First Pacific Company Limited (142) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining this online briefing to discuss the First Pacific's 2023 First Half Financial and Operating Results. The results presentation is available on First Pacific's website, www.firstpacific.com under the Investor Relations section, Presentation page. This results briefing is being recorded and the replay will be available on First Pacific's website, in the Investor Relations section. For participants from the media, please note the Q&A session is open for investors and analysts only. [Operator Instructions] Today, we have with us our Executive Director; Mr. Chris Yang; our Chief Financial Officer, Mr. Joseph Ng; Associate Directors, Mr. John Ryan and Mr. Stanley Yang and other senior executive from the head office of First Pacific. Over to you, John, for the presentation.

Thank you, Sara. A brief overview of our assets, which I'm sure you're all familiar with. There hasn't been any real change here since the last time we spoke with you back in March earlier this year. Now let's go straight into the numbers. Our recurring profit is up 14%. It's a record high for the interim period. Turnover likewise was a record high and our contribution from operations also record high. We've received, looking at the cash flow down on the bottom right, our first ever dividend from PacificLight Power. And our dividend income for the first half of the year was double what it was a year earlier, more than double. The benefit of this to us will be discussed in a bit by our CFO, Joseph Ng. But as you can see from the recurring profit chart on the top right, all our main holdings, Indofood, MPIC, now PLP, and PLDT, they all delivered stronger earnings. The head office numbers were pushed down a bit by an increase in net interest expense, up by about 40% to almost $35 million. Corporate overheads, I'm sure you'll be glad to hear, were down by about 15% and recurring profit was a nice around $300 million. Nonrecurring gains were down just a bit from the earlier year to $7.2 million. And as you can see, our recurring earnings per share, up 15%. And with the stronger numbers, we've felt confident to deliver an interim distribution of HKD 0.105 per share. And looking ahead, recurring profit is on track to a third consecutive record high after '21 and 2022. Now a brief word about our balance sheet. Gross and net debt are little changed from the last time we spoke with you. As ever, our borrowings are unsecured and light on covenants. Our interest coverage ratio is quite high at the end of the half year at 4.5x. And as was implied by the previous slide, our blended interest cost is up a little bit to 5.3%. Fixed rate borrowings are just over half of the total at $750 million. And if you look at our debt maturity profile on the bottom left, you can see what we've got outstanding and their term. We've got $210 million of bank borrowings maturing next year and our treasury team is already in discussions to roll those over. We've only got 1 bond outstanding, notwithstanding our investment-grade credit rating and that's in 2027, as you can see, it's the blue chart. Now the interest coverage ratio and dividend income are portrayed in the top right here, there's the 4.5x, up from 3.8x a year earlier. And there, you can see the increase in our dividend income from one half to the next. You can see it's well over double. And the big contribution there, as you can see, is from PLP. Now a very quick glance at our gross asset value. The ratios are pretty much steady, Indofood, the biggest, followed by PLDT, MPIC and the others. Please note that we are now valuing our stake in PLP at $370 million. That's our investment cost and up from $150 million when we reported our full year earnings back in March. Now a very brief word about the MPIC delisting initiative. If you don't know, First Pacific shareholders voted by 99.99% to approve the -- our participation in that delisting. That is underway after MPIC shareholders earlier this month also gave the go ahead, I think 77% approval rate there, with a miniscule opposition and a bunch of abstentions. Now pro forma, after all the tendered shares are counted up on the 7th of September, the shareholding would look something like what you see on the right-hand side here. We would be just under half of the whole but that's not terribly material because with the voting control, if you're counting preference shares. New shareholder, Mit-Pacific, a joint venture from Japan, as described in the note, GT Capital would be a little increased as well. And then there's the management investment group, led by our Chief Executive Manny Pangilinan. We can talk more about this in the Q&A. There's some discussion of this delisting proposal here. But let's move, very quick word on ESG matters. The Hong Kong Stock Exchange is introducing a new Section D in Appendix 27 of the listing rules, requiring Hong Kong-listed shares to follow the new S1 and S2 ESG reporting requirements imposed by the IFRS. That was announced back in late June. We've had extensive discussions with our operating companies and we feel we'll be able to manage this new reporting requirement when it comes with fiscal 2024. Now [Audio Gap] Indofood, the phrase you've heard a lot from my mouth in this brief narrative. Net sales record high, core profit record high, essentially all driven by consumer branded products at Indofood. It is one of the largest instant noodle manufacturers in the world. It's had, as you can see from the earnings chart there, staggering growth over the past few years, since it acquired Pinehill in August 2020. At the time of that acquisition, the Pinehill noodle factories had a capacity of about 9 billion packs a year. That at the end of the first