Manila Electric Company

Imagine a world where cancer treatments are more accessible because nuclear technology makes precise, life-saving therapies possible. Where crops flourish in barren lands, nourished by nuclear science. Where our homes and industries thrive on clean, powerful energy uninterrupted. But this isn't just a vision of what could be. It's already unfolding across the globe and slowly here at home. Nuclear technology is transforming the way we live, work, and care for one another. What was once feared is now understood. What once seemed distant is now within reach. And what was once seen as dangerous is now saving lives. This is our world, reshaped by nuclear technology, safer, more sustainable, and full of hope. Together, let's embrace this future where nuclear energy not only powers, but profoundly improves our lives, illuminating a path to a brighter, stronger tomorrow for the Philippines.

Energy is the heartbeat of our progress. It powers every step. towards a stronger, brighter future. For our nation to thrive, we must turn to cleaner, more stable, and efficient sources of energy.

Safe, reliable, clean, sustainable. But why is it a game changer in the way we power lives? It starts at the smallest level with the splitting of atoms in a process called fission. This controlled reaction produces heat, turns water into steam, and drives turbines to generate electricity. No smoke, no burning, just clean, efficient energy. Nuclear is built with safety at its core. Layered systems, expert teams, and decades of global experience. It's powerful, too. One tiny pallet of uranium holds as much energy as a ton of coal without the emissions. And it's one of the most reliable energy sources on Earth. It runs 24-7, rain or shine. unshaken by fuel price spikes or cloudy skies this means continuous power and uninterrupted moments cleaner air and lower carbon emissions helping us fight climate change and reduce our dependence on imported fuels today more than 400 reactors across 31 countries supply nearly 10 of the world's electricity and almost a fourth of all low carbon power france for example powers almost two-thirds of its grid with nuclear, achieving a level of energy independence few nations have reached.

Energy and security can hold back our nation's growth. That's why we need a solid foundation. for our energy base load. We're not starting from scratch. We're building on decades of global experience so we can do things right from the very beginning. Through our Nuclear Energy Strategic Transition, or NEST, we collaborate with global experts. The Department of Energy and other government bodies to further develop the Philippine Nuclear Energy Program and Roadmap. Following IAEA Milestones approach and aligning with the Philippine Energy Plan, it's time to change the mindset from apocalyptic to optimistic, from fear to hope.

A key focus is the potential rehabilitation of the Bataan Nuclear Power Plant. Once a symbol of what could have been, today it stands for what still can be we fully support the philippine government's initiative to explore how this long dormant facility can become a modern source of clean reliable and stable energy similar plants built in the same era with similar technology continue to operate safely in countries like slovenia south korea and brazil proving that nuclear power is durable, dependable, and built to last. Through partnerships with the USA, France, South Korea, Japan, and Canada, we carry over 70 years of global nuclear expertise, combined with more than 120 years of local electrical experience built here in the Philippines.

Our commitment goes beyond infrastructure. It's about people. Through the Fission Program, we're building a local nuclear workforce. Scholars and engineers are training with global leaders, preparing for the nation's nuclear future.

This isn't just about generating power. It's about powering the moments that matter most.

The ones that teach us. The ones that hold us together.

The ones that push us forward. It's never just about power. It is peace of mind. Embracing nuclear means choosing a future that's safe, stable, and secure. Energy we can count on, not just today, but for generations to come, with proven technology and the highest global safety standards. We're taking this step forward, carefully, responsibly, together. This is our commitment, to light the way for a better future, to power better lives for all.

Meralco is lighting the way towards a cleaner and greener future.

Our Bulacan solar power plant contributes an additional 55 megawatts of generating capacity to powering the Luzon grid. 55 megawatts of power? Let's quantify that.

It takes 3 to 6 megawatts to light up hospitals, factories and other high-energy facilities. For residential customers, it powers close to 42,300 homes.

This completes a 1,500 megawatts energy portfolio that powers over 1,200,000 homes. This is a humble step to being coal-free by 2050. But along the way, a secure, cost-efficient, reliable and balanced energy mix is our priority. so that in our lifetime we may realize better lives for all.

Visit the Miralco website to learn more.

I will remember the light of tomorrow In every movement and every step Be a hope for everyone A little pain

Together, we will build a future where there will be no community left in the dark and where clean and hopeful energy will give light to the next generations.

This is the beginning of the light, the enlightenment of Barangay Cagbalite Uno, of the whole island of Cagbalite.

Maraming salamat po sa Meralco dahil kayo po ang tumupad ng kanilang mga pangarap. Palakpakan naman natin, Meralco. Paabot po kay MVP ang pasasalamat.

Naway, ang liwanag na ito ay maghatid ng mas maliwanag na Pasko sa inyong lahat. Paskong mas masaya. May this ceremonial lighting serve as a symbol

brighter, more inclusive, and more sustainable future, not only for Cagbalete Island, not only for Mauban, but for island communities across the Philippines.

Congratulations again on this historic milestone. May the light you bring to Cagbalete inspire us all to work harder to energize the entire Philippines.

Long live Cagbalete. Long live Meralco. Long live everyone. Long live the new Philippines.

Good afternoon, everybody. Can we settle down? We'll start in one minute.

And I'm very. Good afternoon, investors, analysts, fund managers, and key stakeholders.

Welcome to Morocco's full-year 2025 results briefing. I am Paul Jason Ramos, Chief Investor Relations Officer for Morocco, and I will serve as a moderator today here at Makati Shangela. We also welcome our guest analysts and investors who are joining us in person, as well as those participating online through our MS Teams conference facility. Before we proceed, please be advised that this session will be recorded. Kindly adhere to the ground rules which were sent to you prior to this meeting. Today, we will present the financial operating results of Morocco for the full year 2025 and December 31. A copy of the presentation may be downloaded from our website at www.morocco.com.ph under the investor relations section. Today, we are joined by members of Morocco's management team, led by our Chief Operating Officer and EVP, Mr. Ronia Perocho, President and CEO of MGEN, Mr. Emmanuel Rubio, SVP and Chief Finance Officer, Ms.

Betty Siap, Head of Regulatory Management, Attorney Jose Ronald Valdez,

Today's agenda will begin with Morocco's full year financial highlights, followed by an update on the operating results of our distribution utility business. We will then provide updates from MGEN and share key regulatory and developments outlook. We will subsequently open the floor for Q&A before concluding the presentation with closing remarks. At this point, I would like to introduce our Chief Finance Officer, Ms. Betty Siap, who will present the financial results.

