Hi, good afternoon, everyone. Welcome to our Q3 briefing for 2023. My name is Hannah Chai, Investor Relations Officer of DMCI Holdings. Joining us today are members of our top management team as flashed on your screen. Before I proceed with the presentation, let me remind you of the following. This meeting is being recorded. Questions should be sent through the chat box. Those who email their questions in advance will be prioritized. We'll answer as many questions as time allows, and pending questions will be replied to via email after the briefing. This briefing is meant to provide our covering analysts and investors with key information about DMCI's financial results and future plans. As such, management may make forward-looking statements regarding the company's plans, expectations, and growth prospects. Statements that are not historical facts, including statements about our expectations, hopes, intentions, or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management beliefs. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Consolidated earnings for the Q3 moderated to PHP 4 billion following the previous year's record high of PHP 7.3 billion. This was due to lower contributions from Semirara and DMCI Mining, which were affected by stabilizing commodity prices. However, robust performances from our other portfolio companies served as a buffer, mitigating the impact on overall profitability. Over the nine-month stretch, Maynilad and DMCI Power emerged as bright spots, with both delivering double-digit growth. DMCI Homes held steady while the rest showed marked declines. In all, the DMCI group reported PHP 20 billion in consolidated profits, a 28% drop from the previous year's record performance, buoyed by then historic commodity prices. This translated to a robust 18.4% return on equity over the same period. While we observed declines in our Q3 earnings, both year-on-year and quarter-over-quarter, it is worth noting that our net income for 2023 showed a substantial growth of 44% versus our pre-pandemic Q3. Turning to our consolidated income statement. Q3 revenues fell due to stabilized commodity and power prices, alongside an increase in real estate cancellations and a dip in revenue from ongoing projects affected by previous cancellations. Despite this, net income margin was respectable 25% in the Q3 and 32% over nine months. These margins were attributable to lower royalty expenses, and higher earnings from Maynilad, along with an increase in finance income. Net finance income expanded by 18 times from PHP 20 million to PHP 378 million due to a rise in cash balances. Moreover, SMPC recognized additional income from a refund on export wharfage fees by the Philippine Ports Authority. To provide context, SMPC mistakenly paid export wharfage fees from September 2008 through December 2014, when it was actually exempt from these fees due to its registration with the Board of Investments. DMCI's financial health continued to strengthen with a 36% increase in liquidity due to solid operating performance and efficient receivable collections. Concurrently, total debt levels decreased due to consistent repayments. The company's book value per share saw a 10% upturn as a result of robust earnings. Capitalizing our sturdy balance sheet, the Board of Directors on October 10 declared special dividends of PHP 9.56 billion or PHP 0.72 per share, set for distribution today, November 9. This will bring our total payout to PHP 19.12 billion, the highest in our corporate history. Moving on to the individual performance of our business units. D.M. Consunji, Inc., or DMCI, recorded an uptick in its Q3 revenues, primarily due to low base effects. As a reminder, revenue recognition was more conservative in the previous year during the period of escalated price gains. For the nine-month span, its top line decreased due to a reduction in ongoing projects, and some construction delays. Despite these headwinds, core net income margin remains unchanged at 5% for both nine-month periods. During the period, DMCI also collected significant receivables from key infrastructure projects. This allowed the company to substantially reduce its debt to PHP 55 million and increase its cash balance to over PHP 2.9 billion. DMCI is on track to eliminate its debt by the year-end. Construction revenues from July to September came mostly from buildings and joint venture projects. This shift was mainly due to the absence of new infrastructure projects undertaken solely by DMCI and near completion of ongoing projects by the infrastructure unit. The infra unit's order book was dominated by a viaduct work for the North-South Commuter Railway Contract Package 02, which stretches from Bocaue to Tutuban. The package comprises of 22% of DMCI's order book. During the period, the company bagged three water infrastructure projects, pushing its order book past the PHP 40 billion mark. These projects include an 88 million liters per day water reclamation facility, various pipe-laying initiatives, and the design and construction of a pump station and reservoir. DMCI Homes reported a 20% increase in standalone net income for the Q3, reaching PHP 1.4 billion. However, the nine-month bottom line held steady at PHP 3.9 billion, bolstered by a rise in other income and finance income. Nine-month revenue declined double digits, largely due to reduced revenue re-recognition from ongoing projects, an uptick in sales cancellations, and fewer new, in-new accounts that met the revenue recognition qualification. To provide some context, last year's cancellation rates for the units falling below the 14.5% collection threshold surpassed 17% amid rising interest rates. This surge in cancellations led to a decrease in both ongoing and new qualified accounts. This year, cancellation rates slowed to 12.7%. DMCI Homes also showed an improvement in its financial leverage, with its net debt-to-equity ratio now at 0.9. The August launch of Solmera Coast provided a significant boost to residential unit sales, ASP per square meter, and total sales value. This despite the launch of projects in prime locations last year. As of September, Solmera