Manila Electric Company (MER) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Thank you to our guests for joining us in this virtual presentation of our financial and operating results. [Operator Instructions] Please note also that this meeting is recorded. The order of presentation is as follows. From our CFO, Ms. Betty Siy-Yap, the financial results; to be followed by the new operation by our President and CEO, Mr. Ray Espinosa; to be followed by the Senior VP for Network, Mr. Ronnie Aperocho; [indiscernible] Head of Regulatory Management, Attorney Jose Ronald V. Valles; and a report from [indiscernible] by President and CEO, Mr.[ Ray Espinosa ]. Our Chairman, Mr. Manuel V. Pangilinan, will give his guidance for the rest of the year. So now will be the presentation.

Good afternoon, ladies and gentlemen. I will give the results for the first half of 2020. The first slide is the financial summary. Our consolidated net income is PHP 10.588 billion, 14% lower compared with same period last year. Our reported net income is PHP 6.8 billion, 43% lower. Core EBITDA, we got PHP 15.4 billion, while reported EBITDA is PHP 11.4 billion. Our gross revenues stood at PHP 142.2 billion, 14% lower. Distribution revenue is slightly up at PHP 33.4 billion, [indiscernible] at 3%. Our generation and other pass-through charges was at PHP 105.3 billion, 18% lower. And [indiscernible] purchased power cost is also down by 18% at PHP 104.2 billion. Operating expenses is higher by 9% at PHP 13.7 billion, while our capital expenditures is at PHP 6.9 billion or 36% lower. Cash and cash equivalents was flat at PHP 27.6 billion, while our borrowings represent PHP 40.9 billion. Our gross revenues was at PHP 142.3 billion, which is 14% lower than PHP 165 billion in 2019 as a result of the combined effect of the 7% decline in sales volume, lower pass-through generation charges, while stable prices remained low. Our electricity revenues were PHP 138.6 billion, slightly lower at 97% of gross revenue compared to 98% in 2019. Generation and other pass-through component as a percentage of total electricity revenues were at 74% in 2020 compared with 78% in 2019 as a result of lower generation cost of the implementation of new PSAs starting February 26, 2019, which underwent a competitive direction cost, the [ fourth ] major gain of Meralco from power suppliers and the continuing low [ stable ] costs throughout the first half of 2020, plus the lower WESM prices driven by improved price conditions [indiscernible]. Our nonelectric revenues was at PHP 3.6 billion, 2% lower compared with 2019. This represented 3% of our total revenue. Our total cost and expenses for 2020 amounted to PHP 135.2 billion, 10% lower than 2019. Our consolidated purchase power cost were lower due to the lower pass-through generation cost, with the average generation cost at PHP 4.33 per kilowatt hour in 2020 versus PHP 5.32 in 2016. And again, the average price of WESM, which was at PHP 3.54 compared with PHP 8.18 in 2019. A [ fourth ] merger gain is related to ECQ resulting in savings of consumers of over PHP 1.85 billion and lower fuel cost, specifically on gas, which is at $7.23 per [indiscernible] from oil based Malampaya in 2020 versus $8.06 per [indiscernible] in 2019. We also saw the appreciation of the peso to PHP 49.83 to $1 as at June 30, 2020, versus PHP 51.24 at the same period in 2019. Our total operating expenses was at PHP 13.8 billion, including assistance from hospitals, local government units and other institution in connection with the pandemic of over PHP 100 million and a provision for bad debt of PHP 1.4 billion. Our total capital expenditure implemented for the first 6 months of 2020 amounted to PHP 6.9 billion, 36% lower in 2019 as a result of the implementation of ECQ beginning March 17 throughout the MECQ period on May 10 -- [ May 30 ]. There was also limited resumption of project and operations across all sectors during the GCQ. So distribution utilities, capital expenditures include the construction of the San Jose-Camarin 115 kV line and the expansion of the net [ 815 ] kV and [ 4.5 ] kV [indiscernible]. The next slide shows quarterly information for our core EBITDA, our reported EBITDA, core income and reported net income. Our consolidated core net income for the first 6 months of 2020 was PHP 10.6 billion, 14% lower than PHP 12.3 billion in 2019. For the second quarter, our core EBITDA was PHP 4.8 billion compared to PHP 6.7 billion in 2019. Our consolidated reported net income in the first half was PHP 6.8 billion versus PHP 12 billion in 2019, with the recognition in the company's share in the impairment of an equity invested of PHP 2.7 billion in the first quarter of 2020. For the second quarter, our reported net income was PHP 4.2 billion compared with PHP 6.336 billion in 2019. Our consolidated core EBITDA for the first half of 2020 was at PHP 15.4 billion, with core EBITDA margin at 11%. Our total interest-bearing debt is marginally higher at PHP 40.9 billion, including debt of our subsidiaries of PHP 1.6 billion at the end of the first half of 2020, of which PHP 28.4 billion are maturing in 2020. Meralco's balance sheet and liquidity position remains strong, with net debt-to-EBITDA of 0.6x. Total principal debt repayments, customer refunds and financing charges amounted to PHP 1.4 billion. Core earnings per share for 2020 was at PHP 9.394, while our reported earnings per share was PHP 6.072. Today, the Board of Directors approved declaration of an interim cash dividend amounting to PHP 4.697 payable to all shareholders of record as of August 20, 2020 payable at [indiscernible].

