Manila Electric Company (MER) Earnings Call Transcript & Summary

I'm Claire Feliciano, and I will be moderating today's briefing here at the Pasig room of the Lopez building inside the Meralco Operating Center. We have guests, analysts and investors present here at the Pasig room, and we have also set up a conference call facility via MS Teams for our online participants. Before we proceed any further, please be advised that this conference call is recorded. Kindly follow the ground rules, which were sent to you beforehand. We will be presenting the financial and operating results of Meralco for the quarter ended March 31, 2024. A copy of the presentation may be downloaded from our website at www.meralco.com.ph under the Investor Relations section. We have members of Meralco's management team in this briefing and our corporate officers who will be presenting; Mr. Ferdinand Geluz, SVP and Chief Revenue Officer; Ms. Betty Siy-Yap, SVP and Chief Finance Officer; Mr. Froilan Savet, FVP and Head of Networks; Atty. Jose Ronald Valles, FVP and Head of Regulatory Affairs and DU Regulatory Management; and Mr. Jaime Azurin, President and CEO of Meralco PowerGen Corporation. We will begin the presentation with the financial highlights followed by the operating results of Meralco's DU business and then highlights from Meralco PowerGen Corporation. After all the presentations are done, we will allot time for the Q&A. At this point, I would now like to introduce our Chief Finance Officer, Ms. Betty Siy-Yap, for the financial results.

