim relief to implement our baseload PSAs, excuse me, with GNPD and MPCL for 100 megawatt and 500 megawatt respectively for GNPD. the equivalent rate is about 491 headline and 490 lcoe whereas for machine lock is 485 headline and 486 75 lcoe the term is 15 years at 100 availability next slide we also received the erc decision approving the mid-merit psa with jnpd for 400 megawatt and uh equivalent rate is 6.733 uh headline uh and the 6.8586 lco e-rate again the term is 15 years and the availability is 100 percent next slide we receive also the erc decision approving the renewable energy mid-medium PSAs of Meralco with San Roque Hydro Incorporated and Gigazole. So San Roque is a hydro power plant and Gigazole is for solar with battery. And the rate are shown on the screen at 7.1 for San Roque and 8.18 for Gigazole. With the line rental cap at 15% for San Roque and the line rental for GigaSol is borne by you. Again, the availability is 100% and no outage allowed. That's it. Thank you very much.

Thank you, Urala.

fjs and jrbv we now proceed with the highlights from the power generation represented by mani nubio president of mchen thank you pj i'll begin my report with a top priority across all sites health and safety we're proud to share that we maintained a safe working environment with over 65 million safe man hours both for employees and contractors While we recorded zero lost time accidents and zero fatality, we had 13 first aid cases and five recordable cases, all of which were immediately addressed on site. These cases remind us that safety is a continuing responsibility, and we will keep reinforcing our systems and culture to ensure that every member of our organization works and returns home safely each day. As of end September, the overall Mgen Thermal group delivered 6912 gigawatt hours of energy, marking a 2% increase driven by high plant availability and stable operations. Energy delivered from San Buenaventura power grew by 7% with 2664 gigawatt hours while global business power on what's now M-Thermal recorded 4248 gigawatt hours. M-Thermal, a coal plant, continues to be a key contributor to grid stability, providing significant capacity for regulating and contingency reserves in the Visayas. M-GEN's liquefied natural gas investment through Chromite Gas Holdings delivered 8,467 GWRs, while Singapore-based Pacific Light Power Private Limited delivered 4,290 GWRs. Lastly, M-Gen Renewable Energy Incorporated, formerly M-Green, and what we will call moving forward M-Gen Renewables, delivered 557 gigawatt hours, 15% more from a year ago, driven by new operations, new capacity from our new operations of its 19.8 megawatts and 52.7 megawatt plants in Bongabon, Nueva Ecija, and Cordon, Isabela, respectively, to service JF2. Overall, Mgen delivered a total of 20,226 gigawatt hours of energy in the first nine months of 2025, a remarkable 75% increase compared to the same period last year. And this significant growth was driven by the added capacity from Chromite gas holdings, improved dispatch across our plants and consistently high plant availability and, of course, the dedication of our teams to operate these plants effectively. So following these strong results, now focus on our growth actions. Joining us recently are Pelino Bernardo and Arnel Santos, two of our new leaders for MGen Thermal. Together, their leadership will help ensure that MGen remains steadfast in its mission of powering a better tomorrow. Another key development for Mgen Thermal this quarter is the signing of the EPC contract for Toledo Battery Energy Storage Systems project in Toledo, Cebu, a partnership with CATL and SUMEC, Complete Equipment and Engineering Company. CATL is a global leader of new energy innovative technologies, while SUMEC is a leading global engineering solutions provider. The first phase of the project is targeted to deliver an initial 25 MWR by Q2 2026 with a total capacity of 47 MWRs, providing a reliable and balanced power delivery across Visayas. The remaining capacity is expected to be completed in 2027 subject to regulatory clearances and this battery will be participating in the co-optimized market to provide both regulating up and regulating down reserves. On the more recent news, just this October, Pacific Light Power has already selected a consortium of Mitsubishi Power and Jurong Engineering Limited, or JEL, as the engineering, procurement and construction contractor for its upcoming combined cycle gas turbine project in Singapore, a 670 MW project in Jurong Island. The new CCGT power plant will deploy Mitsubishi's state-of-the-art H-class gas turbine with hydrogen co-piring potential as the power sector works towards net zero carbon emissions, a key focus of the Singapore Energy Management Authority. This gas turbine is recognized as the world's most efficient large-frame gas turbine model with more than 64% combined cycle efficiency and proven reliability through 3 million operational hours across the globe. On the renewable front, construction progress of the MTERA solar project continues with ongoing construction activities, including grid interconnection and land acquisition, conversion, and reclassification. And as of October 15, Phase 1's overall progress stands at 65%. On a more recent news just this October, we made agreements on the EPC works for the south block of the project with Getty Construction Development Corporation, China Energy International Group Company Limited and Energy China Engineering Group Guangdong Electric Power Design Institute Company Limited to be the EPC for that phase. Following the magnitude 6.9 earthquake that struck northern Cebu last September 30, MGS Thermal Plant in Cebu, Cebu Energy Development Corp, or CEDC, and Toledo Power Company, TPC, flipped Corp URs but went back online on the same day. And on October 1st, just shortly after all the checks, these units went back servicing the grid. MGEN through CEDC and TPC has already mobilized 1.3 million pesos worth of relief goods to support families affected by the earthquakes, particularly in northern Cebu, distributing almost 2,000 food packs and essential supplies like rice, canned goods and 20-liter water containers, in coordination with local authorities and partner communities. And beyond the relief operations, our head office here in Pasig It is also extending further assistance to families in need. Altogether, 1MGEN's efforts are set to reach 2,230 families in Cebu. And as safety remains our top priority, we are actually assessing the overall structural integrity of the plants and carry out necessary repairs if needed. And so far, it's looking well as far as the operating units are concerned. MGEN's strong performance in the first nine months of 2025 demonstrates how far we've come in strengthening our portfolio from thermal to LNG to renewables and now storage. We continue to execute our growth projects with discipline and purpose, while maintaining a steadfast commitment into health, safety and inclusive community development. And as we move toward the close of the year, we remain focused on delivering energy that powers progress and on building an energy future that is secure, reliable, and sustainable. So together, we power a better tomorrow for the region and all the communities that we serve. Thank you very much. Have a good afternoon.

