Manila Electric (MER) investor relations material

Executive summary

• Core net income (CC&I/CCNI) for 1H 2026 grew 3.8% to PHP 26.5 billion, with reported net income up 11% to PHP 26.3 billion, reflecting resilience amid volatile energy markets and a diversified portfolio.

• Core EBITDA rose 11% to PHP 44.8 billion, with gross revenues up 16% to PHP 283.7 billion, driven by higher generation, transmission, and RES revenues.

• Power generation CC&I/CCNI contribution increased 11% to PHP 10.5 billion (39% of total), driven by LNG and renewables, while DU remained the largest contributor at 48%.

• Major operational milestones included the inauguration of MTerra Solar Phase 1, now the world’s largest integrated solar and battery facility, and energization of the Toledo BESS.

• Interim cash dividends of PHP 11.758 per share were declared, representing a 50% payout of core EPS.

Financial highlights

• Consolidated revenues increased 16% to PHP 283.7 billion, with electric revenues accounting for 98% of the total.

• Purchased power costs rose 19% to PHP 220.5 billion, reflecting higher generation and transmission charges.

• Operating expenses were 1% lower year-over-year at PHP 21.6 billion due to cost management.

• Core earnings per share increased 4% to PHP 23.516; dividend yield stood at 4.1% based on end-June stock price.

• Net debt-to-EBITDA ratio stood at 1.4x, indicating strong financial flexibility.

Outlook and guidance

• Distribution volumes are expected to grow 2%-2.5% for full year 2026, with July volumes already up 6.4%-7%.

• Generation segment outlook is positive, with full-year operations of LNGPH and COD for Terra Solar expected to drive further growth.

• Regulatory approval for interim extension of a key PPA is expected to yield PHP 4.25 billion in customer savings in 2H 2026.

• Ongoing investments in clean energy and network reliability are expected to support long-term growth and energy security.

• Management remains cautious due to regulatory uncertainties, particularly around system loss recovery and potential legislative changes.