Thank you, Claire. Good afternoon, ladies and gentlemen. I will be presenting the results for the first quarter ended March 31, 2024. Up on the screen is our financial summary. So our consolidated core net income for the quarter ended March 31, 2024, rose by 11% to PHP 10.1 billion from PHP 9 billion in 2023 on the back of higher energy sales volume of the distribution business and continuing contributions from power generation, retail electricity and the non-power businesses. Consolidated reported net income increased by 19% to PHP 9.6 billion from PHP 8.1 billion, while core EBITDA increased by 15% from PHP 15.5 billion last year to PHP 17.8 billion this quarter. The gap between CCNI and consolidated reported net income represents accounting amortization of day 1 gain adjustment, net of foreign exchange gains and other nonrecurring gain, which includes gain on sale of assets at the global power level. Consolidated revenues amounted to PHP 104.5 billion, slightly lower than PHP 105.6 billion in 2023, mainly due to lower pass-through charges and energy fees. Costs and expenses decreased by 5%, the bulk of which is still purchased power costs, which accounted for 82% of the total. Capital expenditures totaled PHP 9.4 billion, largely for distribution network projects, development of renewable energy projects and acquisition and construction of telecommunications tower. Our cash and cash equivalents amounted to PHP 94.5 billion, while consolidated debt was at PHP 100 billion. The next slide shows our consolidated core net income. Of the total CCNI, the distribution business accounted for 58% or PHP 5.8 billion, while power generation brought in PHP 2.7 billion or 27%. The other nonregulated businesses accounted for PHP 1.5 billion or 15%. Contribution to total CCNI for unregulated business was 42% compared with a higher 51% a year ago. The power generation business through MGen delivered a total of 3,229 gigawatt hours of energy in the first quarter. MGen's total capacity in the Philippines and Singapore was at 2,368 megawatt net as of March 31, with the addition of a total of 195.5 megawatt AC of renewable energy since April of 2023. Power generation contribution declined as a result of scheduled maintenance outages of a number of plants, which include Cebu Energy, Panay Energy, Sarangani, San Buenaventura and Unit 10 of PacificLight as well as a lower coal price in Singapore in the first quarter. Meralco continued to deliver competitively priced power to contestable customers through its local RES units, MPower and Cogent, as well its -- as its affiliate res units, which are MGen's Global Energy Supply Corporation and 2 other companies, which are Vantage and Meridian X. As of the end of March, the total energy delivered by RES business stood at 1,568 gigawatt hours. Our regulated business or distribution utility share in CCNI increased to 58% from 49% a year ago, as volumes sold grew by 9% because of the digit -- double-digit growth in residential and commercial customers and 3% increase in industrial sales. Consolidated revenues amounted to PHP 104.5 billion, as mentioned, slightly lower than last year because of the lower pass-through charges. This came as a result of the decline in the spot market price in Luzon, the lower Malampaya gas prices as well as lower international coal prices and the lower plant availability of the plants, which went on maintenance. Electric revenues totaled PHP 101.4 billion or 97% of the total. Generation, transmission and other pass-through charges were flat at PHP 80 billion. The impact of the 9% DU volume growth was offset by lower generation charges because of the lower prices mentioned earlier. Average WESM price in Luzon went down to PHP 4.65 per kilowatt hour from an average of PHP 6.57 per kilowatt hour following the improved supply situation in the grid during the quarter, even as peak demand during the first quarter was higher by 112 megawatt compared with a year ago because of the relatively warmer temperature. The average Malampaya natural gas price decreased to USD 9.94 per gigajoule as of the end of March 2024 versus USD 10.08 a year ago because of the lower oil indices. Meanwhile, the Newcastle Coal Index fell to an average of $125.6 per metric ton versus $247.81 for the comparative period. With our distribution tariff flat at PHP 1.35 per kilowatt hour, distribution revenue increased by 9% or -- sorry, PHP 16.6 billion from PHP 15.3 billion as a growth in volume. Energy fees, which totaled PHP 5.2 billion decreased by 25% due to lower plant availability. Our nonpower revenues was PHP 3.2 billion. Total cost and expenses in the first quarter totaled PHP 93.4 billion, purchased power accounted for 82%, OpEx represented 10%, depreciation 5% and the combined coal and fuel as well as power plant O&M accounted for the balance of 3%. Purchased power decreased by 3% to PHP 76.5 billion, consistent with the lower pass-through revenues. Operating expense increased by 3%, with the intensified maintenance of line distribution facilities in preparation for the summer peak and the rainy season after. The higher customer-related costs due to the increase in customer count, resumption of the annual update of bill deposits, letter deliveries expenses also added to the O&M. In addition, we took in the SPNEC G&A expenses as we consolidate the numbers with the controlling stake that we took in, in December of 2023. Depreciation and amortization increased by 12% with the completed capital expenditure as well as the additional towers that were acquired by MIDC. Combined coal and fuel power plant O&M totaled PHP 3.3 billion, lower because of the scheduled outage. Other expenses largely pertain to reversals of provisions with the settlement of real property taxes, fuel recoveries, reservation costs and accounting adjustment with respect to IFRIC 23 and net of provisions for overrecoveries. With respect to our capital expenditures, we spent a total of PHP 9.4 billion with 65% for DU capital expenditures, which comprised largely of CapEx related to new connections, asset renewals and load growth projects. Power generation CapEx accounted for 14% for the ongoing construction of 3 power plants, which are Phase 2 of the Baras solar plant, the 49-megawatt Greenergy project and the 18.75 megawatt AC Greentech Bongabon project. Our subsidiaries CapEx represent 21% and, again, the bulk of which would be the towers that were transferred from Globe to MIDC, plus the build-to-suit towers that were completed during the period. On the power generation side, the -- our Singapore-based PacificLight recorded CCNI of SGD 55.2 million or an equivalent to PHP 0.3 billion, lower than last year's USD 131 million -- sorry, SGD 131 million or an equivalent PHP 5.4 billion on account of lower volume, which is 1,048 gigawatt hours compared with 1,327. This is mainly due to the outage days, which is 42.9 planned outage days for Unit 10 upgrade. Moving ahead, PacificLight is set to supply 100 megawatt of fast-start ancillary service in Singapore starting April of 2025 after it won the EMA bid for a 25-year contract. SBPL, which is 51% owned by MGen booked a core net income of PHP 465 million, down from the PHP 911 million in 2023, mainly on account of the first-ever maintenance shutdown since it started operations in 2019. So they came back on stream in early part of January. After they have -- they came back, their average plant availability is at 99% for the months -- average for the months of February and March. The full capacity is contracted with Meralco. GBP posted CCNI of PHP 273 million, lower -- slightly lower than last year's PHP 295 million, again, because of the plant availability. Now all of these outages are scheduled in preparation for the summer requirements. There -- the lower revenue was partially offset by higher gross margins that PDC realized from WESM and revenue from the reserves market. GBP delivered a total of 1,177 gigawatt hours of energy from its portfolio of coal and oil plants with a net capacity of 831 megawatt, of which, 663 are under contracted PSAs. MGen's renewable arm, MGreen, reported a PHP 46 million CCNI from its 5 operating solar plants with a total of 163 gigawatt hours of energy delivered from the 55-megawatt solar plant of BulacanSol, 68-megawatt solar plant of Nuevo Solar, 67.5-megawatt Phase 1 of Baras, 50-megawatt solar plant of SP Calatagan and another 78-megawatt of SP Tarlac. Our consolidated interest-bearing debt stood at PHP 100.8 billion, including PHP 55.5 billion debt of our subsidiaries. Our debt is spread through 2037. Net debt as of the end of the first quarter is at PHP 1.2 billion with net debt to EBITDA of 0.02x. All of our debt are consolidated debt, are denominated in Philippine peso. Our cash and cash equivalents amounted to PHP 94.5 billion, while our short-term investments totaled PHP 5.1 billion. Our long-term cash investments is about PHP 20 billion. We ended the first quarter with core earnings per share of PHP 8.946 a share, up 11% compared with last year versus reported earnings per share of PHP 8.514, which is 19% higher compared with last year. That ends my report.