Thank you, EVR. We now move forward and welcome Mr. Raymond Ravelo to discuss tomorrow's sustainability initiatives.

Thank you, PJ. Good afternoon, everyone. I'll be providing a brief update on the sustainability front. In particular, I'll be covering updates on our recently held Leaders Summit on OneMeralco's long-term sustainability strategy, as well as updates on our ESG ratings and recognitions. So first, last September 19th, we convened more than 600 members of our senior and middle management core at the Meralco Theatre to unveil our long-term sustainability strategy. a distinctive roadmap for a just, orderly and affordable transition to clean energy spanning three decades from 2021 to 2050. The event was headlined by Chairman MVP and Department of Energy Secretary Sharon Garin reflecting strong alignment between our corporate directions and the government's energy priorities. Throughout the event, the message was very clear. OneMiralco's long-term sustainability strategy strikes a deliberate balance between science and practicality, growth and responsibility, innovation and inclusion. At its core, our energy transition is geared not only towards reducing emissions, but also uplifting communities and empowering people. With your indulgence, please allow me to share a very short video on what transpired during Horizons.

So today we gather with a shared purpose to look ahead to a future that is clear and sustainable. Sustainability must not come at all costs to ensure that every what we deliver is not just power, but purpose.

Working together with the private sector like Neraldo, I think we can have a greener, cleaner future for our children if we all work together. And hopefully, let's go for the sustainability of green energy in the country.

Indeed, what flows through our lines is not really or not simply electricity. It is energy. Energy that awakens minds, heals communities, and powers a good life for all.

We are addressing the energy dilemma. Delivering energy that our country needs to grow without compromising the future.

A sustainable future is not only powered by clean energy. It is also powered by shared opportunities. I hope we have needs that level sustainability that the Philippines can be proud of. Attain affordability for the world. I hope we would achieve substantial energy independence.

