Good afternoon, and thank you for joining us today to discuss the Company’s Financial and Operational Highlights for the Full Year of 2023. A copy of today’s presentation is on the website. For those who have not been able to do so, please download the presentation at www.pldt.com under the investor relations section. Kindly note that the broadcast of this event will be available online. The codes for the presentation are on the screen and in the confirmation notice sent to you via email. Today, we have with us our Chairman and CEO, Manuel Pangilinan; Mr. Danny Yu, our Chief Finance Officer and Chief Risk Officer; Attorney Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel; and Mr. Alberto Vea, Founder and CEO of Maya Philippines, as well as other members of the PLDT Group's Management team. At this point, let me turn the floor over to Mr. Yu to begin the presentation.

Thank you, Melissa. Good afternoon, everyone. I'm very pleased to share with you PLDT's financial and operating highlights for the year 2023. Consolidated service revenue for 2023 rose by 1% to PHP 191.4 billion compared to the same period last year. On a gross basis, service revenue grew by 3% year-on-year. Operating expenses were lower by 2% or PHP 1.5 billion to PHP 87.1 billion. The combined increase in service revenues and decline in operating expenses resulted in a 4% rise in EBITDA to PHP 104.3 billion, a new all-time record high with EBITDA margin at 52%. Telco core income, excluding the impact of asset sales in Maya, registered a PHP 1 billion increase to PHP 34.3 billion, which is higher by 3% year-on-year. On a segment basis, revenue growth continued to be broad-based. Individual revenues, accounting for about 43% of the total revenues, grew by 2% to PHP 81.8 billion. The Home and Enterprise segments registered new record highs. Home revenues grew by 1% to PHP 60.4 billion, with fiber-only revenues having added 9% to PHP 53 billion. Enterprise revenues gained by 1% to PHP 47.1 billion. Let me now go through the segments in greater detail. The next slide shows that while the headline revenue growth ranges from 1% to 2%, there are underlying data revenue streams growing more strongly, in line, if not stronger than Philippine GDP growth. In the individual segment, mobile data, accounting for 87% of total revenues, is growing at 8% versus segment growth of 2%, reflecting the decline in legacy SMS and voice. Fiber revenues posted a 9% growth versus 1% segment growth due to the impact of legacy non-fiber revenues. Under the Enterprise segment, corporate data and ICT advanced 6%, albeit segment revenues grew only by 1%. Overall, excluding the decline from legacy revenues, total revenues actually registered a 6% year-on-year increase. The individual segment showed sustained quarterly growth in 2023, signaling early signs of recovery for a business that has faced many challenges over the past years. Against an improving backdrop and early signs of market repair, individual revenues grew by 2% to PHP 81.8 billion. As a result of various initiatives implemented by the business unit, average data usage rose by 19%, while ARPU grew by 17%. Worth noting is that revenues in the fourth quarter of 2023 gained 6%, following a 6% rise in prepaid and a 4% growth in postpaid. Mobile data revenues underpinned the growth with a 6% rise to PHP 71.1 billion. Active data users rose to PHP 39 million as of the end of December 2023, with usage having grown by 19% to 11 gigabytes. Mobile data traffic hit 4,900 petabytes in 2023, higher by 11% compared to last year. Initiatives to accelerate revenue growth in the individual segment include offers that increased usage and velocity, rationalization of packages, launching innovations such as prepaid eSIMs and online retail channels, as well as more efficient and experiential trade operations. While home broadband revenues rose by only 1%, fiber-only revenues, which now account for 88% of total home revenues, improved by 9% or PHP 4.5 billion versus last year. PLDT believes there are unserved and underserved markets in the home broadband space. These include new areas, potential customers at the lower end of the market, as well as niche markets at the higher end. Unique to PLDT is the ability to leverage both fiber and fixed wireless technologies to serve a broader market segment.