Thank you, Ma'am Betty. We will now move on to the operating results presentation to be led by our SVP and Chief Revenue Officer, Mr. Ferdie Geluz, to be followed by heads of the different business segments.

Good afternoon. On to the quarter 1 2024 distribution operational highlights. So as a summary, in terms of energy sales, our energy sales at 12,370 gigawatt hours is actually a 9% growth versus the same period last year. And our customer count due to healthy energization grew more than 200,000 customers. So we're now at 7.88 million customers. Our net system input is at 12,719 gigawatt hours, a 9.1% increase versus quarter 1 '23. And in terms of peak demand at 7.71 gigawatt, it's actually flattish compared to last year. But of course, in April, we're seeing as high as 9.3 gigawatt, already surpassing the 2024 high -- 2023 high last year. On service performance, system loss 12-month moving average is at 5.9%, a slight increase compared to 5.62% of March 2023, owing to the still large share of residential customers, which is actually a high technical loss now in terms of the -- to serve because of longer lines. Our total system average interruption frequency index is at 0.208x. So this is actually 13% better or shorter times versus 2024 in quarter 1 '23. In terms of system average interruption duration index at 22.4 minutes, this is actually 4% better than 23.34 minutes in 2023. While in the -- our average time to connect, so this is from the time the customer is ready for connection, it took us 1.7 days. So slightly longer. But all of these service performance are well within the regulatory metrics acceptable limits. Electricity rate, the average retail rate, meanwhile, stood at PHP 10.78 per kilowatt hour, so slightly higher compared to the PHP 10.41 per kilowatt hour in quarter 1 2023 on the average. Take note that distribution rates remain the same. All other components aptly contributed to the increase. Now on to the energy sales details. Well, as mentioned, the first 3 months of 2024 registered 12,307 gigawatt hours, 9%, or this is actually more than 1,000 gigawatt hours higher compared to same period last year, driven by growth in all segments, but mainly a double-digit growths of commercial and residential segments, while we saw modest growth of industrial at 3%. So on the details, on -- commercial segment surpass prepandemic quarter 1 volumes and was propelled by increasing business activities and expansion initiatives on certain subsegments. So real estate grew double digit at 11% as office market expanded on central business districts with new entrants and notably -- more notably contact center services. Retail trade also grew 11%, and restaurant grew 14%, as small operators purpose spaces into modern multifaceted hubs. And of course, the energization of new malls, like SM Sto. Tomas, SM MOA, North and Gateway Mall to whose consumption ramp up this period. Hotels have the highest growth at 14%, which sustained the arrival of tourists exceeding Department of Tourism's projection. And of course, new hotels are also being energized. An example of this is the one in Solaire Quezon City, which is starting to ramp up its consumption. On the residential segment, residential segment grew 12% as usage of cooling appliances increase due to the effect of tail end of El Niño. So while there were only 0.5 degree Centrigrade rise in average temperature, we experienced drier first quarter compared to last year, which actually drove the real feel temperature higher. For the Industrial segment, the industrial segment has some sort of showed sign of bounce back as semicons scaled up -- semiconductors and electronic scaled up operations as well as food and beverage, which increased production to meet demand. Our semiconductor subsegment increased by 5% compared to quarter 1 '23, as its major -- the major company, Samsung, the largest one, increased production of multilayer ceramic capacitor to support the growing automotive industry. And Toshiba, one of the producers of -- expanded with new products that demand higher consumption for testing. So they actually shifted their product to support the data center industry. So for food and beverage, it also increased 6% as nonalcoholic beverage manufacturers ramp up for the peak summer months as well -- and plastics as well, 6%, as the demand for food packaging and construction plastics grew. As an additional information, Meralco volume actually grew 9%, while Clark Electric Distribution grew 6%. But of course, in totality, so it's still up 9% as Clark Distribution use smaller volume in terms of last year. So I now turn you over to Froi for the network's report.