Strong ESG performance also continues to anchor our sustainability journey. In particular, Meralco demonstrated robust environmental, social, and governance performance as evidenced by our continued inclusion in the FTSE for Good Index, and this is for the fifth consecutive year. In addition, we advanced our leadership in diversity and inclusion with an improved Bloomberg gender equality score, rising to 4.6 in 2025 from 4.1 in 2024. If you could click the next button, please. This was driven by our commitment and transparency to close the gender gap as evidenced in part by greater representation of women in our management core. Moving on, we're very pleased to report that at the 2025 International Business Awards, Juan Miralco earned an all-time best 15 STVs, surpassing our previous record of 11 awards in 2019. We were recognized with five golds, eight silvers, and two bronzes, highlighting our achievements in driving sustainability, innovation, and social impact. Of these 15 STV awards, 10 were ESG-related. Next, Juan Miralco likewise won in the 2025 Asia Pacific Stevia Awards, garnering a total of 11 recognitions, nine of which were sustainability related. These recognitions, these accolades further affirm our excellence in sustainability and strategic communications. Next, last month, Meralco was also named a sustainability champion by the Manila Times, recognizing the alignment between our sustainability agenda and the United Nations Sustainable Development Goals. Moreover, we were featured in the Manila Times inaugural ESG publication, citing how Meralco is leading by example from transforming how energy is generated and distributed to empowering underserved communities. Lastly, just last Friday, October 24th, our 2024 OneMeralco Integrated Report, our very first IR, earned top honors at the 2025 Asia Integrated Reporting Awards, or IRA, securing the Platinum Award for Asia's Best Integrated Report under the First Time category. Aira is considered the most prestigious recognition for excellence in sustainability in corporate reporting, covering Asia, the Pacific, and the Middle East, honoring companies that demonstrate long-term value creation, integrated thinking, and transparency. Thank you very much.

Thank you, Raymond. We will now open the floor for a question from analysts and investors. You may raise your questions in two ways. Raise your virtual hand and wait to be recognized before speaking. Alternatively, you may type your questions in the chat box, and I will read them on your behalf. In either case, kindly state your name and the company you represent before asking your question, and please mention the executive you would like to address. We actually have several questions already on hand. From Klein Resilar of Regis, could you please confirm whether the loan used for Chromite acquisition has been pushed down to the operating unit in third quarters? Thank you, Ms. Brettie. We have a question on site.

Hi, thank you for the opportunity. I'm Jermaine from Maybank. I have a question, I guess, first for Sir Ferdinand. So is there any updated guidance on DU volume growth following observed sluggish demand? Is a rebound expected or should we expect current levels of growth to continue?

Yeah, I think as far as guidance is concerned, with the onset of the technical line, I think we see the same trend for Q4. So, we'll probably end up around half percent to 0.8 percent negative. So, a bit on the negative side, but not far from what we have last year. well at least on the energization side i think we're wrapping up uh and organic i think by next year as weather patterns and normalizes and maybe occupancy picks up so we're gonna get some sort of update on the what we lost this year in terms of our organic organic production

Thank you. And following on that, maybe for Ms. Betty, what CCNI split of distribution and generation does Miralco expect by year-end and overall in the long term, if possible?

Well, I guess more or less where we are right now in terms of our generation. So, our generation is now at 37%. And then, sorry, that's Miss Betty.

Is there, can we have more color also in the mentioned regulatory reset fee adjustments? Is there an exact cost or timeline for these adjustments?

in the last several years.

Thank you, Ms. Betty. And last one for me, maybe for Sir Manny. Is there progress on the upcoming projects like TerraSolar that has, I believe, a contract right for 2026 around 850 megawatts? Are things on track or are we seeing delays and due to what, if ever?

Well, The project today is 65% completed, and we have experienced challenges on-site, including the weather, and then some of the lands we have to acquire, and this requires some realignment of the feeder lines. But key components along the project's critical path, like transmission towers, has been secured. 100% of the transmission towers, 89 out of 89. Corridor access has been acquired, 82%. And connecting land for Phase 1 are already being secured and is progressing well. We still believe that we are within the allowed timeline provided by the PSA with Meralco.

Thank you.

Thank you for that. We're just seeing some online chats saying that Ms. Betty's response earlier was not heard. But just going back to client reseller's message, could you please confirm whether the loan use for the Chromite acquisition has been pushed down to the operating unit in the third quarter? Ms. Betty mentioned earlier that not yet.

We are working on it. questions and tips that you provide

Thank you, Ms. Betty. In line with Jermaine's question earlier in terms of the contribution mix, to what extent is the strong LNG contribution exposed to volatility in Malampaya and global LNG prices, and how are you managing margin stability? It's a question from Marky Karunungan of FF.

The pricing for LNG PH, for Excellent and IRI, the fuel is passed through. So as far as the generator is concerned, that volatility is actually managed on the generator side. We are charging capacity. The two plants are also contacted fully with Miralco. What we are also working on now, just to Again, to address the fuel volatilities, we were informed that Prime is going to start work on the pipeline that connects Ilian SPPC to the Malampaya pipeline in Tabangao. They'll start picking, I think that's the maintenance, starting December 1 and hopefully ready to accept gas from Malampaya if gas can be actually supplied by Malampaya post-December 16, 2025.

Thank you, EBR.

We have a question on-site.

