Manila Electric Company

Good afternoon investors, analysts, fund managers and valued stakeholders. Welcome to Moralco's first quarter 2026 financial operating results briefing. We are pleased to have you with us participating both in person and via MS Teams and we thank you for taking the time to be with us today. Before we begin, please note that this session is being recorded. Kindly observe the ground rules that were circulated prior to this meeting. Today, we will walk you through Meralco's performance for the first quarter ended March 31, 2026. The presentation materials are available on our website under the Investor Relations section. Joining us today are members of Meralco's management team, Mr. Ronia Perocho, Executive Vice President and Chief Operating Officer, Ms. Betty Siap, SVP and Chief Finance Officer, Mr. Emmanuel Rubio, President and CEO, Miralco PowerGen, Attorney Jose Ronald Valdez, SVP, Head of Regulatory Affairs, and Head of VU Regulatory Management. Our discussion today will begin with presentation over financial performance, followed by updates on our distribution utility operations, power generation business, and key regulatory developments and outlook. We'll open the floor for a Q&A session before concluding with a closing remark from our COO. At this point, I would like to invite our Chief Finance Officer, Ms. Betty Siap, to walk us through the financial highlights for the quarter.

and I for the quarter. It's March 31. Contribution. Stable distribution utility and the goal of our generation portfolio. The DU business continues to counter the largest share of our 11.4. Okay, sorry about that. So our CCNI for the quarter ended March 31, 2026, grew 2% from the combined contribution of a stable distribution utility and the growing power generation portfolio. The DU business continued to account for the largest share of our 11.4 billion CCNI at 5.3 billion, 46% of the total, although down from the 61% in 2025, with a higher share of power generation business. The DU sales volume was slightly lower at 12,273 GWh versus the almost 12,500 GWh in 2025. CCNI contribution of power generation grew by 51% to 5.1 billion and now accounts for 45% of CCNI, up from 30% in 2025. The sales volume of power generation was at 6,626 GWh, 25% higher than the 5,294 GWh in 2025, mainly driven by the full quarter volume of LNGPH. Thermal plants generated $1.2 billion in revenues from the reserve market versus $1.7 billion last year. On January 26, 2026, the ERC granted PEDC's change in circumstance or CIC claim representing unrecovered fuel costs from September 26 to December 4, 2022, allowing the recovery from Miralco customers of close to P381 million. On MGREEN, early this year, the ERC approved an advisory regarding feed-in tariff related to SP Calatagan. This allowed SP Calatagan to recover 69 million in feed adjustment. For Terra Solar, it achieved a key milestone in March, beginning with the delivery of an initial 85 megawatt of feed. Clean Energy to the Luzon grid on March 14. This output was progressively ramped up to 250 MW by the end of the month in line with the grid integration parameters of the NGCP. Complementing this, the project successfully energized The first branch of its battery energy storage system enabling the delivery of 450 MWh equivalent to 112.5 MW of stored energy to the grid during nighttime hours. Total energy sold for the month reached 10.6 GWh. Also in March, NGCP issued a PCAT-C for one of our other solar projects, a 450 MW power plant in Bugalyon, Pangasinan. LASO started delivering power to the grid at 50 MW, ramping up to 300 MW by March 31. This generated a total of 7.7 GWh. For retail supply business, sales volume was at 1,827 GWh, up 9% versus last year, mainly from new customers. For our financial highlights, CCNI for the quarter increased by 2% to $11.4 billion from $11.2 billion in 2025. Consolidated reported net income increased by 4% to $10.8 billion from $10.4 billion the previous year. The gap between CCNI and consolidated reported net income represents day 1. gain adjustment, accretion of day one gain adjustment, as well as foreign exchange gains from Cromite and SPNEC. Similar to our CCNI, our core EBITDA rose 2% to $19.6 billion from $19.2 billion in 2025. The total energy volume handled by One Moralco was 15,895 