Thank you. Good afternoon. We are pleased to report that in the first quarter, we commissioned 4 major CapEx projects. On January 14, we energized a new 100 MVA power transformer which replaced the 40-year old unit of Taguig. This project will ensure service reliability for the customers in Taguig City, Makati, Pasig and the municipalities of Pateros, Cainta and Taytay, Rizal. On February 29, we also energized a new 83 MVA power transformer at Abubot Substation in Cavite. This project will address load growth in the areas of Dasmarinas, Imus, General Trias. The third project is the operating of Pamplona-San Pedro 1115 kV line, which was completed on March 21. This 8-kilometer length line along South Super highway was uprated using a 1-795 HTLS, which will allow the accommodation of new embedded generators, particularly floating solar along the shoreline of Binan and San Pedro. Likewise, this will also increase the operational flexibility and load shifting of this transmission system. And lastly, on March 27, we commissioned a new 115 kV GIS under the reliability improvement of Malinta Substation. This project involves the conversion of the substation's old switchyard into a modern indoor-type double bus configuration GIS. This will enhance both the reliability and flexibility of the substation and the 115 kV sub-transmission system. We are also pleased to share that an additional ramp of the NAIAX along Tramo Boulevard in Pasay City opened on March 1. Meralco completed the relocation of 51 distribution poles affected by the project. With this, the additional ramp will enhance the accessibility of NAIA Terminals 1 and 2 for vehicles coming from ESA Southbound. I'm now turning you over to Atty. Valles for the regulatory updates.

Good afternoon. So for the regulatory update, let's start with the measures to be taken to address the summer months this year. So first, we -- the Limay -- the CSP for the 400-megawatt and following the conclusion of that CSP, the Meralco Bids and Awards Committee found the bid submitted by LImay Power to be the best bid with a total headline rate of PHP 6.27 per kilowatt hour. So you will see on the table in your screen the comparison of the rate between -- or among the different power suppliers, with the LPI rate turning out to be the cheapest. It is much lower than the first cash rate and other EPSAs that we have executed the previous year, including the -- our WESM forecast for the same period. So we executed that PSA last March 20 and filed a joint application with the ERC last April 19. And last April 26, we filed the urgent motion to resolve the provisional authority due to the recent red and yellow alerts and high prices in the WESM. We also executed a PSA -- or EPSA with operations effective date beginning March 26, 2024. This is intended to supply power to Meralco during the period from March 26, 2024,until such time that the ERC shall have approved the PSA with SPPC for the supply of the same 1,200 megawatt, which SPPC won in a recently concluded CSV. So this 1,200 megawatt PSA with SPPC replaces the 1,180 megawatt EPSAs with Therma Luzon Inc. and SPPC that were executed last April and August 2023, respectively. So these EPSAs are effective only until March 25, 2024. So again, on your screen, the rate comparison with the different power suppliers, including the WESM. So the WESM rate turned out to be highest -- or one of the highest, including the current bills of Meralco, FGPC or First Gas Power Corporation using LNG. So we filed a joint application with ERC for the approval of the EPSA last April 24 and also the urgent motion to resolve the prayer for provisional authority last April 26. This EPSA has already been implemented because it is allowed by the rules to be implemented pending ERC approval. The other one is the contract for the sale of electric energy with PSALM for the contract capacity of up to 100 megawatts net peaking beginning May 26, 2024. So this is on top of the 1,200-megawatt EPSA. And the rate is shown on the screen. The average plant rate is plant -- that plant gate rate is PHP 6.13. And the -- with the FBHC that will be PHP 6.16. The CSEE between Meralco and PSALM are expected to be signed within the week and shall be filed jointly before the ERC. Finally, with respect to the reported 260-megawatt peaking requirement that was approved by the Department of Energy in the PSPP, on March 8, 2024, the PSA officially declared a failure of bidding for the second round of the CSP and the commenced direct negotiation with the power supplier. So on March 18, the San Roque Hydropower sent its offer to Meralco for the 260 megawatt. However, on April 13, Meralco, received a letter from the same company withdrawing their offer, stating that it will not be able to generate a significant portion of the 260-megawatt peaking capacity for the required period due to El Niño. Since we did not receive any offer from other power suppliers, so we concluded that process already. So that's it for the regulatory update. Thank you very much. Turning you now to Mr. Jimmy Azurin.