Thank you, Ms. Betty Siy-Yap. [indiscernible] operations report by our [indiscernible]

Okay. Good afternoon, everybody. For business performance highlights for the first half of 2020 versus 2019, our consolidated energy sales is down 7% to 21,139 gigawatt hours. Our consolidated customer count is up 3% to 6.936 million customers. Our NSI or net system input is down 10% to 4,158 gigawatt hours. Our Meralco peak demand is down 2% at 7,614 megawatts. In terms of system performance, our system loss is at 5.66%, which is 0.19% lower over a 12-month moving average. Our system average interruption frequency index or SAIFI is down 27% to 0.662. Our system average interruption duration index or SAIDI is down 46% to 15.785 minutes, and our average time to connect is also lower by 4% to 1.69 days. Our average electricity rate for the first half of 2020 is at PHP 8.19 per kilowatt hour, which is 11% lower compared to the first half of 2019. Next page. In terms of our first half 2020 consolidated energy sales, you will see that we hit 21,139 gigawatt hours, which is 7% lower than the same period in 2019. In terms of energy sales mix, Residential accounted for 39% to 8,115 gigawatt hours. The Commercial segment accounted for 35% or 7,430 gigawatt hours, and the Industrial segment accounted for 26% or 5,523 gigawatt hours. Next page, please. To show the month-on-month comparison for the first half of 2020, we started in January with a sales mix of 33% Residential, 41% Commercial and 26% Industrial. Our sales increased in February, declined in March because half the month already was in ECQ, April was on full ECQ leading up to ECQ and MECQ until the end of May. Until June, wherein we recorded our highest energy sales for the year at 3,953 gigawatt hours. Of this, 47% was Residential-driven, followed by Commercial at 28% and Industrial at 25%. Next page, please. If you look at the growth drivers for each of the segments, Residential consumption rose in April, peaked in May given the heat index and the temperatures for the month, and gradually normalized in June. The start of the rainy season also dampened sales on certain days for the month of June. For the Commercial segment, more businesses were allowed to operate with less restrictions on mobility. BPO and finance activities resumed on-site operations up to 50% capacity. Personal care establishments and dine-in services in food and retail were allowed to operate at 50% capacity. Educational institutions are expected to decline as it shifts to online mediums and platforms. And traditionally, our top-performing industries over the past few years has showed the steepest decline in the first half. These are retail trade, retail real estate and hotels and restaurants. For the Industrial segment, manufacturing continues to ramp up. Our export-oriented companies, like semicon and electrical machinery, were allowed to operate between 50% up to full operational capacity. Consumer goods-driven industries continued to thrive post-ECQ. Manufacturing operations were still hampered by a lack of public transportation options available to employees. And some customers that thrived during ECQ are those that were classified as essential services, such as Manila Water, Maynilad, Procter & Gamble, Air Liquide and Nestle. For Clark Electric Development Corporation, even though we saw a 15% decline in terms of energy sales, we've seen a ramp-up already given that predominantly customers in Clark Electric are industrial and commercial. Next page, please. In terms of consolidated customer count for the first half of the year, we are up 3% at 6.936 million compared to 6.742 million the previous year. Of this, 92% are Residential and 8% is a combination of Commercial and Industrial customers. Next page. Just to show you the activity over the past few months with regards to energization of project-covered applications, which are focused normally or mostly on business customers and establishments and ordinary service applications, which are connections of meters for mostly residential accounts. So if you follow the graph, we saw that our energization peaked in the month of February, declined again in March, hit a low in April, but has been slowly ramping up for the past 2 months. If you look at our project-covered applications in June compared to May, we are now at 305 versus 213. This is a growth of 43% versus the previous month. And with regards to ordinary service applications, we are now at over 9,000 OSA accounts versus 2,974 ordinary service applications in the month of May, which is a 203% increase. So we've seen that economic activity in businesses, and Residential segments are slowly starting to ramp up. That's all. Thank you very much.

