Hey, everyone. Thank you for joining this online briefing to discuss First Pacific 2021 Full-Y ear Financial and Operating Results. The results presentation is available on First Pacific's website, www.firstpacific.com, under the Investor Relations section presentation page. This results briefing is being recorded, and the replay will be available on First Pacific's website in the Investor Relations section as well. For participants from the media, please note, this Q&A session is open for investors and analysts only. If you would like to raise questions, please contact us when the briefing finished. Today, we have Mr. Manny Pangilinan, our Managing Director and Chief Executive Officer, Mr. Chris Young, our Executive Director and CFO, Mr. Joseph Ng, and Mr. John Ryan, our Associate Directors and other senior executives from the head office of First Pacific. Over to you, John, for the presentation.
Thank you very much, Sara. Now those of you who know me know that I'll run through this fairly rapidly, and then we can go through some questions. For refamiliarization, page 2 has our major holdings. These percentages are as of the year-end, so you'll please note that the 44.0% in MPIC is, as of today's date, I think 44.1%. There are no big changes, however. Now on page 3, we've got the major highlights of our earnings report that we published at lunchtime today. We've got, in many ways, the strongest numbers we have ever had. Contribution is not one of them. It's the strongest since 2011. Turnover recurring profit are the highest that we've ever had.
That's, as you can see on the column chart on the right-hand side of this page at the top. That's because of a strong increase from Indofood, which had its first full year contribution from Pinehill. That's the noodle maker based on the other side of the world. PLP, PacificLight Power, which we own through a joint venture with Meralco, had a strong turnaround in its performance. Our Head of Corporate Development, Stanley Yang, can speak to that later in this meeting. MPIC bounced back from its COVID woes of 2021. Philex benefited from extremely strong copper prices. Head office improvements were strong, too. We've got sharply lower interest expense, thanks to our Head of Treasury, Joseph Ng, right here. He can speak to these details a little bit later.
All in all, this wound up to a 1/3 improvement in our recurring profit, as you can see there, to a record high $426.5 million. Most of you will recall that we've got a consistent policy towards capital management, which for 11 or 12 years now has included a 25% payout of our recurring profit to shareholders in the distribution. The full- year number is HKD 0.19 per share. That's a 31% increase from 2020's figure. Another second leg of our capital management policy is a share repurchase program, which we introduced 12 months ago. I think to this date, we've spent about $28 million, $24 million of which was in calendar 2021. Now that we've reported our earnings, our blackout period is done, and we can move forward.
Now, I'll speak very briefly on page four about our borrowings and treatment of them, because Joseph, who manages it with extraordinary grace, will speak to it in more detail in our Q&A. Gross debt's really not changed from a year earlier. Our gross debt cover has improved. It's at 3.8x . Net debt also not much changed. We've got a little over $100 million in cash. Average maturity, as you can see, is just over three years. Our blended interest cost is quite low at the moment, 3.2%, but of course, we're moving into an environment of steadily increasing interest rates. That figure might be going up over the next couple of years.
Now, an important figure for us is the interest coverage ratio. That's the ratio of how much money we've got after we pay all our bills to the interest bill. That has improved to 3.8x as of the end of 2021. We're very confident the outlook for that going forward is quite strong. As you can see from the column chart at the bottom of the page here, we've got no borrowings falling due until a bond in April next year, and that's a 4.5% 10-year borrowing, which we were quite proud of when we launched it way back in 2013. As you can see, we've tried to keep our maturity profile fairly even as the years go by. Again, Joseph can speak to that going forward.
Page 5 has got several points which are important way we look at our investments and our strategies for that. The buyback program is something I'm fairly proud of at a personal level. We promised it back in 2017, and we've begun delivering now for the past 12 months. We expect to spend that $100 million fairly evenly over the course of the three-year period. Page 6 shows us a snapshot of our gross asset value. Not a lot of change there from month to month. This, as you can see, is as of the end of February, and probably on Monday or Tuesday, we'll be updating that to end March figures as well. It's a little over $5 billion. Now, looking at page 7, a brief word about sustainability matters.