Coast has sold 926 residential units. However, the project's lack of parking inventory contributed to a decrease in the sales of parking slots and consequently the total sales figures. SMPC reported its second-highest nine-month result after its outstanding performance in 2022. The company's Q3 and nine-month bottom lines were impacted by stabilizing coal markets and a reduction in the net foreign exchange gains. However, the power segment, particularly Sem-Calaca Power Corporation, delivered exceptional results that helped mitigate these effects. The power segment achieved its highest net income for a nine-month period, largely due to the commercial operations of Sem-Calaca Power Corporation Unit Two in October 2022. Despite the subdued top line and lower Forex gains, net income margins remained strong, standing at 29% for the Q3 and 40% for the nine-month stretch. Building on the momentum from its record-breaking results the previous year, Semirara Mining and Power Corporation distributed a total dividend of PHP 29.8 billion or PHP 7 per share for the year, the largest in the company's history. This follows a special dividend of PHP 3.5 per share, amounting to PHP 14.9 billion, which was declared on October 9 and disbursed yesterday. Intense rainfall during July and August, along with the commencement of stripping activities in new block at Molave, led to a substantial rise in strip ratio and a 20% reduction in production. Nonetheless, SMPC remains on track to meet its annual production target of 16 million metric tons. While external domestic demand softened, this was counteracted by an increase in sales to owned facilities, which picked up following the start of commercial operations at SETC Unit Two. Mixed operating outcomes marked the Q3 of the power segment. SETC maintained steady operations in both Unit One and Two after the latter resumed commercial operations Q4 last year. Conversely, SLPGC faced a series of headwinds, including coal coking and silo blockage incidents in September of both units, increasing its number of outage days. This, despite operational hurdles, power sales saw a 13% increase. However, average selling price fell by 23%, influenced by a 38% drop in spot sales. This decrease was attributed to high base effect and a broader supply margin in the grid. Shifting focus to our off-grid power business. DMCI Power recorded profit growth for the 10th consecutive quarter. Its Q3 and 9-month earnings at an all-time high of PHP 267 million and PHP 632 million respectively. The company's stellar performance was primarily due to a 17% increase in installed capacity. Its financial standing also improved substantially, with its cash reserves doubling and debt, net liabilities declining by 13%, owing to a consistent amortization and better collection of outstanding receivables. The synchronization of a 15 MW thermal plant in August led to substantial increase in gross generation and energy sales of Palawan, making it DMCI's largest market. With higher installed capacity and robust demand, the company's share in Palawan expanded by 13% to over half of the market. Management expects continued growth in the area given the island's rising global stature as a premier tourist destination. As DMCI Power is already working on expanding its Palawan capacity to address unserved and future demand. DMCI Mining faced a challenging Q3 marked by decrease in average selling prices and reduced foreign exchange gains. Cost of sales surged to increased shipments, shiploading activities, fuel and labor costs, and excise taxes. Operational expenses also escalated on wharfage fees and ESG spending. These, together with higher depreciation, translated to a net loss of PHP 171 million versus a net income of PHP 80 million. Over the nine-month period, nickel profit was cut by more than half to PHP 537 million. Amid the heavy rains that often slow down operations during the Q3, VDMC reported double-digit growth in production and shipments. The uptrend was primarily due to the environmental compliance certificate granted in January, authorizing the company to ramp up production to 2 million wet metric tons per year. However, the combined effect of lower nickel indices and quality sold dampened Q3 revenues as all shipments for the period was below 1.3% grade. ASP also plunged by 52% to $20 per wet metric ton. Maynilad recorded a substantial increase in Q3 and nine-month revenues on higher billed volume, commercial consumption, and average effective tariffs. Year-to-date, total cash costs rose primarily due to increased cross-border water purchases, spending on outside services, and chemical expenses. In contrast, non-cash costs saw a significant 37% reduction following an adjustment of concession assets to match the term of its legislative franchise which extends to 2047. To recall, Maynilad as adjusted its concession asset in Q4 2022 to cover for the full year of 2022. These adjustments, alongside enhanced operating conditions, contributed to an expansion of 9-month profit margins to 13%-33%. Total production significantly improved, boosted by an increase in raw water availability of the Angat Dam, higher cross-border water purchases, and commissioning of a new water treatment facility in Parañaque. Increased supply coupled with stronger demand pushed billed volume to rise 3% to 137.8 million cubic meters, easily surpassing the pre-pandemic mark of 134.6 MCM. All water and sewer service level indicators also improved on continued infrastructure investments. In summary, the DMCI group achieved its second-highest net income for a nine-month period, buoyed by power and water businesses that rallied to mitigate the impact of moderating coal and nickel prices. Breaking it down, a leaner construction order book and increased real estate cancellations have subdued revenues for DMCI and DMCI Homes. However, the impact on DMCI Homes was mitigated by income from forfeitures and in-house financing. Stable coal prices have resulted in SMPC recording its second-best performance, with a robust power segment bolstering its group earnings. DMCI Power continued its record-breaking streak, achieving