Aboitiz Equity Ventures, Inc. (AEV) Earnings Call Transcript & Summary

Hello, everyone. Welcome to our Analysts Briefing. Today, we're going to report the Financial and Operating Performance for the First Quarter of 2022 of our publicly listed companies, namely Aboitiz Equity Ventures, Aboitiz Power and Union Bank as well as our non-listed businesses, namely our One Food Group, AboitizLand, Aboitiz InfraCapital and Republic Cement. Well, first here are the house rules. [Operator Instructions] Questions have been requested from our guests in advance. These will be prioritized in the Q&A today. [Operator Instructions] Questions submitted now will be answered at the end of the presentation, if there is enough time. Those aren't taken up during the Q&A will be answered via e-mail. The briefing will be recorded for documentation purposes. By joining this session, you can send your name, voice, image, chat comments being recorded for use in this examination. If you do not consent to the foregoing, please do not join the session. Our program will flow as follows: to present for Power, we will have Mr. Manny Rubio, President and CEO of AboitizPower. To present for Banking, we will have Mr. Toto Hilado, Treasurer and Head of Corporate Planning Services of Union Bank. To present for Food, we will have Mr. Tristan Aboitiz, President and CEO of Food Group Philippines. To present for Land, we will have Mr. Dave Rafael, President and CEO of AboitizLand. To present for Infrastructure, we will have Ms. Cosette Canilao, President and CEO of Aboitiz InfraCapital. To present for Cement, we will have Mr. Vara Kalepalli, CFO of Republic Cement. To present AEV's consolidated financials, we have Mr. Dmi Lozano, CFO of Aboitiz Equity Ventures. At the end of the presentations, we will conduct a Q&A session. And now to present for Power, I will turn you over to Mr. Manny Rubio.