Good afternoon. Happy to update you on Maya. Exciting times for Maya as it leads the way towards revolutionizing financial services in the country. We are making significant breakthroughs towards growth as we leverage our strong ecosystem to build the number one digital bank in less than two years. We achieved this on the back of very creative and innovative banking services delivered to our payment customer base, consisting of consumers and enterprises. Some big numbers: As of the end of 2023, we had 3 million depositors at 2.1 times year-on-year growth from 2022. That number is now 3.4 million. We ended the year with a PHP 25 billion deposit balance, 70% higher than our balance by the end of 2022, and that number is now PHP 27 billion. Importantly, we disbursed a total of PHP 22 billion in loans, a massive 6.9 times year-on-year leap from 2022, and that's now PHP 25 billion. On the enterprise front, we solidified our leadership as the payments backbone of the Philippines by empowering more and more businesses to accept various payment methods seamlessly. Our omnichannel offering has established Maya as the number one processor of payment transactions for credit and debit cards, where we hold a 51% to 52% market share. Maya is now successfully bringing banking to the micro, small, and medium enterprises in the Philippines. We provide higher business deposit interest rates than traditional banks, and we offer up to PHP 2 million unsecured credits to businesses that typically do not have access to credit. For 2023, we posted a 4.4 times growth year-on-year on enterprise loan disbursements. We are committed to supporting the financial needs of businesses of all sizes through all-in-one digital banking. So let me start off with our guidance for the consolidated service revenue for 2024. We're guiding service revenue for mid-single-digit growth over 2023 revenues. We foresee continued increases in data broadband revenues, attenuated somewhat by the legacy services that continue to show negativity as they are replaced by the new data and broadband services. EBITDA is being guided similarly, with mid-single-digit growth supported by the top-line growth. However, we need to continue managing our costs as we did a good job last year in 2023, where the cash OpEx line showed very little increase. Our goal is to push EBITDA margin above the 52% margin seen in 2023. Telco core is being guided at north of PHP 35 billion for this year and dividends at a regular dividend of 50%, with a likely additional look back for an extra 10%, so 60% in total for 2024. CapEx has been guided at between PHP 75 billion and PHP 80 billion, most likely below PHP 80 billion for the full year, including carryover CapEx from 2022. However, the bulk of the CapEx for this year will be the fresh CapEx, which is described by Danny. Also, Danny referred to our efforts to increase free cash flow this year because we want to reduce our net debt-to-EBITDA closer to 2x, having reduced it somewhat in 2023 to 2.3. If we manage to sell an interest in our data center, then the intention is to devote most of the proceeds to reduce debt, which should bring us closer to the targeted 2x net debt to EBITDA.

So we're now ready to take your questions. For those who are online, you may take your questions in the Q&A box in the upper right side of the screen. You may also click the raise hand button and wait for me to call your name before you unmute your microphone. You can also send your questions via email to PLDT underscore [email protected]. Please indicate your name and company name, so we can get back to you for any additional information you may need. Allow me now to take questions from the floor first before we go to those who joined us online. There are microphones in the aisles. There were questions sent online by Gab and Pranav. Do you want to ask the questions yourselves? If you want me to read out the questions, please let me know.

First, for the fiber segment. Additions in the segment slowed. Is this due to saturation in the markets you're present in? And which segments do you see it coming from moving forward?

I believe the question was on fiber growth and what we're seeing. I'll start off by zooming out a little bit because if you have a look at the presentation that Danny just took us through, it showed the home segment growing by 1%, which actually looks quite muted. Just want to remind everyone that what actually sits in the Home segment includes three big parts of our business. Number one is our fiber business, which has actually grown 9% year-on-year. The second element inside the home business is fixed wireless. Many of you would know, we have actually seen a correction and a change in fixed wireless subscriber numbers that are declining quite substantially year-on-year. Fortunately, it's not as much as the overall market. So we're actually seeing an improvement in terms of market share there. In fact, when you look at our quarter 3 or quarter 4 numbers, we are starting to see some growth as well come out of fixed wireless. The third element that sits in our home business is our legacy business. Our legacy business, whether it's our copper through ADSL, VDSL, as well as our voice business, has been undergoing significant decline, which is dragging down the overall performance of the home segment. When you exclude some of the legacy business, the declining business, you will see our fiber business continuing to grow at around 9% year-on-year. However, would we like to see more growth in the fiber business? Absolutely. That growth is going to come from two areas. First, we plan on reaccelerating our deployment of our fiber network to more areas in 2024. You would note in 2023, we actually deployed a modest 170,000 ports, far different from what we've done in the past. So in 2024, we'll see a reacceleration in deployment as we cover more areas and make fiber available to more homes in the Philippines. The second area is to maximize the utilization of our existing infrastructure. We are focusing on customer experience to ensure that the lines we provide deliver the best network experience and service our customers as best as we can. With our focus on these areas, we expect continued growth in the home market.

Just a follow-up on that. You mentioned you have a prepaid fiber. How is that trending so far?

We've been in customer trials for prepaid fiber. As we mentioned when it was first launched, we've been very cautious about deploying it to ensure it is revenue accretive. We sit very differently than some of our competitors with a 55% to 65% utilization. Our strategy is to use prepaid fiber to target areas where we have excess capacity, unlike other players in the market with significantly lower utilization levels.

One more question about the mobile segment. Smart's been faring better in terms of getting new subscribers and staying ahead of competitors. Do you see this as a long-term indicator for revenues in this segment? Do you see that picking up? And are you seeing competition broadly in the mobile space?