For the power generation group, we were able to deliver 3,229 gigawatt hours of energy during the first 3 months of 2024. This is lower against the previous year due to the scheduled preventive maintenance of our plants. Of the 2,575 gross capacity, around 1,200 megawatt completed its preventive maintenance or major overhaul during the first quarter. . GBP's energy delivered decreased by 20% compared to last year, reaching 1,177 gigawatt hours. This is a result of the planned preventive maintenance. Meanwhile, for our San Buenaventura plant, both planned and unplanned outages tempered delivered energy to 561 gigawatt hours and an average plant availability of 71%. Our Singapore-based subsidiary, PacificLight, also saw a decrease of its energy delivered to 1,327 gigawatt hours on account of advanced turbine efficiency, package upgrade, which was completed last February.

We'd like to acknowledge the presence of our Chairman and CEO, Mr. Manuel Pangilinan; and our EVP and COO, Mr. Ronnie Aperocho.

Lastly, MGreen, the renewable energy unit of MGen Group, delivered a total of 164 gigawatt hours of energy, supported by the operations of Currimao and Baras solar power plants as well as the acquisition of SP New Energy Corp. As we move forward with our low-carbon energy transition journey, we've seen notable progress in the first quarter of the year. In January, MGreen increased its stake in SPNEC from 50.53% to 53.66% through the acquisition of an additional PHP 2.17 billion of SPNEC shares. It was also announced by the MSCI Philippines that SPNEC now is included in the small cap index. In the same month, we held an EPC contract signing with SUMEC Complete Equipment and Engineering Co. Ltd. for our solar projects in Bongabon and Cordon. In February, the said projects saw considerable development. As we broke ground, Greentech Solar Energy, a wholly owned subsidiary of MGreen, commenced construction of its 18.71 -- 18.75-megawatt AC solar power plant in Bongabon, Nueva Ecija. Similarly, Greenergy for Global, Inc., another subsidiary of MGreen, marked the ceremonial start of its 49-megawatt AC solar power plant in Cordon, Isabela. Moreover, in March, we entered into an investment agreement with Aboitiz Power in Chromite Gas Holdings, where CGHI will be investing in 2 of San Miguel gas-fired power plants, namely the 1,278 Ilijan power plant and a new 1,320 combined cycle power plant facility expected to commence operations by the end of 2024. Once operational, this will be the country's first and one of the most expansive integrated liquefied natural gas facility in Batangas. Looking forward, we anticipate further progress in our efforts to low-carbon transition as we continue to dedicate ourselves to providing cleaner and more sustainable energy to the market. Thank you.

Thank you, Sir Jimmy. The last presentation will be the sustainability report of Mr. Raymond Ravelo, Chief Sustainability Officer.

Thank you, Claire. Good afternoon, Chairman MVP. Good afternoon, everyone. We're very pleased to share some brief updates on the sustainability front. First, international ESG rate, or CDP, formerly known as the Carbon Disclosure Project, maintained its assessment of Meralco's performance at the grade of C with regard to our impact on both climate change and on water security. This score of C is in line with the average score among companies globally. On climate change, we were recognized for our strong performance on greenhouse gas emissions reporting and on our management of climate risk. On water security, our remarkable performance on water conservation and on our governance of water-related risks was likewise highlighted in CDP's latest report. Next, our 2022 combined annual and sustainability report entitled Sikat was recognized by the Asia Sustainability Reporting Awards, or ASRA, with a gold award in the best workplace reporting category, best in companies such as Singtel of Singapore, which came in silver and Innolux of Taiwan, which came in with the bronze. Sikat stood out as the lone gold winner from the Philippines among participants from 15 countries across the region. Finally, Meralco was also recognized in May -- I'm sorry, in April, earlier this month at the 11th Asia-Pacific Stevie Awards. In particular, we were awarded 5 Stevies, 3 golds, 1 silver and 1 bronze. Of these 5 Stevies, 3 are sustainability related. We received gold Stevies for first our MSCube, or Meralco Supplier Sustainability Scorecard, in the building sustainable supply chains category. This is an effort spearheaded by the supply chain management team of Meralco, where we embed sustainability in our vendor accreditation process, providing us a view of the ESG performance of our suppliers, vis-a-vis the United Nations Sustainable Development Goals and versus our own Meralco sustainability agenda and standards. MSCube was the actual lone -- was a lone winner in this category. We likewise won gold for our Giga Summit on Sustainable Energy, Energy Efficiency and the Future Grid and also for our Meralco Facebook page in the thought leadership campaign of the year and most innovative Facebook page categories, respectively. Lastly, we won -- we were also recognized with a silver Stevie for our Race to Zero Waste Program, our overarching waste management program here in Meralco. That is in the reuse and recycle category and also a bronze Stevie in the Climate Hero of the Year category. Thank you very much.