Thank you. Thank you, Judd. Good afternoon, everyone. Good afternoon, friends. Welcome to Aboitiz Power's first quarter 2022 analysts briefing. In line with our presentations team powering a sustainable future, I would like to take this opportunity to share recent initiatives of Aboitiz Power as far as our sustainability journey is concerned. But first, let me give you an update on GNPD. I am excited and happy to share that both units are now operating as Unit 2 was successfully synchronized last April 23. This is very time in which we expect the continued tightening of supply and GNPD is well positioned to address critical market needs. GNPD Unit 2 after came in a month earlier than expected. Just last week, we celebrated the World Earth Day through a virtual forum as part of our BetterTogether sustainability series. We launched BetterTogether last year with the goal of improving the knowledge and appreciation of our team members on sustainability. This initiative aims to bring to light ESG challenges as well as encourage conversations and actions towards more sustainable business practices with the organization. For Earth Day forum, we were joined by Fr. Ramon T. Villarin, Executive Director of Manila Observatory; and former Climate Change Commission Secretary, Emmanuel M. de Guzman who respectively talked about how the Philippines can become more resilient against climate change as well as the national framework strategy on climate change. It was a very insightful conversation that fully reinforced the imperative for all of us to work together towards a well-managed and sustainable energy transition. And as we continue to find solutions for well-managed energy transition and decarbonization, we recently partnered with the International Finance Corporation to study the viability of generating baseload power from different renewable energy sources in the Philippines. Now allow me to share Aboitiz Power's first quarter results. Last January, GNPD Unit 1 began running and serving its power supply agreements from its own generation, which contributed 13% to our beneficial EBITDA for the first quarter of 2022. However, our beneficial EBITDA was lower by 24% for the first quarter of 2022 compared to the same period last year, mainly due to the liquidity damages for the delay in the construction of GNPD and business interruption claims for GMEC outages. Our EBITDA in 2022 was further impacted by Typhoon Odette last December, for which the FX were up to early February in business and advanced outage due to elections of Pagbilao 1 and 2. Without LD and BI claims, Typhoon Odette and advanced planned outages, EBITDA would have been up by 8% and it's good that Pagbilao was already undergone its outage maintenance as we will be able to produce when prices are high today moving forward. The decrease in EBITDA drove core income 53% lower year-on-year. The group recognized non-recurring losses of PHP 22 million, mainly due from the revaluation of US-denominated debts. As a result, Aboitiz Power's net income for the first quarter was PHP 2.9 billion, 53% lower year-on-year. And if we are to exclude the impact of LD and BI claims, Typhoon Odette and advanced plan outages in Pagbilao 1 and 2, the first quarter of 2022 would have resorted to a 4% decline in net income compared to the same period in 2021. Cash decreased by 6% due to regular debt service payments of the operating business units. Investments and advances increased by 2%, mainly due to increase in share of equity earnings. As a result, our total assets increased by 2%. Total liabilities increased by 3%, mainly due to current bond issuance. And with that, our net debt to equity increased from 1.1 times to 1.2 times. Despite the new capacities from GNPD, our capacity sales were flat year-on-year, driven by the expiration of bilateral contract quantities and lower ancillary sales due to lower water inflow in our large hydros, offset by higher part sales from Therma Luzon. To note that TLI already provided replacement power from GNPD Unit 1 customers last year for around 350 megawatts, TLI is now selling this capacity WESM at spot prices. Our total revenue increased by 52%, primarily due to higher effective bilateral contract quantities and smart rates driven by indices, while our total energy sold was sustained due to the same reasons mentioned previously. Our gross margin increased by 8% year-on-year, mainly due to the previously mentioned drivers. Our purchase power cost was higher, driven by higher WESM prices, while purchase power volume increased by 34%, mainly driven by lower water inflows. Spot selling prices increased by 86% to PHP 6.29 per kilowatt hour, driven by higher resin prices due to the higher indices and higher volume of capacities on outage in the market. Our trading strategies also allowed us to take advantage of higher peak prices. Bilateral contract quantity selling prices increased by 34% to PHP 5.47 per kilowatt hour, mainly due to higher indices because of index contracts. Average NEWC for the first quarter of 2022 was $264 per metric ton versus $89 per metric ton in 2021. The recent movement in coal prices underscores the risks attached to fixed-price contracts longer than 3 years. Availability of TLI, TSI and TVI plants was 88%, which remained above the NERC benchmarks. And to note that GNPD Unit 1 was at 93% in March, higher than expected. We continue to have issues with GMEC until mid-March. We continue to address issues with GMEC targeting to resolve finality when we do the major plant outage by August 2022. Today, 2 units are running at capacity. We are now much more involved in the daily operations of GMEC with key positions occupied by AP representatives based in Batangas. A key driver of our improved plant availability and liabilities are organizational response to continuously strengthening our technical bench with targeted hiring and placement of strong and season team of experts in asset management, digital initiatives, AI, data science, project development and execution, in project management, operational excellence, systems and strategy and reliability and performance management across various business units. And for our distribution business group, beneficial power sales were sustained year-on-year. Any sales from residential customers decreased by 5%, driven by lower consumption due to Typhoon Odette and cooler weather and Typhoon Odette was impacted vehicle in December up to early February. The average gross margin declined from PHP 1.64 per kilowatt hour to PHP 1.34 per kilowatt hour. This was due to the timing difference of pass-through charges brought about by higher coal prices, lagging by about a month. Except for Cotabato Light and Power Company, all our systems losses from below the regulatory cap of 5.5%. Cotabato Light system losses ended above the regulatory cap due to non-technical losses, which have minimal impact on the bottom line. And to note, given our CapEx adjustments, there was a significant drop from 7.84% to 6.09% showing that we are on our way to being lower than the cap in Cotabato Light. On WESM, average year-to-date LWA, load weighted average price was PHP 6.74 per kilowatt hour, 139% higher compared to the same period in 2021. This was due to the civil supply in the market caused by an increase in unplanned outages of baseload plants, advanced maintenance outages of baseload plants in preparation for the national elections and an increase in indices driven by the ongoing Ukraine crisis. On average, we expect higher WESM prices to remain in 2022 compared to last year due to the depletion of Malampaya gas, an upward impact of higher indices given the Ukraine crisis. We also expect higher demand due to the elections and less or softer expected water restrictions versus last year given the vaccination increasing. For better appreciation, we will show you the Luzon supply and demand situation in the next slide. The Luzon supply and demand situation continues to tighten to meet existing critical market needs we are optimizing our existing baseload facilities. So over the past few months, we have been seeing NGCP alerts for the Luzon grid. As our economy recovers and opens once again and assuming that the recent surge in COVID cases does not merit another economic shutdown and considering election-related demand, we expect that a tight situation will continue and become tighter still in 2023 onwards. We anticipate that new capacity will only come in at the earliest, late 2025. For the benefit of those who are unfamiliar with this chart, please closely note the broken black line, which represents the intersection of annual peak demand and grid supply requirements. Amidst this evolving supply and demand situation, which includes the impact of the DOE moratorium on the building of new coal plants, we expect our GNPD units to play a significant role in addressing supply gaps and meeting critical market needs. Unit 1 is currently addressing 2022 peak demand, while unit 2 will help address 2023 peak demand onwards. We currently have over 600 megawatts of projects under construction, and these are expected to commercially operate this year. On top of that, we have 160 megawatts of renewable energy projects expected to be issued and notice to proceed this year. And finally, we have an additional 721 megawatts of renewable projects under priority development and this will help us achieve our 2030 target of 9,200 megawatts total capacity. So allow me to update you on some of the projects in the next slides. So GNPD Unit 1 began running and serving PSAs from its own generation starting January 25, 2022, subject to completion of certain tests and works by the EPC contractor. Meanwhile, unit 2 got synchronized last April 23, a month earlier than the expected target date of May 2022. And GNPD unit 1 has so far achieved an equivalent availability factor of 93% in March since its return from service from a planned outage in January 2022. PV Sinag is a 94 megawatt peak plant located in barangay Cayanga municipalities Bugallon, Pangasinan. Survey and geotechnical investigation and basic design works were completed, construction activities for control building, transmission line and Cayanga substation are all ongoing. And overall project status was at 28% completion with zero lost time incident. The project is expected to commercially operate by fourth quarter of 2022. And last March, SNAP signed the engineering, procurement and construction agreement with Hitachi Energy for the development of the 20-megawatt Magat battery energy storage project in Magat, Isabela and Ifugao. Construction began this month and the project formally broke ground as April 25, signaling its progress towards its targeted commercial operations in the first quarter of 2024. And an update on the APRI steam field operator initiative. Steam production enhancement campaign, which aims to build 12 new production wells with a minimum of 50 megawatts aggregated individual well capacity by 2023. As of today, 5 wells were completed, 3 more will be added this year and another 4 by 2023. In Tiwi, the initiative to convert waste heat from the geothermal brand to power a 15-megawatt binary power plant is reaching the final stages of negotiations with Philippine geothermal production company and binary power plant vendors. We also intend to issue NTP for the project this month. So we hope to start commercial operations by the fourth quarter of 2023. And finally, in partnership with Wartsila and Aboitiz Construction, we've energized our first battery energy storage system, or BESS project in our Therma Marine, or TMI, facility with a capacity of 49 megawatts in Maco, Davao de Oro. This will fortify TMI's capability to support the grid, especially during the summer months when the stream supply of energy generated by hydropower plants, providing needed contingency reserves. The best is deciding to work in tandem with the TMI diesel engines and part of the ongoing work is continuing the control systems to enable the hybrid functionality to offer contingency reserves to the grid operator. It will serve as a model for future battery investments as well as hybrid renewable energy projects. So indeed, exciting times ahead for Aboitiz Power. So it's with great pleasure to end this presentation with another exciting milestone, the launch of our data innovation program. In partnership with Aboitiz Data Innovation or ADI, we are currently running experiments that seek to solve real business problems using data and new ways of working. Our goal is to make data innovation real and we aim to make significant progress this year as we endeavor to make a positive impact on our bottom line, while at the same time to benefit our customers. This program will be an anchor program for our digital leap strategy as we seek to produce more data that will fuel insight-driven decisions and actions. We have several ongoing projects, exploring artificial intelligence solutions across our business units. This includes optimizing energy storage for battery systems, predicting 2 bleaks for thermal plants leading to improved preventive maintenance programs and avoided planned shutdowns and monitoring thermodynamics performance, increasing power generation efficiency. And to drive this digital transformation and create a digital citizenship among its team members, we have put in place DSAI-upscaling initiatives. And as we strive to continue being a market leader in the energy space, we are cognizant of the need to remain agile and competitive. And with a strong culture of working in a digital ecosystem, thus, our digital transformation will play a key role in the pursuit of commission to continuously deliver reliable, cost efficient and environmentally sustainable energy solutions and ultimately to continue being a strong partner for progress and nation building. So to summarize my presentation, we are giving takeaways for you today. These are the key takeaways for you today. Good afternoon.

Thank you, sir. And now to present for financial services, I will turn you over to Mr. Toto Hilado.