quarter this year was already up to 13 billion packs. We've got, counting the domestic market, about 1.2 billion potential customers for Indofood products. Most of those markets are very lightly penetrated compared with the domestic Indonesian market and we're confident about the prospects for medium-term growth in the years ahead. Now looking at the EBIT margin chart, you can see that the ICBP businesses overall had a pretty good first half of the year, while the remaining businesses, all saw their margins decline. There was a stark fall in palm oil prices, which had an effect on the margin at the agribusiness, which fell by more than half. Now looking towards the full year, we expect a continuing steady strong performance from Indofood. A brief glance, closer look at ICBP. Now as you can see, ICBP bought Pinehill 3 years ago and subsequently issued 2 bonds in United States dollars. And these are described here in the box on the bottom right. And you can see the net debt, this is, of course, in rupiah terms, went down from the year-end to the end of June and that is because of almost 5% strengthening in the closing rupiah exchange rate. Now a brief look at the sales here at Indofood. You can see that growth was very strong, again, record high, driven by the noodles business, followed by distribution and Bogasari, notwithstanding the lower margins there. Now let's move to the largest and most sophisticated telco in the Philippines. Again, record high service revenues, record high EBITDA, service revenues just under PHP 100 billion, EBITDA a little more than half of that, the margin is at 53%. The increase in earnings was driven very largely by the home business, as we can see here on this page with a strong [ 3 % ] growth in revenues. Over the individual business, which historically has been a strong earnings driver, we saw that revenues were flat in the first half. But if you look more closely at the second quarter revenues, you see that they were up over the first quarter by a strong 7% and -- for the postpaid business and slightly lower pace of growth at the prepaid at 2%. So we're looking for good things overall from PLDT going forward. Telco profit for the full year PHP 33.5 billion to PHP 34 billion. CapEx is going to be down by probably PHP 10 billion or more for the full year from 2022, in the region of PHP 80 billion to PHP 85 billion. Let's not leave PLDT without a word about the Voyager fintech holding company in which they're the biggest shareholder. It's got Maya, the #1 fintech ecosystem in the Philippines. It's got more customers than everyone else. It's got more loan disbursals and it's got 61% of domestic bank accounts. And that's very much a nice to have at the moment, seeing as -- how equity analysts put enormous valuations on these sorts of businesses. It's growing fast and we're keeping our eye on it. Now in the interest of time, we will skip over to MPIC. A reminder, these are the main businesses that MPIC is invested in, its 3 big ones, all had a very good first half of the year, as you can see in the change in contribution chart down here on the bottom left-hand side. Driven by the power business, which had much stronger pass-through revenues and also a big boost of income from its generation business. The water business benefited from higher tariffs and the toll roads also saw growth as well. For the full year, we're looking for MPIC to probably deliver record-high earnings even as it deals with the results of the delisting initiative currently underway and just described. Now we can get into more detail about MPIC in the Q&A, so I'll skip over the specific companies. Meralco had a very strong first half of the year, the toll roads business did also and you see they've got some more roads under construction. And then the water and the other businesses are reported here on this page, the other larger businesses. Now PacificLight, we're kind of getting used to here for Pacific as thinking about it as a core holding because of its impressive performance over the past couple of years, as you can see in the recent profit and loss chart here on the top right. Now you'll have seen that it's paid us a very large dividend and its other shareholder, Meralco, in the first half of the year. All of this occurred while it was pushing down its debt very, very hard, from SGD 590 million at the end of 2021 to just SGD 250 million at the end of June. Looking ahead for the rest of the year, we see it's -- we are comfortable with it continuing to earn well. And looking ahead, we're quite hopeful for it too, not least because it's got some potential projects in the works such as a solar power joint venture, to export electricity from Bulan Island in Indonesia to Singapore and potentially more conventionally fueled power plant business locally in Singapore. Now a brief word about Philex Mining, where the currently operating mine has had its mine life extended to the end of 2027, while development of the new Silangan project continues down in the south of the country, in Mindanao. Its performance was worse than it was a year ago and that's largely because of lower metal production and lower copper prices. Now in summary, our core businesses all did extremely well, as we're reminded by here with the recurring profit chart. The full year numbers will probably look similar. We're very excited about another likely strong year in 2023. If the delisting initiative with MPIC goes ahead, we'll be looking at kind of a new look at First Pacific with not 1 in PLP but 2 very large privately held holdings. And how the market will look at us if we can pull off that delisting will be quite interesting. Now that's the end of the brief narrative to start things going. A few folks would like to ask some questions, Sara.

