Good afternoon, and thank you for joining us today to discuss the Company’s Financial and [Technical Difficulty] for the Full Year of [Technical Difficulty]. Copy of today’s presentation is on the website, those who’ve not been able to do so download the presentation [Technical Difficulty] www.pldt.com under the investor relations section. Kindly note that [Technical Difficulty] broadcast of this event will be [Technical Difficulty] codes for the presentation is on the screen and in the confirmation notice is email to you. For today’ s presentation we have with us our Chairman and CEO, Manuel Pangilinan; Mr. Danny Yu, our Chief Finance Officer and Chief Risk Officer; Attorney Marilyn Aquino, our Corporate Secretory and Chief Legal Counsel; and Mr. [indiscernible] Vea, Founder and CEO of Maya Philippines, as well as other members of the PLDT Group’s Management team. At this point, let me turn the floor over to Mr. Yu to begin the presentation.

Thank you, Melissa. Good afternoon, everyone. I'm very pleased to share with you PLDT's financial and operating highlights for the year 2023. Consolidated service revenue for 2023 rose by 1% to PHP 191.4 billion compared to the same period last year. On a gross basis, service revenue grew by 3% year-on-year. Operating expenses were lower by 2% or PHP 1.5 billion to PHP 87.1 billion. The combined increase in service revenues and decline in operating expenses resulted in a 4% rise in EBITDA to PHP 104.3 billion, a new all-time record high with EBITDA margin at 52%. Telco core income, excluding the impact of asset sales in Maya registered a PHP 1 billion increase to PHP 34.3 billion, higher by 3% year-on-year. On segment basis, revenue growth continued to be broad-based. Individual revenues accounting for about 43% of the total revenues grew by 2% to PHP 81.8 billion. The Home and Enterprise segments registered new record highs. Home revenues grew by 1% to PHP 60.4 billion, with fiber-only revenues having added 9% to PHP 53 billion. Enterprise revenues gained by 1% to PHP 47.1 billion. Let me now go through the segments in greater detail. The next slide shows that while the headline revenue growth ranges from 1% to 2%, there are underlying data revenue streams growing more strongly in line, if not stronger than the Philippine GDP growth. In the individual segment, mobile data accounting for 87% of the total revenues are growing 8% versus segment growth of 2%, reflecting the drug from legacy SMS in voice. Fiber revenues posted a 9% growth versus 1% segment growth due to the impact of legacy nonfiber revenues. Under the Enterprise segment, corporate data and ICT advanced 6%, albeit segment revenues grew only by 1%. And overall, excluding the drug from legacy…

Good afternoon. Happy to update you on Maya. Exciting times for Maya as it leads the way towards revolutionizing financial services in the country. We are making significant breakthroughs towards growth as we leverage our strong ecosystem to build the number one digital bank in less than 2 years. We achieved this on the back of a very creative and innovative banking services delivered to our payment customer base, consisting of consumers and enterprises. Some big numbers. As of end 2023, we had 3 million depositors at 2.1x year-on-year growth from 2022. That number is now 3.4 million. We ended the year with a PHP 25 billion deposit balance, 70% higher than our balance by end of 2022, and that number is now PHP 27 billion. Importantly, we disbursed a total of PHP 22 billion in loans, a massive 6.9x year-on-year leap from 2022, and that's now PHP 25 billion. On the enterprise front, we solidified our leadership as the payments backbone of the Philippines by empowering more and more businesses to accept various payment methods seamlessly. Our omnichannel offering has established Maya as the number one processor of payment transactions for credit and debit cards where we hold 51%, 52% market share. And on QR PH transactions where we have a 44% market share based on Visa and Bank net data. May is now successfully bringing banking to the micro, small and medium enterprises in the Philippines. We provide higher business deposit interest rates than traditional banks, and we offer up to PHP 2 million unsecured credits to businesses that typically do not have access to credit. So for 2023, we posted a 4.4x growth year-on-year on enterprise loan disbursements. We are committed to supporting the financial needs of businesses of all sizes through all-in-one digital banking. Now on…