its highest-ever earnings for both the Q3 and nine-month period, driven by a 23 MW expansion in installed capacity. DMCI Mining's profitability took a hit due to lower selling prices and the shipment of lower grade nickel in the Q3. For the nine-month period, the decline in the nickel market was offset by better production, and shipment volumes. Improved operations and average effective tariffs propelled Maynilad's financials upward. Despite higher cash costs, adjustments in non-cash operating expenses expanded the company's net income margins for both the Q3 and nine-month stretch. To conclude my presentation, let me share with you our guidance and outlook. We expect subdued construction and real estate demand to persist to 2024 amid elevated inflation, and interest rates. Commodity prices should remain steady, barring geopolitical tension escalation. Spot electricity prices, on the other hand, could rise. DMCI is rebuilding its order book with a cautious approach, targeting projects with reliable funding, particularly those backed by overseas development assistance. It is also on the lookout for infrastructure projects where it can serve as both an equity investor and contractor. DMCI Homes is proactively adjusting to the changing market dynamics by focusing on its leisure development in Baguio and Laguna. It launched Anisa Heights in Pasay City to provide students and young professionals with suitable living spaces that cater to modern urban needs. SMPC expects coal prices to stabilize even as power prices remain elevated in 2024. With this, the company is focusing on improving its operational efficiency and water seepage management and contracted capacity to sustain its bottom line, and cash balance. DMCI Power is expanding its capacity by an additional 45 MW, with plans for 35% of this expansion to be in renewable energy sources like wind and solar. This move will diversify the company's energy portfolio and support the growing demand in the off-grid. DMCI Mining is poised to open a new mine in Zambales by this year's end and another in Palawan by mid-next year, with permitting processes for other sites in progress. Opening these mines could increase its nickel resource to over 200 million wet metric tons, which would allow the company to explore downstream processing. Maynilad is investing heavily in its water, and sewer infrastructure to fulfill its service obligations for 2023. With supply augmentation initiatives and growing commercial demand, the company is positioned for a potentially stronger performance in 2024. With that, I end my presentation and now open the floor to your questions. To open the floor to questions, let's start off with some questions sent via email. We start off with questions addressed to DMCI. We have Sir J.A., Mr. Jorge A. Consunji and Ms. Rebecca Isabel, Sir JAC, President for DMCI, and Ma'am REC, Director for joint venture. Hi, Sir JAC. Good afternoon, sir. The first question goes: Are you seeing more project awarding left for the year, expectations for 2024? And are you more keen to pursue public or private led projects? Well, I have Rebecca here, who's in charge of the business development. Maybe Becca, can you please, yeah. Good afternoon. As far as the projects are concerned, we expect awards from the bids that we have submitted last month. It's a couple of projects ranging around about PHP 5 billion. It's more or less what we are expecting. We're also submitting tenders this Q4, and hopefully by Q1 of next year or Q2 next year we will be able to get information or response to those bids, you know, that we have submitted. On public and private led projects, yes, we are keen on participating on this and we are in touch with some proponents for this public and private led projects. Yeah. That's very exciting to hear both Sir JAC and Ma'am REC. The next question goes, can you share with us your target growth and net margins for the construction business currently at only 9% and 2% in the Q3 respectively, and when do you expect to get back on this. Okay. Thank you, Hannah. For full year of 2024, we are looking at or projecting 10% and 4% for EBITDA and NIAT respectively. Though from the records also for the last five years, we're doing slightly lower at 9% and 2% respectively. Of course these are due to various headwinds that we have experienced like previously the pandemic, no? And currently we all know that we have a very tepid market, and inflation and price increases are affecting the costs of doing construction. We continue to remain positive because we're looking forward to these projects in 2024. Thank you, ma'am. Next question. Which segment of the order book does the company intend to grow or expect growth from? Okay. We will continue to work on those projects now that are definitely within the competence of the construction group. We're looking at areas where the growth is expected, like the utilities market, no? Water, sewer, the corresponding pipelines, the reservoir continue to be a need, no, in the market, now, as well as transmission lines, no? Of course, due to the still growing population of the country. On infrastructure, we continue to look into the Build, Better, More projects of the government. We're still bidding on the subway, the remaining three packages. There are also bridges that are for tender by the government. We're also looking into fuel depot ports causeway projects, no? For the building, although there's a significant reduction, there are still opportunities for logistics centers, for data centers and hospitals. Those are the growth areas that we will continue to pursue. Thank you, ma'am. Next question. What government infrastructure projects is the group seriously considering, and what are the sizes of these projects? What kind of new business model is the group exploring into? Okay. For the government infrastructure, as mentioned earlier, we're still bidding for the three remaining subway projects, no? Subway packages of the government that's supposed to be bidded early this month. It was postponed to the 21st of the month. Those are the three remaining. Then, we're looking forward, hopefully these