FIRST PACIFIC(FPAFY) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Contribution from operations increased by 18% to just over $700 million, marking a third successive high [7] - Earnings per share rose by 19% to $14.24, with a final distribution to shareholders of HK$12.5 per share, bringing the full year payout to HK$0.23 per share, up from HK$0.22 in 2022 [8] - Gross debt and net debt remained unchanged at $1.5 billion and $1.4 billion respectively, with blended interest costs at 5.4% [11] Business Line Data and Key Metrics Changes - Indofood achieved record high net sales and core profit, driven by its consumer branded products division [15] - Metro Pacific Investments (MPIC) reported record highs in core profit and contributions from operations, with Meralco and the water business seeing significant improvements [19] - PLDT experienced record high service revenues and EBITDA, with growth driven by wireless data and SMS [24] Market Data and Key Metrics Changes - First Pacific's share price increased by 22% in 2024, following a 33% rise in 2023, outperforming peers and major indices [13] - The average daily vehicle entries across Metro Pacific's toll roads exceeded one million, contributing to record high revenues and core profit [22] Company Strategy and Development Direction - Management is confident in continuing earnings growth from core holdings over the medium term [9] - The company is focusing on renewable energy projects, including a solar power export scheme from Indonesia to Singapore [30] - There are ongoing discussions for a merger with San Miguel Corporation to combine tollway operations, which could enhance EBITDA [57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, with expectations of continued growth in earnings and dividends [9][60] - The company is monitoring interest rates and plans to potentially issue bonds to diversify its debt profile [84] Other Important Information - The company achieved carbon neutral Scope 2 emissions in 2023, reflecting its commitment to sustainability [14] - Non-recurring losses included an impairment provision for an investment in Nigeria due to currency depreciation [69] Q&A Session All Questions and Answers Question: What is the NAV as of today? - The NAV discount is approximately 44.4% at today's closing price of HK$3.82 [36] Question: Can you elaborate on the latest dividend policy? - The dividend policy aims to unlink distributions from profit numbers, focusing on cash income to ensure consistent increases in shareholder distributions [38] Question: What is the current voting stake in Metro Pacific? - The economic stake is 46%, while the voting stake is approximately 58% due to preference shares [44] Question: Can you provide details on potential bond issuances? - The company is considering issuing bonds to manage debt maturity profiles and diversify credit sources, with a preference for longer-term bonds [46][84] Question: What are the plans for toll road developments? - There are several toll road projects nearing completion, and the company is the highest bidder for a stake in the Trans-Java tollways in Indonesia [55] Question: How is the solar project progressing? - The solar project is expected to be transformative, with significant interest from financing banks due to its scale and backing by a long-term power supply agreement [91]