First Pacific Company (142) H2 2023 earnings summary

Executive summary

• FY 2023 turnover rose 2% to a record $10,510.7 million; contribution from operations increased 18% to $701.5 million and recurring profit rose 19% to a record $603.8 million.

• Net profit increased 28% to $501.2 million, while recurring EPS rose 19% to a record 14.24 U.S. cents; higher non-recurring losses partly offset recurring growth.

• Record dividend income of $324 million included the first dividend from PacificLight Power; the full-year distribution rose to HK¢23 per share from HK¢22.

Financial highlights

• Revenue reached $10,510.7 million, up 2% YoY; operating-company contribution rose 18% to $701.5 million, led by MPIC, PacificLight Power and Indofood.

• Net interest expense increased 30% to $71.4 million amid higher interest rates; total head-office costs rose 16% to $97.7 million.

• Excluding foreign-exchange and derivative effects and non-recurring items, recurring profit was $603.8 million; non-recurring losses were $122.1 million versus $19.7 million in 2022.

• Non-recurring losses mainly included a $65.7 million investment impairment and $63.6 million of asset write-downs at PLDT and Manila Electric Company, partly offset by $24.4 million of PLDT tower-sale gains.

Outlook and guidance

• Management expects medium-term earnings growth, supported by rising per-capita GDP and expansion of investees’ products and services.

• PLDT expects 2024 service revenue and EBITDA to reach consecutive records on mid-single-digit growth; telco core profit guidance is at least P35 billion, with capex of P75–78 billion.

• Indofood CBP forecasts 2024 sales growth of 5–8% and an EBIT margin of 19–21%, supported by higher volumes and a benign commodity-price environment.

• MPIC’s chairman expects double-digit earnings growth in 2024; Meralco expects its generation arm to contribute up to one-third of core profit over time.

• PacificLight Power expects continued strong 2024 performance from contracted retail margins, though margins may be slightly below 2023 levels.