Thank you for joining us this afternoon. So I'll be presenting the results for the first quarter of this year. So the bank recorded a net income of PHP 2.6 billion for the first 3 months of the year. While our income was 45% lower due to extraordinary trading income in the first quarter of 2021, we did see recurring revenues up 21% due to higher net interest income from better margins and higher service and transaction piece. Next slide, please. Net interest income increased by 12% to PHP 8.1 billion, driven by higher margins in higher earning assets year-on-year. Our margins increased by 6 basis points to 4.6% on account of the higher yields of our consumer loan portfolio, and at the same time, lower funding costs from the continued growth of low-cost asset deposits. Earning assets grew 10% year-on-year. Next slide, please. Total loans grew by 3% to PHP 314 billion as credit appetite and consumer activities improved amidst the continuous recovery of the economy. So all loan segments in the parent bank were higher, led by commercial and retail segments. So commercial and MSME loans were up 7% and home loans 1%, credit cards higher by 5%. And while our mass market loans were flat quarter-to-quarter, we did see a decent growth starting March of this year. Next slide. Total deposits grew by 12% with CASA continuing to be our primary funding source. CASA deposits continued its robust growth at 27%, which we attribute to the increased usage of our cash management solutions and digital channels. This boosted our CASA ratio to 56% from 49% in the same period last year. Non-interest income was lower by 69% year-on-year on account of the extraordinary trading gains that we booked in the first quarter of 2021 amounted to PHP 5.8 billion. But net of trading gains, noninterest income is up 88%, driven by fees and other income. Service charges and fees more than doubled to PHP 1.4 billion due to higher fund transfer fees and credit card interchange fees. CSB also contributed higher fees. Miscellaneous income was up 48% to PHP 942 million, driven by higher foreign exchange income and gain on asset sales. On operating expenses, OpEx was down 4%. If we itemize the OpEx, manpower was lower by 13%, controllable expenses higher by 29%. Non-controllable was down 2% and volume related in the form of DST and GRT was higher by 12%. Next slide, please. On the asset quality, our NPL ratio was at 5.2%. It's slightly higher compared to December 2021. So we did see a substantial improvement on the consumer loans, which was the first portfolio that was hit during the pandemic, but we did see that recovering. What we saw in terms of the slight deterioration was on the middle market or the SME loans. In terms of our NPL coverage ratio, we are at 71% on the parent company and as a group at 67%. Next slide, please. In terms of our capital ratios, we are currently at 17.1% on CAR basis and on CET1 basis is at 15.1%. Now in terms of our economic outlook, of course, we are all aware that the interest rates have been going up globally. In terms of the local front, the BSP has guided that we might see a 50 to 75 basis point increase in overnight rates in the third quarter and CPI was actually at 4%. And we think that the CPI range of the BSP might be exceeded, although, of course, we agree with the assessment of BSP that our inflation pressures are different from the inflation pressures that they see in the US and we do tend to agree with the Governor that our rates are not quite to be much point by point in terms of the rate hike adjustments. Of course, in the US, what is currently priced in by the market is about 8% to 9% -- 8 to 9 hikes till the year-end, which will bring the overnight rate from 0.25% to 2.5%. But in the case of the Philippines, we think that the adjustment in the monetary policy rate will not be as high and we do see that in our current yield curve, we have a steep yield curve already and most of this has been priced in. So this assumes, of course, that oil prices do not really go up substantially from current levels. So we do see that at a certain point, rates in terms of the fixed income market should be stabilizing. Next slide, please. On our updates, we'd like to update the group that we are on track to take over the business of Citi by the middle of the year. So far, we have secured approvals from the Insurance Commission and the Philippine Competition Commission. In terms of stock rights offering, we have started the offer period. This will last from April 25 to May 6 and we intend to raise about PHP 40 billion in the offer price at 64.81% and entitlement ratio of 1 for every 2.47 common shares held. So far, in terms of the key value drivers, everything is intact. The latest update from CP shows that there is not much customer attrition. Actually, new accounts have been opened. Credit card applications continue to come in and we have also been informed that most of the employees, including the senior management of Citi are joining the bank by the time we take over in July 2022. Next slide, please. So to summarize, our recurring income is healthy. We continue to see an improvement in our net interest income and fee income. Margins have been sustained. CASA growth continues to be strong. Our consumer loans portfolio is growing. We have very strong growth in our mass market loans in CSP. And lastly, our CT integration remains on track. Thank you.

Thank you, sir. And now to present for Food, I will turn you over to Mr. Tristan Aboitiz.

