Investor Presentation - First Half 2021Results Creating long-term value - First Pacific Company Limited
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Investor Presentation
First Half 2021Results
HKEx: 00142 Creating
ADR: FPAFY long-term value
www.firstpacific.com
Copyright © First Pacific Company Limited 25 August 2021. All rights reserved.
inAsia
Consumer Foods Infrastructure Natural Resources Telecommunications
First Pacific has an First Pacific holds an First Pacific has an First Pacific holds an
economic interest of economic interest of economic interest of economic interest of
50.1% in Indofood, 43.4% in MPIC, 19.6% in 31.2% in Philex and Two 25.6% in PLDT which in
40.3% in ICBP, and both Meralco and Global Rivers, a Philippine turn owns 100% of Smart,
40.3% in Pinehill. Business Power, 47.5% in affiliate, holds 15.0%. its mobile
PacificLight, 22.8% in First Pacific holds effective telecommunications
Maynilad, and 43.1% in economic interest of subsidiary.
Metro Pacific Tollways. 42.4% in PXP Energy,
35.9% in IndoAgri, and
50.8% in Roxas Holdings.
2 Economic interest in most holdings can be found on page 28.
Earnings Rise, Dividend Up, Share Repurchases Continue
Recurring Profit Rises 38% & Interim Distribution 1H21 Recurring Profit (USD mln)
240
Jumps 2.0 HK cents to 9.0 HK cents per share
220 4.6 209.5
4.7
5.5
o Indofood and PLDT delivered their highest-ever first-half 200 6.0
8.7
revenues on lockdown-induced increases in demand for
7.1 x 11.0
180 29.1
both companies and, for Indofood, contribution of
160 151.7
Pinehill businesses
(0.9)
13.1 x 3.8
140
o FPM Power makes first positive contribution on fuel-price
competitiveness 120
o Contribution from operations rose 26% to $249.2 million 100
vs. $197.4 million on strong performances by all
20
21
od
e
er
R
x
T
C
il e
c
D
N
PI
w
operating companies save the sugar business RHI
1H
1H
ff i
fo
PL
FP
M
Ph
Po
O
do
d
M
In
o Sharply lower interest expense improved Head Office
ea
FP
H
costs by $6.0 million, resulting in a 38% improvement in
recurring profit to $209.5 million vs. $151.7 million
o First Pacific recorded net profit of $181.0 million vs. 1H21 Head Office Cash Flow (USD mln)
150 132.0
$100.6 million as non-recurring losses fell 90% to $5.4 68.0
125 111.4
million
100
o Interim distribution raised to 9.0 HK cents/share vs. 7.0
75
HK cents/share a year earlier on continuing commitment (24.6) (7.5) (6.4)
to distribute a quarter of recurring profit to shareholders 50
25
7.0 x 11.0 (5.1) (3.8)
o $100 million three-year share repurchase program well
under way to enhance returns to shareholders 0 13.1 x 11.2
o Operating companies forecast higher earnings over the
e
e
es
ts
s
sh
ds
sh
er
m
ns
en
ea
ar
Ca
Ca
th
co
pe
medium term as accelerating vaccination programs prod
st m
sh
rh
O
In
ng
g
Ex
ve
in
of
ve
ni
e
st
os
.O
domestic economies to new growth
Fe
se
in
pe
re
Cl
ha
rp
O
&
te
et
rc
In
o Interest coverage ratio improved to 3.5 times (next slide)
N
Co
d
en
pu
et
id
N
Re
iv
D
3
Prudent Capital and Balance Sheet Management
Head Office Balance Sheet as of end-June 2021 Bonds Outstanding
o Gross debt $1.4 billion, gross debt cover 3.8x
o Net debt $1.3 billion, net debt cover 4.0x
Principal
4.0 x 12.0
Coupon Price* Term Maturity
Net Debt to GAV ratio at 27%, Gearing at 80% US$357.8 mln 4½% 105.38 10-Year 16 April 2023
o
o Cash balance of $132 million US$120.5 mln 5¾% 12.1 x 3.7
107.33 7-Year 30 May 2025
o Average debt maturity of 3.4 years US$350.0 mln 4⅜% 107.30 7-Year 11 Sept 2027
o Blended interest cost of 3.5% *Mid-market data 30 July 2021.