Thank you, Mr. Genuino. The next report comes from the Head of Networks, Mr. Ronnie Aperocho. Go ahead, please.

Thank you, Maite. Good afternoon, everyone. Our consolidated net system input for June 2020 was down by 10%. On a year-to-date basis, it dropped by 8% primarily due to community quarantine. Typhoon Ambo, which hit our franchise in May, also contributed to the drop in our NSI. Next slide, please. For our power sources for the first half of the year, 56% came from our IPPs and old PSAs, 19% from our new PSAs, 14% from other RESes, 10% from WESM and 1% from special contracts. In terms of fuel mix, 40% came from natural gas, 34% from coal, 26% from multi-fuel. And from the multi-fuel, 58 gigawatt hours came from solar and 26 gigawatt hours from liquid fuel. Next slide, please. The highest demand for the first half of 2020 is at 7,614 megawatts, which was registered in March 10 prior to the ECQ. This is 2% lower than the 7,740 megawatts peak demand in 2019, which occurred on June 4. For June this year, with the entire franchise transitioning to GCQ, the demand gradually increased and peaked at 7,080 megawatts in June 23, but this is still 8.5% lower than last year's peak demand and 7% lower than this year's peak demand. We are seeing the same pattern for Luzon grid with 2% reduction in peak demand. The highest demand this year at 11,103 megawatts also occurred prior to the ECQ on March 9. 10,642 megawatt peak demand in June, which occurred in June 23, is 6% lower than last year's peak demand and 4% lower than this year's peak demand. On system loss, next slide, please. Our 12-month moving average system loss for June is 5.66%. This improved by 0.19 percentage points after our meter readings had almost resumed to BAU levels and accounted as sales backlogs in prior months. This is 1.34 percentage points below the current cap of 7%. For our S-Factor performance, next slide, please. All indicators are well within the rewards levels based on the third RP targets, with double-digits improvements on total SAIDI and prearranged SAIDI. Forced and prearranged or total CAIDI also improved by 2%. This reflect a much improved service reliability to our customers during the community quarantine. Next slide, please. The average time to process -- next slide, please. The average time to process applications was affected by the travel and quarantine restrictions. But in terms of connection speed, we improved our turnaround time by 9%. For our call center operations, our performance was heavily impacted by the huge volume of calls related to distribution transformer outages, typhoon Ambo and the bill spikes. But excluding the ECQ and bill-related calls, however, our performance will still remain at the rewards level. Next slide, please. Okay. For the guaranteed service levels, the full RY 2020 GSL performances are also well within the [ setup ] third RP limits, with huge improvements compared to RY 2019 performances. GSL 1 at 897 compared to 6,667 customers in RY 2019; GSL 2 at 0 violation; GSL 3 at 3,014 compared to 5,743 incidents in prior RY 2019; and for GSL 4, 73,445 days of delay compared to 88,841 days of delay in RY 2019. Next slide, please. For CapEx, of course, we have already gained the momentum in our CapEx execution despite numerous challenges. And we have already utilized PHP 4.76 billion or 51% out of our reduced CapEx of PHP 9.34 billion budget for the year. The biggest realization is for the new connections at PHP 2.42 billion. Please note that out of this amount, close to PHP 80 million was utilized for the quick energization of COVID-19 quarantine and treatment facilities all over our franchise. We also spent PHP 1.12 billion for maintenance and asset renewals, PHP 780 million for load growth and some residual utilization for BBB and Meralco electrification projects. Of course, we expect higher utilization for BBB-related projects in the second half of this year, and we are working closely with the different stakeholders, especially with DPWH and the Department of Transportation. Next slide, please. A major project that we finally completed and energized last June 28 was the San Jose-Camarin 115 kV line, which took us around 3 years to complete due to numerous right-of-way issues. This new line will provide N-1 contingency and will strengthen the 115 kV backbone serving the north area or Sector 1 of our franchise. This will also unload our Paco, Duhat and Balintawak Delivery Points, and this will also help improve voltage regulation and will reduce technical losses. Okay. Next slide, please. And despite the community quarantine, we were able to install and commission an additional 83 MVA powered transformer inside our NAIA 3 Substation. This project will address the critical loading of our existing transformer Bank No. 1 inside NAIA 3 Substation and will improve the reliability of service to Newport City, NAIA Terminal 3 and the other customers in the area. Okay. Next slide. For new connections, maintenance and asset renewals combined, we spent around PHP 3.5 billion. And this is the snapshot of our June 2020 year-to-date accomplishment in terms of the number of pole that we replaced, in terms of the number of spans of conductors that we shielded and in terms of the number of meters that we replaced and the number of substation equipment that we also replaced. We also installed around 93,000 meters to energize new customers, completed or energized 2,363 customer allocation projects and replaced close to 1,500 overloaded distribution transformers. And again, despite the community quarantine, next slide, please, we remain committed to bring light to our unserved customers through our Meralco electrification program. After completing the Priority 1 grouping early this year, which covers 95 sites and close to 10,000 households, we are now working for the completion of Priority 2 and 3 with close to PHP 1 billion budget. So this covers 565 sites and 30,740 households, with December 2020 and June 2021 completion targets, respectively. As of June 2020, we have already energized 168 sites. With the completion of these projects, we are confident that we can attain 100% household electrification in our franchise as envisioned by the Department of Energy and the Duterte administration. And finally, next slide, please, we also remain committed to support the government in its numerous Build Build Build projects through the timely relocation of our affected facilities. Priority projects are the BGC-Ortigas link, CALAeX, Skyway Stage 3, MRT 7, PNR North 1 and 2 and LRT 1 extension. Added to the priority list are the Mega Manila Subway, NLEX-SLEX Connector Road and Unified Common Station. It is indeed a challenge given our limited resources and with our people having to maintain social distancing and strict health protocols to avoid being infected by the COVID-19, but we remain hopeful that we can meet and even exceed the expectations of the stakeholders of this numerous BBB and PPP projects. That would be all. Thank you.