Thanks, Judd, and good afternoon, everyone, and thank you for taking part of your afternoon to be with us. So I will start with the Food Group's financial highlights for the first quarter of 2022. For the first quarter, the group's revenue increased 29% year-on-year, ending at PHP 24.6 billion or $477 million. Coming from revenue improvements in both our agribusiness units and our Food & Nutrition unit, which were up 24% and 43%, respectively. Likewise, EBITDA grew 9% to PHP 1.5 billion or USD 30 million, driven by a 12% increase in EBITDA contribution coming from agribusiness, which was slightly tempered by a 2% drop in EBITDA from our food and nutrition unit. However, our EBITDA margins decreased by 115 basis points and they were pulled down by our Food and Nutrition unit, particularly our flower division due to a 562 basis point decline in the margin of that division. Lastly, our NIAT in the first quarter was 28% lower year-on-year, finishing at PHP 502 million or roughly $10 million. The drop in NIAT was caused by the subdued performance in both Agribusiness and Food & Nutrition units as we saw contraction of 37% and 30% in their NIAT contributions, respectively. It is important to mention that the gains in the agribusiness EBITDA were wiped out by an unrealized ForEx loss of approximately PHP 263 million or $5.1 million and this was brought about by the devaluation of the Sri Lankan rupee from LKR 203 to the dollar to LKR 295 to the dollar in the first quarter of this year. This FX loss is related to the country's payables to Abaca, which is the purchasing arm of the Food Group and the Gold Coin Management Holdings. Focusing now on revenue. The Food Group's revenue grew 29% year-on-year to PHP 25 billion or $477 million and was generally lifted by volume growth and selling price hikes across all of our business units. The Food & Nutrition business unit contributed PHP 5.1 billion or $99 million in the first quarter of the year. This was 43% higher year-on-year and the growth was seen across all of these divisions, flour, farms and trading. Our farms division, in particular, the revenue increased 37% year-on-year on the back of a 56% increase in volumes sold due to the successful recovery in operations of our breeder farm 1 in Tarlac, which some of you may recall was hit by ASF in the early part of 2020. Our trading division meanwhile continues to benefit from the impact of shortages in soybean meal and feed with in the Philippine market, which was started in the last quarter of 2021. This drove sales volume up 45% year-on-year and post revenue 87% higher than what we saw in the same period in 2021. Our flour division's revenue was 28% higher year-on-year. up to PHP 2.7 billion or $53 million and this was driven by price increases that have been put in place to try and offset the sharp increases that we've seen in our commodities, specifically, wheat. Lastly, the Agri business unit delivered a total of PHP 18.6 billion or $361 million in revenues for the first quarter of the year. This is a PHP 3.5 billion or $69 million increase, which represents a 24% growth year-on-year. And this was driven by increases in average selling prices of 21%, which is due to a series of price hikes that have been needed to offset again the impact of more expensive raw materials across the region. In terms of revenue contribution of the business units, 76% of total revenue came from our Agribusiness unit and 21% was contributed by Food & Nutrition. In the first quarter of 2021, the share of Agribusiness and Food & Nutrition was 79% and 21%, respectively. Now for the Food Group's EBITDA. The Food Group's first quarter 2022 EBITDA grew by 9% year-on-year to PHP 1.5 billion or $30 million due to a 12% improvement in the contribution coming from our Agribusiness unit, which cushioned the 2% shortfall that came from our Food & Nutrition unit. The 2% year-on-year decrease in the contribution of the latter, which was down to PHP 512 million or about $10 million was attributable to a 20% decline in the EBITDA contribution coming from our flour unit. This saw a drop in volumes sold and in its margin per bag relative to the first quarter of 2021. Meanwhile, our farms and trading divisions saw growth in their EBITDA contributions year-on-year coming from a significant increase in volumes sold of both divisions. Farm was up 56% year-on-year and trading was up 45% year-on-year. Meanwhile, the 12% increase in EBITDA contribution of our Agribusiness unit was a result of a 2% uptick in volume, combined with better gross profit per unit as we were able to catch up and recover with our prices relative to the increases in commodity costs in the first quarter. Shifting now to the Group's NIAT. Overall, NIAT was lower year-on-year by 28%, down to PHP 502 million or $10 million. The lag in NIAT versus the first quarter of 2021 was due to a drop in NIAT contribution from the Agribusiness and Food & Nutrition business units by 37% and 30%, respectively. The 12% growth in Agribusiness' EBITDA was wiped out by the recognition of an unrealized ForEx loss of PHP 263 million or approximately $5.1 million, which was driven by the devaluation of the Sri Lankan rupee from LKR 203 to the dollar to LKR 295 to the dollar and this happened over the first quarter of 2022. The ForEx loss is related to our Sri Lanka units payable to Abaca, which, again, is the purchasing arm of our Food Group, and the Gold Coin Management Holdings. The Food and Nutrition 2% drop in EBITDA was further pulled down by PHP 86 million or $1.7 million in taxes due to our farms last year as the 2020 income tax holiday adjustments and our flour's PHP 28 million or $538,000, our foreign exchange loss due to the importation of wheat and short-term investments. This resulted in a 30% reduction in the Food & Nutrition bottom line to PHP 250 million or $5 billion. If we exclude the recognition of the FX loss in our agribusiness numbers, the NIAT for the full group in the first quarter would have been PHP 765 million or $15 million, which is 10% better year-on-year. In terms of net income contribution of the business units for the first quarter of 2022, 42% of our total NIAT was derived from agribusiness, 50% was contributed by Food and Nutrition business units. This used to be 48% and 52% contribution in the first quarter of last year, respectively. Moving on now to one Food Group's aspirations and strategy. Our strategy remains anchored on the 3 pillars, which are balance, optimize and develop. Balance means diversifying our product portfolio to increase resilience as well as to balance our revenues and EBITDA across countries, businesses and species. Optimize means focusing on operational excellence by identifying and removing inefficiencies across different divisions and countries and leveraging technology in order to do so. While developed means building new growth opportunities by investing in fast-growing and high-margin segments like Aqua, Specialty Nutrition and pet food. Over the next 10 years, we have identified 5 strategic moves anchored on these 3 pillars, and they are, one, to improve operational efficiency; 2, to diversify and grow our feeds across all geographies; 3, to selectively integrate downstream in farms and processing; 4 to protect our market share and margins in our flour business; and 5, to develop new businesses in the fast-growing Aqua and high-margin segments like Specialty Nutrition and pet food. These strategic moves will continue to guide the Food Group towards this aspiration of becoming an integrated regional food and agri business. Heading now to the projects that we commit to deliver and 2 other projects that we are starting in 2022, but commit to finish by the second half of 2023, which are 30 tonne per hour mill feed mills in China and Vietnam. The latter 2 projects are in the technical design phase with construction to begin late in the third quarter of this year. The new plant in China will serve the Kunming area and cater to our livestock Aqua and premix and ruminant feed requirements while our Vietnam plant expansion aims to grow our livestock feed business in the southern part of Vietnam. I will focus more now on the first 2 projects in the succeeding slides, which are related to Food & Nutrition in the Philippines. For the Farms division, under the Food & Nutrition business, we continue to grow our brand and channel of meat distribution, which we call the good meat. On top of the existing store that we currently have, 4 new physical stores will be fully operational by August of 2022 with a capacity of 2 metric tons per day per store. As of April 2022, we've completed 1 out of the 4 stores, and that's to be launched soon. Furthermore, The Good Meat will expand its supermarket presence to grow from 260 stores in 2021 to 330 stores in 2022. These are a combination of retail concessionary stores and stores that carry our value-added products, again, under The Good Meat brand. This initiative, we hope will do 2 things for the Food Group. One, further develop its B2C channels; and 2, provide an expansion to the supply chain, which will ensure better distribution to all customers in our relative -- in our target markets. With this, we hope to capture a larger percentage of the margin that is available along the value chain and be able to unlock the value that is created by getting closer to the end consumers of our products. Next, the construction of our third breeder farm facility in Nueva Ecija. This particular facility broke ground in August of 2021, and is nearing completion at 73% completion rate. The farm will initially have a capacity of approximately 2,500 sow level and loading of the animals is scheduled for June of this year. The market hogs that are produced from this facility are expected to be available in the first quarter of 2023, and will help us bring up the utilization of Tarlac Meatmasters, our slaughter facility in Bamban, Tarlac. We will continue to invest in our swine raising business, supporting the local hog industry and with our improved biosecurity protocols in place. We are confident that we can expand our capacity amidst the spread or the continued spread of ASF in the country. So to recap, here are the key points of the Food Group's first quarter 2022 financial and operating results. The Group registered revenue improvement due to volume growth and increases in selling prices, which are designed to help us keep up with the continued increase in commodity costs. The Food Group EBITDA surpassed last year's performance, but NIA was dragged down primarily by the recognition of an unrealized ForEx loss in our agri business unit due to the devaluation of the Sri Lankan Rupee relative to the U.S. dollar and our Farm divisions tax adjustments pertaining to our 2020 income tax holiday, which was recognized in 2021. We'd also like to highlight the growing presence of our Good Meat brand, both off-line and online, on e-commerce channels like Lazada, Shoppee, and our own thegoodmeat.ph, and the increase in physical channels from 260 stores in 2021 to what we hope will get to 330 in 2022. And the completion, again, of our 3 additional The Good Meat outlets by August of this year. For our agribusiness unit, we will start the construction of 2 new mills in China and in Vietnam, respectively, each with a combined 30 tonne per hour capacity. So Judd, that's it from The Food Group. Thank you very much.