Good afternoon, and thank you for joining us this afternoon. Let me start off with our guidance for the consolidated service revenue for 2024. We're guiding service revenue at mid-single-digit growth over 2023 revenues. We foresee continued increases in data broadband revenues attenuated somewhat by the legacy services legacy products that are negative, which continue to show negative as they replaced by the new data and broadband services. EBITDA is being guided at a similar manner, mid-single digit, supported by the top line growth. But we need to continue to manage our costs as we did a good job last year in 2023, where the cash OpEx line showed very little increase. And the intention is to push EBITDA margin above the 52% margin that you saw in 2023. Telco cores being guided at north of PHP 35 billion for this year and dividends at a regular dividend of 50% with a look back for most likely 10% additional, and therefore, 60% of course, for 2024. CapEx has been guided at between PHP 75 million to EUR 80 billion, most likely below sub-PHP 80 billion for the full year, including carryover CapEx from 2022. But the bulk of the CapEx for this year will be the fresh CapEx, which I think Danny has described the usage of. Then also, Danny referred to greater free cash flow effort this year because we want to reduce our net debt-to-EBITDA closer to 2x. It was reduced somewhat in 2023 to 2.3. And if we're able to sell an interest in our data center, then the intention is to devote most of the proceeds to reduce debt, so that, that should bring us some ways closer to 2x net debt to EBITDA. I think that's basically it, Melissa.

So we're now ready to take your questions. For those who are online, you might take your questions in the Q&A box in the upper right side of the screen. You may also click the raise hand button and wait for me to call your name before you unmute your microphone. You can also send your questions via e-mail to PLDT underscore ir_scorecenter@pldt.com.ph. Please indicate your name and company name, so we can get back to you for any additional information you may need. Allow me now to take questions from the floor first before we go to those who joined us online. There are microphones in the aisles. There were questions sent online by Gab and Pranav. Do you want to ask the questions yourselves. If you want me to read out the questions for now.

First, for the fiber segment. Additions in the segment slowed. Is this due to saturation in the markets you're present in? And which segments do you see it coming from moving forward?

So I believe the question was on fiber growth and what we're seeing on fiber growth. I think when you have a look, I'll start off, I'll zoom out a little bit because if you have a look at the presentation that Danny just took us through, it showed the home segment growing by 1%, which actually looks quite muted. Just want to remind everyone, what actually sits in the Home segment are actually 3 big parts of our business. Number one is our fiber business, which actually grew 9% year-on-year, right? So our actual fiber business, which is our biggest area, it's the future business for us is actually growing at a rate of 9% year-on-year. The second bit that's actually inside the home business is fixed wireless. Now many of you would know in the market, we have actually seen a correction and a change in that. In fact, we're seeing fixed wireless subscriber numbers quite substantially declined year-on-year. We saw a similar amount. Fortunately, for us, it's not as much as, say, for example, the overall market. So we're actually seeing an improvement in terms of market share there. In fact, when you have a look at our quarter 3 or quarter 4 numbers, we are starting to see some growth as well come out of fixed wireless. So we're starting to use fixed wireless in areas where we don't have a footprint. We're also using fixed wireless to attack a different segment of the market. The third element that actually sits in our home business is actually our legacy business. Our legacy is whether it's our copper through ADSL, VDSL as well as our voice business and calling business. That is actually a really -- in the past, has actually been quite a large business for…

Just a follow-up on that. You mentioned you have a prepaid fiber. How is that trending so far?

So we've actually been in customer trials for prepaid. As we mentioned in the very -- I guess when it was first launched, it was something that was heavily discussed. We've been very cautious about how we've actually deployed that. We want to make sure that it is revenue accretive and value accretive for all of us. We sit very differently. PLDT is in a different position than some of our competitors. We currently enjoy 55% to 65% to 60% utilization. So if you look at billable lines, we have 55% point utilization. If you look at it from an overall, obviously, you have some customers that you are in different levels of suspension and connection, you're actually seeing at about 62% utilization. So we have a lot more of our customers, a lot more of our ports being used. We want to make sure that we use prepaid fiber to target areas where we have excess capacity as opposed to other players in the market, which actually have significantly lower utilization levels.