To respond quickly: We came from the SIM registration bill enacted in the third quarter last year. We saw a decline in our overall subscriber base. However, we have seen a healthier retention of customers, ending with over 58 million subscribers across both prepaid and postpaid. We have a lot of work to do to rebuild this base and are pushing heavily on the postpaid and prepaid businesses. We are also focusing on efforts around the eSIM, which we launched on prepaid initially and is now also available in postpaid. Understanding that there will be corrections, we will need to match that with the growth in devices sold in open channels year-on-year.

Thanks. Gab, did you want to ask your question?

Gabriel Madrid from an unknown company here. First, question is on the PHP 13.9 billion in asset write-offs in the fourth quarter. Could you please provide more color on that?

The asset write-off pertains to our amortized subscriber acquisition costs of churned customers. Since these customers have already left us, there is a need to write down costs associated with their service, including costs of CPEs and installation.

Follow-up on the fourth quarter depreciation. It was slightly lower than the typical run rate. I think it was about PHP 10 billion in the fourth quarter. Is that because of the assets that were written off? Do we expect that normalized run rate moving forward?

Yes, fourth-quarter depreciation being lower is related to the written-off assets, but we expect that to normalize moving forward.

Regarding Maya, I believe it was mentioned in the previous briefing that Maya was in talks with existing shareholders to possibly conduct another fundraising round. Is there any update on that?

After our $80 million funding round in December, we are fully funded at this point. Our focus is on growing the business, building more services, and launching more offerings. That’s where we are at this point.

I have one last question.

Let me add more color to that. Maya presented to the Board this morning about the results for the first two months. We're tracking their performance monthly as their target is to break even towards the fourth quarter this year. For January and February, significant improvement in financial metrics were noted, with segmented EBITDA turning positive compared to last year's loss. While corporate overhead is still negative, it has improved by 50% compared to last year's first two months. Cash burn is also around 50% of last year's levels, with sufficient cash reserves to accommodate it till the third quarter, and we expect breakeven or slightly cash flow positive by fourth quarter this year.

Thank you. My last question is on CapEx. The continued decline in CapEx is encouraging, although the rate of decline is much slower versus other telcos. I believe that's due to the CapEx overrun of 2022. How much of that overrun amount is left to be paid out this year and maybe next year?

This year, we’re projecting our CapEx at 75% to 78%, with about 3/4 or 75% outdated, and the remaining balance will be spread over a time period.

So the rest of the CapEx will be?

It will be finalized in about two more years. CapEx should remain around PHP 60 billion.

There's a question from those who joined us online. Arthur, your hand is raised. You may unmute your mic.

If I can go for three questions, please. Firstly, on broadband. The total fixed broadband momentum seems to be quite soft for the last two quarters. You did mention that fourth quarter was weighed down by seasonal issues. Are you seeing this moving back to positive territory in the first quarter of 2024, and what are your expectations for the year? Secondly, mobile competition: What do you see on the ground? Are you seeing any increased activity or customer traction from the third player following their earlier capital raising? And lastly, on the data center side, do you see this as immediately accretive upon operation at the end of the first half? Or do you need to ramp up contracts first?

On your question about broadband: Yes, we had a limited rollout in 2023, and you can see some of the momentum starting to come off. As Danny has mentioned, we plan in 2024 to accelerate the rollout, so you can expect to see improvement in the first half of the year and growth in the fiber side of the business. Regarding mobile competition: Yes, we are seeing more activities as our competitors build out. We will ensure to remain relevant by deploying differentiated offers. Lastly, for the data center: We have active discussions with potential partners that factor in our current capacity of 28 megawatts along with the incoming capacity of 30 megawatts for Vitro Sta. Rosa when it opens in July.

So of the 50 megawatts, am I correct that only the first 10 megawatts will be online? When will the full 50 be available?

The Sta. Rosa data center is in three phases. The first phase, which goes live in July, is 10 megawatts. The remaining will enable another 10 within the year, and the last 10 will be available in the first half of next year. We are having discussions with international hyperscaler operators to secure contracts, bringing revenue from foreign locators in the Philippines. This is our approach to bifurcate the data center business and enhance our capabilities.

Thank you. Are there any other questions from the floor? If there are no further questions, we will now turn the floor back to Mr. Pangilinan for his closing remarks.

I don't have anything more to add. I spoke too much. Anyway, Happy Easter, is it 3 weeks or something?

On that happy note, that concludes today's briefing. As always, should you have any further questions or clarifications, please feel free to reach out to PLDT Investor Relations. Thank you for your participation and join us for some refreshments outside. Thank you.