o All borrowings are unsecured
o Fixed-rate borrowings amount to 74% of the total
o The Company’s interest coverage ratio improved to 3.5x
o No subsidiaries, affiliates or associates have any recourse to First Pacific Head Office for any borrowings
o First Pacific’s outstanding bonds (above, right) can be tracked on Bloomberg via FIRPAC
Head Office Borrowings at End-June 2021 (USD mln)
400 357.8
350.0
300.0
300
210.0
200 7.0 x 22.8
120.5
100 1.3 x 11.1 100.0
0
2021 2022 2023 2024 2025 2026 2027 2028 2029
Bank Loans Bonds
4
First Pacific’s Investment & Management Approach
Investment Criteria & Strategies Investment Objectives
o Geographic focus on emerging Asian economies o Create shareholder value by growing First
o Industry focus on consumer foods, infrastructure, Pacific’s recurring earnings and dividends and
natural resource, and telecommunications increasing the share price over the medium
o Companies will have strong or dominant market term with emerging Asia investment focus
positions o By actively participating in management of
o Companies will have potential for strong and operating companies grow their underlying
committed profit growth, substantial cash flows earnings, cash flow and dividends
and increasing dividends while following o Fully incorporate sustainability factors into
industry-leading ESG practices investment decisions and management
o Potential co-investment in new digital and practices to manage risk and generate
renewable energy businesses with group sustainable long-term returns
operating companies
Management Approach Three-Year Share Buyback Program Launched
o Achieve significant management influence or control o First Pacific is currently trading at a relatively
o Engage actively in setting strategic direction, high discount to its net asset value
business plans and performance, and ESG targets o First Pacific has accordingly launched a three-
o Work closely with management of operating year $100 million share repurchase program in
companies on acquisition and disposal activities March 2021 reflecting Management’s
o Develop management incentive plans including commitment to reducing First Pacific’s NAV
financial and sustainability targets to align discount
management interests with those of stakeholders o Repurchased shares are canceled, immediately
o Raise financial and ESG reporting standards to increasing NAV per share, earnings per share,
world-class levels throughout the Group and dividend per share for all shareholders
5
Gross Asset Value of $4.91 Billion
Diversified Investments, Strong Returns Roxas Holdings
$22 mln (0.4%)
o Balanced weighting of mature and Philex
growth investments Group*
o Balanced weighting of different sectors $495
mln
o 17 years of growth: Gross Asset Value
(10%)
grew at a compound annual growth rate
of 8% from end-2003 to end-June 2021 13 cm
o CAGR of 17% in dividend income to
PLDT Indofood
First Pacific from 2003 to 2020
o First Pacific dividend policy of at least $1.46 bln X $1.87 bln
25% of recurring profit since 2010
o $100 million three-year share
30% of GAV
13 cm 38% of GAV
repurchase program launched in March
2021 11.5 x 4.5
Consumer Foods 38% MPIC
Infrastructure 21% $1.05 bln
Telecommunications 30%
Natural Resources 11% 21% of GAV
Data as of 30 June 2021; rounding may affect totals. Head Office net debt not included.
*Includes Philex, PXP Energy, and SMECI notes (see page 22).
6
UNPRI1, UNGC2 & ILO3 Among New Commitments
New Commitments to Global Standards Proxy Advisor Ratings
o First Pacific’s formal Responsible Investment Policy implements
the six United Nations Principles of Responsible Investment1 HS Sustainability Benchmark Index AA- 1st Decile
o The Company has signed the United Nations Global Compact2 ISS Governance QualityScore 1 Best Possible Score
and committed to its 10 core principles ISS ESG Corporate ESG Performance C Prime Status
o First Pacific formally complies with the eight fundamental MSCI ESG Rating BB Up from B in 2019
conventions of the International Labour Organisation3
o Our ESG Reports are available here Sustainalytics ESG Risk Rating 15.2 “Low Risk”
Excellence Award in Governance in Hong Kong
Head Office GHG Emissions (tons of CO2-e)
350 35 o First Pacific won the 2020 Award of Excellence in Corporate
Governance from the Chamber of Hong Kong Listed
300 30 Companies and Hong Kong Baptist University’s Centre for
Corporate Governance and Financial Policy
250 25 o The Company is a member of the Hang Seng Corporate
Sustainability Benchmark Index with a decile rating of AA-
200 7.7 x 11.0 20 o First Pacific was awarded a “Prime” status by ISS ESG for
fulfilling “demanding requirements regarding sustainability
150 1.3 x 10.6 15 performance”
Head Office Emission Reduction Goals Exceeded
100 10
o In First Pacific’s 2019 ESG Report, the Company committed to
reducing Head Office total GHG emissions by 10% in 2021
50 5
and 15% in 2022 compared with the 2019 figure
o Having met both targets with a 44% fall in total GHG
0 0
emissions in 2020, First Pacific is reassessing its targets, even
2013 2014 2015 2016 2017 2018 2019 2020