Sorry, I just have one more question. For the mobile segment, Smart's been faring better in terms of getting new subscribers and actually staying at of your competitor. So do you see this as a long-term indicator for revenues in this segment? Do you see that picking up? And are you seeing competition in the mobile space broadly?

Probably just to respond quickly to the question. Number one, we came from a SIM registration bill that was enacted and put in force last year around the third quarter. So obviously, we saw a decline in our overall subscriber base. We have seen a healthier retention of customers ending at over 58 million last year combined for both repaid and postpaid. Obviously, there's a lot of work now to do to rebuild the base, and we are pushing very heavily both on the postpaid and prepaid businesses. And we are also pushing a lot of efforts around the eSIM which we launched on prepaid initially for digital delivery and now also available in postpaid as well. So we understand that there's going to be correction. Customers who were on rotation previously are probably not going to be as engaged as before because they have to go to a normal process of registration. And second, we also have to match this together with the growth in devices, which are sold in open channels year-on-year.

Thanks for. Gab, did you want to ask your question?

Gabriel Madrid from [indiscernible] here. First question is on the PHP 13.9 billion in asset write-offs in the fourth quarter. Could you please provide more color on that?

[Technical Difficulty].

And a follow-up on that. Fourth quarter depreciation was slightly lower than the typical run rate. I think it was about PHP 10 billion in the fourth quarter. Is that because of the assets that were written off? And do we expect that normalized run rate moving forward?

[Technical Difficulty].

Okay. Second question is on Maya. I believe it was mentioned in the previous briefing that Maya was in talks with existing shareholders of possibly doing another fundraising round. Is there any update on that?

After our $80 million funding round in December, at this point, we are fully funded. So our focus is on growing the business, building more services and launching more services, enlarging the base. So that's where we are at this point.

And one last question.

Add some color to that. Maya did the presentation to the Board this morning about the results for the first 2 months because we -- we're obviously closely tracking their performance on a monthly basis because their target is to breakeven towards the fourth quarter this year. So we want to make sure that they're on track to meet those targets. So the first 2 months showed that an improvement -- significant improvement in their -- in certain financial metrics. The segmented EBITDA turn positive for the first 2 months compared to the loss last year. That is the EBITDA at the operating level. If you take into account the corporate overhead, it's still negative EBITDA, but 50% roughly of what it was of the loss that they showed in the first 2 months last year. And similarly, on a bottom-line basis, the result is similar. It's 50%, a bit more production in their net loss for the first 2 months compared to last year. So on that basis, the cash burn is also 50% thereabouts of their cash burn last year. And you have cash of about 3.5 billion at the moment, 4.4 billion. And there's USD 20 left out of the USD 80 that [indiscernible] do mentioned. So that's more than PHP 1.1 or PHP 1.2 billion, incoming sometime this month. So we think that, that provides more than a buffer to accommodate the cash burn up to the third quarter. And our expectation is they should be at least breakeven if that's slightly cash flow positive in the fourth quarter this year. And then 2025, we hope they can see the light of day.

Thank you very much. My last question is on CapEx. The continued decline in CapEx is encouraging, although the rate of decline is much slower versus other telcos. So I believe that's due to the CapEx overrun of 2022. So I just wanted to ask how much of that overrun amount is left to be paid out this year and maybe next year?

For this year, you have focus on projected CapEx of 75% to 78% around 3/4 or 75% is outdated and the balance is over a time perid.

So the rest of the CapEx will...

It will be less then [Technical Difficulty]

So the balance will be fully paid out by the end of this year from the overrun.

Probably 2 more years.

2 more years.

CapEx PHP 60 billion. [Technical Difficulty]

There's a question from the -- from those who joined us online. Arthur, your hand is raised. You may unmute your mic.