big jobs would push through. This is the Laguna Lake Road Network project and the Bataan-Cavite interchange or Bataan-Cavite bridges. These are expected next year, maybe next year or the year after. These are two big projects, no, worth each about 40 or more than PHP 100 billion each, these two jobs. We will be bidding this with foreign partners. For the new business model, because this was the direction also that our Holdings has, and our chairman has asked from the group for. We will continue to tender, to submit tenders, to be involved in tenders, but we also would like to look into opportunities by being a solutions provider, you know, to our clients. Also PPP investments, we're also looking into that. Our asset-based business, which is the concrete, the equipment group. We're looking at them being able to provide services or to supply this not only within our group, but also to other contractors, to other projects. Those are the areas that we're looking into or we're exploring also. In relation to the PPP projects mentioned, are you bidding for the NAIA upgrade as a contractor and equity investor? I think it was also mentioned earlier, maybe more—we have more callers on this, po. Okay. Anyway, we have been approached? No, for the NAIA. We have invitations for both contractor and investor role. We're looking into those. We're reviewing the conditions, but we cannot disclose much, no, at this time. You asked there, did you include the question about the CapEx? Hannah, no? Okay. That was in the n- I- Sorry. I have them. The question on the CapEx, ma'am. Do you plan to bid alone for NAIA or will you have partners? If so, who and what attracts you for this project? Does the proponents really need to spend PHP 170 billion for CapEx, and how do you plan to fund this if you win? You have many questions, Hannah. Anyway, as mentioned earlier, we've been approached. Now the PHP 170 billion is a number that was floated already. It's in the newspapers also. It really depends on how the investor will address the requirements or to respond to the requirements that are being given in the TOR of the government. There are mandatory works that are required. There are KPIs that are required. It really depends on how the investors will look into that. We will see with the current discussions that we're having with them. To bid alone will depend. As a contractor, it depends on what the requirements are of the investors. As investor, that's still something that the group has to look into. I think, ma'am, the next question po, is one of those important questions. Will dividends be affected if you win NAIA? That's still a very futuristic question, but definitely projects like this, you have to go for project financing. Yeah. It should not affect us. That's all we have on DMCI for now. Thank you very much to Jay Asia and Ma'am REC for the insights on the possible future of D.M. Consunji, Inc. Now we proceed to questions addressed to DMCI Homes. With us here this afternoon, we have Miss Vanji Achoco, Chief Finance Officer of DMCI Homes. Hi, Ma'am Eha. Hi, good afternoon. Good afternoon po. The first question goes, noting that lower percentage of completion was offset by better selling prices, and higher income from sales cancellations, what is the cancellation rate for the Q3 and the nine months for 9M 2023, and what efforts have been done to manage sales cancellations? There's actually a similar question on that. I'll read this na rin po. In relation to the efforts on managing sales cancellations, any change in how you arrange payment schemes, customer screening, so as to limit future cancellations? And can you give more context on how it has fared quarter-over-quarter and year-on-year? For our cancellation rate, Q3 2023 is at 18% versus last year's same period of 14%, so our cancellation rate for this quarter is higher. Nine months 2023 is at 19% versus 12% last year. What efforts have been done to manage sales cancellations? Well, for accounts that were originally their preferred terms of payment is bank financing, and they were not able to get loan approval from the bank. We allow them to convert to in-house financing. We offer other financing options, so in-house financing. Some of our buyers would opt to convert temporarily to in-house and, say, after a year, they would again look for other banks to apply for another loan. Most of the cases, they will get approval, so they would pay off their balances. Another option is that we allow them to assign the unit to another buyer if in case they can find an interested buyer who's willing to assume the purchase. Though a significant portion of our cancellations this year are coming from the Chinese buyers who bought from us way back 2018 and 2019, so prior pandemic. Around 20%-25% of our cancellations are from the Chinese buyers. For the payment schemes, right now we are offering extended down payment period, especially for our reopened RFO units, and also, we offer rent-to-own scheme to move our RFO inventory. We also have arrangements with some of our partner banks for a low equity, as low as 5%, so they would finance the 95% and for our RFO projects. In terms of our customer screening, well, our parameters are still the same, though we've required additional KYC requirements, additional KYC documents in compliance with the AMLA requirements. Thank you, ma'am. Next question po. How were the Q3 2023 revenue reversals and the reservation sales cancellations compared to the Q2 2023 and 2019 level? Are these still elevated? Okay. More questions are more on the cancellation. More on the cancellation. Yeah. Okay. Q3 2023 revenue reversals versus Q2 2023 is lower by 9%. Nine months, tama ba, Hannah? Nine months 2023 versus 2019. The question is 2019 or prior pandemic. Definitely our cancellation or revenue reversal rate is higher because way back 2019, our reversal rate, revenue reversal rate is only around 2%. Now we are at 19%. For the reservation sales cancellation, our Q3 2023 is 3% lower compared to Q2 this year, while for our reservation cancellation rate is at 14%, the same na for 2020 and 2019. Though in terms of number of accounts, our 