as operating companies in the Group are encouraged to set
Scope 1 Scope 2 Scope 3 their own targets
o First Pacific GHG emissions have been verified by Carbon
GHG/floor area (CO2-e/sq ft) (RH scale) Care Asia
7
Covid-19 Response
First Pacific Has Stress-Tested Operations & Liquidity Indofood Is Gearing up to Help Those in Need
o The Covid-19 pandemic has coincided with greater o In a practice it has followed for many years when
demand for many of the products and services provided Indonesia faces natural disaster, Indofood is helping
by First Pacific Group companies authorities to ensure that all regions of the country have
o The Company has prepared several scenarios of adequate food supplies
potential impacts on operations and liquidity o Like other Group companies, Indofood and its subsidiaries
o First Pacific holds sufficient cash resources to meet all are following government guidelines for helping to slow
cash requirements, including all interest expenses and and isolate the pandemic, such as work-from-home
Head Office overheads plus a reserve policies where possible, temperature checks of staff and
o No borrowings fall due in 2021 visitors, and other such practices
o FPC pandemic response at Head Office included PLDT Is Ensuring its Data Network Remains Robust
temperature checks at building entrances, work-from- o PLDT is carrying out its public service obligation to ensure
home procedures where necessary, and persistent that its data network is prepared to withstand greatly
advocacy of thorough hand-washing, social distancing
increased demands for bandwidth
and the wearing of masks
o It has introduced data discounts and giveaways to protect
o All business travel remains suspended indefinitely public access to news and information
Philex and Roxas Are Helping Their Communities o PLDT has strengthened sanitation measures at stores and
o Philex, a large gold and copper mining company, service centers and introduced temperature checks
has introduced pandemic response policies at all MPIC Companies Are Adjusting to Evolving Demand
its sites o The toll roads business has introduced electronic
o Roxas, a sugar and alcohol producer, is producing contactless payment at all tolls
70% ethyl alcohol for use in hand and surface o Meralco is observing declines in electricity demand from
disinfectants for use in hospitals and public places the industrial and commercial sectors while residential
demand rises with more people staying home
Group Companies Press Vaccination Efforts o MPIC’s 20%–owned hospitals business continues to
o First Pacific Group companies are working together and
redirect capacity to help cope with the Covid-19
with government and healthcare authorities to
pandemic
maximize vaccination rates among employees, their
families and other stakeholders
8
Noodles Lead Earnings to Record High
1H 2021 Financial Highlights Net Sales & Core Profit (USD mln)
o Net sales rose 20% to record high IDR47.3 trillion vs. IDR39.4 trillion 6,000 5,136 5,414 5,583
on sales growth at Consumer Branded Products division followed by 5,000
the Agribusiness, Bogasari flour and pasta, and Distribution divisions
o Core profit rose 37% to record high IDR3.9 trillion vs. IDR2.9 trillion 4,000 3,293
driven by sales growth, contribution from Pinehill noodle maker
purchased in August 2020, and stronger gross profit margin
3,000 6.5 x 11.2 2,671
o Unit performance*:
o CBP sales up 22% to IDR27.8 trillion, EBIT up 45% to IDR6.1
2,000
1,000
12.9 x 3.8
279 346 407 194 273
trillion driven by Noodles
0
o Bogasari sales up 8% to IDR12.0 trillion, EBIT up 4% to IDR795 2018 2019 2020 1H20 1H21
billion
Net Sales Core Profit
o Agribusiness sales up 29% to IDR8.9 trillion, EBIT quadrupled to
IDR1.0 trillion vs. IDR 224 billion
o Distribution sales up 10% to IDR2.5 trillion, EBIT up 72% to IDR147 EBIT Margins Compared
billion 1H20 1H21
Noodles 22.1% 25.4%
Outlook Dairy 12.9% 12.5%
o Robust sales growth is seen continuing at CBP, driven by Pinehill operations Snack Foods 8.3% 12.7%
in Africa, the Middle East and Southeastern Europe, as well as continuing Food Seasonings 10.4% 12.4%
demand growth for our consumer branded products, supported by strong
product innovation across all food segments
6.0 x 11.5
Nutrition & Specialty Foods 5.7% 7.0%
Beverages -4.6% 3.4%
o Further expansion of CPO milling facilities to support production growth,
while expansion in flour milling and dairy will also boost production capacity
ICBP Overall 1.3 x 12.1 18.5% 21.9%
o Continued development of food services channels and export business will
Bogasari 6.9% 6.6%
continue to foster growth
Agribusiness 3.3% 11.8%
o With market leading positions in many categories, supported by an extensive
Distribution 3.7% 5.8%
and growing distribution network, Indofood’s products are readily available
across Indonesia and well positioned to capture growth in the FMCG sector Indofood Overall 14.3% 17.9%
*Before elimination and unallocated income.
9
Sales, EBITDA, Profit Reach Record Highs
1H 2021 Financial Highlights Net Sales & Core Profit (USD mln)
3,500
3,186