Thank you. Good afternoon, ladies and gentlemen, I will be presenting the results for the full year ended December 31, 2025. On your screen is a summary of highlight of each of the business units. Our CCNI or Consolidated Core Net Income for the year 2025 grew 12% driven by the steady performance of the core distribution business and solid growth of the power generation business. Following are the highlights. The DU business continued to account for the largest share of our 50.6 billion peso Consolidated Core Net Income, at 29.6 billion, up 6%. The UCCNI contribution accounted for 58% of the total, down from 61% share in 2024, with the higher share of power generation business. Our sales volume for 2025 was flattish at 53,997 gigawatt hours. Morocco refunded a total of P938.5 million out of the P987.2 million in ERC reset costs for the periods July 2015 to October 2024. P4.9 billion was also refunded from April to December as part of the P19.96 billion average-weighted actual tariff refund over 36 months. Moralco's distribution rate was lower by 0.0023 cents per kilowatt hour in February. So it's down to 1.3499 per kilowatt hour due to ERC's exclusion of the regulatory reset costs embedded in the average interim tariff. On the other hand, on September 18, 2025, the ERC approved the average distribution supply and metering charge of Shin Clark of 4.023 pesos per kilowatt hour. On the power generation side, CCNI contribution of power generation grew by 52% to 16.8 billion pesos and now accounts for 33% of the CCNI, up from 25% in 2024. Their sales volume was at 27,289 gigawatt hours, 78% higher than the 15,296 gigawatt hours in 2024, driven primarily by the volume of LNG pH. The thermal plants generated 3.6 billion of consolidated core net income from the reserve market. For MGREEN, On March 16, Actis acquired a 40% share in Terra Solar through a 30 billion peso subscription of common shares. In October of 2025, the ownership of Espinek increased to over 69% with the acquisition of the additional 10.8 billion common shares from Solar Philippines Power Project Holdings Inc. On MGAS, On January 27, 2025, a 40.2% effective interest in the gas companies was acquired with a total investment of close to P70 billion. All three units of Excellent Energy obtained a final certificate of approval to connect from the National Grid Corporation of the Philippines and Provisional Authority to operate from the ERC by April 30 of 2025 and July 1 of 2025, respectively. During the year, dividends received from unconsolidated investees totaled P9.2 billion, largely from Pacific Light for a total of P6.4 billion and San Buenaventura at P1.6 billion. With respect to RES and other businesses, the RES business and non-electric businesses provided a combined 4.2 billion pesos or 9% of CCNI. The rest business had a combined energy delivered of 7,510 gigawatt hours in 2025, up 11%, driven by continuing customer acquisitions. Miralco provides competitive price power to Customer Choice Program customers through its local REST units, Empower, and Clark Electric's Cogent, as well as three other affiliate REST suppliers. Dividends declared out of the 2025 CCNI was about 62.5% of core EPS, or a total of P28 per share. Dividend yield was at close to 5% based on the 2025 year-end closing price of Miralco. On July 21, 2025, S&P Global affirmed Beralco's BBB credit rating and revised its outlook to positive, citing strong market position and improving business integration. Our stock price reached a high of 618 on November 24, 2025, and it closed at 574 at the end of 2025. So we now go to the details. As mentioned, our CCNI increased by 12% to 50.6 billion. Consolidated reported net income increased by 11% to 51.1 billion pesos. The gap between CCNI and consolidated reported net income represents accounting adjustments for day one gain from the present value adjustment of our over-under recoveries, foreign exchange losses, and impairment loss recognized by our subsidiary. Like our CCNI, our core EBITDA also rose. It grew by 15% to 86.4 billion pesos from 74.9. Our consolidated revenues increased by 6%. to 497.3 billion from 470.4 billion in 2024, driven by the higher pass-through generation transmission charge of the distribution utility, increase in power generation revenues from the reserve market, and higher volumes of the retail electricity business. Costs and expenses increased by 6% to 448.9 billion pesos, the bulk of which represents purchase power costs. Capital expenditures totaled 108.9 billion, largely related to the development of the solar power plant in Nueva Ecija and distribution network improvement projects. Our cash and cash equivalent amounted to 109.3 billion pesos, with consolidated debt at 230 billion pesos. The next slide shows the segment information. The CCNI contribution of our regulated or distribution business was from consolidated energy volumes of Miralco, Clark Electric, and Shin Clark, which totaled 53,997 gigawatt-hours. Note that the CCNI contribution of DU declined to 58% from 61%. However, in absolute terms, the numbers actually grew by 6%. For our unregulated business, the higher CCNI in terms of peso amount came from the growing par generation business, with its share now at 33%. This is equivalent to 16.8 billion of the CCNI owing to the LNG investment, improved availability of the thermal plants in the Philippines and our gas plant in Singapore, as well as higher revenues from the participation in the reserve market. The retail electricity business and non-electric businesses, meanwhile, brought in a combined 9% share in RCCNI. The RES volume was at 7,510 gigawatt hours, up 11%, driven by continuing customer acquisitions. The DU revenues accounted for 82% of the total. RES and non-par subsidiaries and affiliates accounted for the 12% and par generation, 6% of revenues. Due contribution to the consolidated core EBITDA amounted to 53.3 billion pesos, up 19%. Power generation was at 25.5, up 30%, compared to 29% of the total, while RES and non-power subsidiaries accounted for the remaining 9%. The next slide shows the system-wide power sales volume. So in this chart, we simply added the volume of the three segments. System-wide sales volume was