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.