o Net sales rose 22% in Rupiah terms to a record high 2,990
3,000
IDR28.2 trillion vs. IDR23.0 trillion on growth led by 2,688
Noodles, driven by inclusion of sales by Pinehill following its 2,500
acquisition in August 2020 1,964
7.0 x 11.0
2,000
o EBITDA rose 33% to IDR7.2 trillion vs. IDR5.4 trillion on 1,563
higher gross profit margin (37.0% vs. 36.1%) 1,500
o EBIT margin rose to highest-ever 22.6% vs. 20.3%, lifted by
surging Noodles margin to 25.3% vs. 22.6% year-earlier
1,000
13.1 x 3.7
365 398
500 295 214 275
o Core profit rose 25% to IDR4.0 trillion vs. IDR3.2 trillion
0
o ICBP to remain focused on maintaining supply and quality 2018 2019 2020 1H20 1H21
of products while balancing market share and margins
Net Sales Core Profit
o With steady and strong sales growth, Indomie noodles
remain well regarded all over the world
Change in Net Sales (IDR bln)
Net Sales by Source (IDR bln) 32,000
30,000
187 15 11 9 28,199
1H20 1H21 Change 28,000
4,730 279
Noodles 15,493 20,223 31% 26,000 7.1 x 11.0
Dairy 6.0 x 11.5
4,274 4,553 7%
13.1 x 11.1
24,000 23,047
Snack Foods 1,456 1,643 13%
Food Seasonings 1.3 x 12.1
Nutrition & Specialty Foods
1,622
485
1,637
494
1%
2%
22,000
20,000
(79)
Beverages 661 672 2%
s
s
n
s
es
gs
s
SF
ry
le
le
io
od
ge
dl
ai
Sa
Sa
in
N
at
Elimination (944) (1,023) 8%
Fo
ra
D
oo
on
in
20
21
ve
im
N
k
as
Be
1H
ac
1H
Total 23,047 28,199 22%
Se
El
Sn
od
10 FoData Drive Revenues to Record, Core Profit Up
1H 2021 Financial Highlights Service Revenues# & Telco Core Income (USD mln)
4,000
o Service revenues# rose 10% to record high 3,508
3,129
₱91.6 billion due to higher data and 3,000 2,892
broadband revenues in wireless and fixed line
6.1 x 12.9 1,651
1,896
o EBITDA* rose 8% to record high ₱46.6 billion 2,000
on stronger service revenues slightly offset by
higher cash opex and subsidies
o Telco core income rose 10% to ₱15.2 billion
1,000 491 11.2
487 x 3.8
548
274 315
on higher EBITDA and lower provision for 0
income tax, offset by higher depreciation and 2018 2019 2020 1H20 1H21
financing costs Service revenues Telco Core Income
o Net debt/EBITDA at 2.28x with investment
grade rating and pre-tax interest cost of 4.41%, Change in Service Revenues# (PHP mln)
down from 4.66% in 2020 94,000
92,000 790 91,593
Outlook 4,117
90,000
o Service revenues seen rising at high-single-
digit rate to consecutive record high in 2021, 88,000 4,790
driven by data
o 2021 full-year telco core profit seen at ₱30
86,000 8.0 x 12.9
83,482
11.2 x 10.2
84,000
billion
82,000
o Special dividend of 5% of telco core profit for 1,586
2021 under consideration in addition to 80,000
regular 60% payout ratio 78,000
o 2021 revised capex budget of ₱88-92 billion 76,000
focuses on 5G and LTE, transport/backhaul 1H20 Wireless Wireless Fixed Line Fixed Line 1H21
expansion, and data center capacity to Service Voice & Data Data Voice & Service
maintain market leadership Revenues Others Others Revenues
*Ex-manpower reduction program costs. #Gross of interconnection costs.
11Home Business Leads Growth
Individual Business Leads Growth in Mobile Data Revenue Sources (PHP bln)
Surge
o 1H 2021 Individual service revenues rose 7% to ₱43.8 billion,
now 49% of service revenues
o Individual business seen continuing strong revenue growth Data & B’band ₱68.3
7.0Services
x 11.0
Data and Broadband
o Mobile data traffic up 17% on-year to 1,579 Pb
Voice ₱16.7
o 2Q revenues ₱21.7 billion vs. ₱22.1 billion in the first quarter
on usage shift to home broadband/wi-fi and tighter consumer
wallets 13.1
76% x 3.8 SMS
Int’l Long Dist.
₱3.0
₱1.8
o Smart’s GigaLife app has been enhanced to include GigaPay of Total
with PayMaya to enable more convenient top-ups, data
purchases and access to exclusive promotions
PLDT Enterprise Business Banks on Racks for Growth
o 1H 2021 Enterprise service revenues rose 2% to ₱20.4 billion
as demand for work-from-home services offset effects of
pandemic lockdown o LTE/4G devices make up 78% of all subscribed SIM
o Enterprise revenues now make up 23% of service revenues cards (84% in metro Manila)
o Largest data center portfolio in the Philippines: 10 data centers o 2G devices make up 14% (9% in metro Manila)
with full capacity of over 9000 racks, 72MW , 99.9% SLA o 3G make up 7% of the total (5% in metro Manila)
redundant power o 5G devices make up 1% (2% in metro Manila)
o Data/broadband revenues account for 72% of total Enterprise o Data/broadband revenues rose 16% in 1H 2021 to ₱68.3
service revenues from 69% in FY2020 billion or 76% of service revenues
Home Business Continues to Expand Fixed Wireless to Manage Ongoing Surge in Demand
o 1H 2021 Home service revenues rose 23% to ₱22.7 billion, now 25% of service revenues
o Monthly installations reach 115,000, exceeding 2021 target of 100,000, and up from 74,000 in 4Q 2020
o Stronger take-up of fixed wireless while payment terms extended
o Total homes passed up 13% since end-2020 to 10.2 million, total fiber footprint up 11% to 478,300 cable km
o Port capacity up 8% to 4.39 million
12Industry Observers Agree Which Provider Is Best
PLDT Network Is the Country’s Best, Say Observers Integrated Fixed & Wireless Network Architecture