Thank you, Sir Raymond. [Operator Instructions]

This is Jelline Gaza from JPMorgan. My first question is about the profit guidance that you have for this year. As you recall that last quarter, there were talks about, at least best efforts, maintaining what was made -- I mean, the profit made last year. What drove the increase in the guidance? That's my first question.

That's driving the PHP 40 billion. I think it will come from, well, the 3 major sources of profit contribution to Meralco or the -- and we -- you've seen the growth of the DU. The bill volumes are up, especially given this warm weather. And I think, generally speaking, we've seen that this robust demand across our businesses. So we are actually quite bullish about the economic growth this year, maybe slightly better than we expected. So the DU will continue to perform well. In the first quarter, it is ahead in profit terms by 12%, and we expect that to continue. The April volumes are ahead by 10%, right, compared to March this year. Whilst it may not continue at that rate, I think it might continue through May. And depending on the weather conditions in June, let's see how that happens. So -- but the DU is expected to record higher revenues and EBITDA and profitability for this year. The rest has done very well for the first quarter. It's probably hard to sustain that. Compared to last year, it was slightly more than double the income that we've reported in 2023. So of course, some of it related to trading gains, but it should perform better than it did in 2023. Now the generation units were affected by the scheduled outages, scheduled maintenance periods in the first quarter this year, principally, January and part of February. That's why the volumes are down. Volumes produced in the first quarter is down compared to last year by about 11%. But that's since been normalized starting March. That's why profits were up in March compared to last year. And then we expect the profits for the balance of the year and the 9 months to be similar to the 9 months last year, broadly similar. So we expect some recovery on the generation side in the last 9 months. So -- and then on Chromite, which is the gas plants, that will have probably a modest impact. So it depends on when we can close. The application with the Philippine Competition Commission has not been filed yet. I think it's scheduled to be filed on May 7. So maybe, it will take them 3 months, 6 months, we don't know yet. So -- but in terms of budgeting processes, we have moved the approvals from government towards the fourth quarter this year. So we have some impact, but not large for 2024.

And I think in relation to that, how about dividend payout? What can we reasonably expect knowing that you will also have to pay the Chromite acquisition?

[Foreign Language] the impact of SPNEC will be some time, maybe second quarter of '26 because they -- that -- it will take them that much time to build -- it will be done in stages and phases. [Foreign Language] the entire 3,500 will come online at the same time. We won't do it that way. So it will come in phases. Most likely, maybe 1,500 megawatts by second quarter of '26, where the first phase would be energized. And then thereafter in stages as well until the full 3,500 megawatts is built all the way, maybe '27, '28. The -- what's on the critical path now is not so much the land, the titling and the conversion. But the -- because we have at least 1,400 hectares that have been -- that are now titled and converted. The two issues that are looming ahead of us, number one, is the supply chain. Although we've met with suppliers from China, they -- I think they can supply us with the relevant batteries and solar panels. The second key element is the -- is in transmission line from the solar plant to the grid to NGCP, which is about 13 kilometers. So now we're in the process of acquiring the land. I think the route has been defined together with the NGCP. So we're coordinating with them, and we're coordinating with SPNEC and they have released accordingly that acquisition. What we see because Meralco has been disclosed as a partner, as investor in SPNEC. So -- also the prices have gone. And whilst the kind of land that we need won't be as big along the route of, say, 10 hectares per land owners, but of course, the land owners are saying we buy the entire property, right, at elevated prices. So it would be challenging because that transmission has got to be finished. Otherwise, no power.