GWh up versus last year's 15,621 GWh. The Philippine volume was at 14,431 GWh, also higher versus the 14,218 GWh last year. The EU volume inclusive of sales of Pelco II, which we manage under an IMA or Investment Management Contract, was at 12,468, 52% of about 23,900 GWh total volume distributed by all DUs and electric cooperatives in the Philippines. RES volume, as mentioned, was 1,827, with 1,497 sold within the franchise area and 330 outside the franchise area. This was 26% of about 6,900 GWh total volume supplied by all RESs. The Mgen volume at 6,626 had 5,223 sold within the Philippines, 18% of approximately 28,100 GWh volume delivered by all Gencos in the Philippines. A total of 3,529 GWRs was sold to the Meralco DU and its local and affiliate resses. The contracted capacity of Meralco of 2,992.5 MW with M-Gen represents 38% of Meralco's franchise area peak demand or 25% of the Luzon peak demand during the quarter. This chart shows the segment information. On the right side are the contributions in terms of CCNI gross revenues and core EBITDA. The CCNI contribution of our regulated or distribution business represents the consolidated energy volume of Miralco, Clark Electric Distribution and Shin Clark Power. The total of which was 12,273 as mentioned 2% lower versus last year. For our unregulated businesses, the higher CCNI in terms of PESA amount came from the growing par-generation business with its share now at 45% from 30% last year. This is equivalent to $5.1 billion driven by the strong performance and a full quarter results of LGPH where Amgen holds 40.2% interest following its acquisition at the end of January of 2025. The retail electricity supply business and non-electric businesses, meanwhile, brought a combined P1 billion or 9% driven by continuing customer acquisitions for a REST unit. The DU revenues accounted for 82% of the total. REST and non-power subsidiaries and affiliates accounted for 12% and power generation at 6%. Out of the consolidated core EBITDA of 19.6 billion, DU contribution amounted to 10.4 billion and accounted for 53% of the total. Par generation core EBITDA contribution was at 7.7 billion pesos and contributed 39% of the total while RES and other non-par subsidiaries and affiliates accounted for the remaining 8% or 1.5 billion pesos. The consolidated revenues increased by 5% to $120.8 billion from $114.5 billion in 2025, driven by higher pass-through generation and transmission charges of the DU and higher power generation revenues. Electric revenues of P118.1 billion accounted for 98% of the consolidated revenues. Generation, transmission and other pass-through charges were 7% higher at P94.7 billion versus P88.6 in 2025. Generation charge for the period includes a 30 centavo per kilowatt hour combined contract price adjustment relating to additional fuel cost recoveries, which the ERC approved for four generation companies. These are ASEN, SPPC, SUAL, and Panay Energy. Also contributing to the higher generation charge were the higher fixed costs of the first gas plant, following the ERC-approved interim extension of the power purchase agreement with Moralco, and also the peso depreciation as the local currency weakened to an average of 59.102 pesos to the dollar versus 57.96. against the U.S. dollar during the first quarter. Transmission charge also increased due to higher ancillary service charges from the reserve market and NGCP's higher maximum average revenue, which is equivalent to 10 centavos per kilowatt-hour as approved by the ERC, and collection of all its under-recoveries from the period 2016 to 2022, resulting into a 4 centavo per kilowatt-hour additional billing. Distribution revenue decreased by 2% due to the lower volume sold and the 0.0023 per kilowatt hour downward rate adjustment for the Reset Expert Costs refund. Starting February of 2025, energy fee, which totaled $6.8 billion, increased by 9% from $6.3 billion to $6.8 billion from GBP's higher WESM revenues, SP Kalatagan's fit rate adjustment and the higher radiation of solar power plants, and PEDC's fuel CIC. The 2.7 billion non-electric revenues were largely from RADIUS for its enterprise and SME accounts and the billable projects to PLDT from NASCOR's EPC projects and MSERV's high-voltage solutions and integrated facilities management projects. Cost