at 67,630 gigawatt hours, slightly up from the 67,411 gigawatt hours in 2024. The DEU volume includes the volume of PELCO II, which we manage and operate under an investment management contract, was at 54,849 gigawatt hours, including 6,086 gigawatt hours sold by our RES units within the Miralco franchise area. The RES volume was at 7,510, of which 6,086 was sold within within the franchise area and 1,424 sold outside the franchise area. The Mgen volume was at 27,289 gigawatt hours with most of them or 21,600 sold within the Philippines and of which a total of 15,931 were sold to the Meralco Group, DU and RES. Okay, so with respect to our revenues, electric revenues was at 485.5 billion pesos, accounting for 98% of the consolidated revenue number of 497.3. Generation, transmission, and other pass-through charges were 8% higher at 386.8 billion pesos due to higher fuel costs of power plants using liquefied natural gas and the Malampaya natural gas. Transmission charge also went up due to the higher ancillary service charges from additional capacity sourced by the National Grid Corporation of the Philippines from the reserve market and implementation of a higher MAR or maximum annual revenue for the National Grid Corporation as approved by the ERC, which they began implementing in July of 2025. Distribution revenues decreased by 2% or 1.4 billion due to the 938.3 million peso reset cost adjustment book in June. The 0.0023 per kilowatt hour downward rate adjustment for the reset export cost starting February of last year and the flattish volume, which was at 53,997. These were mitigated by adjustments of Shin Clark's distribution revenue in July. that the ERC had approved to be collected and their under recovery, which the ERC had approved to be collected over 11 months. The energy fee, which totaled 26.8 billion, increased by 9% from 24.6 billion with higher revenues from the reserve market. This were partially offset by lower fuel costs charged to customers with the decline in fuel price and a decrease in WESM sales as WESM prices in Panay declined. Non-par subsidiaries revenue was 12% lower due to the deconsolidation of our revenues from the tower business beginning September of 2024. With respect to costs and expenses, This totaled P448.9 billion. Purchase power costs accounted for 84% of this total. OPEX accounted for 10%, depreciation at 4%, and the combined coal and fuel and O&M for power plants was at 2%. Purchase power costs increased by 9% to $377.3 billion in 2025, reflecting the higher generation and transmission costs billed by the GenCost and NGCP during the year. OPEX amounted to $43.5 billion, reflecting a 6% year-on-year increase. The increase was primarily attributable to higher repairs and maintenance costs for the distribution asset, sustained investments in IT systems and software, ongoing cloud and online subscriptions. Salaries and salary-related expenses increased with MGEN as MGEN strengthened its manpower complement in support of the expanding base of operating power plant. Depreciation amortization, were higher by 4% with the completion of CAPEX projects. Combined coal and fuel and power plant O&M amounted to 11.3 billion, 19% lower with decrease in fuel and coal prices, partly offset by higher maintenance costs due to the scheduled outage of Toledo Power. Other expenses consist of present value adjustment pertaining to long-term liabilities and net provision reversals after settlement of real property taxes and reassessment of previously recognized provisions. Our CAPEX stood at 108.9 billion in 2025. Of this amount, 70% or 80 billion represented are spent for the Miralco PowerGen 3,500 megawatt-hour solar power plant, as well as two other smaller plants which came on stream during the year, which are in Bongabon, Nueva Ecija, and Cordon, Isabela. The DU CAPEX amounted to 28.5 billion, which was spent on new connections, asset renewals, load growth, and pole relocation in support of the government infrastructure projects. For power generation, The power generation business sustained its strong growth momentum as it closed the year with a 52% increase in CCNI contribution, driven by earnings of LNG investment through Cromite Holdings. The LNG business contributed P14.4 billion to MGEN's CCNI, while MGEN's thermal business contributed P6.5 billion, backed by higher revenues from the research market. Our consolidated interest-bearing debt stood at $230 billion, including $117.7 billion of debt of our subsidiaries. As of the end of December, net debt stood at $120.6 billion, with net debt-to-EBITDA ratio of 1.38 times. Debt maturities are well spread through 2040. All of Meralco's consolidated debt are peso denominated. Cash and cash equivalent amounted to 109.3 billion, while our short and long-term cash investments totaled 140 million and 4.3 billion pesos respectively. Our core earnings per share is at 44.868 pesos per share up 12% versus the 40.052 in 2024. The Moralco Board today approved the declaration of final cash dividend amounting to 16.672 a share to all shareholders of record as of March 26, 2026, payable on April 20, 2026. This brings the total dividends declared out of the 2025 CCNI to 28 pesos a share, close to 62.5% of core EPS. Using the December 31 closing price, of Meralco of 574, the yield is at 5%. Looking back, dividends to shareholders in this last five years totaled 117.1 billion pesos on cumulative five-year CCNI of 184.5 billion, representing 63% of such aggregate cumulative CCNI. In July of 2025, S&P Global Ratings affirmed Beralka's BBB credit rating and revised our outlook to positive from stable, citing our strong business position with improving scale and profitability in power generation and diversification of an integrated utility. S&P mentioned as well that the company will likely maintain strong operating cash flows from the core distribution business on the back of recent distribution franchise renewal. Our stock price is at 488 at the end of 2024. But by the end of 2025, it stood at 574. So it's trending up today. It actually closed at more than 600 pesos. As of this morning, I think it was 634.5. It's just like, I think it's 632 when we closed today. That ends my report. Thank you.