2023 reservation cancellation is lower by 40% compared to 2019. In terms of amount, it's higher because of the increased selling prices, but in terms of number of accounts, we have higher cancellation accounts in 2019 compared this year. Thank you, ma'am. Ma'am, for the next question, please provide book revenue and EBITDA margin guidance for 2024? For 2024, our projection for the revenue is lower, but we are expecting a slightly higher EBITDA margin now because of the increased selling prices. Since we normally recognize revenue within 3 years from the launch, pandemic started 2020, so our sales were affected, so that's why our revenue for 2024 is also low. We're projecting a lower revenue for 2024. Thank you, ma'am. Mm-hmm. Our last question on finance, for now. How much were income from forfeitures in the Q3 2023 and nine months 2023, and do you anticipate this line item to drop in 2024? What's the normalized level for this? Our income for Q3 2023 from forfeitures is at PHP 154 million, and for the nine months it's PHP 534 million. For 2024, we still assume the same cancellation rate under our most conservative scenario na, forecast scenario. Considering that interest rates is still high and, the forecast according to the banks that will continue at this level, this rate, or might increase, and it's less likely to decrease until next year. A normal level, well, we can't declare a normal level. If you compare our income from forfeitures prior pandemic- I think 50% lower way back 2019. One factor also to consider, you know, for the increased forfeiture income from cancellation is also because of the increase in selling prices. We collect higher. When they cancel the account, we also forfeit higher amount based on the collection. Thank you so much, Miss Vangie. Our next questions are addressed to Sir Dennis Yap, Head of Business and Project Development and OIC for sales of DMCI Homes. Hi, sir. Yeah. Sir Doy. Hello. Good afternoon. Afternoon. Sir, our question, the first question goes: Are you launching more projects in the Q4? And what would be your reservation sales guidance for 2023, and which market are you focused on? For the first one in launches, we just launched Anisa Heights in Pasay about a week ago, and that will be our last launch for this year, bringing the total launch of DMCI Homes new projects to four. In terms of the sales guidance for 2023, we set a sales target of PHP 35 billion this 2023, and we are in pace to hit that set target and maybe exceed it by a bit, thanks to a very good sales performance of our first leisure residences development in San Juan, Batangas, the Solmera Coast. While for the market focus, we remain focused on our core market, which are the middle and upper middle market segment. This year we also entered into the leisure or investor market with Solmera Coast. Also just recently we launched Anisa Heights. That's for the more lower price points market. Okay. Thank you, sir. Sir, next question. How many projects do you plan to launch in 2024? Okay. For 2024, we are currently preparing 10 projects to be ready for launch for next year. However, ready for launch lang. Actual launch will still depend on market conditions. We at DMCI Homes will remain agile in terms of launches as we monitor closely the country's market and economic conditions. Thank you very much, Sir Doy, for the very insightful answers. Thank you. Yeah. Also as well to Eha. We now proceed to questions addressed to SMPC. For the first question, first question is addressed to Ma'am CCG, President and COO of SCC. Hi, Ma'am CCG. Good afternoon. The first question, the question goes. It was mentioned during the recent SCC briefing, so that was last week, that the company is looking at opportunities in mining, like gold, copper, or nickel. Will this be solely under SCC, and when can we expect this to push through? Good afternoon, everybody. Yes, we are looking at opportunities in the metal mining. However, there are some headwinds here because of the acceptance of the LGU and also the permitting by the regulatory body. We're not at liberty to disclose right now. That's another thing. It's very difficult to say the timeline for these projects. Yes, we are interested and looking actively into the metal mining. Thank you very much, ma'am. Our next question is addressed to Mr. Christopher Gotianun, Head of Business Development of SCC. Hi, Sir Christopher Gotianun. The question goes: On NGCP connection to SRPGC, has management ever thought about putting up own connection to the grid, then having it bought by NGCP later on? Good afternoon, Hannah, and everyone else. Thank you for the question. So actually the transmission line, we have planned to develop the transmission connection you call it a connection asset from the plant to the substation. What is taking a long time is the transmission asset that is a 47-kilometer stretch from the NGCP substation to the new substation that they're planning to build in Tawi. That is the sole responsibility of NGCP, which they are the only ones who can develop that. Thank you so much, Sir CTCG. Our third question for SCC is addressed to Mr Andreo O. Estrellado, Head of Power Marketing. Hi, Sir AOE. The question: Any outlook on WESM prices, and are we looking to participate in the 1,800 megawatt PSP of Meralco? Conversely, when do you see the group start entering long-term bilateral contracts for its merchant plants? Good afternoon. For the market outlook, our projection is that the price, the WESM prices will still be elevated for the Q4 of this year and even up to the whole year of next year. This is still mainly on the, of course, it's the supply-demand issue, wherein one of the factor now is the possible effect of El Niño. That may affect the supply of hydropower plants, but at the same time increase the temperature, and thus increasing the demand of the consumers. That would happen this Q4 and also for the whole of next year. Although there will be incoming plants next year, but the projected demand growth on the average without considering yet on the effect of El Niño, which is about 5%-6% increase. If you include the possible effect of El