Thank you, sir. And now to present for land, I will turn you over to Mr. Dave Rafael.

Good afternoon, everyone. So I'm here to present to you our quarter 1 performance for -- I'm pleased to announce that in -- for the first quarter of 2022, AboitizLand has basically met and surpassed most of its key financial metrics. The same metrics now. So in terms of revenues, we posted nearly PHP 1.2 billion in revenues for the first 3 months of the year, which is 68% higher than the same period last year, driven mostly by construction completion site development completion, given that there were more -- there were less restrictions and there was more flexibility and openness in terms of construction. Gross profit was at PHP 554 million, which is 86% higher the same period last year. And EBITDA was a total of PHP 397 million or 181% higher than the previous year. Our first quarter sales for the residential is that were PHP 1.1 billion, which is 5% higher than the same period. Next slide, please. Okay. So in terms of the total contribution of the residential group, the residential group contributed PHP 799 million in the first quarter of the year, which is about 68% of the total. The sales of the industrial and the commercial will be reported later on by Cosette in the -- when she reports for Aboitiz Infra. So in terms of sales, we're running the residential sales, as I said, we're running 5% above the same period last year. So we continue to capitalize on the momentum pushing residential sales for this period. At this rate, we are confident that we will be able to meet our year-end sales target by the end of the year. Next slide, please. Just to give you an idea of our operational milestones for the quarter. We're mostly on track. We were able to successfully launch a new phase in Foressa, which is in Balamban Cebu, 19 hectares. Now we launched it last March. We've also launched a new campaign to really strengthen the sales take-up of our Ajoya projects in North Luzon, it's called Find Your Center campaign. So it was launched just a couple of weeks ago. And our construction progress, we continue to show a very good significant improvement in our [Technical Difficulty]. Next slide, please. Okay. As part of AboitizLand's great transformation, several innovation initiatives are being pursued and closely monitored to ensure timely and effective execution. The launch of Phase 1 of the Vecino App in January allowed us to provide seamless, contactless home buying experience on Vecinos. It has improved overall operational efficiency by shortening the booking period and decreasing the share of agent counts versus total booking pipeline. Phase 2, which [ comprise purchase ] and purchase stages will go live by the end of April. Phase 3 is slated to be launched in the Q3 of 2022. This will aim to cover post purchase process as well as Vecino and seller retention tools. Several innovations in construction and project management are progressing smoothly as well. The precast panel technology is in full swing in Seafront and in -- and we will start in May for Amoa, and June for TVL. The Amoa system, 3D modeling and [ Trimble Stratus ] initiatives are all on track. Next slide, please. So in summary, let me just -- the key takeaways from this presentation. Number one, based on our Q1 performance, we are confident. We are on track to meet our annual targets. And number 2, with the opening up of the economy, we expect a boom in real estate. Residential property trends that we've seen in 2021 are particularly the preference for residential offerings outside of Metro Manila for bigger, wider spaces and facilitated by the infrastructure boom, we think will continue and will work to avoid this lands benefit. And finally, we see very minimal impact on our operations and financial performance in 2020 arising from the disruptions cost by the ongoing Ukraine-Russia conflict, largely because we've already basically lapped in all our purchases and our costs for all our materials for the whole year, okay? So with that, thank you.

Thank you, sir. And now to present for infrastructure, I will turn you over to Ms. Cosette Canilao.

Thank you, Judd. Despite the initial concerns around the rapid spread of the Omicron variant in January this year, the local economy quickly recovered as cases started going down. Less cases translated to less mobility restrictions, which also meant that we were able to fully ramp up our projects. So Aboitiz InfraCapital is off to a good start this year with our consolidated EBITDA up by 200% versus the same period last year. The economic assets growth is at full speed with the ongoing development of 96 hectares worth of expansion projects. The start of the construction of Lima Tower 1 and the increase in our occupancy rate. We have also recently consolidated our small cell sites business under Unity Digital Infrastructure to help beef up Unity's differentiated offerings to mobile network operators. Apo Agua meanwhile is well on its way to begin operations by this year. AIC's CapEx doubled in the first quarter versus the same period last year, driven by the Economic Estates with PHP 550 million, mainly for its land acquisition activities. The water businesses CapEx also increased to PHP 657 million as Apo Agua nears completion of its facilities. CapEx for Digital Infrastructure also grew to PHP 184 million as [ Aboitiz Power ] build ramps up. The Economic Estate is also the main driver of AIC's EBITDA as it more than tripled its year-to-date EBITDA to PHP 244 million versus PHP 75 million last year, thanks to the higher incremental percentage of completion from Block-9-1 inventory versus the same period last year. Amid the challenges by the pandemic and various natural calamities in the past 2 years, the economic estates moved forward with the development of our various expansion. Today, the 47 hectare Block 9 Phase 1 expansion is almost complete, head of this Aboitiz schedule had merely sold out. In fact, the first locator already broke ground just last month. We continue to be very optimistic about the future due to the strong demand for our industrial lots from both foreign and domestic enterprises. We recently broke ground on the Block 9 Phase 2 expansion, which spans 57 hectares. Once completed and fully built out, the entire Block 9 expansion is projected to yield up to 40,000 additional jobs, adding to the existing population of 62,000 workers within the estate. In February, Cebu Industrial Park Developers, Inc. also broke ground on its 39 hectare industrial expansion within West Cebu Estate's 540 hectare property. This development will include a diversification about our locator mix to include light to medium manufacturing as well as a new neighborhood mall with a transport terminal and a community park that will support the everyday needs of the estate and of the growing population in Balamban Cebu. Once completed and fully constructed, the expansion is projected to double the existing population of 14,000 workers within West Cebu Estate. The commercial business is also building up momentum. We have begun construction of Lima Tower 1, which is the first of the Plant 7 Tower office park at the heart of Lima's 30 hectare Central Business District. The PEZA-registered LIMA Tower One also recently became a green building project under BERDE, and is perceiving a 5-star rating. We anticipate that the building will be about halfway complete by the end of the year. As mentioned earlier, the commercial leasing business also performed well and posted gains despite the Omicron spread at the start of the year, as it increased occupancy levels to 71% in the first quarter. On the other hand, Lima Water has begun expanding its services with Lima Estate. Last February, Lima Water signed a memorandum of agreement with Aboitiz plants The Villages at Lipa for water supply and distribution services. This allows Lima Water to harness opportunities and synergies within the estate, increasing participation in its ecosystem. Meanwhile, industrial water demand is back to prepandemic levels as medium industrial locators like [indiscernible] and LIMA Park Hotel, bounced back from the pandemic. Lima Water is also set to become more efficient with the completion of its first of its full automation initiative this year. This will serve as the backbone of its smart water network, which will turn Lima Water into a world-class estate water utility company. Over in Davao, Apo Agua is fully focused on launching its operations this year. Civil works for the intake we are in the standard, which are part of the raw water facility are complete with final mechanical and electrical works ongoing. For the water treatment plant, civil works for the first drop are almost complete with mechanical and electrical works construction in full swing as well. All pipes have been laid for the 8-kilometer conveyance and [indiscernible] lines, leading from the wear to the water treatment plant. Relevant portions of the pipeline have been encased in concrete to provide added defenses against adverse weather conditions, while slope protection works are ongoing. For the treated water pipeline leading to our 8 offtake points. 96% or 55 kilometers of our 57 kilometers pipeline has been laid with 60% or 36 kilometers having undergone hydrotesting already. Road restoration works are now ongoing. Also preparation for testing and commissioning of the whole facility is ongoing, which is the final step prior to operations. Unity continues to build up its portfolio with the acquisition of the small cell sites business from AIC. This will allow Unity to get closer to its goal of becoming a one-stop service provider for MNOs fixed infrastructure needs. To summarize my presentation. Here are key takeaways for you today. 2022 is shaping up to be a significant year for Aboitiz InfraCapital, characterized by business growth from our economic estates expansion, the start of Apo Agua's operations and Unity's tower construction ramp-up. We remain committed to participating in the government's infrastructure program from this administration through the next, especially moving forward with our projects with the original proponent status. That ends my presentation. Thank you, and back to you, Judd.