Thank you, Ms. Betty. We will now move to the Operational Highlights and Sustainability Report. To be led by our Chief Operating Officer, Mr. Ronio Perocho.

Thank you. Thank you, PJ. Good afternoon, and thank you for joining today's briefing. 2025 has been a banner year for Meralko, marked by strong operational performance despite a challenging business environment. Throughout the year, we remained focused on our core mandate as a distribution utility, delivering reliable, efficient, and affordable electricity to millions of Filipinos. Our operational indicators reached record best levels, system losses stayed below regulatory limits, service reliability improved significantly, and customer connections became faster and more efficient. These gains were achieved while managing external pressures such as volatile fuel prices, weather-related demand shifts, and broader economic uncertainties. I'll now walk you through our full year 2025 performance highlights, showing how disciplined execution, sustained investments in our network, and a customer-first approach enabled Meralco to deliver a strong year operationally while positioning the company for long-term resilience and growth. Starting with our business drivers, full year 2025 energy sales reached 53,997 gigawatt hours, broadly flat compared with the 2024 leap year. The slight decline of 0.6% versus an all-time high performance in 2024 was attributable to the cooler temperature with the transition from El Niño to La Niña, as well as the increased vacancies from Pogo exit and higher unrealized sales from more frequent typhoons, which led to work and class suspensions. Nonetheless, our efforts to speed up customer energizations contributed an uplift, tempering the overall impact. Similarly, the DU net system input or NSI was 55,855 gigawatt hours, posting a marginal decline of 0.8% compared with the same period in 2024. At the closing of the year, Meralco's peak demand was 9.13 gigawatts, recorded last April 23, 2025, 2% lower than in 2024. The drop can be attributed to the unprecedented power demand surge in 2024, which normalized last year. Comparably, the Luzon peak registered at 13.84 gigawatts on the same day, which is a 1% decrease as well. Our customer count continued to grow, reaching 8.22 million customers, a 2.2% increase year on year. highlighting sustained growth in electrification and service rates. Moving to the service performance of the DU, we closed 2025 with a 5.85% system loss performance, a 0.14 percentage points improvement than in 2024, making this the 18th consecutive year of achieving system loss performance below the indicative threshold. regulatory cap of 6.5%. So this translates to system loss charge savings for our customers amounting to an estimated 6.5 billion pesos or 12 centavos per kilowatt hour in 2025 compared to the 5 billion in 2024. Reliability indicators also showed strong results as we attained another all time best performance with a double digit improvements versus last year. Total SAI fee dropped by 12% at 0.911 times and SAI-D was shorter by 10% to 97.5 minutes, surpassing the one and 100 gold standard reflect our sustained investments in distribution automation. Preventive maintenance and storm hardening along with our efforts or faster response to outages. Meanwhile, our average time to connect customers was faster by 4.1% at 1.39 days over 1.45 days last year or in 2024, reinforcing our commitment to customer convenience and service excellence. On electricity rates, our average electricity retail rate for the year was 11.81 pesos per kilowatt hour, 12.1% higher versus the same reporting period in 2024, primarily due to the following. First, due to higher generation charts, 14.5% increase, mainly from higher Malampaya natural gas prices. Recovery of previously deferred charges for first gas plants and inclusion of under-recovery adjustments under ERC rules. And second is the increased Transmission charges, 30.5% increase from higher ancillary services costs. Higher NGCP maximum allowable revenue or MAR and collection of NGCP under recoveries. Following the discussion on energy sales earlier, let's now look at the sector breakdown. The residential segment accounted for 36% of total sales or 19,060 units. gigawatt hours. Residential sales contracted 2% in 2025, heavily impacted by extreme weather patterns and cooler temperatures starting May last year. The commercial segment, which makes up 37% of total sales, posted a slight decline of 0.4% as office vacancies and sluggish foreign arrivals offset gains in retail and restaurants expansions. The industrial segment delivered the strongest performance, growing by 1% year on year and accounting for 26% of total sales. This was driven by the resilient demand from semiconductor, steel and construction related industries. For the network project updates, This slide highlights our key network investments completed in the fourth quarter of 2025, which directly supported load growth and further strengthened system reliability across our franchise area. In the fourth quarter alone, we energized six major capital projects worth about 1.5 billion pesos, significantly strengthening grid reliability and capacity. This portfolio includes the replacement of three switch gears, construction of new sub-transmission line, development of a new GIS substation, and expansion of an existing substation, adding a total capacity of 166 MVA. This additional capacity and reliability improvement will accommodate load growth and improve service delivery across multiple areas in the franchise, especially in the provinces of Laguna and Cavite. On sustainability, I'll be covering updates on our latest ESG performance and ratings, as well as some news on our global sustainability recognitions. First, on ESG ratings, strong and disciplined ESG performance continues to anchor our sustainability journey. Meralco stayed in line with global ESG rating averages as we maintained sea ratings in the CDP or climate change and water security assessments for the fourth consecutive year, reflecting improvements in our climate risk disclosures, public policy engagements, and industry collaboration, as well as emission reduction initiatives, including our green mobility, resource conservation and efficiency, and SF6 management programs. Likewise, we sustained our above industry average rating in the S&P Global Corporate Sustainability Assessment, driven by strong performance in sustainability reporting, risk governance, and climate-related disclosures. Moving on, our Juan Miralco 2024 integrated report, our very first IR, was recognized by Asia Sustainability Reporting Rating, or ASRAD for the sixth straight year, earning a silver rank for its strong alignment with the Global Reporting Initiative or GRI standards. This recognition comes on the heels of the top honors recently conferred by the Asia Integrated Reporting Awards or IRA, where our IR received a platinum award for Asia's best integrated report for the first time category. And finally, in line with the COP 30, Meralco's long-term sustainability strategy was recognized by the International Chamber of Commerce or ICC through its Global Opportunity of a Lifetime campaign. As the world's largest business organization representing companies in over 170 countries and serving as the voice of the global business community to intergovernmental bodies, The ICC spotlighted Meralco's strategy for charting a just and affordable path to a coal-free future by 2050. Meralco was the only Philippine company featured standing alongside global organizations such as the United Nations, Nestle, and Bayer. This recognition underscores how our investments in renewables, next-generation technologies, as well as our 30-year key sustainability initiatives through 2030 are not only curbing emissions and strengthening communities, but also demonstrating that sustainability and business growth must advance together. Thank you. And I am now turning you over to Attorney Ronald Valles for the regulatory report.

Thank you, Ronnie. For the regulatory report, we'll discuss first the first topic, which is the reset filing of Meralco for the first regulatory period. This is covering the period of July 1, 2026 to June 30, 2031. So, we filed recently the application last February 2. The application consists of the annual revenue requirements as follows for the opening rub as of June 30, 2026. the amount is 359 billion pesos. And then for the carryover CAPEX or the CAPEX that have already been started from 2016 until the present, that amounts to 31 billion pesos. And then for the proposed four-year new CAPEX, it's about 242 billion pesos. For the proposed four-year OPEX, it's about 156 billion. And the four-year other taxes that includes the real property tax for calendar years 2021 and for the prior years, about 6 billion pesos. We use the rate of return equivalent to a WACO 14.6% as determined by an independent expert. Thank you. An independent expert. This WACC is considered the industry WACC and will be used similarly by all the other utilities applying for the first RP. And then the volume that we use is 225 billion kilowatt-hour sales. This is already net of the 8.4 billion kilowatt-hour lost sales due to solarization. And the resulting rate is 2.34 pesos per kilowatt-hour. on average. As an overview of the Meralco CAPEX, the CAPEX program for the PRS-RP consists of the following electric capital projects, about 154 billion, non-network assets, about 26 billion, information communication technology projects, about 20 billion, cybersecurity, about 7 billion, AMI projects, about 34 billion, and carryover projects, about 31 billion. In comparison with the other utilities that have filed under Group A, the Corp has filed an average of 2 pesos and 28 centavos for the four-year period, Tepalco, 2 pesos and 42 centavos per kilowatt hour, and Cotabato Light, 4 pesos and 42 centavos per kilowatt hour. The next topic is the competitive selection process. But last February 16 was the bid opening and bid submission and bid opening for our 200 megawatt concluded CSP. Out of the 14 bidders that submitted expressions of interest, only 10 submitted the bids. And out of the 10 bidders that submitted the bids, only eight passed the pre-qualification evaluation. The reserve price was set at six pesos and 51 centavos per kilowatt hour. Out of the eight, that qualified in the pre-qualification evaluation. Two of them submitted bids higher than the reserve price and therefore were disqualified. So the one that submitted the best bid is Wall Power Incorporated for the entire 200 megawatt at a rate of 4 pesos and 29 centavos per kilowatt hour, inclusive of VAT and line rental. The rate offered by SUWAL is for 100% plant capacity factor and is good for four contract years from January 26, 2026 or until January 25, 2030. The term will start upon ERC approval of the power supply agreement. The rate is a fixed rate and there will be no escalation or price adjustments. Next slide. Change in circumstances, claims by different generators contracted by Meralco. Last January 27, Meralco received various ERC orders, all dated January 26, granting price adjustments in Meralco's PSAs with the following suppliers, ASEN, PENC, SPPC, and SPI. The ERC approved ASEN mid-merit um dic claim of 220 million pesos and for asian base load is about 1.5 billion or a total of 1.7 billion for asian uh they also the erc also approved pensies additional claim of cic of 380 million this is on top of the 884 million that the erc previously approved in the past And then for South Premier or the Ilihan, ERC approved 15.8 billion. And for Suwal, it's about 13.3 billion pesos or a total of 29. All in all, what the ERC approved is a total amount of 31.3 billion. And in terms of per kilowatt hour, this is about 28 centavos per kilowatt hour. The term of collection or recovery is staggered between 12 months up to 36 months. With respect to the first Gas and Tarita Power Purchase Agreement extension, the ERC approved the second extension of the first Gas and Tarita EPA until June 25, 2026. In its approval, the ERC noted the following. The ERC's overarching consideration of critical balance between energy security and consumer welfare, According to ERC, if this is not extended, shutdown of Santa Rita plant will force Malampaya and the LNG terminal to shut down as well, which presents a critical energy security risk in the Luzon Green. And then the Santa Rita plant has contributed to energy security through the frequent operation of its available units at full capacity, providing the needed increase in supply and stabilizing waste and prices. Reliable and flexible capacity offered by Santa Rita plant is much needed during the summer months. And finally, according to ERC, it is imperative that power grids maintain sufficient capacity available to avert yellow and red alerts. That's it for the regulatory update. Turning over to Giovanni Rubio for the PowerGen highlights. Thank you.