Yes, we are now ready for questions. [Operator Instructions]

Hi, John and Sara. I just unmuted. I just pressed unmute button.

Thank you, Jeff. Go on.

Thank you very much for the presentation. I have 3 questions that I would love to ask one by one. So the first one is on the PLP, which obviously has posted some good numbers in the first half. So when we spoke last time in the briefing, we talked about PLP did secure some of the retail contracts for the tariff for 2023. So my question on PLP, is it reasonable to assume the second half earnings will be comparable to the first half? And how are we thinking about the outlook for the business in terms of tariff and whether it is likely for PLP to do another round of lock in of the tariff at a level that will generate some good earnings in the next year? So that's my first question.

Our Associate Director and Head of Corporate Development, Stanley Yang, will help you with that.

On the PLP question. When it comes to the second half, a lot of the retail contracts are 1-year contracts and so it's fair to say that the second half, a lot of the balance of retail contracts will also take effect. And so we would expect a strong performance of the business in the second half of this year. Now the company, looking forward, is also signing up retail contracts for the ensuing years, next year in particular. And one thing that has slightly changed in the market before, rather than just 1 year, we're seeing longer-dated contracts that are being made possible. And so some of these will be 2-year contracts but some even 3- and even 5-year contracts. And so we feel that in being able to secure these longer-term contracts, that could also help in terms of the profile of the business and the margin and some of the stability in the performance in the next couple of years. Now there -- so that would give a sense in terms of certainly the balance of this year and thinking ahead for next year.

My another question will be on the head office capital allocation. So can we get an updated thoughts on what you're thinking about it now. So certainly, there are a few things going on, the general offer, which shall be completed somewhere in September and share buybacks has stopped since November last year and we also see the income dividend payout declining to 19% in the first half. So just want to see where the latest thought is and especially on the dividend policy, whether we should be still expecting an annual payout ratio of minimum 25%? And I have one more question after that.

Jeff, our CFO, Joseph Ng, will address your questions.