Thank you, Mr. Aperocho. Maybe now call on Attorney Ronald Valles for his regulatory report.

Good afternoon, everyone. For the first half of 2020, the average retail rate of Meralco registered a reduction of PHP 1.06 per kilowatt hour as compared with that of the same period from 2019. The reduction in generation charge was the result of the implementation of new power supply agreement starting last January 2020 supply month and the lower resin prices and the implication of Meralco's force majeure claims during the community quarantine period. From March until May supply month, which are the basis of April to June rates, customers enjoyed savings of around PHP 1.6 billion due to FM claims. A slight reduction was also observed for the average transmission charge due to the lower power delivery service charges, coupled with the lower average billing demand. Note that in April 2020 supply, NGCP implemented a modified billing scheme or PDS or the power delivery service, and system operator charges were pegged at March 2020 rates. Said rates were applied to the billing determinants for the current period, which reflects significant reduction in demand due to the lockdown, instead of the usual average determinants for the latest 12 months. The decrease in average system loss charge is the result of lower generation and transmission charges for the first half of 2020. For our distribution rate, our distribution rate has not changed since 2015. However, the 2020 year-to-date average distribution charge as of June 2020 is PHP 1.58 per kilowatt hour. This is PHP 0.2038 higher than the interim average rate of PHP 1.3810 per kilowatt hour. The high average rate was the result of 2 factors. First, there was a change in power consumption behavior during the months of April, May and June brought about by the ECQ. Residential consumption went up and nonresidential operated at lower load factors. This led to higher residential rates and high rates for nonresidential customers due to the demand charges despite lower consumption. Secondly, the May and June billings corrected for the estimates done in the March and April bills further contributing to the abnormal high rates. Average FIT-All rate registered a significant decrease with the approval of lower FIT-All rate for implementation this year. The FIT-All rate of PHP 0.2563 per kilowatt hour was implemented in January until March of 2019, while PHP 0.2226 FIT-All rate was implemented from April 2019 to January 2020. The ERC approved a lower FIT-All rate of PHP 0.05 -- almost PHP 0.05 per kilowatt hour starting February 2020. Collection of FIT-All was also suspended for the months of April and May 2020 following ERC advisories in consideration of the COVID-19 situation. So the FIT-All collection resumed in June 2020 billing. So that's all for the regulatory update.

Thank you. Thank you, Attorney Valles. May we now call on Mr. Rogelio Singson for his report on Meralco PowerGen.