Thank you. Thank you, Ronald. Good afternoon, everyone. As always, we begin our report with our number and Number one priority across all sites, health and safety. For the full year 2025, we are proud to share that we maintained a safe working environment with over 74 million safe man hours, both for employees and contractors. While we recorded zero lost time accidents and zero fatalities, we had 39 first aid cases and 22 recordable incidents, all of which were immediately addressed on site and minor. And we will continue enhancing our safeguards to ensure that every team member and contractor returns home safely every day to their families. Now, for the full year 2025, the overall MGEN thermal group delivered 8,955 gigawatt hours of energy, slightly higher than the previous year, driven by higher plant availability and stable operations. 2025 marks Global Business Power's first full year in participating in the reserve market, driving significant growth for MGEN. It continues to be a key contributor to grid stability in the Visayas area, providing significant capacities for regulating, contingency, and dispatchable reserves. Mgen's liquefied natural gas investment through Chromite Gas Holdings delivered 11,912 GWh, while Singapore-based Pacific Light Power Private Limited delivered 5,689 GWh. And finally... Mgen Renewable Energy, or what we now call Mgen Renewables, delivered 733 gigawatt hours, 18% more from a year ago, driven by additional capacity from solar facilities commissioned in Q1 2025 in Nueva Ecija and Isabela. And with a total generation of 27,289 gigawatt hours in 2025, Mgen achieved a 78% increase from last year, driven by new capacities from chromite gas holdings, new capacities from green projects, efficient plant operations, and operational excellence of our teams. MGEN ended the 2025 with a consolidated core net income now at P16.8 billion, reflecting a significant 52% growth. In 2024, MGEN only contributed 24% to the one Meralco CCNI, and with the strong results, we are now contributing 33%. Notably, our plants remained available for an average of 95.2% throughout the year, which is 3% higher compared to the previous year, and I must say, world-class. All these growth figures are driven by our first full-year participation in the reserves market, and the contribution of LNG, pH, and new capacities from our solar facilities, and higher plant availability. Building on these strong results, we now turn to the key developments that shaped 2025. The closing of the Chromite Gas Holdings deal drove significant growth to MGEN's portfolio in the past year. And actually, happening today, we are marking the successful arrival and unloading of its 50th LNG cargo, a milestone already achieved just barely two years after the terminal's commissioning. Across the region, our Singapore-based subsidiary, Pacific Light, is also expanding MGEN's footprint. With commercial operations of its 100-megawatt fast-start ancillary services, or what we call in the Philippines dispatchable power, on Jurong Island. It is also moving forward with its upcoming 670 megawatts high-efficiency combined cycle gas turbine facility in Singapore, the largest in Singapore and ready to burn alternative fuel like hydrogen when that fuel becomes viable. It has appointed a consortium of Mitsubishi Power and Jurong Engineering Limited to develop this project. expected to commence operations in 2029, coupled with a 97-megawatt-hour battery energy storage. Our LNG investments are not opportunistic. They are strategically positioned to support both energy security and low-carbon goals. And from 2025 to 2030, our LNG capacity will grow by 32%, with 4,447 megawatts. This reflects a deliberate expansion strategy anchored on LNG as a key transition fuel as we build a more sustainable future. Moving on to our thermal portfolio, the Department of Energy has reaffirmed the status of Atimonan Energy Power Plant project as a committed project following the agency's earlier confirmation that the project remains outside the coverage of the 2020 coal moratorium policy. The Timonan Energy Power Plant will be constructed using high-efficiency, low-emission technology that utilizes higher temperatures and higher pressures to maximize energy production while minimizing fuel consumption, thus lower carbon emissions. Once operational, the facility is expected to account for approximately 7% of Luzon's energy supply. Emgen is expanding its capacity in Cebu. with an upcoming 49 megawatt battery energy storage in Toledo and a 74 megawatt thermal power project in Toledo as well. We are in fact signing early works contract with the EPC on Friday. These projects support the country's goal of expanding energy capacity and ensuring energy security and power availability. With these developments in place, we expect a thermal portfolio to almost double by 2030. These are critical in ensuring energy security through baseload power expansions. And we remain committed to leveraging advanced thermal technologies to reduce carbon emissions while delivering reliable, sustainable energy to support the country's transition toward the low-carbon future. And on the renewables front, we successfully inaugurated three solar power plants in Q1 2025, totaling 152.7 MW AC. Notably, two of these, Mgen Renewables Bongabon and Cordon Solar, are GEA-2 projects completed ahead of schedule. Altogether, these three plants supply clean energy to more than 154,000 households in Luzon. As of end January 2026, Terra Solar Phase 1 has reached 75% overall construction progress, delivering as scheduled. We have already installed 1,288 MW DC of photovoltaic cells and 622 battery energy storage system units. M Terra Solar has accomplished a major milestone on December 21, 2025. with the energization and cut-in of its 500 kV substation connecting to the Nagsaag-San Jose 500 kV Line 2, the first in the Philippines. On February 12, 2026, MTERA Solar successfully connected to the Luzon grid through NGCP's 500 kV backbone and is now in the final stages of energization as load, and we are soaking all the transformers that we have on site. The project is expected to energize as generator by second week of March 2026 and progressively ramp up capacity, starting with its first 250 megawatt AC block. By May, PV capacity is targeted to reach up to 700 MW AC, complemented by around 825 MWh of battery storage. This would position the project among the largest integrated solar and battery installations globally. By August, we expect to fulfill our Phase 1 supply commitments under our contract with the distribution utility. With M-Terra Solar expected to be fully operational next year, including Phase 2, and our upcoming Concepcion solar project in Iloilo, our renewable energy portfolio is set to grow by 649% by 2030. And we are also setting a new target for attributable renewable energy capacity by increasing it to 1,800 MW AC by 2030. MGEN is also preparing for the future of nuclear energy in the Philippines through targeted capacity building and strategic studies. Through the FISSION program, five MGEN employees are now learning world-class expertise in nuclear engineering. On more recent news, we have received a grant from the U.S. Trade and Development Agency enabling a study on the viability of small modular reactors the deployment of SMRs and identifying preferred technologies and sites. These initiatives support a safe, responsible, and well-planned approach, ensuring the Philippines is ready to explore nuclear as a long-term secure energy option. Amgen continues to power a better tomorrow. through different initiatives that paved the way for a more sustainable future. As mentioned, our top priority remains the safety of our people, safeguarding their well-being both physically and psychologically. Our power generation portfolio continues to expand across technologies to meet the region's growing energy demand. And at MGEN, we also remain committed to reducing our carbon footprint through coal ash and solid waste diversion, wastewater recycling, and tree planting. Lastly, through our ER1-94, MGEN has supported host communities by contributing 38 million pesos. We have also created over 12,000 jobs for MTERA Solar Project, and installed the first internationally compliant football lighting system in Western Visayas at the La Paz football field. And on a final note, Amgen's overall performance in 2025 was marked by strong operational efficiency across our portfolio, delivering solid results in both power generation and financial growth, achievements made possible by our people. Amid a rapidly changing energy landscape, we successfully pursued inclusive and sustainable growth. These efforts have earned both local and international recognition, highlighting MGEN's leadership in innovation, operational excellence, and sustainable energy solutions. We look forward to a promising and impactful 2026 as we advance our ongoing and upcoming projects. Thank you very much and have a good afternoon.