o Independent industry observers agree PLDT’s customer o Demand-driven 2021 capex budget of ₱88-92 billion to be
experience is the market’s best in both fixed and wireless 23-28% higher than 2020 to underpin revenue targets
o In April 2021 report, Opensignal said “Smart has achieved o Fixed line traffic jumped 66% to 46,105 Tb/day in June 2021
a rare and remarkable achievement” in winning all 7 o Mobile data traffic rose 11% to 8,954 Tb/day in June 2021
categories o Nu4G LTE base stations rose 4,500 in 1H 2021 to 34,700, 3G
o Smart won Ookla’s Speedtest Award for Fastest Network in base stations up 500 to 16,700, 5G up 4,300 to 4,800
the Philippines for three years in a row 2018-2020 o PLDT has signed an MoU with AST SpaceMobile to explore
o Ookla data up to June 2021 demonstrate that PLDT’s Smart satelling broadband options
mobile brand has the fastest network in the Philippines o Total capex for past 10 years of ₱460.8 billion has built a
o 2021 capex targets include: strong foundation for continuing earnings growth
o Raising domestic backbone capacity of 55 Tbps o 2021 focus on 5G coverage and rollout, ensuring no LTE
nationwide to 93 Tbps by year-end congestion, transport/backhaul expansion and transformation
o Completing the Jupiter Cable system by Q1 2022 to raise by “fibering” the base stations, extending fiber footprint for
international capacity to 60 Tbps from 16 Tbps now capacity and resiliency, and further expansion of data centers
Wireless Download Speeds (Mbps) Fixed-Line Download Speeds (Mbps)
55.00 90.00
50.00 80.00
45.00 70.00
40.00
60.00
7.0 x 11.0 7.0 x 11.0
35.00
50.00
30.00
40.00
1.3 x 11.1 13.1 x 11.1
25.00
20.00 30.00
15.00 20.00
10.00 10.00
Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Smart Globe Dito Converge PLDT SKY Globe
13Electricity Toll Roads Water Hospitals Others
46% stake 45%-100% stakes 53%-100% stakes 20% 20%-99% stakes
45.5%
18 Hospitals
5 Radiotherapy
Centers
100% § Largest healthcare 36%
provider in the
Philippines
§ Present in all major
§ Maynilad is the island groups Philippine
100% largest water utility § Servied 1.5 mln Coastal
outpatients and Storage
in the country
47,000 inpatients in 50%
§ It serves close to
the first half of
10 mln people in
2021
Manila’s West
§ Approximately
Zone 9,400 accredited
§ Meralco is the § MPW develops medical doctors 99%
Philippines’ largest and operates other § Approximately
electricity distributor water utility 3,500 beds
§ MGen and GBP are its projects outside § Targeting growth to
power generation arms
Manila 5,000 beds in total
20%
14Core Profit Rebounds on Toll Road Turnaround
1H 2021 Financial Highlights Earnings Growth and Sustainability Commitment
o Contribution from operating companies rose 11% to o 2021 earnings seen rising as gradual exit from
₱8.5 billion vs. ₱7.7 billion on higher contributions community quarantine with increased vaccination
from toll roads, power, and hospitals businesses rates towards the latter part of 2021 increases demand
o Core income rose 13% to ₱6.0 billion vs. ₱5.3 billion for the services provided by MPIC businesses and as a
o Non-recurring items swung to a gain of ₱4.4 billion vs. result of lower corporate taxes
loss of ₱2.3 billion on sale of Global Business Power o MPIC has deferred discretionary investments such as
and Don Muang Tollways logistics to focus on infrastructure capital expenditure
o MPIC Head Office holds cash of ₱21.5 billion o MPIC formed a Group Sustainability Council to
o Recovery in the Power, Toll Roads, and Water embed sustainability in core operations and joined
businesses with the easing of COVID-19 movement Sustainability Accounting Standards Board alliance
restrictions are seen leading to FY core profit of at least o MPIC also commits to aligning its 2021 report with
₱12.0 billion vs. ₱10.2 billion in 2020 the TFCD disclosure framework
Change in Contribution (PHP mln) Revenues & Core Income (PHP mln)
9,000 1,200
154 84 8,528
951 1,000 956
8,000 821 826
7.0 x 11.3
7,709 800
7,000 (370) 600 7.0 x 11.1394
1.3 x 11.1 449
6,000
400 286
13.0
303 x 11.1
207
200 106 125
5,000 0
1H20 Water Toll Power Others 1H21 2018 2019 2020 1H20 1H21
Roads Revenues Core Income
15Earnings Rise as First Solar Plant Launched
1H 2021 Financial Highlights & Outlook: Meralco Distribution Revenues & Core Income (USD mln)
1,600
o Distribution revenues rose 7% to ₱31.5 billion vs. 1,400 1,278
₱29.5 billion on 7% higher volumes sold 1,177 1,223
o Core EBITDA up 52% on higher revenues and 1,200
reversals of provisions 1,000
o Core income rose 8% to ₱11.4 billion vs. ₱10.6
billion on higher revenues
800 7.6 x 12.2 583
652
11.9 x 3.8
600
o Volume sold rose 7% to 22,663 GWh 425
462 439
o Bulacan Solar Power Plant now online with capacity 400
236
209
of 50MWac/80.9MWdc 200
o Purchase of GBP from MPIC consolidates power
0
portfolio and strategy under one parent company 2018 2019 2020 1H20 1H21
with medium-term aim of building 3,000 MW of
new power plants, half of which to be fueled by Distribution Revenues Core Income
renewables Note: Meralco franchise until 2028.