We'll be publishing our 2021 ESG report in late- April to mid-May, following publication of Indofood's very first sustainability report. We're looking forward to that very, very much. That has enabled us to issue our first consolidated ESG report. For those of you who are putting increasing importance on ESG matters in your investment decisions, please be aware that from calendar 2022, annual staff bonuses will have a sustainability component in them. With this, I will have personally either earned a great love or great disdain from my colleagues. Let's see how it works out in a year's time or so. Now, before we move into the operating companies, let's recall the superlativeness of some of these numbers that we've got published at lunchtime today.
The last time we had similar level of performance was 10 years earlier in 2011. As you can see, it took another 10 years for recurring profit to exceed that figure. Looking at the performance of our main operating companies, and by this, I mean Indofood, PLDT, MPIC. Over the past three, four, or five quarters, there seems to me to be consistent grounds to expect continuing improvement of their results going forward, and that's just looking at their quarterly performances in the recent past. That instills in us a high degree of confidence, particularly given the strength of our cash flows and our balance sheet, and our expectations for the future. Now, let's look at Indofood very briefly on page 8.
They had record high net sales, as you can see, up by more than 20%, and that's driven quite a lot by Consumer Branded Products division, which has reported its first full year of results, including Pinehill. That's a noodle maker based in Africa, the Middle East and southeastern Europe. As you can see, very strong. Core profit is at a record high IDR 8 trillion in 2021. As you can see, I think it's very important to consider the margins in the blue box at the bottom right. As you can see, there is broad improvement across the board. The noodles margin is at an astonishing 24.3% for 2021. This is a very core product for Indofood.
It's north of 50% of all of their sales, and it's an extraordinarily profitable business which we expect will be growing fast in the years ahead, thanks to Pinehill. Now let's move on to PLDT, which is on page 10. Essentially we've got three main businesses for PLDT. It's the Home business. You can consider that's your wired Wi-Fi. There's a little bit of fixed wireless in there. There's the Individual business, which is mostly consumer mobile. Of course, there's the Enterprise business, which is services to businesses and data centers and so on. Now, over the past couple of years of dealing with COVID and its ramifications for mobility in the Philippines, the Individual and Home businesses switched off on the leadership for earnings growth.
PLDT has, I think, for five or six straight years, shown steadily increasing earnings year-over-year, and they did it again. Service revenues at a record high. EBITDA at a record high. Telco core up 8% to over PHP 30 billion, hitting their target. That was driven largely by the home business, which saw their service revenues rise by almost a quarter. By contrast, the individual business, which led earnings growth in 2020, was mostly flat. The enterprise business saw their revenues go up 4%. We're expecting probably similar sort of performance in 2022. As you can see that PLDT does have some guidance. Telco core profit up another PHP 2 billion or PHP 3 billion. Very important to people who've been watching it closely.
For the first time in many years, their CapEx guidance is for a lower number than in the previous year. 2022 CapEx seen at PHP 76 billion-PHP 80 billion pesos. Let's have a quick look at page 12 and you can see why they're bringing down the CapEx. As you can see, their performance, whether it's fixed line for home Wi-Fi or wireless for everybody's mobile phones, PLDT and its wireless brand, Smart, are delivering much better customer experience than their competitors and that's enabling them to take their foot off the gas pedal a little bit on the CapEx. It's just enough to keep them maintaining that excellent customer experience. Now on page 13, we've got a snapshot of the shape of MPIC today.
The three main businesses, of course, are Electricity distribution and increasingly generation. Now that Meralco has bought all of Global Business Power and is merging it into its MGEN subsidiary. We've got the Toll Roads, which have been busily extending their network over recent years and expect in the second half of this year to see new roads come into operation, not least a very beautiful bridge linking the mainland to the airport in Cebu. Of course, the Water business, which had a very difficult couple of years trying to sort out with its regulator, how the shape of relations are going to go over the next 15 years or so left in the concession, now a franchise. A quick look on page 14 for the financial highlights. The Electricity, Roads, and Water businesses all saw higher volumes.
As you see implied by the red mark above the word water in the change in contribution, the build volumes in the Water business were a little bit lower. Largely because of COVID restrictions, making non-revenue water a little bit higher. They couldn't get out there to fix the pipes as best they might. Now, as you can see, as people hopped back in their cars with the easing of travel limitations, the Toll Roads business sharply increased its contribution to a head office, MPIC, and then that's followed by the Power business. As I say, looking ahead, you'll expect Meralco to begin delivering in a big way on its commitment to build out 1,500 MW of renewable energy electricity generation over the next five to seven years.