Thank you, ma'am. And other presenter for cement, I will turn you over to Mr. Vara Kalepalli.

Hi. Good afternoon to all. Welcome to this Q1 analyst meeting. Being a nonlisted company, as usual, for cement we will not have the financials, but we will give you some perspective about the market information and how we are weathering this commodity inflation. Last year, if you recall, I think cement has witnessed a good volume growth in 2021, utmost 7% higher versus pre-pandemic levels. However, for the Q1, we see a slight -- as per our internal estimates, a slight negative growth in Q1 compared to the previous year, probably 1% or 2%. There is no exact data available as such. Now how is this -- there are 2 main criteria. I mean, the high steel prices is really impacting the construction as of now. People are just trying to postpone, it is a shock for everyone. The 40% increase in the steel prices, which is also a major component in the construction is basically leading to postponement of the construction. That is how the market is a bit sluggish in the Q1. Of course, we also have some election-related impacts, some places, positive, some places, negative. So this is the current scenario of the cement demand. But then what is the outlook for the full year? I think we are still cautiously optimistic for the full year. Even though we may not have a high growth in 2022, but still we see -- we expect H2 will be rebounding in demand. And full year, we may see still a positive 1% or 2% growth for the full year. So that is our outlook for the demand for the full year. Now just a few comments on the commodity inflation. Cement is a highly energy-intensive industry. So how are we adhering this high commodity inflation? 2 things. Okay. Our Ecoloop team is basically leading in our cell health actions. We are doubling our alternative fuel usage. Last year, we did -- we just around double digit. And this year, we hope to achieve almost 20% in alternative fuel consumption. In fact, for the month of March, we already achieved a 20% alternative fuel mix in our fuel consumption. This helps a lot in mitigating the high fuel cost. Secondly, I think we also did secure our almost our fuel needs for the current year through fiscal hedges, I think. So at a very good competitive prices versus the market prices. So the only thing we are focusing on is to see that these contracts are implemented in the year. As of now, our stocks as the end of March will come up to July. That is -- that we are holding a very healthy level of fuel inventory. So this will mitigate our fuel costs to a great extent. On the other hand, we are also continuing our digital efforts. So we are progressing well in our digital road map and then we continue to have our data sense programs, both in our operations and also in our finance and commercial operations. So overall, the Q1 contribution is slightly negative at PHP 16 million, mainly because of the lower demand in Q1 compared to the previous year. So this is from our side from the cement side. Thank you very much.

Thank you, sir. And now to present AEV's financials, I will turn you over to Mr. Dmi Lozano. Dmi?