If I can go for 3 questions, please. Firstly, on broadband. On the total fixed broadband momentum, that seems to be quite soft for the last 2 quarters. You did mention that fourth quarter was weighed down by seasonal issues. But are you seeing this moving back to positive territory into the first quarter of 2024, what are you seeing for the year? Second question was on mobile competition. What are you seeing on the ground? Are you seeing any increased activity or customer traction from the third player following their earlier capital raising? And maybe just one last question on the data center side, on the expectations here. Do you see this as immediately accretive upon operation in the end of the first half? Or do you need to ramp up contracts first? I'm not sure if the capacities are already precontracted.

Okay. I might start off first. On your question, Arthur, I believe it's around broadband seasonality and a slowing down in the second half of last year and what do we see for this year. And I think if I paraphrase that roughly. The short answer is we had a limited rollout in 2023, and you can actually see some of those -- the momentum actually start to come off. As Danny has mentioned already, we actually do plan in 2024, an acceleration of that rollout. So you'll actually start to see those things come online in the first half where we'll be looking to monetize them as quickly as we possibly can. So we would actually expect to see that we'll start to improve some of the momentum and get the momentum back into the fiber side of the business, getting back into, I guess, not maintaining, but actually growing, it's actually growth rate. So if you look at it on a quarterly basis, you're seeing sort of 7%, 8%, 9% growth rate, 7% to 8% in the last 2 quarters. We actually want to take that even further. When you're only isolating out the fiber business, right? So obviously, we still have some of the legacy to go that actually weighs down our number. But if you exclude that, we do expect to see actually fiber over the next -- well, for this year, over the balance of this year, we actually do want to ramp up our growth in our fiber business.

There's a question on the data center.

So on the data center, we have active discussions with potential partners, and that factors in the current capacity that we have of 28 megawatts plus the incoming capacity of 30 megawatts that we have for Vitro Sta. Rosa when it opens in July.

So that's precontracted. The upcoming 30 megawatts, you expect that when it launches already revenue generating?

We obviously have -- we still have to fully sell out the 30 backwards, but we have a very exciting pipeline of opportunities for our 11 data center. No. Well, the hyperscaler data center Sta. Rosa it will be implemented in several stages. The first stage is only 10 megawatts. And I think there have been -- there's one major hyperscaler that have signed up, which we cannot disclose yet. So we're quite confident that the 10 megawatts first phase will be substantially contracted for before we open. Now with respect to the existing data centers, we're actually pull up. And so there are plans to expand the non-hyperscale data centers, particularly the one in Makati, right? Now we are -- it's fair to say, I think we've disclosed that we're in discussions with several buyers or investors in the hyperscaler data centers, which are ongoing at the moment. But despite that, business continues as usual in terms of talking to potential locators on the -- in Sta. Rosa for the hyperscaler data center.

Arthur, did we get all your questions?

Yes. Sorry, I had a -- the second question earlier was on mobile competition. Are you seeing that picking up following the recapitalization? And sorry, I just couldn't hear the answer on the CapEx a while ago because there were some microphone. If I can just get clarity in terms of the CapEx expectation?

So for the mobile question first, Alex.

Okay. Let me respond first to the question, mobile. So first, let me speak of what we do. So we have continued to deploy differentiated offers. We talk about longer validities, larger bandwidth, better experiences. With respect to competition, expect a lot more action online. So a lot of the issues regarding sales and after sales are obviously revolving around social and digital media. A lot of concerns, though, on experience, I think it's already been mentioned that we're restarting our network build, and we're intensifying investments and improving capabilities to deliver product lines that are going to be on value and really to the customer. Now with respect to competition, expect them to continue to build as well. And we'd like to ensure that we're able to compete I think the question here in the end is how do you remain relevant and to continue to provide value.

There are several requests for you to repeat your answer on the clarification of the impairment. They couldn't hear you.

This roughly pertains to an amortized subscriber acquisition cost of home churn customers. Since the customers have already led us, there is a need to write down costs associated with the service. This includes cost of CPEs, installation and others.