This will gradually, increasingly deliver to the bottom line that comes to its shareholders, the largest of which is MPIC. Likewise, the Toll Roads business will begin seeing much heavier traffic as it builds out its new roads, and so on and so forth. The Water business will now that it's got a stable environment, it will return to steady contribution to MPIC going forward. Now, if we look at page 17, we've got the rather pleasant view of PacificLight Power, which we bought, I think, in 2014 or in late 2013, which had years of difficulties going forward because of an imbalance between supply and demand for electricity in Singapore, its market. As you can see, that began to change rather drastically in 2021.
It swung to a decent core profit, as you can see in the chart there and on the bullet points. Its EBITDA rose 10x to over SGD 100 million. Early electricity demand data for the first two, three months of 2022 suggests that it's going to continue that strong performance going forward. It's no longer a red-headed stepchild, perhaps, even it's a favored offspring because they're talking now about investing in the import of solar-generated electricity to Singapore from Bulan Island in Indonesia to the south of Singapore. Stanley Yang's been closely involved in that. It's personally very exciting, and it's a key part of First Pacific's thinking about where it will put its money in future. We're looking at renewables and fintech, which, of course, today fits right underneath PLDT.
A brief word about Philex Mining. They saw their core profit double to a 10-year high in 2021, and that's because of a huge increase in the price they're able to get for copper. A little bit of an increase for gold. Looking ahead, they are looking around the environs of the Padcal mine for new ore deposits to develop. But the big part of their future remains the Silangan project down in the south in Mindanao, which they are keen to begin developing so that they can get it online in 2025. Now, the Padcal mine, as you can see, is scheduled to close operations at the end of 2024. With what they're finding around in the environs, I wouldn't be entirely surprised to see it continue operations a little bit longer than that.
It is not an enormous part of First Pacific's future. We've got our core holdings of PLDT, MPIC, and Indofood, which are going to be our earnings drivers for the next few years. We can talk about that in the Q&A. As we saw in this morning's board meeting to discuss our full- year 2021 results, the atmosphere was really something to behold. The optimism is great, and it's a delight to be working here. That's it for the opening monologue, Sara.
Yes. Thanks, John. We are now ready for questions. You can unmute yourself if you have any questions, please. One question in the chat box.
What have we got? Shall I read it? Okay, Jeff Kiang, a CLSA analyst who covers First Pacific, is asking a question that everyone can read, and it seems to be directed at Joseph Ng, our Head of Treasury. Eliza, can you scroll so Joseph can see it?
Yeah. Let me just make it bigger, too.
Okay, that should do it. Right.
I mean, just for the benefit of others the question is, with continued improvement of head office interest coverage ratio, will there change your current capital deployment strategy at head office level, such as the priority amount acquisition, debt reduction, dividends, and share buyback? Yeah, maybe I could address that. I think it's a function of the n et cash flow at the headquarters. He's talking about basically the capital allocation strategy. Main thing is the level of the dividend that we could collect from the units.
We are recording quite a decent, not spectacular, but decent growth in dividend in the course of 2021. We grew by roughly 7% from $190 million in 2020 to $204 million in 2021 as shown in the cash flow. Of course, I mean, the interest expenses reduction helped a bit mainly because of the previous liability management initiatives. We bought back about $300 million bonds in, I think, last quarter of 2020.
That helped us to basically have the full- year benefit in 2021. Now that the interest is trending up, that impact would be kind of mitigate a little bit in the course of 2022. Even after that, I think there basically wasn't left after the head office overhead will be allocated mainly to shareholders return per se, right? Distribution. Then the accounting profit is increasing quite a bit, and then we are paying 25% dividend payout. Some of the payment to the shareholders also increased by roughly 30%, as demonstrated in the dividend per share increase over 30%. At the same time, we are also allocating some budget for the share buyback, also mentioned by John.
After that, it's basically the residual cash we could deploy about debt reduction and acquisition. It's just going forward, I think it's a function as to the growth of the dividend streams from the respective major operating units, in particular, PLDT and Indofood. There's some prospect that there are news about PLDT selling some of the towers, and that could raise quite a bit of money, and that may be an opportunity for distributing a little bit more dividend up to headquarters here. If that's the case, we have more flexibility to explore the acquisition and debt reduction. For now, I think quite a bit of our free cash or cash flow at headquarters will be allocating for shareholders return, like distributions and share buyback.