and expenses totaled 110.5 billion pesos, which is power cost accounted for 84%. OPEX represented 9% depreciation at 4% and the combined coal and fuel and power plant O&M at 3%. Purchase power costs increased by 7% to $92.7 billion from 86.4 reflecting higher generation and transmission costs billed by the generation companies as well as NGCP, the details of which have been previously explained as part of the revenue charges. Operating expenses amounted to 10.4 billion, 1% higher year-on-year primarily due to sustained cost efficiency measures and tighter management of controllable expenses, including optimization of operations and deferral of non-essential activities undertaken to protect customers from the cost pressures arising from the Middle East conflict. This initiative reinforced Moralco's commitment to reliable service delivery while prudently managing costs in a volatile global environment. Depreciation and amortization was higher by 10% with the completion of CAPEX projects during the period. Combined coal and fuel and power plant O&M amounted to $2.8 billion. due to PEDC3 and Cebu Energy's plants 2 and 3 maintenance in 2026, whereas in 2025 it was only Unit 3 of Cebu Energy. Fuel cost increased with GBP's higher WESM sales. Other expenses pertains to provision reversals after settling of various tax outreach and assessments, net of provisions for over-recoveries. The power generation business ended the first quarter with a 51% growth in CCNI versus the same period last year, mainly driven by full capacity operations, and full three-month contribution of LNGPH starting its acquisition end of January. The LNG business contributed close to $4 billion to the CCNI as LNG PH and Pacific Power delivered a total of 2,712 GWh and 1,464 GWh respectively. The thermal business contributed $1.6 billion, higher by 6% from last year's $1.5 due to the higher earnings from the WSM, partially offset by the weaker reserve market pricing. On capital expenditures, consolidated CAPEX stood at 19.5 billion in the first quarter. Of this amount, 71% was spent for MGEN's 3,500 MW DC Terra solar power plant with the 4,500 MW R battery storage, as well as 49 MW battery energy storage in Toledo, Cebu, and the 31.8 MW expansion of SP Terlac. The total DU capex of 5.7 billion were spent largely on new connections, asset renewal, load growth projects, pole relocation to support government infrastructure projects, and non-electric projects. Cash and cash equivalents amounted to 112.9 billion while our short-term and long-term investments totaled 172 million and 4.2 billion pesos respectively. Major cash transactions during the period include the Moralco Awat refunded to customers, amounting to $1.4 billion in the first quarter of this year. A total of $6.3 billion has been refunded since April of 2025 as part of the $19.96 billion Awat refund over 36 months. Note, though, that the refund period has been shortened to 12 months for the remaining amount following ERC's decision last April 2020. 22. Loan drawdowns of Moralco totaled $6.5 billion, mainly used to pay the working capital adjustment as well as the reimbursable cost to San Miguel Global Power in relation to the Cromite acquisition. Terra Solar's drawdown of 7.5 billion from its project financing, which now totals 76.1 billion pesos. Infusion by Actis of 3 billion pesos and dividends received from unconsolidated investees of 2.7 billion, largely from Pacific Light and San Buenaventura. are consolidated interest-bearing debts to the P238.1 billion, including the P125.1 billion debt of our subsidiaries. As of end March, our net debt stood at P125.1 with net debt to EBITDA a ratio of 1.7 times. Debt maturities are spread through 2040, most of which are in Philippine peso except with respect to the Pacific light debt. Our core EPS is at 10.137 per share, up 2% year-on-year, while our reported EPS is at 4% higher, at 9.611 per share. That ends my report. Thank you.

Thank you, Ms. Betty. Overall, the off-quarter reflects stable earnings growth and disciplined cost management, with core net income up 2% to $11.4 billion, supported by both EU and power generation business. We will now move on to the operating performance. I would like to invite our COO, Mr. Rony Aperosho, to present the operating performance of the distribution utility.