1H 2021 Financial Highlights: Generation Renewable Power Generation Begins in Bulk
o MPIC completed its sale of its stake in GBP to o Mgreen renewable generation subsidiary plans
Meralco PowerGen at the end of 1Q 2021 for a gain 1,500 MW of new capacity construction by decade-
of ₱4.6 billion end, up from a negligible share of power generation
o GBP, a leading independent power producer in the today
Visayas and with operations in the fast-growing o Powersource First Bulacan Solar’s 50 MW plant in
Mindanao market, has an existing portfolio totaling Bulacan commenced commercial operations in May
1,091 MW of coal and diesel plants o GBP subsidiary PH Renewables broke ground on
o GBP recorded net profit of ₱904 million in the 115 MW solar power plant in Baras, Rizal on June
period, down 20% from ₱1.1 billion a year earlier 30 with aim of commencing commercial operations
on lower sales volumes in 2022
16Toll Roads Earnings Surge on Traffic Growth
1H 2021 Financial Highlights & Outlook: Toll Roads Revenues & Core Income (USD mln)
400
359
o Revenues rose 36% to ₱8.3 billion on eased quarantine 350
294
restrictions 300 274
o Core income rose more steeply, doubling to ₱1.9 250
billion vs. ₱922 million on shift to Optional Standard 200 6.1 x 11.1 173
Deduction in tax regime 150
13.0 x 3.8
102 122
o Philippine traffic rose with a 38% increase in vehicle 100 84
54
entries to an average of 471,000 on all domestic toll 39
50 18
roads 0
o CII B&R in Vietnam saw a rise of 31% while Nusantara 2018 2019 2020 1H20 1H21
Revenues Core Income
in Indonesia saw traffic increase 15%
Note: NLEX concession until 2037; SCTEX until 2043; CAVITEX until 2033/2046.
1H 2021 Financial Highlights & Outlook: Water Revenues & Core Income (USD mln)
500
465 463
o Maynilad revenues fell 2% to ₱11.2 billion vs. ₱11.4 450
418
billion on slightly lower billed volumes, partly offset by 400
higher average effective tariff 350
o Core income fell 15% to ₱3.0 billion vs. ₱3.6 billion on
higher operating costs and amortization arising from
300
250
7.0 x 11.1 226 231
continuing facilities upgrades, partly offset by the
impact of the CREATE tax legislation reducing
200
150
147 13.0 x 11.0
150 132
corporate income tax rates 100 71 63
o Average non-revenue water rose to 31.1% vs. 25.2% 50
0
o Revised concession agreement signed in May 2021
2018 2019 2020 1H20 1H21
with regulator establishes stable terms and “reasonable”
Revenues Core Income
returns for the life of the concession
Note: Maynilad concession until 31 July 2037.
17Profit Leaps on Surging Copper Prices
1H 2021 Financial Highlights Operating Revenues & Core Income (USD mln)
200
158
o Operating revenue rose 29% to ₽4.7 billion vs. 143 171
150
₽3.7 billion as a result of a surge in the average
realized price of copper and higher gold price,
offset in part by a stronger Peso and lower metal
100 4.8 x 11.9 73
98
production
o Cash production costs rose 5% to ₱554/ton vs.
50
11 12.2 x 3.8
3
23
8
24
0
₽527/ton on sharply higher power costs 2018 2019 2020 1H20 1H21
o Core income nearly tripled to a nine-year high of Revenues Core Income
₽1.1 billion vs. ₽402 million a year earlier on
higher operating revenue as a result of higher Outlook
copper prices
o Realized gold price rose 8% to $1,807 vs. $1,677 o The mine life of the current operations at Padcal has
per oz. been extended by two years to the end of 2024
o The extension allows further time for development of the
o Realized copper price rose 71% to $4.21 vs.
resource-rich Silangan project (see box below)
$2.46 per lb. o In-Phase Development Plan for Silangan aims to start in
2022 with Silangan commercial operations in 2025
o Philex plans to appoint a financial advisor to assist in
1H 2021 Production Highlights fund-raising
o Volume of ore milled was flat at 3.97 million tons Silangan Mineral Resource Estimate
o Gold output 27,025 oz., down 5% from 28,332
oz. on lower recovery and grade Metric
o Gold grade 0.279 grams/ton vs. 0.283 grams/ton tonnes Cu Au Cu Au
o Copper output fell 2% to 13.2 million lb. vs. 13.5
million lb. on lower recovery and grade Measured
(mln)
438
4.6 x0.67
(percent)
0.55
10.7 5,280
(g/t) (mln lb.) (‘000 oz.)
9,390
o Copper grade at 0.187% vs. 0.189%
o Co-production operating cost per ounce of gold
Indicated
Total M&I
133
571
1.3 x0.47
0.43
0.52
13.1 1,260
0.62 6,540
2,010
11,400
was $1,232 vs. $1,343, and $2.87 vs. $1.97 per Inferred 224 0.36 0.48 1,790 3,490
pound of copper produced Total 795 0.47 0.58 8,320 14,890
18Appendix
Shareholder Information
Selected Financial Data
19Senior Management of First Pacific
Joseph H.P. Ng Chris H. Young Manuel V. Pangilinan John W. Ryan Ray C. Espinosa
Associate Director Executive Director & CFO Managing Director & CEO Associate Director Associate Director
Richard P.C. Chan Peter T.H. Lin Stanley H. Yang Marilyn A.