Niño, then that may equalize the impact, no. What we're saying is that it will also be elevated next year, possibly an equal rate equal price about more than PHP 6 for next year on the average. On the participation on the Meralco bidding, as much as we wanted to participate, but unfortunately, there are limitations imposed by Meralco on their terms of reference for the bidding, particularly on the commercial operations date of the power plants. What they require is that the power plants who will be participating in the bid should be in operation, commercial operation, starting earlier than January 2020, but not later than May 2022. Our power plants cannot be qualified. For the plan to, let's say, enter into a long-term contract, there are several factors really. It's not a matter of when. There are really several factors, no. One is the WESM prices. If we look, if we find out that it would be stable enough, not too high, then we might consider of a longer-term contract. Number two is the terms of reference. The terms of reference, if we found it attractive, like for example, the pass-through cost, the fuel pass-through cost, and then also the outage allowance, then we might consider of participating in a longer-term contract. Like for example, in this Meralco bidding, we are very much interested, but unfortunately, they put some limitations. Okay. Thank you. Thank you very much, Sir AOE. We now proceed to questions addressed to DMCI Power. We have Mr. Antonino E. Gatdula, Jr., President of DMCI Power with us this afternoon. Hi, Sir AEG. Sir, the first question: Update on renewable energy projects. Good afternoon to everyone. We have two renewable energy projects. As mentioned before, 4 MW solar in Masbate and 12 MW wind in Semirara. For the solar, we are done with all of the permits except for the ERC approval, and hopefully we can file our PSA with Maselco within the month of December. For the wind, we have secured the ECC from the DENR, and we're about to file the DOE, the wind energy operating contract. For the EPC of the solar, we still have to wait for the approval of the ERC before we sign up with a contractor. While for the wind, we received two offers. We're currently evaluating, and hopefully within the month of December or this month, we can award and sign the EPC contract. Thank you, sir. Sir, next question. The presentation mentions about 45 megawatts in pipeline projects. Can you give us more colors on this? I think it was we earlier mentioned na about the renewable capacity. For the others, how will the pipeline projects also be planned to be funded? Okay. For the 45 megawatts, it's both conventional and renewable. As explained a while ago, it's 16 megawatts renewable, so there would be another 29 megawatts for conventional. 16 megawatts will be installed in Aborlan, Palawan. This is part of our obligation under our power supply agreement with Paleco that we have to provide a reserve plant. This is equivalent to our biggest unit. Since we have commercially operated our thermal plant in Narra last July, that is 15 megawatts, so we need to increase our N-1 requirement. We have to put up 16 megawatts additional capacity. While the other 8 or 9 MW, we will install it in Masbate. Given that we are the sole power provider in Masbate, we have to ensure that power is always available so that we will avoid load shedding, and we can capture the growth in the demand in the island. For the funding, well, of course, this will be funded by both our long-term loan and internal cash generation. Thank you, sir. Sir, our next question about the 15 MW coal plant. When did the 15 MW coal plant in Palawan went online? And do you expect to add more plants? If so, please provide timing and capacity. The thermal plant, our second thermal plant, which is in Palawan, it went online last July, mid-July this year. We have successfully all the permits, including the COC, we have obtained, so we commercially operated last July 2023. For the timeline of the 45 MW, for the renewable, the solar most probably, if the ERC will give the approval by Q1 of next year, we can see the operation of the solar by Q3 of next year. However, if not, there would be a delay in the approval of the ERC, then the COD will also be delayed. For the wind, we're looking at Q3 of next year for its commercial operations. For the conventional, we are targeting the Q3 of next year also for the commercial operations. Thank you, sir. Sir, why are energy sales in Masbate up by 3% year-on-year, but in the nine-month period up 9% in the Q3? Yeah. For the Q3, we posted a 9% growth because the weather in Masbate in the Q3 is a lot better than the first half of this year. Now, in the H1, the growth is so, it's too minimal, it's too small, it's roughly less than 1%. The 9% increase in the Q3 resulted to a 3% growth year-on-year. Thank you, sir. Next po, how are energy sales for the entire market in Palawan in the Q3 and the nine-month period? Based on our records, the market growth of PALECO as of Q3 is 12%. Our total sales growth as of Q3 is 17%. Our performance is better than the total market growth. For the Q3 alone, the growth in Palawan is 10%. It's lower than the as of growth for this year. Why are energy sales in Mindoro soft? I think it's because of the presence, the high dispatch of the hydro. We experienced more rains this year compared to last year. At the same time, ORMECO signed up with other power providers on emergency power supply agreement, of which 10 megawatts was awarded to DMCI Power. Thank you, sir. Sir, last question for now po. How has El Niño impacted the Q3 performance of DMCI Power? The effect varies per site. In Masbate, we experienced a dry season. In Palawan, since we are the only power provider who has additional capacity to dispatch, you know? Even if it was rainy, because we have the capacity, we were able to supply the growth. For Mindoro, because of the rain, the higher dispatch for the hydro plants. Thank you very much, Sir AEG, for the very insightful answers. We now proceed to questions addressed to DMCI Mining. We have Mr. Tulsi Das C. Reyes, president of DMCI Mining with us. Hi, Sir