Jeff, it's Joseph here. I think on the capital allocation, maybe I'll just address that the kind of macro level before attending to your specific question on payout. I think we're still sticking to the kind of the 3-pronged approach that we have been kind of articulating. The first one is actually riding on our organic growth in both earning and, of course, then the steady dividend payment. And of course, the dividend payment will tie to earnings performance as well as the cash flow situation, in particular, the dividend stream that we will be collecting, all the operating unit, in particular, the top 4, the likes of Indofood, PLDT, MPIC and now, in particular, PLP. Second, of course, then we will stick with some additional kind of corporate value creation initiative and that would include what you mentioned about the buyback. And we did some buybacks in the past. And then we kind of stopped that because now we are in the middle of a corporate transaction, the MPIC delisting exercise. So that's not the kind of insignificant capital investment at the headquarters level in the tune of up to USD 110 million if the transaction goes through. Now the third one is actually the M&A space but we are not talking about a lot of M&A initiative at the corporate headquarters level but one of those that we are considering as alluded earlier by John is, they're looking into this [indiscernible] project, in which we have a certain direct stake. So we are proceeding ahead with this 3-pronged as far as the capital allocation strategy is concerned. Now back to your question about the payout, as I mentioned, we are in the middle of a corporate transaction, which is not insignificant and that may cause us a capital outflow, up to $110 million. So we are taking a kind of situation where we are trying to monitor the development on that transaction first. And then subject to the outcome of that, we will take stock after that. And as we mentioned in the press release that we published, we'll take -- tightly monitor the situation and review the situation after the conclusion of that transaction. With the kind of the positive outlook, as mentioned by John, clearly, we'll take a optimistic view about kind of setting the final dividend when we have more clarity as to the outcome of that transaction.

So my final question is, maybe is a little bit medium to long term. So as we think about First Pacific, the head office cash flow stream going forward after the MPI offer, so do you have any preliminary comment on MPI's dividend policy going forward, whether you want to extract more cash from that or whether it will be a status quo from what we have seen in the past?

Maybe I address that again. It's Joseph here. And we take note of the fact that, in the past MPIC has been paying a fairly steady but fixed dividend, per share dividend, I think it's something like $0.11 per share in the past. Notwithstanding the privatization [indiscernible] there has been discussion and there has been a lot of internal review as to the dividend policy of MPIC. The trend is that we try to tune up the dividend payment from MPIC, disregarding the company becomes kind of delisted or continue to be listed after the privatization. So yes, we are encouraging all the units, including MPIC to tune up its dividend payout going forward. It actually, it adopted kind of the fixed and steady dividend in the past because we looked at that the company is in a kind of a heavy investment phase in the past, in particular and involving the -- so kind of kept a high level of CapEx investment on the toll road side. And now that we are getting into the situation that many of these toll roads will get completed either during 2023 or by end of 2024, so we are kind of in a situation that we need to review the dividend policy of MPIC. So there's a possibility that we'll turn out the MPIC dividend payout to all the shareholders, whether it's listed or unlisted going forward starting, hopefully starting in the later part of 2023. If not, then it will be 2024.

Okay. We've got some written questions from [ Patrick Millicom ]. First, Patrick, you're asking a update on our current NAV. This is the NAV per share at the half year as published in our review of operations. Between June 30 and today, the amount of debt and shares in issue is pretty much unchanged. And our discount today is smaller than the 63.5%, thankfully but still high, in our view, at 57.3%. Joseph, he's got a few more questions there on the screen, if you want to address those?

Debt and PLP dividend and others.

I can jump in for the PLP dividend. So the start of the dividends, we expect that to continue. And what's helped is that, in the improved performance that's about the company, PLP to reduce its debt balance. When PLP did its debt restructuring, refinancing in the end of 2020, the debt level was over SGD 600 million. And so as of the first half, it's been reduced to SGD 250 million. And so that's allowed also, as part of that, the maturity to be pushed out, as well as more dividends to be paid by the company. And so the quantum of course will be linked to the amount of profits and the cash flows available moving forward. But with the new financing in place and with the reduced levels of that, we expect that PLP will be able to continue dividend payments in the second half and into next year and beyond.