Hi, everyone. Good afternoon. Peter Garnasio from Unicapital Securities. Thank you so much for the briefing and congrats on the results. I have three questions. I'll go through them one by one. First is on the provision right box. Are the consecutive quarters of provision right box an indication of increased confidence of rate reset by July next year? Will this trend continue or would it be safe to assume a similar scale of right box moving forward? That's for my first question. Sorry, I'll just repeat it. Are the consecutive quarters of provision writebacks an indication of increased confidence of a rate reset by July next year? Will this trend continue or would it be safe to assume a similar scale of writebacks moving forward?

The write-backs right now are all related to our settlement of real property tax, and it has nothing to do with the reset.

Got it. Thanks.

We settled on real property tax for our poles, wires, etc., which has been a case that was decided by the Supreme Court back in 2015, if I'm not mistaken. So there are several...

of us. Thanks, Miss Betty. Yeah, I think my second question is still addressed to Miss Betty. Can you provide a breakdown on the difference between the core net income and the reported net income?

Okay, so I did mention earlier that it pertains to the day one gain adjustment. That's about $4 billion. $500 million. And then the balance would be gain and sale of asset of MGEN. That should be a total of about $350-$360 million.

Thank you so much for that, Ms. Betty. And also to my last question, I think I'll address it to Sir Manny Rubio. Could you provide an update on MGEN Renewables or MGREEN's exchangeable note agreement with Solar Philippines? If I'm not mistaken, both of the exchangeable agreements have matured in September of this year. Any update if the loan was or will be repaid through cash or through shares? Thank you.

exchangeable notes with Solar Philippines Power Project Holdings to buy shares in SPNIC. The exchange of shares for the loan extended by M-Gender New was to be affected after the shares were released from the lock-up after they got listed. This occurred in September 2, 2025. So prior to effecting the block sale, Mgen Renewables was asked if SP can first transfer to the owner Lian before transferring to Mgen Renewables. This assignability is part of the exchangeable note agreement. So the transfer to Mr. Leviste was implemented already, and the transfer to Mgen Renewables has also been accepted by the PSE. The settlement is due today and will be deflected tomorrow.

Thank you, ADR. We have a set of questions here for, still on Mgen, MTERA Solar in specific, for a set of questions from Nikki Frank of Abaco Securities. Is there a firm date or window for declaring commercial operations? Kindly confirm that the capacity factor for a solar panel's use is, is it 18 or 20 percent? Third question is, can you give EBITDA margin guidance? And fourth one is, what is the average cost of debt?

The contract allows us to declare COD up to August 1, 2026. That's for Phase 1. And for Phase 2, February of 2027. On the capacity factor, Philippines is, because of the regions, anywhere between 17% to 18%. I think that would be a number that we're looking for the PV panels of TerraSolar. The third question is, can you give EBITDA margin guidance? We're expecting EBITDA to be north of 80%.

And last one, what is the average cost of debt?

Average cost of debt would be around 7%.

Thank you, AVR. A question related to battery energy storage. What kind of scale in terms of megawatt is the company looking to build up for this, and what type will be used?

Well, it's not about just building on batteries. I think what we're looking at when we build batteries is where are they needed and what will be the purpose. At the moment, we're looking at building one in Cebu because it's needed. We're talking to our partners in Mindanao where energy storage is also needed. However, when a case is actually built, we have extra land in, terrasolar And if we can actually justify putting additional batteries outside of the TerraSolar project and we can justify it through an arbitrage, then we will do the same. But it has to serve a purpose. It's not just a matter of building batteries for building capacity sake.

Thank you, EVR. Just related to M TerraSolar still. We have a question from Christina Ulang of First Metro. Good afternoon. Appreciate your information guidance for equity valuation purposes on selling prices for TerraSolar, USM-based or mid-merit on the higher end, like P7, for instance, and load factor, say, 30%.

Well, TerraSolar's 53% capacity factor to be delivered to Meralco is um ronald ballas presented earlier the um the results of the csps approved by erc you know 50 capacity factor asian sold at uh or um approved at an improved rate of 18.1819 we will be lower than that thank you evr

Do you have a question on site?

Yes. Good afternoon. Martin Martia, also from First Metro. And I wanted to direct this question, I guess it's either to Attorney Valdez or Mr. Rubio. How will this prioritization of indigenous natural gas affect chromite, I guess, at the point where gas can be delivered?