And sir, lastly, for me, the dividend payout that we can reasonably expect for the year because last year, it was a little bit lower than the payout. Yes, sir.

What's our dividend yield now? 5.5? You want it at 6%? Well, take a look at it because we're trading at about -- if you use the forward earnings multiple, we are trading about 10x. Is the share price up today? It probably went down as we're reporting the numbers.

We have 3 questions from German de la Paz from Abacus Securities. Any updates on rate you're basing? Second question, any indications on April sales volume, I think? And third question, any more scheduled outages for the rest of the year?

For the first question, so we are still awaiting from the ERC the decision on the motion for a withdrawal that we have filed last year. We are asking the ERC to allow us to withdraw, considering that the first 2 years of the 5RP should be considered as part of the lapse period already, and that Meralco should be allowed to refile its application, considering a new regulatory period of 4 years. So we are still awaiting the order of the ERC on that point. So in the meantime, while that is pending, the ERC has not released any new notice of hearing for the 5RP that is still pending up to now.

I'll take number 2. For the sales volume for April, I think we're looking at around 4,600 gigawatt hours. So the Chairman is right indicating it is more than 10% better than the 4,100 plus we have in March and around 8% better than April last year, which stood at around 4,250. So 4,600 in -- about -- the number that we're looking at given the few billing days [Foreign Language]. Any more scheduled outage? Is it for Jimmy?

Yes. For the scheduled outage, we still have about 5 units for the second half of this year, but only 1 unit per month.

Another question from Gio from Regis Partners. Will Meralco's purchased price for the SMC gas-fired plants be adjusted if the operation of the new gas plant is delayed? How confident is the management that the completion or operation of the new gas facility will not be delayed?

The purchased price is based on the capacity. For now, well, Ilijan is operating. So we're just waiting for the 2 regulatory agencies approval, which are PCC, but we still have to file May 7, and then the ERC approval of the PSA. Now note that the PSA covers -- well, Ilijan has recently won the 1,200 megawatt PSA. And then for Excellent, it's expected to be on stream end of this year -- December of this year. So that is also the basis of the purchased price, Gio.

Next question from Eunice Dolatre from Security Bank. Would like to confirm again your guidance on RE. How much is the total megawatt commitment and the pace of these additions? Also, if you can share any guidance on when we can expect SPNEC to be EBITDA positive.

We are still on track with our commitment of 1,500 megawatts of attributable capacity. We are now at about 200-something megawatts AC, and we're building additional about 60 to 70 megawatts. So we are on track with the 1,500 by 2030. And the next question, EBITDA positive, well, we expect that the EBITDA will be positive on the first year of operation of SPNEC.

Are there any more questions? One more.

I have other few questions, more on the franchise. What's the current update? And when do we expect this to be completed?

So we are still waiting for the Legislative Franchise Committee in the House of Representatives to issue the notice of hearing. Since we have filed this early last -- late last year, we haven't received any advice on the schedule. So we're still waiting for that.

I understand. And then lastly on the Atimonan 1, what's the current plan for the asset? And will this be somewhat attached or related to the LNG investment that you've done lately?

For Atimonan 1, it's -- whether it will be attached to the current, no decision yet. But Atimonan is basically waiting for the next bidding of Meralco, which is up for 2029 delivery.

Any more questions? Okay. Thank you for your questions, everyone. I would now like to call on our Chairman and CEO, Mr. Manuel Pangilinan, for some final words.

Well, I think we've covered quite [ great ] this afternoon, so I really have don't have much to add to what's been said, except to say that it looks like it's not a good year for Meralco for 2024. And we take note of your suggestion of the increasing dividend yield, right? But first, it's your job to increase the share price, isn't it? What's your target price point, JPMorgan? [Foreign Language]. Then we should see your President. He is coming in September, right? Maybe I'll remind him. Okay. Thank you. See you -- when do we announce our first half? July or August? [Foreign Language]. Okay. Thank you.

Thank you, Sir MVP. That concludes our briefing for today. You may listen to an audio recording of today's briefing from our website under the Investor Relations portion. Thank you very much for attending, and we hope to see you again when we release our first half 2024 results. Have a good day, everyone.