Are these not taken out over the 2-year contract? Is it not amortized normally within the 2-year contract, right?

No, it's not. Historically, we amortize it over a period of 7 years, but effective this year, we're going to amortize over 6 years. That's isolation costs. But for CPE, we amortize it over a period of 5 years.

Thanks, Arthur. There's another raised hand from --

I just want to get more color again on the data centers. So of the 50 megawatts, am I correct in understanding that only the 10 megawatts will be first online? And then -- so when will the full 50 be available?

Maybe [indiscernible]?

Sure. So the builders Sta. Rosa is in 3 phases. The first phase that goes up in July is the first 10 megawatts. The remainder of the year will enable the remaining will enable another 10. And then the third, the balance of the remaining 10 will be enabled within the first half of next year.

If I may add to that. I think what we'd like to see, as we're talking to foreign investors, where operators also of hyperscalers or simply data centers abroad is to bifurcate the business -- the data center business into 2. One is the hyperscaler side where they have to make admitments to us to bring in revenues from foreign locators in the Philippines for the hyperscale data centers, anywhere between 30 to 50 megawatts capacity for each of those data centers. In respect to what I call the domestic data centers, those below 30 megawatts, which will address the domestic market, not only Alpha enterprises, but also the MSEs that we can handle by ourselves, and they can take a minority or a significant minority interest in the domestic data centers, which we can handle, right, all over the Philippines. So that's the way -- that's the direction we're taking in terms of this data center, the business, right? So we don't have the capability to bring in by ourselves. I think it will enhance our capability if you bring in somebody who is a major data center player internationally. So that's the logic of bringing someone in on the hyperscale side of our business.

Thank you. There are no other questions online. We'll take a second round from the floor, if there are any.

I'm Derrick from CLSA. So I have several questions. First on the data center side again. For the planned stake sale, how much are you planning to sell in terms of the stake? And I might have missed it earlier. Have you already earmarked CapEx for the next data center after the 11th? And my second question would be in the -- on Maya. You mentioned a total loan disbursed of PHP 22 billion for Maya. This all loans to customers or does this involve repurchase agreements and such? What's the actual LDR for Maya? And what's your strategy in expanding loans?

Well, on the -- as I said, we will bifurcate or. We intend to bifurcate the data center business. So quite likely, the hyperscaler side because they're big data centers. So they insist that they will have majority. So most likely either 50% plus one share or 51%, and we keep the 49%, right? On the premise that we told them you commit to bring a certain level of new revenues. And of course, finance your portion of the equity required to expand not only Sta. Rosa to be the full 30 megawatts, but also new data centers, either by ourselves with them or in conjunction with restate developments here in this country, right? Now in respect of what they call domestic data centers, we said we have to be majority and they will be a minority. So that is not clear yet to decide with them whether we have 60% or at least 51%.

George, on the CapEx for this, the next data center.

So the same -- so we are actively looking for the location for the 12th data center. So we -- there's a couple of candidates, but they have to be within a certain geographical location versus Makati, Clark and Sta. Rosa for it to be within, say, what you call a hyperscaler availability zone range so that you can maximize the cloud infra that is being put there. So after the selection, the design will then determine the amount of CapEx that we will need for that facility. So it all needs to be planned. But we have to -- essentially, we're targeting that we have to build by late -- starting late next year, if not early 2026.

Yes. In respect of the CapEx for the entire 30 megawatts, the Board has approved that project in its entirety. But since its phase, every phase has got to, of course, they got an approval for the first phase of 10 megawatts. And the next phase would be maybe another 10. So that is subject to final approval by the PLDT board and so forth and so on. Now let me stress that the distinct advantages of PLDT and its data center is number one. So our -- and number two is the assurance of power. A number of these data centers require a certain proportion of power supply being renewables. So I think it's only us this group that can provide a guarantee of power, continued power supply despite and, of course, a proportion of the power supply being renewables. Yes, I had several questions. First, on what type of loans this PHP 22 billion consists of? They are mostly personal loans on 30-day. And some of it -- a small part of it is business loans, which we are just starting to offer. So on the other question, strategically, we're pushing SME loans in -- well, currently as we speak. So that will comprise a bigger part of our loan portfolio for 2024. I can let SB describe other loans. We are -- kinds of loans we are launching this year. But on LDR, current LDR is at 12%, 12% to 15%. Obviously, that's still low, a lot of room to push it up. Towards the end of the year, we'll probably push it up beyond 50%. So that's on the LDR. So SB on the loans.