As Ronald presented earlier, you know, the prioritization of indigenous gas should not impair existing contracts for gas, right? And obviously if indigenous gas is actually cheaper, right, we should have access because the indigenous gas bill mentions of that everyone should have access, non-discriminatory access to gas. So at the moment we're looking at, we're asking the OEA, but it seems that if gas, whatever gas is going to be available, will be allocated based on installed capacity. So we have bigger capacity, so it has to be 55, 45. I think that's what we're looking at. But, yeah, at the end of the day, I don't think if gas would be cheaper, you don't even need to prioritize it. We will have access to that.

Thank you for that. Before we go on site, we have a question online. It's a question from Jilin Gaza. Can you open the line?

Hello. Good afternoon. Can you hear me?

Yes, we can.

Thank you. My first question is on the trending method that will be adopted in the PBR asset methodology or RAB methodology. Can you please expound on what it means and what it effectively translates to in terms of the ARR or effective rate for Morocco?

That's my first question.

Hi. The way we understand the trending method is that it's a form of reappraisal as allowed under the IPIRA for assets that are undergoing devaluation during the RORP time. And it's trending because it's subjected to an adjustment based on recognized adjustment factor or CPI or indexation. So that's how we understand it.

So effectively, it's like a form of revaluation still?

Yes, it is a revaluation because the Supreme Court decision did not say, when it voided the replacement power costs, that the revalvation or the revalvation of the asset will be based on historical costs.

Thank you, Sir Attorney Valdez. Another on the tariff determination, I recall in the last briefing you were mentioning that there's an ongoing Supreme Court file placed about questioning the applicability of the Final interim rate. Are there any updates on that?

Sorry, can you say that again? I did not hear the question exactly.

There's a Supreme Court case filed by a consumer group which questions the validity of the final interim rate.

You mean the AWACS? Yes, the AWACS, correct. That have been settled by the ERC. There were three cases that were elevated to the courts by consumer groups, two in the Court of Appeals and one in the Supreme Court. And Meralco has already submitted its comments to all of these cases, and our comments are aligned with the comments submitted by the Office of the Solicitor General representing the ERC. So consistent naman yung position taken by the government and Meralco in defending the Tawak decision. But we have yet to receive any further advice or notice. from the ERC on the action to be taken on these cases from the Supreme Court or Court of Appeals rather.

Okay, understood. Thank you for clarifying that. My next question is actually a follow-up on the prioritization of the local indigenous caste. Do you think that this might have any impact on Morocco as a distributor, your plans for future PSA auctions?

Well, right now, the guidelines speak only of prioritization of ING over LNG. So it does not yet cover prioritization of ING over coal or other conventional sources. So although I think that the Department of Energy is going to issue a separate guidelines on that. Based on my reading of the circular, the applicable CSP or guidelines for the procurement process is still the same CSP that the DOE has approved prior to the issuance of these guidelines.

It's a matter of just waiting for the order to come out because if I recall, when we look at the law or initial IRR, there's a mandatory percentage procurement by distribution utilities for power plants using local gas, right? Is that understanding correct?

Yes, but there is no implementing guidelines yet on the mandatory procurement of ING over any other sources. So, we are awaiting further advice or issuance from the DOE in that respect.

Okay. So, it's more like waiting for it. Understood. And lastly, on a number for Ms. Betty, would you be able to disclose the net income contribution to Morocco of LNGPH after contributing or considering the PPA adjustment? Thank you.

I should have the number for LNGPH.

Can I get back to you? I have the number. I think 5 billion. That's 5 billion pesos, LNGPH.

After PPA and before net interest.

Thank you. Thank you.

Thank you, Jeline. We have a question on site.

Hi, good afternoon. My first question would be directed to Sir Manny Rubio. In terms of the timeline for MWIN3 IPO by SPNEC, any target on the target transfer of assets and if there are any changes on the earnings mix, should this materialize? That's my first question.

We don't have any timeline yet on that one because it's just an option that we're considering. If ever, we'll do that once Terrasolar is fully delivered and we've merged the assets of MGREEN and SP9. But today, we're still planning for the milestones to achieve that if we take that option.

Alright, thanks for that. And then my next question would be on the current plans for the ATIM 1-1.

um we have we've started project development of um at the modern one um we've um uh issued uh um we put out the bids uh for the epc um we have received three offers um so we are in a position to participate in a csp that will come out probably by around december anytime between december and january Whether that's through Meralco or based on capacity auctioned by the DOE. By then, we'll be ready to participate. 1,200 megawatt capacity.