TDCR. Good. For the first question, please remind us on the seasonality of shipments. Is the Q3 normally the leanest quarter, and how much do you plan to ship this year and in 2024? Hi, everyone. Good afternoon. Usually the seasonality for both mine sites are between October to about July. Palawan normally starts a month later, about November. The Q3 is usually the leanest for both mine sites. This year we did something different as, for Zambales there. We decided to test the waters, create a baseline, let's see how far we can go. Historically, we did one a month. As we're expanding in Zambales, we wanna see, we wanna push the thresholds to see what we can do. It'll be quite lean for us, but we're trying to push it forward. This year we'll do about 1.7 million tons, our historical high for Zambales. Consolidated next year with hopefully Palawan online, operational by midyear, we hope to ship out about 2.5 million tons if all everything goes well. All right, sir. Sir, next question. How are ASPs trending so far in the Q4? Is it already improving? Just to give you or just to remind everyone of our strategy, you know, we had a lot of low grades in Zambales, so we took advantage of the higher prices to get rid of our lower grades. Q1 for us was about 42. This quarter or up to actual for this year is about 35. Please bear in mind, we have a lot of medium, and high grades that we're gonna start letting go for the balance of this year and hopefully carry over to next year. We really took the opportunity to clean up the mine site, take advantage of high prices, especially for the lower grades. I feel you should be seeing a tick-up in the next few seasons coming along. Okay, sir. Next question: Can you please provide a breakdown of your cash cost structure? How much are fuel and royalties, et cetera? Royalties are about 5%, taxes are about 15%, operations are about 40%, labor is about 10%, fuel is about 20%, and admin is about 10%. It gives us 100. Okay. More or less. Next question, sir. Do you anticipate your costs to change materially once you open up more mines in the next few years? Can you provide more guidance on cash cost per metric tons for shipments for 2023 and 2024? Okay, this is the exciting part. Yes, 100%. Both mine sites will drastically go down once they are in mature mining areas. Just bear in mind, right, when we open our assets in Zambales and Palawan, there's startup costs, development costs, road costs, port costs, and all of these things. If you're asking about 2023 versus 2024, they'll be somewhat the same. If you move forward beyond three to five-year horizon, those should be drastically lower. Why? Shorter hauling distances. We'll have more volumes going out, higher grades, especially in Palawan, less maintenance and operational costs. Drastically, yes, but if you're gonna ask per ton for this year and next year, Zambales is currently at 18. We do a 35-kilometer run there. Our ZCMC asset does a 21-kilometer run, but development costs might offset that $1, $2 or so. Palawan, the same thing in Long Point. New port, new roadway. Historically in Berong, I think we're doing about $14 there, so we should be about the same, but higher grades, right? But the interesting one is Dangla right after Long Point. That will use the same port as Berong. That use similar roadways. Our barracks are up, so development costs will be lower. I'm very excited for 2025 onward. Allow us to get these assets in, get the mine started up, then you should see the efficiency moving forward. Sir, next question. In your current form, how will House Bill 8937 affect your bottom line? As of right now, we're looking at the mineral reservation tax about 4% right now with our current form. Now, things might change with the windfall, et cetera, but you know, we gotta study it a bit further. We're still teasing it out, so allow us to get back to you. Right now, with that particular question as of right now, probably 3%-4% lower due to that mineral reservation tax. Last question for now. How has El Niño impacted the Q3 performance of DMCI Mining? Goes back to my previous comment. We've never performed the best in the Q3 because normally we really took the time to stop operating, get our production higher, stockpile, rebuild. It was a learning curve for us in Zambales. Are we gonna continue to test the waters and see if there are opportunities? Definitely. Normally Q3, we stand by, carry maintenance, but we're trying to find efficiencies wherever we can, right? Did it affect us? Honestly, it gave us some cash flow income, so it was quite good. Normally we take this time to slow down, so we'll see. Thank you very much, Sir TG CR, for the very insightful responses. We now proceed to Maynilad. We have Sir Ricardo de los Reyes, Chief Financial Officer of Maynilad with us, and Mr. Emmanuel Marmol, AVP for Corporate Planning. Hi, sir. The first question goes: Why did billed volume growth accelerate to 2.6% year-over-year in Q3 versus 1.5% year-over-year in the Q2? Which segment drove the recovery? Actually, if you recall in Q3 of last year, we had severe water supply issues. In fact, there were occasions there where our water availability at 24 hours, 7 PSI fell to almost 50%, right? That has greatly improved this year, as a result of, again, improved water supply, but also some of our mitigation efforts, coming online. That kind of explains why Q3 is much better than Q2. Next question. Is demand from residential, commercial, and industrial segments already back to pre-COVID levels in the Q3? Can you please provide data for each segment? Actually, we segment our customers between residential, semi-business, commercial, and industrial. As far as residential and industrial, that has more than recovered relative to the pre-pandemic year of 2019. For semi-business, it's virtually equal or flat, right? For commercial, we're still about 6% below pre-pandemic levels. Next question. Please provide CapEx guidance for 2023 and 2024. All right, we will probably end up with having spent around PHP 24 billion-PHP 26 billion this year. To provide context, the largest annual spending on CapEx projects was back in 