Thank you so much, and good afternoon to everyone. Can I have the slides, please? Next slide. I'd like to just mention what's happening with this SBPL or San Buenaventura, which is the first operational supercritical coal plant in the Philippines, which was commissioned last September 26. On our first year, we still had a very good availability on the average of about 90%. And for the first 6 months, we were able to contribute 1,438 gigawatt hour during this period, first 6 months. And although we still encounter some slugging in the plant, we're still addressing that. Unfortunately, because of the restricted travel from foreign experts, we're not able to do design work in terms of what interventions can be undertaken to address the slugging in the power plant. Next slide, please. As far as our next ultra-supercritical project, which is the Atimonan project in Quezon, we're still awaiting the final terms of reference that -- and we will participate in Meralco's CSP process. We expect CSP to still proceed within the year. As far as the site is concerned, we continue to prepare the full site development under -- even under strict COVID restrictions in terms of construction workers. We were -- the operations was temporarily suspended last March, mid-March, and we expect full resumption of work sometime August of this year. We understand that the LGU has been very cautious in allowing workers from outside Atimonan just to avoid any contamination in the community. Next slide, please. Let me just mention what we are doing in terms of additional renewable energy, which is part of Meralco's energy transition plan. We have a long pipeline of projects because of our commitment to develop 1,000 megawatts of RE projects within the next 5 to 7 years. And this includes all utility scale solar projects, both land based and floating, wind and hydro, specifically the pump storage. This will supply the Luzon grid with very competitive electricity rate for consumers. All activities continue. Unfortunately, because of the restrictions from LGUs, we have -- we had some difficulties, specifically in one of our first projects. So let me show you the next slide. This will show you actually the ongoing development. Can I have the next slide, please? This is our first utility-scale 50-megawatt AC solar project in San Miguel, Bulacan. This is 40% by MGreen, our subsidiary for renewable energy, together with PowerSource and Sunseap. The site is in San Miguel, Bulacan with 72 hectares. And unfortunately, work there has been suspended. Otherwise, we would have been commissioning this project sometime third -- end of third quarter for -- of 2020. However, construction has commenced with a lot of support from the local government. And however, it's still restricted in terms of bringing workers outside of Bulacan. So site works have continued, and we still are hopeful that we can commission the project end of 2020. Right now, overall progress is at 53%. Would like -- I'd like to show you actual sites in the project. This is the total area of 72 hectares. As you can see, roads have been constructed around and the road network inside the site itself. Next slide, please. Next slide, can I have the next slide? Yes. What's important during the early construction is the completion of the drainage works, so that when rainy season comes, it doesn't affect the actual construction and lay down of the panels. Next slide. So these are the inverter stations all over the 72-hectare area. Next slide. These are the actual PV panels in actual construction. So these -- most of the panels are already on site, so it's a matter of laying down on these areas. Next slide. So another important work is the cable trenching. The excavation continues as we continue the development in the area. Next slide. Another major component is the main control building. As you can see, this massive foundation works that's ongoing as well as the main transformer and capacitor bank foundation excavations. As you can see, these are very massive construction work. We also are doing the main transmission foundation that will support the steel poles that will connect this solar project to the Meralco lines -- Meralco substation. That's all that I have. Thank you very much.

Thank you, Mr. Singson. May we now ask our Chairman, Mr. Manuel Pangilinan, for his guidance for the rest of 2020.

I think I'd just like to refer you to the last -- the last sentence of our press statement, which provides guidance of PHP 21 billion for the full year 2020 based on our latest estimates of how we will do for the full year. Obviously, the management will try to do better than this PHP 21 billion. But as of now, that's our best estimates for the full year. Thank you.

Thank you. So that was the results -- those were the results of our financial and operating performance for the first half of 2020. We are now ready for your questions. [Operator Instructions] Thank you. Okay. The first question comes from German de la Paz of JPMorgan. I'm sorry, of Abacus Securities. Any nonrecurring loss booked in quarter 2?

German, Betty here. None in the second quarter. The loss was recognized in the first quarter. That's the impairment of our investment in [indiscernible].

Thank you. Next question is from JPMorgan's Jelline Gaza. Housekeeping cues. How much provisions were recognized for 2Q 2020? How much cash and investments as of end June? That's the first question. Her second question is updates on the bill shock issue and implications to collection.