Thank you, Minister Aperoccio, Attorney Valdez, and Mr. Manny Rubio.

At this point, we'd like to acknowledge our chairman, Mr. Manny V. Pangilinan.

We will now open the floor for questions from our analysts and investors.

You may raise your questions in two ways. Place your virtual hand in a way 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 your question to.

We start here and on the floor.

We have a virtual hand raised. When you open the mic for Jalene Gaza of J.P. Morgan.

Hello.

Good afternoon. Thank you for the opportunity. Can you hear me?

Yes, we can hear you.

Thank you. My first question relates to the tariff reset for the DU business. I'm just wondering how confident are you that it will be resolved or finalized within the year?

That's my first question. Hi.

uh actually the erc uh prior to the uh uh requiring uh the use to file the application as a uh issue the rules no and the rules contain the schedule for the filing and resolution of the application and in all um public consultation uh the erc has emphasized that uh it will definitely resolve all applications uh by before the start of the first rp so that will be uh before july 1 this year our expectation is that the erc will have a final resolution at least for the meralco application either by may or june of this year thank you sir attorney values

Can I have a follow-up also with your application? May I please understand the inputs that you've brought into this one? This map at around 2.34 per kilowatt hour seems to be a big jump from the current one. In what particular input would you say you are confident with regard to getting it approved at that level? So for example, RAP I noticed that it includes a 25% contingency allowance. Number two, on the WAC, we saw NGCP propose a 15% as well, but only got an award of around 11%. And then the CAPEX, all in all, would be almost double of what you've spent in the last four years as well. Can you comment on those major inputs? And another interesting point I noticed is on the volumes. It practically implies like a mid or low single-digit decline in annual volume growth from 2026. Is this how you are concerned about solarization in the medium term? Thank you.

Hi. Thank you for the question. So first on the asset, yes, you are correct. The ERC has issued the guidance that we include or the utilities include a 25% contingency on the RAB. So in the case of Meralco, that contingency, that 25% contingency amount to around 66 billion pesos of the 359 billion regulatory asset base that we included in our filing. And on top of that, the ERC also recently advised that to include an inflation for the assets included in the RAB, uh from the 2016 uh onwards no so we included that and that uh that that inflation amounts to about 76 billion so if you add that together and you deduct that from 359 billion the asset would have been 187 billion only uh that will be a big a big reduction you know and then uh for the for the capex uh That's 242 billion that we propose, but that includes major CAPEX that we are proposing that have not been included in the previously approved rate of Meralco. The previously approved rate of Meralco of 1.35, for example, did not include AMI CAPEX of 34 billion pesos. And then we also for the first time are including assets that have not been part of the regulatory asset base in the past, or not part of the capex that we have filed in the past, such as the battery storage. That's, I think, around a billion pesos. and electric vehicle charging stations and other CAPEX related to electric vehicles in compliance with the electric vehicle law. That's about 700 plus million pesos. Of course, the bulk of the CAPEX proposal is still the electric capital projects. About 64% of the total proposed CAPEX pertain to electric capital projects. Of course, there's also an increased amount of CAPEX pertaining to cybersecurity. and other non-network and ICT projects. Now with regard to the WACC, the WACC is 14.6%. Again, it is based on the formula of the ERC, which is 60% equity and 40% debt. The independent expert determined that the rate of the cost of debt is about 9%. nine or nine point two percent and then the cost of equity is about fourteen to twenty two percent so when you average it out and get the seventy percentile that's about fourteen point six percent now when you compare that with ngcp understand the ngcp file for a higher rate but the scheme for ngcp is different so for ngcp for example the walk that was given to them for the first rp Oh, sorry for the fee party. The last, uh, is 14 point. Sorry. 11.7411.74%. No, but they're subject only to 3%, uh, uh, franchise stocks. No, if you take out the, if you, if you net it out, that's, uh, that's only about 111138. And if you gross it up the 1138, the, the rate that the, the rate of the, the walk for the D, you should have been 15 plus percent. But our expert applied only a lower WACC, which is 14.6% based on his own or their own independent review and analysis. So we expect that the ERC will grant us a WACC that is commensurate to the net rate of return that they have given to the NGCP. And for the sales, the sales is actually based on the based on the EIU December 2025 forecast, but we only deducted from that sales forecast our own internal forecast on the impact of solarization, which is about 8.5 billion kilowatt hours. So we need to do that because the loss sales translate the loss income to Meralco. So to compensate for that, we need to increase the the rate by reducing the sales. So that's it. I hope I answered the question. Thank you.