The second question is about value of PacificLight. Stan, please.
Yeah. PacificLight, as you may recall, in 2020 in the fourth quarter, completed a debt restructuring, as well as a restructuring of their gas supply agreement. At that time, PLP was marked down to zero, and that is still reflected in our NAV calculation. Having said that, though, with the strong EBITDA last year and the continuation of the performance, as expected this year, the business is starting to generate cash flows and positive income. The proceeds are being applied to reduce the debt. It is our plan that even with $23 million of debt that was repaid in 2021, that amount will increase in terms of the debt repayment this year. We believe that the fundamental value, the value of PLP will grow. But at the moment, it's still carried in the books at zero.
The second question is from Patrick. It's about the raw material cost impact on Indofood. John, can you help?
Yes, sure. Now, Indofood doesn't hedge on the futures markets for soft commodities. For wheat, they purchase ahead for up to six months. They have not been enormous buyers from Ukraine. While the Black Sea may deliver something like a quarter of all global wheat exports, that doesn't amount to much. That's a low- single-digit percentage of all wheat consumed. Now, Bogasari, that's the flour and pasta business at Indofood. Their business model is consistently cost plus. EBIT margins range generally between 5%-7%. They've raised wheat flour prices so far this year already by about 8%. Now generally speaking, in an environment of higher prices for soft commodities, that tends to boost the profitability of Indofood as a whole. I hope that helps there.
There's another question from Jeff about PacificLight.
Sure. If I could just scroll up to it. The question is around the solar, and this is related to a solar import project of which PacificLight is partnering in a consortium. There's a consortium of three parties that are looking at importing the solar from Indonesian island to Singapore. Now, there has been a pilot, a conditional license granted by EMA for a 100 MW project. This is on a continuous basis, so the peak is higher, but on a continuous basis, 100 MW. Having said that, though, there is a RFP that the EMA is now tendering and the initial bids, non-binding bids, will be due next month.
As part of that, there's an opportunity to scale it beyond 100 MW and this is something that the consortium is reviewing our opportunities. If it's the pilot project, the business would start operations in the beginning of 2025. If it is through the RFP, then there is up to two more years, up until 2027, when the expectation of the project would be commenced, the COD date. Thereafter it also depends because this is a solar project, but there's interest from hyperscalers and retail contracts are looking at a long arrangement for buying the power from this project. It is something that we would know later on. It's still premature to have a view on the P&L impact.
I think there's no question.
Okay. Chris, could you please take the question from Vincent Lam regarding buybacks at Metro or even Indofood?
Sorry, John, I can't see the question. This is buyback at their own level? At the Metro Pacific level?
Yes. The question is, may I know if management has anything in mind besides share buyback at FPC? e.g., will Metro Pacific and Indofood adopt or accelerate their share buyback schemes on their own?
Well, I think that if you follow Metro Pacific, I think you will have seen a few weeks back that they actually announced a new share buyback. I think it's another PHP 5 billion. Yes, we will consider and support share buybacks at the operating companies. At the moment, there's no proposal that could extend beyond Metro Pacific to the Indofood group meantime. Yes, it's something we are watching briefly.
Okay, Stan. LNG pricing for PLP? This will take half an hour to answer, guys.
The LNG contract was a long-term contract signed with Shell when PLP commenced operations in 2014. The contract, as it approaches the end, there's been discussions on renewal. What's happened in Singapore is that, in the beginning, Shell was the only provider, and now there are other aggregators which include Exxon, it includes Pavilion. There are other opportunities, and PLP has been speaking with the other groups. There is a formula that is indexed to Brent in terms of the movement on LNG. It does move up. Having said that, though, the ability for the plant to pass through and if you look at where the non-fuel margins are in the business, they're reflecting that improvement. You know, while the prices of the LNG are higher, the margins are significantly improved as well.
There's two questions about Indofood and Pinehill. John, can you?