All right. Well, I'll try to answer it [indiscernible]. I mean there are a couple of questions here and some of them have been touched earlier. There's a question about increasing the interim dividend and there's another one about doing the buyback. There's also another question about why not reducing debt. So the 3 actually is kind of different aspect about capital allocation. As I mentioned earlier, we're in the middle of a corporate transaction and we may be spending a not insignificant $110 million. So we'll take stock and review all this when we get to the end of, hopefully end of September, as to the outcome of that delisting exercise. Then we will take stock and revisit some of this. As for the buyback, as I say earlier, as part of the capital allocation is either buyback, value creation or a delisting exercise. So it's not an insignificant $110 million. And part of that will be funded by the maiden dividend from PLP but our first half dividend from PLP is in the tune of $60 million, $70 million, that would not be sufficient for funding the whole delisting need. So it's a balancing act at the end of the day. So we take stock, as I say, we will take a kind of more optimistic view when we get to the end of 2023. As for the debt repayment [indiscernible] because interest rate is going up and we are having a roughly [ 1.5 billion ] gross debt, net debt about [ 1.3 billion ]. And interest rate is going up and as shown in the P&L, it's hitting us by extra [ 10 million ] interest expenses in the first half. If you do a pro rata, that will be maybe [ 20 million ] extra for the full year. So it's something that we are addressing. And -- but on the other hand, we need to balance the other need as to the corporate transaction that I mentioned. And there's also request about increasing the interim dividend. It's -- all of that together is the balancing act. We will take stock when we get to the year-end 2023.

Thank you, Joseph. Tony Watson, you've raised your hand.

Congratulations on a good first half. So I've got some questions from kind of all over the place. First one, very broadly, can you just walk us through how the Pinehill immigration -- integration is going?

Yes. I think that's probably not too difficult. In fact, we've got a page in our book, which might be helpful in that way. This book shows you the revenue breakdown by geography and business. And the crucial line for you is under consumer food products, Middle East, Africa and others. And as you can see, there was an increase there from $711 million to $728 million from one half to the next. Bear in mind, though, that generally speaking, Pinehill's second half is better than the first half. And the integration, from our perspective, is going very, very well. The Pinehill transaction has pretty much been the biggest driver in Indofood for the past couple of years, recording successive record highs in earnings. The growth might have been slowed down a little bit by the pandemic. So over the next few years, we're quite hopeful about continuing strong growth in those markets driven not just by noodles but by new products driven by the ICBP parent. Does that answer your question, Tony?

Just a little bit more specifically, are you realizing the economies of scale that you're expecting? Are you finding any issues with system compatibility between your systems and their legacy systems? Any issues regards to marketing, that kind of thing that you're running into?

For many, many years, Tony, ICBP helped with -- through connected party transactions, Pinehill with the establishment and management of their factories. If you walk into a Pinehill factory in Saudi Arabia and look around and then you get transported to a similar factory in Sumatra in Indonesia, you'll find that they're just about exactly the same. So when Pinehill was acquired, there was basically almost a zero operational risk because the ICBP people knew exactly what they were getting because they're the ones who installed it and set it up and showed them how to operate it. So on that side of things, no great difficulty. I mean, if you want to look for difficulty in the Pinehill markets, look at those markets where there have been extreme fluctuations in the exchange rate. Now those Pinehill businesses, most of them have been operating for many years and they know how to deal with exchange rate fluctuations. I'm thinking in Egypt, for example.

Yes.

Yes. And they know how to take it on the chin and roll with it and come out of the other side, try to smooth out those bumps as best they can. They're quite good at it.

Okay. I hadn't realized that. The next question, commodity prices, particularly inputs for ICBP, I am thinking, things like wet, rice, sugar. Obviously, with wheat, we've had some fluctuations given the Ukraine war and we're seeing some export restrictions on rice and lately sugar in various countries. How have you dealt with the price fluctuations, particularly for wheat? And for all your commodities and potentially rice and sugar going forward, how are you positioned to hedge yourself or otherwise manage your risks?

By and large, the Bogasari flour business tends to buy in great big bulk well ahead of time. So they weren't caught as badly on the hop when Russia invaded Ukraine, about 1.5 years ago almost. But you'll see when prices get high, the margins do take a little bit of pressure, as we saw in the first half of 2023. But now you look a little more closely, even though the margin was compressed, you can see the overall sales at Bogasari were up. So they've done a pretty good job of managing the market share and the sales overall of that business. And you'll find that, historically, Bogasari has dealt with big changes in the cost of its inputs going up and down and generally manages to maintain its quite strong market share and a decent margin at the same time. But looking back again at the margins of the various businesses, you can see when soft commodity prices get hit, the agri business takes it on the chin and you'll see then that ICBP was the big driver in sales for the first half, as you can see, plantations saw a decline. So overall, lower soft commodity prices are terrific for the ICBP businesses, as you can see, stronger margins. The noodles margin was near a record high, which I think was set last year. And that's what carried the earnings growth in the first half.