Victorico P. Vargas
Exec. Vice President, Exec. Vice President, Exec. Vice President, Victorio-Aquino
Associate Director
Financial Controller Tax & Treasury Corp. Development Associate Director
20Adjusted NAV per Share
At At
30 June 31 December
2021 2020
US$ millions Basis
Indofood (i) 1,872.7 2,143.9
PLDT (i) 1,463.8 1,541.5
MPIC (i) 1,054.0 1,178.5
Philex (i) 301.5 235.2
PXP (i) 90.2 127.3
FP Natural Resources (ii) 21.5 27.2
Head Office - Other assets (iii) 103.3 104.9
- Net debt (1,300.2) (1,319.5)
Total valuation 3,606.8 4,029.9
Number of ordinary shares in issue (millions) 4,323.2 4,344.9
Value per share - U.S. dollars 0.83 0.93
- HK dollars 6.51 7.23
Company's closing share price (HK$) 2.65 2.47
Share price discount to HK$ value per share (%) 59.3 65.8
(i) Based on quoted share prices applied to the Group’s economic interests.
(ii) Based on quoted share price of RHI applied to the Group’s effective economic interest.
(iii) Represents the carrying value of SMECI’s notes.
21Contribution & Profit Summary
Contribution to
Turnover Group profit
For the six months ended 30 June 2021 2020 2021 2020
US$ millions (Restated)
Indofood 3,293.4 2,671.4 122.9 93.8
PLDT - - 71.2 62.5
MPIC 448.5 394.5 49.9 44.4
Philex - - 6.9 2.2
FPM Power 412.9 253.9 2.8 (1.8)
FP Natural Resources 71.2 117.9 (4.5) (3.7)
Contribution from operations 4,226.0 3,437.7 249.2 197.4
Head Office items:
– Corporate overhead (9.8) (9.4)
– Net interest expense (25.8) (31.5)
– Other expenses (4.1) (4.8)
Recurring profit 209.5 151.7
Foreign exchange and derivative (losses)/gains, net (22.5) 4.5
Loss on changes in fair value of biological assets (0.6) (2.2)
Non-recurring items (5.4) (53.4)
Profit attributable to owners of the parent 181.0 100.6
22Head Office Net Debt & Cash Flow
Cash
and cash
US$ millions Borrowings equivalents Net debt
At 1 January 2021 1,430.9 (111.4) 1,319.5
Movement 1.3 (20.6) (19.3)
At 30 June 2021 1,432.2 (132.0) 1,300.2
Head Office cash flow
For the six months ended 30 June 2021 2020
US$ millions
Dividend and fee income 68.0 61.1
Head Office overhead expense (6.4) (6.2)
Net cash interest expense (24.6) (28.6)
Tax paid - (0.2)
Net cash inflow from operating activities 37.0 26.1
Net investments (5.1) (1.0)
Financing activities
- Repurchase of shares (7.5) -
- Repayment of borrowings - (1.1)
- Others (i) (3.8) (1.2)
Net increase in cash and cash equivalents 20.6 22.8
Cash and cash equivalents at 1 January 111.4 325.0
Cash and cash equivalents at 30 June 132.0 347.8
(i) Mainly payments for lease liabilities and to the trustee for share purchase scheme.
23Group Net Debt and Gearing
Consolidated
At 30 June 2021 At 31 December 2020
Net Total Gearing(ii) Net Total Gearing(ii)
US$ millions Debt(i) Equity (times) Debt(i) Equity (times)
Head Office 1,300.2 1,451.6 0.90x 1,319.5 1,621.2 0.81x
Indofood 2,466.3 5,731.6 0.43x 2,548.1 5,598.2 0.46x
MPIC 3,731.0 4,715.5 0.79x 3,762.8 5,079.5 0.74x
FPM Power 438.5 (37.4) - 468.4 (42.9) -
FP Natural Resources 97.4 38.0 2.56x 106.8 55.3 1.93x
Group adjustments(iii) - (1,462.4) - - (1,682.8) -
Total 8,033.4 10,436.9 0.77x 8,205.6 10,628.5 0.77x
Associated Companies
At 30 June 2021 At 31 December 2020
Net Total Gearing Net Total Gearing
US$ millions Debt(i) Equity (times) Debt(i) Equity (times)
PLDT 4,356.8 2,473.4 1.76x 3,801.1 2,492.0 1.53x
Philex 175.4 519.7 0.34x 182.6 504.5 0.36x
(i) Includes short-term deposits and restricted cash.
(ii) Calculated at net debt divided by equity.
(ii) Group adjustments mainly represents elimination of goodwill arising from acquisitions prior to 1 January 2001 against the Group’s retained earnings
and other standard consolidation adjustments to present the Group as a single economic entity.