All right. And then my last question for now would be on the spot market trends. So currently, the year-to-date spot average is now below five pesos. And looking at the recent PSA contracts, it's now also below five pesos per baseload. So I just wanted to know your outlook or perspective on the spot prices moving forward and for your future contracts. And just a follow-up on that, what's the current contract mix for Terra Solar and your spot market exposure?

if they're saying yeah for um the spot market i've used that it's going to remain low um given that um new capacity coming in um jf2 capacities there are four plants that came in which pushes the the merit or the dispatch to the to the right side no um and then of course um as we uh continue to construct and commission terra solar um that capacity will also be coming in in um in 2026. If there will be any excess apart from charging the batteries, then probably an option if the prices in spot market are low, we can sell it to our risk and sell it to the retail electricity market.

Thank you, EBR. We have an online question from Client Reseller of Regis regarding why are REST volumes up 8% but EBITDA and income contributions from REST and service subsidiaries dropped?

Reason why the EBITDA decreased despite volume would be mainly because last year we had the benefit of trading gains when spot prices were higher. So that amount has actually decreased the trading gains that we have this year compared with last year. If I recall correctly, the trading gain last year was closer to 3 billion, I think 2.7 billion pesos, compared with what we have this year, which is only less than 300 million pesos. So if we look at the volumes, these are actually coming from customer contracts where the margins are not as big as if it were a trading margin.

Thank you, Ms. Betty. Klein, as a follow-up question, could you elaborate on the factors behind the rise in distribution profits even as sales volumes dipped?

Okay, so on the distribution side, while the volumes are lower, to a certain extent, we look at cost. And also, the other point was as it relates to the reversal of provisions related to settlement of tax cases, more of real property tax. conclude on settlement for taxes. As I mentioned earlier, this pertains to real property tax on poles and wires. This is based on a Supreme Court decision back in 2015. And the settlement is not Smeralco itself. So we have to go to each of the LGUs.

Thank you, Miss Betty. The virtual hand of Jillian Gaza was up earlier. Can we check with with her again? Jillian

Okay, sure. Thank you for the opportunity. And maybe as a view on the demand, just curious to know about Miralco's view on rooftop solar and net metering. Do you think that this might be a potential driver of how volumes has been weak? And if you have any figures on the extent of net metering or your own internal review of how much this has been, even for those that are not connected to the grid, that would be extremely helpful. Thank you.

uh yes so i i have uh some figures now well for solar estimated solar losses so we estimate our solar loss uh today uh at around 427 gigawatt hours now so this is up uh up around 74 gigawatt hours compared to 353 gigawatt hours of losses that we had last year and we some sort of project the incremental loss to reach around 100 gigawatt hours so that's here on 2025 versus 2024.

So incremental by 100 gigawatt hours for the full year and 74 gigawatt increase and loss was for the nine months.

Yeah, for the nine. And of course, in terms of total, it will be more or less around 600 gigawatt hours by end of year. So the increment is around 100.

So 400 out of So just around only 1% of total demand.

Yeah, yeah. The incremental is around 100. But in terms of the actual loss, it's around 600 to 600 plus gigawatt hours.

Understood. Thank you, sir. Thank you, sir.

Thank you, FOG. We have a question from Raymond Franco related to regulatory. I believe Attorney Valles answered this earlier, but if you can elaborate further, JRVV, what does management expect to happen with regard to the supply agreement extension with FPH or Santa Rita after January 2026?

uh today uh the parties are discussing it but there are no uh firm uh commitment or decision yet on whether the there will be another extension beyond january 31 2026. thank you turing rvv

We don't have questions on site anymore. Okay. Peter?

Thank you, Paige. Yeah, just one last question from me. I think I'll address it to Ms. Betty. With regards to the peso depreciation, the peso is now back to 58.9, almost 59 versus the dollar. Would you be able to quantify for us the impact of every peso depreciation to Miracle's operations?

First, we don't have foreign currency denominated debt, no. we do have a little of the foreign currency-denominated trade liabilities. But we plan all of this. We factor it in our daily requirements for foreign currency. On the purchase power side, we do a – daily purchase to manage the impact of Forex to purchase power costs, which is billed to the consumer. And the purchase power costs, so now we have the currency already, right? When we settle it, that's the same rate that we used to settle. So there should be not much impact to us for that one.

liabilities which are related to trade thank you ma'am thank you miss betty that's the last set of questions we have mindful of the time well thank you everyone for attending attending our briefing this time we look forward to having you in our nine in our full year briefing come february 2026.