Thank you very much for the comprehensive answer, Attorney Valius. If I may, my last question is on the generation business. Can you comment about the quarter-and-quarter decline in generation net income? Is this driven by an outage with one of your plants? A question on SBPL specifically, and then may be a timing of overhead cost recognition. Is this a correct way of understanding the quarter-and-quarter movement of generation profits? Thank you so much. I'll go back in the queue.

Thank you.

Hi, Jeline. For power generation, there are a couple of factors. For example, for GBP, there were plants which went on outage or maintenance. In the case of San Buenaventura, it is the end of their holiday, so they are now subject to income tax, and that started towards October. the end of the last quarter of 2025. But also at the start of 2025, remember in 2024, they went on their first major maintenance. So for the first month of 2025, San Buenaventura wasn't in full operations. So that's for GBP and San Buenaventura. In the case of Pacific Light, the margins, the net non-fuel margins actually came down compared with 2024, although I think they averaged at around 80-plus dollars per megawatt hour. And in the middle of the year, I think there was one of their units that went out.

So it's a combination of, yeah. Thank you, Jalene, for the question. Hope we were able to answer it. Opening the floor here in attendance. Hi, good afternoon.

Eunice Delater from Security Bank. My first question would be on the core earnings mix. We've seen that in terms of the DUN generation, there has been a slight shift towards the generation business. Do you think this is the sustainable trend for a generation to eventually overtake the distribution? Or how do we intend to see it moving forward? Thank you.

That's my first question.

I think for the short to medium term, it's possible that the profits from the degeneration units will catch up or will outpace the growth of the DU. Because you have Toledo plants coming in, the expansion in Singapore, which is the 100 megawatts that's finished, and then they're building a new plant of 600 megawatts. gas plants in Singapore, and of course the Terra Solar, which is the biggest solar facility in the Philippines and elsewhere in the world. And I think we start energizing, selling to the grid sometime in March on a phase basis, reaching about 1,500 sometime in August. And that will continue through to the early part of 2027 when phase two should be finished and the entire 3,500 megawatts solar facility will be on stream. So that will impact the generation profitability, these plants. And then we, part of the transaction, the investment we made in Chromite, it turned out that San Miguel bought a turbine of 450, 435 megawatts, which was in surplus at the time last year. And we were wondering whether we should put it in the Ilihan complex in Batangas or in the Visayas. Because the Visayas is in supply deficit to the tune of about 400 megawatts. So the decision is to move the turbines. It's uninstalled yet to the plant we have in Iloilo. So we will have a gas plant in Iloilo, 485 megawatts, a new one. Located in the Panay Electric in the inner city, no? And so that will. Answer for the supply deficit in in the besides, because with the power rates there in deficit power is a very high because they default to these plans right money. So this is a very important for besides. So just for two it is that we suddenly got did buy this because Uh, gen sets, generators, turbines are very very extremely short supply nowadays. So besides that, we'll answer for the besides, uh, uh, deficit. No, no. Mindanao is currently in a bit of a surplus, but I think demand will eventually catch up and Mindanao will need quite soon, maybe as early as next year, some new generation plants. So so we're looking at that as well. So. Yeah, I think for the short to medium term, growth of generations likely to outpace the growth in the DU. Now, the DU should not sit idly by while could have internal competition as well, right? So there are two thrusts that the DU starting to make and should be aggressive in pursuing these two tracks. the our ability to invest acquire in in the use in the provinces. Principally owned by electric cooperatives. That's a tough one to crack because I'm tough not to crack because. It's it's sort of coated by politics, local politics, right? So I think but our our people have been active in talking to several jurisdictions. in in several parts of the country uh like but batangas even i'll buy and what's called gen sunday illegal will soon bid out their the use not very large it's a medium-sized provincial du so there are many things that are available many of those ecs that are available but it's it's it's not easy to to uh to implement, to execute on the on the investment. The other track that the DU should take is solarization. I think that was mentioned a bit earlier, if I recall, to solarize in the first instance in the provinces outside the franchise area of Meralco, because that is additive to the volume and the revenues of Meralco and the business model is to sell power, to sell solar panels right uh because if we sell power we we do earn the the power rates we don't earn just the distribution rate in in the case of miracles franchise here we are known about one peso 35 one right whereas if we charge the full electric rate which we own uh then it'll be anywhere between eight to ten pesos uh per per kilowatt hour right so so those are the two key components of the direction that the EU should take to build its own business. Then as an adjunct to that is, of course, electric vehicles. Miralco is in the best position to roll out charging stations. In the first instance, in the franchise areas that we have, and hopefully we could do so on a short basis in the urban areas, in the urban cities of the Philippines. So that those are the that's the future for the EU, apart from the existing legacy business of wires.

Thank you, sir. Just since we're already on the DU, just to follow up in terms of how do you see your volume growth moving forward? Because we've seen from prior years that there's, of course, there's higher correlation in terms of your volume growth and the GDP. So give it, and we've seen that the economic, like, can you share your the factors that could have led to the divergence from last year? Because we've seen flattish to negative sales growth for ADUs and about 4% of GDP.

You're right. There's a strong correlation between GDP growth and the growth of the business, the DU, particularly in our franchise area, which accounts for about 60%, I believe, of the GDP of the country, right? So we're directly affected by GDP growth. And that's the principal reason why the second half demand has been quite soft, occasioned by the president's address on the flood control issues. That's one. And then there's the inroads slowly being made by solar panels, solar power on rooftops, principally. Number three is the weather. It's been cool in the last quarter, last year, and in the first two months. This year, I'm glad that we're starting to warm up. The weather is starting to warm up. Hopefully, demand can resume. Now, our outlook for economic growth, and I think everybody's outlook for economic growth, 26 and maybe for the better part 27 is quite cautious right so some five percent economic growth so it will affect the demand for power uh for morocco particularly now how long will that last i think it will last uh at least for two more years 26 27 38 depends on who the front runner is I think that will drive economic sentiment, right? So, yeah.