Okay. That's good. Third question is on treasury policy, both on a consolidated basis and at office level. Are you comfortable with debt levels where they are now? Or are you aiming to bring them down over time? Or are you looking to bring them up?

Well, it's Joseph. I mean, well maybe answering from 2 aspects. One is the headquarters level. We currently have [ 1.5 billion ] debt and net debt of [ 1.3 billion ]. And we are having kind of a interest operating ratio of 4.5, that of course, given the increase in interest rate, we expect that, that 4.5 ratio will trend down a little bit. As I said earlier, if we have kind of a meaningful service cash after kind of the conclusion of the delisting exercise, the MPIC delisting exercise, we'll assess our cash level as to whether we need to pay down some debt. If you ask us from the treasury angle, of course, it's good to pay down some debt, in particular the interest rate is rising. And then we'll manage then the interest expenses a bit lower going forward when we get into the 2024. So yes, I mean, debt will be one of the initiatives, if you ask us from the treasury angle. There is no plan for us to take on any more debt at the headquarters level. It's more on the other side, it'll be going down. I mean that will be something that we will think about. On a consolidated rate basis, we have a net debt of about [ 8.7 billion ]. I think a big part of that, [ 4.7 billion ] I think is actually attributable to MPIC and given that it's a infrastructure company and that includes a lot of loans at various projects like building the roads and the water treatment plants and the like, so it's not insignificant, [ 4.7 billion ]. But if you check the gearing ratio and the debt servicing capability, so we are quite comfortable that MPIC could handle that in particular, a quite a number of toll roads will become -- will be coming into operation in the course of 2023, the later part of that, as well as 2024. So we are seeing that, yes, a high CapEx and high debt situation. And hopefully, when those are up and running, then the debt servicing ratio and the gearing ratio will be more manageable and getting better at the MPIC level. So Indofood's gearing is actually at 0.4 level. So it's not really that high. Our PLP level -- debt level, again, as mentioned by John earlier, essentially prepaying that fairly quickly, down to a kind of less than [ 250 million ] level. So the net debt-to-EBITDA as far as PLP is concerned, is less than 1. So it's very, very manageable. And that's why they could easily refinance the debt a few months ago in May and June this year.

Final question. Regarding investor meetings, if we happen to find ourselves in Manila, would you guys be open to taking a meeting at your offices there?

Tony, drop me a note, man, I'll fix you up as best I can. Okay. [ Charles Sanuk ], you've been waiting patiently.

Congratulations on the results. I just had 2 short questions. The first one was on the delisting, could you just lay out any key milestone dates from here on out, in terms of completing that transaction. And also, what would this closure look like for those infrastructure assets going forward? That's my first question.

Stan?

Sure. On the MPIC delisting, in terms of the timetable. So after the August 8 special shareholder meeting, this is the MPIC, then the tender offer period started on the 9th. And under the PSE rules, it has to run for a 20-business day period. And so that tender offer period is set to finish on the 7th of September. And so if -- at that date, if the 95% acceptance threshold is reached, then this can proceed towards closing. And so the settlement would be on the 19th of September. And so that's really the date that we would look at in terms of the closing of the transaction. All the other conditions, including the PCC, the competition confirmation of non-coverage, along with the First Pacific shareholder approval, we just obtained today, that's all been taken care of. So it's really just running the tender offer and getting to the acceptance threshold. In terms of disclosure, I think you're asking what will happen in terms of following the delisting. Is that the question?

Yes. Yes, that is the question. So just whether we'll get that same kind of line-by-line disclosure.