2019, and that was only PHP 13.9 billion. We're almost double of that, right? That's quite an accomplishment. For next year, we are targeting PHP 31 billion in spending for CapEx. Remember that, you know, CapEx spending is an indicator of implementation and execution of projects. Sir, how has El Niño impacted the Q3 performance of Maynilad? It has not actually. We've been fortunate enough to have experienced rainfall for the Q3, right? The levels are high, relatively high at the moment. I think we're beginning to experience the effects of El Niño now. You can see that the rain has tapered off. Although Angat levels are still quite good, it's really kind of being conservative about our use of the existing water supply in anticipation of more severe months next year. Last question for now, Sir Dicky. How much do you intend to spend to lower the NRW down to 25%? How much CapEx allocation is spent to improve water facilities? Yeah, this rate rebasing cycle between 2023 to 2027, we're embarking on an accelerated CapEx program. In fact, our budget for CapEx spending over this five-year period is PHP 163 billion. About PHP 28 billion of that or PHP 26 billion of that is intended for NRW projects, essentially pipe replacement projects. Another PHP 73 billion of that is intended for water infrastructure projects. Thank you so much, sir, Sir Dicky, for the very comprehensive answers this afternoon. We now proceed to the corporate questions addressed to HI. We have Ma'am Cristina Gotianun to answer our queries. Hi, Ma'am CCG. The first question goes: Based on the January to September 2023 net income in comparison with 2022, only Maynilad and DMCI Power contribute positive growth in earnings considering high base earnings last year. With this, what are the plans and actions to improve earnings for the rest of subsidiaries? Yes. Good afternoon to everybody. For the other subsidiaries of HI, like for DMCI Homes, we've heard Vangie a while ago say that they're looking at different financing schemes in terms of those clients that's unable to get the bank financing. As you know, there are also higher document requirements with the AMLA and the higher interest rates. These environments do not help in increasing the sales. However, there are operational efficiencies that DMCI Homes and all the other subsidiaries have been working on and also prudent CapEx expenditure. With this, you know, we're also involved in highly regulated industries. The things that we can do are also limited in terms of permitting and also the commodity prices. The only thing that we can do is really operational efficiencies and prudent cash management. Thank you, ma'am. Ma'am, in terms of the medium-term plan and outlook for the DMCI group, what would be the plan to double or even triple its current revenue base where the company can utilize its engineering knowhow and investment savvy in the next five years? Okay. There are the synergies that we're looking at among the group and are like Homes looking at targeting different market segment with the resort and then the lower priced condos for the lower income group that is outside of this core business. So, slowly venturing into new product lines. That's one. Number two, we're also looking at different businesses. We just have M&As right now. We cannot disclose at this time, but they're M&As, so we're looking at allied industries where the group's core competence lies. Of course, well, we cannot. The other, like, the other things that we're already doing, we're looking at efficiently managing our costs of operations. With those, I hope that we can go through this medium and long-term plans, no? Thank you, ma'am. Will the company consider a long-term Japanese, Korean, European, or American JV partner to expand its offerings into other markets to achieve the necessary growth? We've been having joint venture projects, especially in construction. We will see if there's a fit to be able to have a long-term JV partner of some foreigners, no? Like, for the DMCI Mining, if we have everything permitted, now we can consider the processing. That's something that is on the table. If there is a fit, because it's very difficult to have a joint venture agreement when there is no synergy, no, for the partnership. For as long as there's a fit, we are open to a joint venture partnership with a foreign entity. Ma'am, last question po. Can we get guidance or indication from management as to the expected dividend contribution from the other subsidiaries outside of Semirara for this year and next? Yeah. The guidance really is for the other subsidiaries of HI to continue giving dividends to HI upwards if the same amount, if not higher. We are always pushing the subsidiaries to give a higher dividend each year. I think that's one of the most important questions for our shareholders po, the dividend. Yeah. I think we will have a slightly higher dividend for next year. Everyone will be excited for that, ma'am. That we came to the end of our list. May we ask our Director and Assistant Treasurer, Ms. Cristina Gotianun, for her closing remarks. Good afternoon. On behalf of our chairman and president, Mr. Isidro Consunji, thank you for participating in today's analyst briefing. 2022 was a standout for us, and we knew that, 2023, we would have, our headwinds and challenges, given the market shifts and the events that we've seen. For the most part, our resilient portfolio, operational efficiency, prudent cash management helped us deal with our headwinds and keeping us steady on our financial course. While we cannot replicate the 2022 results, we are cautiously optimistic that we can end the year strong and uphold the commitment to solid dividends. As laid out by our chairman and president, we will focus on the capacity expansion, cost control, and cash flow management to carry us forward. Again, thank you, maraming salamat, for joining us this afternoon. I'd like to take this opportunity, since this is the last final briefing for the year, allow me to extend our early Christmas greetings, and best wishes to you all and for a prosperous 2024. I hope to see you all in our next year's analyst briefing.