Thank you, Judd. Thank you. Thanks, everyone. So, good afternoon, and we're at the tail end. So hopefully, everyone's still awake. Let me just start off with our key performance highlights and specifically revenues. AEV recorded consolidated revenues of PHP 61 billion for the first quarter of 2022. This was 32% higher year-on-year. And really, it's a combination of volume increases in prices, in particular, for our food and power businesses. Power had higher revenues due to higher effective BCQ and spot rates. A lot of it is driven really by increasing index prices of coal and oil, but also by higher availability of its plants. Food on the other hand, had higher revenues, the increase in both volume and selling price across all of our Food Group's business segments that Tristan was discussing earlier. Moving on to EBITDA. Our first quarter beneficial EBITDA was 39% lower compared to last year. This was mainly due to a few things, right? So first, there were some one-offs that happened last year, in particular, in power, where we received LDs and business interruption insurance, which we didn't obviously get the same in 2022. Additionally, 2022 is -- sorry, are we moving on to the next slide, Judd? Yes. Okay. So -- and then unfortunately, this year, we had a couple of unexpected events, including the impact of Typhoon Odette, which affected the -- obviously, the revenues of Design Electric. And some of our plants were asked to do advanced outages to -- that otherwise would have been in the second quarter because of -- to try to avoid the election period. For financial services, there's a 6% decrease in the EBITDA for impact for us, mainly due to the recognition of extraordinary trading gains in the first quarter of 2021, which we didn't have again in 2022. Without these one-offs, like the LDs, BIs and the impacts also here on 2022, as well as these trading gains, EBITDA would have been lower by about 4%, right, rather than the 39% that we're showing here as the headline. It's also worth pointing out that -- it's a very important thing to point out that as part of our transformation strategy, you may recall or you should be recalling that AEV sold a portion of its share in AP to JERA. And that also meant that means that AP will have a slightly -- will be a lower contributor for us in this first quarter. If we also account for that differential, our EBITDA for all the other units actually is 27% higher than what we saw in 2021. Similarly, when we look at the consolidated EBITDA, it's down by 28%. And again, as mentioned, driven mainly by the -- some of the events in the first quarter last year, like with power and financial services that didn't occur this year. Core income is down by 64%, again, mainly driven by the decline that we've discussed in EBITDA. The increase in tax and others was due to the great tax adjustments that we had in 2021. So net income. The group recognized net nonrecurring gains of PHP 766 million, mainly due to the revaluation of dollar-denominated assets. And as a result, net income for the first quarter of 2022 was PHP 3.9 billion, 54% lower compared to the same period last year. And this translates to an EPS of PHP 0.70 per share. Again, just to -- for comparison purposes, if we exclude the one-offs that I discussed, such as the LDs, the BI and others, net income would have been lower by about 4%. Despite the challenges and the headwinds, one of the main things that we were able to achieve over the last few months and towards the end of last year was really to strengthen the balance sheet. On a consolidated level, cash and cash equivalents decreased by 12%, but this is primarily due to the dividend payments that we made in the first quarter and other regular debt service payments that we have been doing for our operating business units. On a parent level, AEV was in a net cash position of PHP 16 billion. With our cash on hand, our plan is to fund AEV's growth plans. Well, we're in a fortunate position where we have a strong balance sheet, quite a bit of cash on hand and bank lines available as well. All of this will be used to fund our growth plans for our subsidiaries, our investments in our subsidiaries, which will include quite a few infrastructure projects and other data and digital-related investments. And also I think the most obvious and the first real major use of our cash will be the Union Bank's acquisition of the Citi assets. Meanwhile, on a consolidated level, our net debt to equity ratio remains well within our internal parameters. And on a parent level, our interest coverage ratio has significantly improved. On a consolidated level, it decreased due to lower EBIT or earnings before interest and tax. So we feel that this is quite strong. It's positioned us, again, as part of our transformation, we are ready and searching for the right investments, and our business units have the ammunition to fund the growth that they will be needing or they will be working on over the next few years. So just a couple of key takeaways that I want you to lead with. While revenues were up from better performance of all SBUs, clearly, after looking at on the EBITDA and net income level, there were some challenges. However, when you start to consider or remove things like the LDs, BI claims from power and then the trading gains from the bank as well as other one-offs, both EBITDA and NIAT would have been higher. And so -- and this includes also the effect of the reduction in our ownership in AP. The balance sheet continues to be strong, which has been a critical part of our goal, ensuring that now that we are emerging from the pandemic, a lot of opportunities to grow the business and further strengthen our position in our various business units start to become available that we are well positioned to take advantage of this. Thirdly, as new global disruptions emerge and with the continuing conflict in the Ukraine, we are prepared to deal with these uncertainties through our agile and resilient mechanisms balance sheet. And of course, most important, the mindsets of our teams, right? We -- it's not the first recent uncertainty that has hit us. We've had some, obviously, the pandemic. We've had ASF in the Food Group. So the last couple of years have seen quite a few major upheavals that affected the economy and our businesses, and we've emerged stronger because of this. So we feel that we've set up the people, the mindset and even our financial position so that we can -- that we can continually emerge and maybe even benefit strongly from these disruptions. And finally, our great transformation into a techglomerate will definitely ramp up -- start to ramp up in scale and speed as our new strategic partnership with JERA fixing for one, our Citibank acquisition, which should be completed by middle of this year, the launching of our digital bank as well as quite a few significant investments in data technology that will help transform and modernize our businesses, not just today, but for the remainder of the decade. So thank you, and let's move on to the most awaited part of the session, which is the Q&A. Thank you, everyone.

Thank you, Dmi. Before we move on to our Q&A, we would like to request the audience to complete a call that will pop up on your screen. Thank you for answering our call. Now on to our Q&A. We have received advanced questions. We will take them up now. If we have time, we will address questions raised live on the platform. For our first question, this first question will be addressed to our non-power SBUs. For all our non-power segments, can you kindly provide updates on the heightened commodity price situation, particularly the impact on your SBUs demand margins or stock accumulation. And if there are any changes to your prior plans strategies? Maybe we can begin with the bank, Toto?

In the case of the bank, there is no direct impact. We did review our portfolio. And given at the level of our clients, we haven't seen any sector that will be adversely affected the -- most of our clients are able to pass on the additional cost of energy and raw materials. The only thing that we have noted is that the companies that are involved in the distribution of fuel and oil, they have to have higher levels of working capital as a result of the higher oil prices. And of course, as the prices go up, they are able to pass on to the consumers the additional cost. The only thing is that when prices start going down, then they may be left with some inventory. But we don't see any immediate risk in our portfolio so far.

Thank you, Toto. For our food business, Tristan.

Yes. Thanks, Judd. So super relevant question for The Food Group, right? First, you all know, I mean, we deal with several key commodities as inputs for our products in feed and flour, mainly wheat, corn and soybean mill. As the question touched on, I mean, prices have been very volatile, right? As of the moment, I think between wheat and corn prices, you're probably sitting anywhere between 20% and 25% above where they were at the start of the Ukraine and Russia crisis, right? And I think for as long as that goes on, right, you're going to see that, that risk premium kind of remain in the market in terms of future values for those commodities, right? On top of that, there are some supply-related issues. This actually started in the fourth quarter of 2020, mainly in key grain growing regions of the world. And this is really has to do with weather-related issues and whether or not these regions are getting enough precipitation to ensure that the crops are growing as they have kind of historically, right? So all of this combined basically leads -- sorry, third factor, fertilizer availability globally, right? This is going to impact kind of the long-term availability of grain, I'd say, when I say long term, I'm talking more, let's say, next year, 12 to 18 months, maybe, right. So all of that combined basically leads to a very volatile 1.5 years in front of us from a Food Group standpoint. We have been actively trying to manage our exposure to grain prices even prior to COVID-19, right? And we employ a tactic that we call a neutral position when pricing are green, which draws a correlation between our ability to pass on commodity prices to the market, right, and how long that takes, right? And then we procure the equivalent amount of months of grain for operations, right? So we were subjected to commodity prices -- commodity price increases. We do our best to pass them on. Obviously, we have to balance this with the interest of our consumers, farmers, right, livestock rates across the region, passing these prices on too fast will kill our customers. So that's why we've been kind of a little bit behind over the course of 2021 in terms of being able to pass on these increases. But we have been able to pass them on in time, right? So margins have been squeezed. We foresee that they -- depending on how much further prices go up, they will remain squeezed for the short-term, but we should be able to catch up over time. As far as demand goes, demand has been strong, volume has been up across all segments of our business for the most part across the region, right? So again, it's about managing and balancing the interest of our customers with ours, right? And so we're doing our best to kind of keep both in check, right? And I think this is something that -- it's basically going to trickle down into inflation numbers across the region, right, as you're already seeing in terms of food inflation. But we have our strategies in place to try and combat this, right? I mean we're talking about balance optimize develop, really looking at ways to move into higher-margin segments of the industry. We're doing that. We've gone downstream in the Philippines. Our Good Meat brand is growing volume in that area is growing. So that's great, right? We've been able to launch our pet food brands across the Philippines, Vietnam and Malaysia. Again, the first quarter has been a pretty strong quarter for the Philippines in terms of pet food, so we're happy about that, right? And really, right now, at the moment, I think what's really key is that we ensure we're able to optimize our operations and control those costs that we can control, right? And so no matter where the commodity prices go, at least at the end of the day, we know that we're as efficient as possible in our operations, right? So I know it's a long answer, but definitely, it's a very relevant topic for our business. And so there's a lot to say about it.