Thank you, sir. And I guess this is going to be my last question for now. Because in terms of, I just want to understand your rationale on your interest over the Semerara COC. So what brought that idea to take on that COC, if ever?

Thank you. By the time we build and commission Atimonan, we would probably have around 2,600 megawatts of capacity. So it's just, I think, rational for us to, or logical for us to consider or be interested in Semerara as a physical hedge on coal price volatility and, of course, fuel security. We know in the past that Indonesian policies have shifted from time to time. And we want to make sure that if we have that kind of coal demand, we want to at least have some level of security. It's still very early days. We don't know yet how much coal capacity is there. We don't even know yet the oil specifications of the plant. Although we've ordered Semirara for some of our plants and we can burn them. And Timonan is also designed to burn the calorific value that Semerara has. Just on the calorific value, but not yet on the chemical composition.

If I may add, you know, Seed Consumers are partners in Manila and other things. So I think Manny here has met Sid. And he seems to be open to... A situation to use Gen Z vocabulary with with us, right? So in a way it's it's. Here's the inside track because we got the equipment is got knowledge of the the operations and the extent of the reserves of coal available in in that particular location. So we are likely to partner with him. And he's got the equipment in place, right? So we don't have to reinvent the wheel and all that. So but slightly that he will insist. On majority position by DMCI for that so. Now we want to know your reaction if we were to see the mind mouse kind of situation where you integrate backward to call.

So. Some banks don't like cold. Most banks. Thank you for your questions, Eunice.

We have some virtual hands raised on the line.

Can we open the line of Mr. Raymond Franco?

Hey, Raymond. You may ask your question. Hello. Sorry. Can you hear me?

Yes, we can.

Okay. Thank you for the opportunity. Just two questions for me. This is regarding sensitivity analysis due to the rate reset application. So, The first question would be for Attorney Valles. What would be the distribution rate if eventually the WACC that is used by the ERC or implemented by the ERC is 12%?

actually there are many factors that will determine the rate not just the walk no are you asking or are you telling us that everything else is constant in the application except that the walk will be reduced from from uh for from 14.6 that we applied for down to 12 percent uh yes uh everything else held constant just the whack will be changed it's around the

I'll get back to you.

Okay, thank you for that. If I can ask the second part of the question on sensitivity, I guess this is for Ms. Yap. What would the impact on earnings be for every 10 centavo increase in the distribution rate?

So gross of tax, assuming we have the same volume at 53,000, that's 5.3 billion pesos. So net of tax, that's about 3.94 billion.

So that's just the tax component.

There's no other... That could go either way, right?

Yeah, yes. Up or down.

Up or down. So I think, frankly, as Ronald indicated, it's not just the WAC. It will obviously impact the rates are other considerations like opex capex principally and your forecast of demand or not so at the end it will be a number that will be determined i think unscientifically let me say that because then you know right now about 135 3499 and something like that so so But the final number would be because I see it on great night 20. This hasn't been adjusted since July of 9, 2015. Am I right until June 30 or 2026? And there's been a final determination up to June of 2022. That but July of 2022 up to June 30, 2026 made you tentative.

not final yet so but that's when they start the first rp on july the first the the erc already ruled with finality on the uh rate that will apply on the for the lapse period so the lapse period today is uh from 2015 2016 up to uh june 30 2026 So that rate is equivalent to the last approved rate, which in the case of Miralco is at 1.35 per kilowatt hour.

For the last, since July 2015, we've invested

We've invested and spent OPEX, I think over 350 billion pesos already, both CAPEX and OPEX. And this has not been considered in the rate that we are charging the consumers today. Because the last rate that was approved to us considered only those CAPEX and OPEX. And that were filed in 2010. And plus the four-year forecast of APEX and OPEX from 2011 to 2015.

So in its commercial merits, Neralco deserves some increase from the current base of $134.99 billion. But of course, it's not entirely objective in this country, is it? So we

We should behave as. Say utility. Aren't we well behaved? Yes, sir, everyone's in.

Yes. Hey Raymond, thank you for the question, Raymond. uh to answer your question earlier on the 12 percent uh walk no so uh the rate that we applied is a 234 if that walk will be will be uh 12 percent instead of 14.6 so that's around uh the rate will be reduced by around three centavos per kilowatt r again that is on the walk alone okay

Thank you very much. That's all the questions I have. Thank you.

Thank you, Raymond. We have one more virtual hand raised online. Can we call on Mr. Roberto de la Paz Valar?

Hi, Roberto. You may speak now. Hello, Roberto? Okay, well, we were, hi, Robert. Hello?

Yes, hi, we can hear you now. Hello, can you hear me? Yes, we can. Sorry, hello, can you hear me? Yes, we can. Please go ahead with a question. Hello, sir, can you hear me?

Hi, Roberto, we can hear you. Please go ahead with a question.

Sorry, hello, sir. Can you hear me? Hello? Yes, Robert. Hi, we can hear you. Hello? Can you hear me, sir? Maybe perhaps you can type it, Robert.

We have another question virtually here. from Jeline, from a client.

What's driving this bottleneck of securing land for TerraSolar Phase 1?

What's remaining for the land that we need to acquire? And I think just to put some context, when we started the project, when we issued the EPC in 2024, November, we only have around 45% of the required land. And through the last 15 months, I think what's remaining out of the 3,900 that we need to acquire, we have around close to just 200 hectares that are pending. We have offers for those 200, almost 200 hectares, but we are actually holding off on acquiring because these are the last mile and they're offering a higher rate than what we have acquired the balance for. And we still have to acquire some land for phase two. And we don't want the last mile to dictate the price of the remaining land. However, I think we need closer to the time we need to deliver around maybe June we will make the decision and acquire them. And these are not PV lands. These are connecting lands because the sites are not contiguous. So we have to connect the clusters and what we'll do with these lands are just to lay down cables to connect the clusters in order to connect them to domain control. So that's mainly the issue with the remaining land.

Thank you, EVR. Do we have any questions on the floor? Yes.

Hi, Klein from Regis Partners. Two questions for me. First, could you provide the balance of provisions in your balance sheet as of end 2025? And in the event that you do get the tariff you want, should we expect this amount to be reversed immediately?

That's my first question.

Well, there's still a fairly substantial amount of provisions on the books of Miralco that because we There have been, I think, around 10 years where the tariffs were provisional, right, Ronald? So that put us in a quandary where there's a difference between the billing rate to the customers and what our booking rate should be, because everything was tentative about the rate. So we wanted to be conservative in terms of the booking rate. as compared to the billing rate. So that's why some of you may have noticed that there was some difference between the accounting profits we disclosed versus