24Proven Track Record in the Capital Markets
$152 mln bond tender $215 mln Bond
($69 mln of 2010 7-yr) Redemption
Over a Decade of Strong Market Performance ($83 mln of 2010 10-yr) (2012 7-yr)
o First Pacific has issued a total of six bonds totaling
over $2 billion in the decade from 2010 $220 mln bond tender $252 mln Bond
($160 mln of 2012 7-yr) Redemption
o Three of those issuances, totaling $1.1 billion, ($60 mln of 2010 10-yr) (2020 10-yr)
have fully redeemed
o The three remaining outstanding bonds total $219 mln Bond $54 mln Bond
$828 million Redemption Repurchase
(2010 7-yr) (2018 7-yr)
2009 2010 2012 2013 2017 2018 2019 2020
$282 mln Rights Offer $500 mln Rights Offer
(one-for-five (one-for-eight
at HK$3.40/share) at HK$8.10/share)
7-yr $300 mln 7.375% 7-yr $400 mln 6.00% 7-yr $175 mln 5.75% 7-yr $350 mln 4.375%
Secured Bond Unsecured Bond Unsecured Bond Unsecured Bond
(redeemed) (redeemed) ($121 mln outstanding) ($350 mln outstanding)
10-yr $400 mln 6.375% 10-yr $400 mln 4.50%
Secured Bond Unsecured Bond
(redeemed) ($358 mln outstanding)
25Shareholding Structure of the Company
Shareholder Breakdown Minority Shareholders Mln Shares % Stake
1 Brandes Investment Partners 322 7.4%
2 Lazard Asset Management 139 3.2%
3 GIC Asset Management 110 2.5%
4 Seafarer Capital Partners 97 2.2%
All 5 Letko, Brosseau & Associates 87 2.0%
Others 6 Dimensional Fund Advisors 69 1.6%
16% 7 Gokongwei Investors 68 1.6%
8 Capital International Los Angeles 68 1.6%
9 Guthrie Venture 66 1.5%
10 The Vanguard Group 65 1.5%
Salim 11 M&G Investment Management 62 1.4%
13.4 x 13.4 Group 12 Prusik Investment Management 60 1.4%
13 Oldfield Partners 47 1.1%
1.3 x 4.5 44.4% 14 Capital International Geneva 46 1.1%
15 BlackRock Fund Advisors 46 1.1%
16 Marathon Asset Management 41 0.9%
17 Charles Schwab IM 38 0.9%
18 Neon Liberty Capital Management 32 0.7%
19 Maple-Brown Abbott 28 0.7%
tko 20
Le Banque Pictet & Cie 26 0.6%
er
ar
21 Hof Hoorneman Bankiers 26 0.6%
af
Se
GIC 22 Santa Lucia Asset Mgt 19 0.4%
Lazard Brandes 23 Value Square 19 0.4%
24 BNP Paribas Asset Management 18 0.4%
Remaining Board Directors & Mgt 2.4%
25 GMO 18 0.4%
Data as of 30 June 2021. Analysis counts 268 minority shareholders. Total shares out 4,332,109,044; free float 2,304,179,296.
26Insider Ownership & Institutional Shareholder Statistics
Turnover Total Interest of Directors
Unvested
Shares Options
Share Awards
Anthoni Salim NED, Chairman 1,925,474,957 - -
Not Stated Manuel Pangilinan ED, CEO 70,493,078 - -
Low
34%
6.5 x 6.5
57%
Chris Young
Axton Salim
ED, CFO
NED
6.5 6,774,906
x 16 - 1,610,283
-
-
-
8.1 x 3.6 -
e ry
Ac
tiv1.3 x 3.6
e 0.2
% Holding periods:
Low: Longer than 3 years
Medium: 2-3 years
Benny Santoso
Edward Chen
NED
INED 2,627,559
-
319,000
5,167,600
-
V
Medium High: 1-2 years Philip Fan INED 9,749,652 319,000 -
9%
Very Active:FPC’s
FPC’s Economic
Economic
25.6% 25.6%
Interest
Interest 43.4%
(%)
(%) 50.1%
19.7%
40.3%
19.7%
40.3% Pinehill
53.4%
43.4% 35.9%
22.9% 29.9%
19.5% 17.8%
43.4% 13.0%
33.1%
50.8%
8.7%
15.5% 46.2%
42.4% 46.2%
28Notes
29IMPORTANT NOTICE
This presentation is provided for information purposes only. It does not constitute an offer or
invitation to purchase or subscribe for any securities of First Pacific or any of its subsidiaries or
other companies it is invested in, and no part of this presentation shall form the basis of or be
relied upon in connection with any contract or commitment.
Certain statements contained in this presentation may be statements of future expectations and
other forward-looking statements that are based on third-party sources and involve known and
unknown risks and uncertainties. Forward-looking statements contained in this presentation
regarding past trends or activities should not be taken as a representation that such trends or
activities will continue in the future.
There is no obligation to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. You should not place undue reliance on forward-
looking statements, which speak only as of the date of this presentation.
The dollar sign (“$”) is used throughout this presentation to represent U.S. dollars except where
otherwise indicated. “Ton” and “tons” refer to the metric unit of mass.
We hope the hyperlinks in this document are useful. Please report any breakages or errors.
30Contact Us
First Pacific Company Limited
(Incorporated with limited liability under the laws of Bermuda)
24th Floor, Two Exchange Square
8 Connaught Place, Central
Hong Kong
Tel: +852 2842 4306
Email us at info@firstpacific.com
firstpacific.com
31You can also read