Yeah, I'll take a stab at that, Chris. If expansion is needed, please carry on after me. Indofood's revenue and earnings growth, not counting Pinehill, are not numbers that Indofood shares, but I am very confident that those numbers are positive. There was revenue and earnings growth in the domestic Indonesian markets. Key synergies between Indofood and, or ICBP rather, and Pinehill. Well, as you know, before ICBP bought Pinehill, there was a business relationship of many years between those companies. So the Pinehill noodle factories were exactly like the noodle factories in Indonesia, using the same spice packets and ingredients and so on, sourced from ICBP. So that's all internal now. Can't really get much closer.
One thing they have started to do already, and that is, import non-noodle products from ICBP into the Pinehill markets, and that will help growth, going forward. All in all, it's been a quite positive acquisition for Indofood. I'm very pleased with it. I'm proud of the effort we made in persuading shareholders to take it on, and I think they'll eventually all of them agree that it was a great acquisition. I would imagine that the margin improvement overall at Indofood that we saw a few pages away from here were helped by the Pinehill acquisition. Chris, do you have more to add on that?
No, I think that's quite comprehensive.
Okay. Now we have free cash flow. Chris, I believe this question here, can you rule out any risk of making large acquisitions again, e.g., Goodman Fielder? I think this is right up your alley, Chris.
Yes, I think we can rule that out. I think John in the presentation and Joseph in his earlier description, but I think the presentation, page 23, you can effectively see that the approach, at least for the next couple of years, is to take the net operating cash and return the bulk of that to shareholders, the biggest chunk as the 25% distribution of dividend. We have committed to the $100 million share buyback. You can see on page 23 that till the end of 2021, we spent $24 million on purchasing shares.
If you factor that into 2023, 2024, together with a modest increase in dividends from the underlying businesses, you will see that the bulk of our operating cash flow is gonna be used to return to shareholders. That's, I think, what we have indicated we would do. We may make one or two smaller investments. These investments we will probably invest alongside the operating companies. I think Stan mentioned fintech earlier as an area and possibly something on the renewable side, but smaller scale and together with the operating companies. In some way, the bulk of operating cash flow will be returned to shareholders in 2022 and 2023 through dividends and share buyback.
Thank you very much, Chris. We've a question now about the updated adjusted NAV for First Pacific per share based on yesterday's closing prices of all the quoted subsidiaries. What I'll do there is, since today is the last of the month, tonight or tomorrow I'll put together that spreadsheet, which we do on a regular basis, so you'll have the end-month data there rather than the 29 March. If that's not okay, then just drop me an email and I'll see what else we might be able to do. While it's on my mind, in late April, early May, Stanley Yang and I will be visiting equity investors in U.K., Europe and North America.
If you want us to see you, please drop me a note, and we'll see how we can assemble the entire trip. We haven't seen investors on a formal earnings road show in what, a good couple of years? 2.5 years, I think. We're quite looking forward to it. We're feeling really good about the story we can tell.
Any more questions? Not yet. All right. As there is no more questions, please may I invite Manny to give his closing remark.
Sorry, there's one more question. What is the pace of share buybacks going forward?
Joseph, can you help with that?
Yeah. I mean, as mentioned by John, the program is $ 100 million over three years. So far we spent about $28 million before we got into the buyback period. We still have somewhere around $72 million to be spent. For a three-year program, clearly it's market driven and riding on the up and down on the share price. On average, you are talking about three years over $ 400 million. On average you talk about $30 million. Yeah, I think that's probably a good estimate. At the end, it's subject to a number of things, as to say, the power and other things. In very broad terms, I think we say $30 million a year is kind of a fair estimate.
Thank you, Joseph. I think there's n o more questions. Manny, can you please give us your closing remark?
I simply want to thank everyone for joining us this afternoon in this investor's briefing in respect to the full year results for 2021. Actually, in the Board Meeting today, we briefed the board about at least among the Philippine companies, the first two months appear to have been a good start for the year 2022. I think our own budgets at First Pacific assume a better year for First Pacific this year than compared to 2021. I'm glad John and Stanley are going out to see most of you, all of you, to explain not only our 2022 and 2021 numbers, but to update you on the latest developments among our operating companies. Again, thank you, and we look forward to talking to you again when we announce our mid-year results sometime in August, I guess. John?
Yeah, towards the end of August, I believe, Manny.
Yeah. Okay. Thank you. Thank you so much.
Thank you. Thanks again for attending today's online briefing.
Thank you.
Thank you.
Thank you.
Goodbye, everybody.