Yes. At the moment, the business will still continue in terms of being in infrastructure, although not listed. I think going forward, though, there would be plans to list some of the units within MPIC. And so, for example, the Manila Water under the revised concession agreement, there is a requirement for that business to list within 5 years. And so by 2027, the company would seek to list the business. And so that's a exercise that is being reviewed by the management. There are a couple of other units that are being considered. This could include the roads and also possibly the hospitals business. And so these are some of the areas that we would think about in terms of listing those businesses. But in terms of structure, though, it would continue to be held within the MPIC portfolio but in a delisted context.

Okay. Just 2 follow-ups on that. Just in terms of that timetable. So that end date, so as you say, it's September, is that when sort of the transaction is totally completed, all the cash is -- those cash out layers there and it's kind of consolidated as such with those new holding weightings. Is that the right way to think about it?

Yes. At that point and that was when all of the public minorities upon the settlement would be paid in cash for their shares that they've tendered into the offer. So yes, that's when the transaction concludes. There would be a couple of weeks, though, for the actual delisting to happen. And so if it's the 19th of September, then we're talking sometime early October for the actual delisting to be effective.

Okay. And just a final one for me was, yes, so on the kind of toll roads and kind of water, potentially hospitals, as those get potentially listed, would the idea be to kind of raise new funds for those businesses? Or is that effectively kind of an exit -- an opportunity for exit to you and kind of special dividends up to the holding company as a result?

I think it's too early to give a sense of the breakdown, certainly, the discussion around whether it's primary, secondary or some combination. I mean, these are businesses that have their own growth opportunities but also cognizant of whether or not some secondary is possible. I think at this moment, I would say there's nothing definitive in that, in terms of the plans. But as the delisting takes place and as decisions are made, then we could come back and communicate that more clearly in terms of the forward plan.

Okay. Patrick, you asked about Manny not being on the call. He's in Manila because the world basketball authority FIBA is running a basketball World Cup, today is the first day and he's had to play host. But we did run our Board meeting this morning. [ Minkunchen ], you asked about our net debt level. I believe Joseph has already answered that. And Stan, you've been waxing philosophical about MPIC. Can you help [ Graham Rhodes ], our old friend of First Pacific, get a grab of our thinking on this, the benefit to shareholders with the privatization?

Sure. In terms of the privatization, so under a delisted MPIC, one of the challenges of -- as we would see is that for many years, the business, the company has traded at a significant discount. There's always been a holding company discount, which in the recent years has not narrowed but actually gotten increased. It has widened. And as part of the offer then, it is a chance to come in and to buy out the public minorities but also to have direct holdings from the First Pac level into these underlying subsidiaries. There are plans in place that we would like to expand some of them and grow them. But also to, as I pointed out, to look at various monetization efforts that could lead to a IPO of some of the key subsidiaries. And so the value that we would see is that as these businesses continue and as we also review asset allocation in terms of where the investments will be, whether any assets may be sold, if they're less core or we see an opportunity to monetize, I think these are the areas that under the delisted company, there's more flexibility from us as a head office. And we would look at making those decisions once the -- and plans in place once the delisting is done.

Thank you very much, Stan. Are there any more questions, folks? In a moment, I'll ask our Executive Director, Chris Young, to summarize where we feel we stand at the moment. But ahead of that, just a quick housekeeping. I'll be in London on personal business at the end of September. I'm leaving the 28th free, that's a Thursday. If you want me to come by and say hello, please drop me an e-mail. I think you all know how to get in touch. Chris, can you wrap it up for us please? Thank you.

Thanks, John and thank you all for calling in today. I think what you've heard is that we've had a good start to 2023. And again, I think what you will have picked up, we're optimistic that the positive trends that we've seen in the first half will continue into the balance of the year. I think that's what we're seeing. As also mentioned by Joseph, I think this should allow us to revisit the level of the 2023 full year dividend, hopefully in a positive way, towards the end and in the early part of next year. So I think we finish on an optimistic note. We look forward to discussing the full year 2023 results with you on the next investor call, which I think is at the end of March next year. Thank you again for joining us today.

Thanks, Chris. And thanks, again, for joining today's online briefing and we can disconnect the briefing now. Thank you.