Jelline, in terms of provisions, what we had provided in the second question was a provision for bad debt of PHP 1.4 billion, on top of the regular distribution adjustments. With respect to cash balance, cash and cash equivalent is PHP 26 billion, PHP 27 billion, which is flat versus last year. But including our long-term investments, that's about PHP 86 billion. Bill shock with Ron or Viboy? Viboy?

Yes. So regarding the bill shock issue, I think we have been doing a lot of efforts to communicate clearly customers why their May or their June bills were as such. And as previously explained, this is mostly due to estimated bills that happened during the March, April and/or May period. We've started -- and we've sent out very clear explanation letters to our customers for those that got their first bills after ECQ in May. And for the ones that got their first bill in June, we actually sent out very clear explanations as well in their June bill, which shows already reflected the payments made from the previously estimated bills. We also in both letters advised them that these payments could be refunded and put in an installment plan of up to 4 to 6 months depending on their consumption of February 2020 where it was below 200-kilowatt hours, which would then entitle them to a 6-month installment plan, or above 200-kilowatt hours, which would allow them a 4-month installment plan. So we have been communicating and we will continue to communicate more to our customers.

Thank you, Ms. Siy-Yap and Mr. Genuino. There's another question from German de la Paz of Abacus Securities. Which components of OpEx went up in Q2?

German, the increase is for bad debts, that's PHP 1.4 billion. Generally, that one in terms of contracted services were actually lower because much of the billings -- sorry, meter reading and delivery were suspended, including disconnection. In terms of salaries and wages, no overtime during the second quarter. But for basic salary, it's just the increase as it relates to the annual inflation adjustment, but we also provided for higher pension adjustment given that evaluation -- actual evaluation has been done and interest rates are lower.

Thank you, Ms. Siy-Yap. The next question comes from Karisa Magpayo. Can you provide an update on the rate-setting process?

It's Atty. Valles. The rate-setting process is still ongoing at ERC. We have already concluded the fourth RP. And at the moment, the ERC is working on the rules to govern the fifth RP for Group A entrants, including Meralco. So we're hoping that with the complete set of commissioners that the ERC will now be able to tackle the issue of resets.

Thank you, Atty. Valles. Next question is from George Ching. With regards to the 19% rise in distribution revenues due to higher mix of volume coming from residential customers, will this be adjusted downward by the ERC? Has MER made provision for this?

The -- yes, the mix resulted in higher average distribution rate. Now this will be -- even in the past, if that happens, that would -- it would be adjusted. It will be accounted for in the rate verification process.

Thank you, Ms. Siy-Yap. Next question is from Gio Dela-Rosa. Can you reconcile the 2Q reported income of PHP 4.225 billion versus 2Q core income of PHP 4.864 billion? Please break down the difference.

2Q-on-2Q. Gio, Betty. If it's 2Q-on-2Q, well, I have year-on-year, but I can discuss the year-on-year and then I can give the Q -- quarter-on-quarter separately. But largely, the difference on a quarter basis would be the impact of the decline in volume between quarter and the higher tariff as a result of the sales mix. The other component would be with respect to contribution of San Buenaventura, because last year, they were negative. In this year, there was positive contribution by San Buenaventura that is -- in the whole year this year. And then for the other component, that means the difference is income tax. Because of the lower income before income tax, then the overall provision is also lower. That's on a year-on-year basis. By you separate quarter-on-quarter, I don't have it right now.

Thank you, Ms. BSY. The next question is from Jelline Gaza of JPMorgan. How much was the regular distribution adjustment provision booked in the quarter?

Jelline, I'll give you the full first half [indiscernible]. The total distribution generation and other over-recoveries is PHP 9 billion. I'll give the quarter separately. I can e-mail you.

Thank you, Ms. Siy-Yap. Jelline has another question. How much was SBPL net income distribution in first half of 2020?

The share of MGen in SBPL is PHP 540 million. Compared with last year, that's negative PHP 120 million.

Thank you, Ms. Siy-Yap. Are there other questions? Okay. Another question from German De La Paz. May I ask RES income contribution for first half 2020 versus last year?

For RES, the total contribution of RES is about [ 400 ] for this year, but last year it was higher. Sorry. For RES, it's about [ 500 ] this year. It was half of last year. Jelline, your question, the income for the second quarter is PHP 6 billion.

Thank you, Ms. Siy-Yap. We have another question from Gio Dela-Rosa. He asks, what's the PHP 639 million difference between the core income and reported income in 2Q? PHP, 4.225 billion and PHP 4.864 billion.

I didn't get the question. Wait, let me read your question, Gio.