Yes. Thank you for that response. For our infrastructure business, can we hear from, Cosette?

Yes. Thanks, Judd. Not large impact. We are protected by our contracts for our construction and also the inputs we have placed the orders for that advanced, and if there are any commodity -- either increase in prices of input materials, we managed to offset it with a bit more efficient operations. So not much step back from -- in our sector.

Thank you, Cosette. For our cement business, is there anything else that you want to add, you answered earlier a while ago, or are you good with that?

Yes. I think probably to clarify again, it is the same thing, like demand is impacting in the short run, but then this is a temporary postponement of construction, that's what is we estimate, because projects are there and then the intent is there. So the demand will pick up shortly. And as far as the cost management is concerned, really, I think what I say is, like Winston Churchill said, never waste a good crisis. So I think this commodity inflation will help us in moving to more to renewables and improving our alternative field strategy, and that will motivate our teams to pickup in these areas. I think overall, I think we are able to mitigate our commodity inflation through our selective hedges and also through our physical contracts that we have for the fuel is concerned. So we have various self-help initiatives in place to mitigate the cost to a great extent. We -- our strategy is to pass on the increase in cost to the customers. But then in a fast manner, like Tristan very well said, we need to balance the interest of our customers versus our ability to pass on the cost. That's what I would say. Thank you.

Thank you for that, Vara. Last but not the least, Dave for land -- for our land business.

Yes. I think as I said in my presentation, on my last slide, the impact of the Ukraine, Russia prices on AboitizLand is really limited. But that's not to say there's no impact on the property business. There will be no, since a lot of the materials for real estate like steel, cement and all that are all going to be facing that risk though. Okay, continue, yes. As I said in my presentation, in the -- my last slide, that the impact of this Ukraine, Russia was -- AboitizLand is very limited. So for 2022, we don't really expect much of an impact. However, it will be -- if it continues, it would be a risk that we will have to cover. I think the reason why we were not too affected is, because we were able to secure long-term contracts, purchases for our materials with contractors and all that. So we were lucky that we were able to do that. But for next year, I think it's going to be a new challenge. Thanks.

Thank you for that, Dave. For our next question, okay, so our next question is for Power. Can you kindly itemize the peso impact of these extraordinary one-off events, the impact of Typhoon Odette, advanced plant outages in 2022 and 2021 LD, BI claims on your EBITDA core net income? EVR?

Yes. Thank you, Judd. Well, for the one-off items, the impact of Typhoon Odette for December, January, February in Cebu, for VECO and TVI in particular, is around PHP 516 million. The advanced planned outage for Pagbilao 1 and 2, is around PHP 372 million, but it has been completed in the first quarter, these plans would be available when we expect that prices to be higher than the first quarter, Q2 onwards. And the other income as the BI claims totaling to PHP 3.2 billion in beneficial EBITDA. So the total impact of this in income is around PHP 3.1 billion.

Thank you for that, sir. The next question is still for power. And the next question is on coal. What is the EBITDA earnings contribution of GNPD in the first quarter of 2022 versus fourth quarter of 2021?

Yes. Judd, and with Liza Montelibano and -- the AP CFO; and Racquel Bustamante, the CFO for Generation and the CFO for GNPD and GMEC, first time we've been together since the pandemic. So I'll let them actually answer this question, especially for this GNPD question for Racquel.

All right. So for GNPD, the EBITDA for Q1 2022 compared to last quarter or Q4 2021 is lower by 18%, again, driven by the recognition of the date guidance last quarter of PHP 999 million beneficial with 2021. Now if you take out the LT, the EBITDA for first quarter of GNPD was higher by [ 120% ] driven by higher availability and the commencement of GNPD Unit 1 in serving its power supply agreements from its own generation.

Okay. Thank you for that, Racquel. Our next question is still for power. Why is AP's normalized are still down by 4%, even if we remove the effects of BI and LD claims, the effect of Typhoon Odette and the advanced outages from the national elections. Also, can you provide equivalent normalized Q1 2022 and Q1 2021 net income figures?

Judd, I'll let Liza answer this question.

Good afternoon. The decrease in NIA is primarily due to the fact that we've started to book depreciation and interest for GNPD Unit 1, which began running early this year, as it started to serve its own PSA. So if you take that out, the NIA would have been higher by 9% versus first quarter of last year. Now, you will recall last year, we kept on mentioning, we were -- TLI actually provided replacement power for the GNPD Unit 1 customers. So we were actually earning EBITDA already from the GNPD Unit 1 customers last year. But TLI was already an established asset, you don't have additional interest and depreciation. So for that same EBITDA, we're serving those customers, using GNPD, we are booking the interest and depreciation from the GNPD assets. So -- and the TLI now is selling to WESM. Normalized NIA for the first quarter of 2022, 3.5% versus PHP 3.7 million in the same period of last year.

Thank you, Liza, for that. Our next question is still for power, are there any BI claims, one-off income still expected in full year 2022? If yes, how much? And when will this be received?

Well, we are still -- for year 2022, which is targeting to receive the balance of the Manolo Fortich insurance claim, around PHP 500 million. And the GMEC insurance claim about $18 million for the 2021 outage.

Our next question, what is the overall impact of planned and unplanned outages on Q1 2022's core net income and EBITDA?

The total impact of outages, including Odette related outage in TVI and in VECO, on EBITDA was PHP 1.1 billion with the total impact of the core -- on the core net income was PHP 627 million.

Next question. How much did GNPD contribute to earnings in Q1 2022?

GNPD's net income contribution for the quarter was PHP 1.6 billion of beneficial, all from Unit 1.

Next question. Still for power, what was the operating and financial earnings performance of AP's hydro plants in Q1 2023?

Yes, we were expecting higher inflows, but we -- closing to the -- into the rest of -- into our run prepare actually lower than normal. So the first quarter impact on the 2022 NIAT of our hydro plants was PHP 283 million, but we are now above the rule curve in all of our impounding hydros.

Next question. Still for Power. Can you provide color on why gross margins for the Genco business declined from 49% in Q1 2021 to 35% in Q1 2022? Would we expect the same level of margins for the rest of 2022 in light of the elevated spot fuel prices?