[Technical Difficulty] That launch 2 months back and is scaling up nicely. And then on the micro and the small enterprise, that's really the next area where we are focusing in a big way. We've already started disbursing micro loans since November last year. And now we are testing and launching the small enterprises. So these are longer-term loans, which help us, as Doug mentioned, to end the year closer to a 50% loan-to-deposit ratio. Those are the number that we're looking at.

I think with your indulgence, we may need additional CapEx for microphones.

There is a request for you to repeat your answer because you didn't have your mic on. In respect to the CapEx overrun, how many -- how much of the PHP 33 million was already absorbed this year?

We have already recorded PHP 21 billion out of the PHP 33 billion.

Any more questions from the floor or from online. If there are no further questions, we'll now turn the floor over -- there's one more question.

One question only. Can you provide more color on the digital entity or the DGI code that you're in the disclosure in terms of the contribution or the expenses that they involved?

Maybe we'll do the tougher question together. So we're actually forming what we call a digital company or digital. So what we intend to do is harness the assets of the group. We feel that's a good start in. ultimately, it's all about providing service to the consumer. Of course, in a more digitalized way. So a lot of that, of course, it will start from the data that we have. Definitely, this is going to be based on the consumers' uptake, and we intend to be able to bring together, address these of the consumer and address them in a better way. I think one thing that the Philippines that we have today is our own expression of a digital service for ourselves, right? It's very ironic because we are a very young digital savvy country. I mean if you look at Southeast Asia, right, we -- we're probably one of the most digital, very useful, very clear creative. But unfortunately, we don't have our own real super app. Correct. It's still a very fragmented space. Yes, we do have Maya, yes, G cash, Heavy Payments. But what about in terms of servicing, what about in terms of providing the providing the ability to conduct, let's say, mid by day-to-day activities online. Anything you can think about.

Is that comprehensive enough? Well, it's a very complicated [indiscernible] when he first presented to us. So we have to slice and dice. So the priorities which cut indicated is data, right? Because when you look at the spectrum of the group companies, you started the telco, which is the largest subspace and therefore, it generates a lot of data. So the question is that we probably have the data, so called data leak, but have created curated it to the point with the deployment data analytics for -- to be presented to the Board, for example, what's their buying pattern, what's their lifestyle of each of the subscribers, be it an individual for the corporate, right? So that replicates itself in Meralco, which is the second largest consumer base of the group. They have 8 million customers, which suggest 5 people per household, for example, that's more than 40 million people plus institutions, hospitals, schools, et cetera, et cetera, which are invariably part of the Meralco consumer base. Then the next is mainly at 2 million customers as well. And the last is the tollways. The hospitals as well, they do generate a lot of data about not only health conditions, but the way they behave. But with respect to the hospitals, they probably are the least school in IT adoption. So the pain points, as you know, you've been to our hospitals, we've been the digitalization, the manualized medical records. When you check in, you have to fill up every time you do that. And of course, of the billing, it takes a while. So with that they call every department who [indiscernible] bills, which takes a long time. So that has got to be attacked individually, persuading each of the companies to create the proper data lake…

Any other questions? Last chance. So if there are no other further questions, we will now turn the floor over back to Mr. Pangilinan for his closing remarks.

I don't have anything more to add. I spoke too much. Anyway Happy Easter, is it 3 weeks or something?

End of April -- end of March.

So do your payments.

On that happy note. And that concludes today's briefing. As always, should you have any further questions or clarifications, please feel free to reach out to PLDT Investor Relations. Thank you for your participation and join us for some refreshments outside. Thank you.