Good afternoon, investors, analysts, fund managers, and key stakeholders. Welcome to Meralco's First-Half Investors Briefing. We welcome warmly our guest analysts and investors who are joining us in person, as well as those participating online through our MS Teams conference facility. Before we proceed, please be advised that this session is being recorded. Kindly adhere to the ground rules which were sent to you prior to this briefing. Today, we will present financial and operating results of Meralco for the first half of 2025. A copy of the presentation may be downloaded from our website at www.meralco.com.ph under the investor relations section. We are joined by members of Meralco's management team. Presenting with the team is Mr. Ronnie L. Aperocho, executive vice president and chief operating officer. Ms. Betty Siy-Yap, SVP and chief finance officer. Mr. Emmanuel Rubio, president and CEO, Meralco PowerGen.
Mr. Ferdinand Geluz, senior vice president, chief revenue officer, and OIC subsidiary of businesses. Mr. Froilan Savet, first vice president and head of networks. Attorney Jose Ronald Valles, SVP, head of regulatory affairs, and head of DU regulatory management. Today's agenda will begin with the financial highlights, followed by the operating results of Meralco's distribution utility business, update from MGEN, and regulatory. We will open the floor for a question and answer session. At this point, I would like to introduce our chief finance officer, Ms. Betty Siy-Yap, who will present the financial results.
Good afternoon, ladies and gentlemen. I'll be presenting the results for the first half of 2025. Our strong first-half results was fueled by the solid performance of our core distribution business and accelerating momentum of the generation business. We present here the highlights. In the first six months of 2025, the distribution utility business accounted for the largest share at 54%, or PHP 13.7 billion, out of the total CCNI, or Consolidated Core Net Income, of PHP 25.5 billion. While power generations share grew to 37% with PHP 9.4 billion contribution, higher versus the 27% in 2024. The RES business and the non-power business brought a combined PHP 2.4 billion, or 10%. The board of Meralco approved today an interim cash dividend of PHP 11.328 per share, representing 50% of core EPS for the period, payable on September 22, 2025. For power generation, MGEN achieved milestones as follows.
The thermal plants continue to play a critical role in ensuring grid reliability, with 128.9 MW capacity allocated to regulating and contingency reserves, providing a total of PHP 3 billion in revenues. On the LNG investments, in January, PacificLight was awarded a 600 MW hydrogen-ready CCGT project in Jurong Island, bringing the total generation capacity in Singapore for PacificLight to 1,500 MW by the time this plant comes into operation in 2029. On March 31, the ERC approved the increase in SPPC supply from 910 MW to 1,200 MW. The 290 MW of which started delivering power to Meralco on April 1. Commercial operations of Excellent Energy Resources, or EERI's units one, two, and three, by April 30 of this year after the ERC issued the provisional authority to operate.
Linseed Field Corporation , or the regasification terminal, achieved 2,400 MW gas send-out capacity starting June 1 of 2025. On May 14, PacificLight successfully completed and commissioned a 100-MW Fast-Start ancillary facility, significantly enhancing the flexibility of Singapore's grid. For MGreen, it delivered a total of 387 GWh , 13% higher with contribution of its newly operational solar power plants, more than with 98% average plant availability. Dividends from unconsolidated investees totaled PHP 4.9 billion, mainly from PacificLight and San Buenaventura . On July 21, less than a year after the upgrade of Meralco's long-term rating in August 2024, S&P Global Ratings affirmed Meralco's BBB credit rating and revised its outlook to positive, citing the company's strong business position with the improving scale and profitability in power generation and diversification as an integrated utility. On your screen would be the comparative first-half numbers.
Our CCNI for the first half of the year increased by 10% to PHP 25.5 billion from PHP 23.2 billion. Our consolidated reported net income increased by 5% to PHP 23.6 billion from PHP 22.4 billion last year. Similar to our net income, core EBITDA rose 9% to PHP 43.2 billion from PHP 39.7 billion. Consolidated revenues increased by 3% to PHP 245.2 billion from PHP 237.5 billion in 2024, mainly due to the increase in pass-through generation and transmission charges, higher volumes of the DU and Retail Electricity business, and higher revenues of MGEN from the reserve market. Costs and expenses increased by 3% to PHP 219.7 billion, the bulk of which purchased power costs, which accounted for 85% of the total. Capital expenditure totaled PHP 47.5 billion, mainly for the development of the solar power plant and about PHP 11 billion for the distribution network.
Cash and cash equivalents amounted to PHP 91.6 billion, while consolidated debt was at PHP 204.8 billion. The next slide shows the comparative segment information. The charts on the right show the contribution of each of the segments to our CCNI revenues and core EBITDA. The CCNI contribution of our regulated or distribution business was from the less than 1% growth in consolidated energy sales volume of Meralco, Clark Electric, and Shin Clark, which totaled 27,091 GWh from 26,954 GWh from the previous year. Note that while CCNI of the DU declined to 54% in terms of its share in CCNI contribution in absolute terms was higher by 7% at PHP 13.7 billion. For our unregulated businesses, the higher CCNI contribution in terms of peso amount came from the growing power generation business with its share at 37%, equivalent to PHP 9.4 billion of CCNI.
This was coming from the higher revenues with the participation in the reserve market, our share in Chromite Gas Holdings, and the new 100-MW plant of PacificLight. The Retail Electricity Supply business and non-power business subsidiaries, meanwhile, brought in combined PHP 2.4 billion, or 10%, with combined energy delivered by the RES business of 3,543 GWh . The DU revenues accounted for 83% of the total. RES and non-power subsidiaries and affiliate accounted for 11%, and power generation at 6%. The DU contribution to consolidated core EBITDA amounted to PHP 24.8 billion, up 11% versus last year, and accounted for 58% of the total. Power generation was at PHP 14.6 billion, up 33%, and comprised 34% of the total, while RES and non-power subsidiaries and affiliate accounted for the remaining PHP 3.7 billion. Next slide, please.
With respect to our revenues, electric revenues was at PHP 239.1 billion, or 98% of the consolidated revenues. Generation, transmission, and other pass-through charges were 5% higher at PHP 190.7 billion due to the higher cost of LNG and natural gas. The increase in Malampaya natural gas prices was a total of $11.6 per gigajoule as compared with $9.99 per gigajoule last year. The peso also depreciated at an average of PHP 57.141 per US dollar in the first six months compared with an average of PHP 56.887 last year. Transmission charges went up with the higher service charge from the additional ASPA agreements of NGCP and also the additional capacities from the reserve market.
Despite the less than 1% increase in sales volume, distribution revenues decreased by PHP 830 million due to the implementation of one-time refund of PHP 0.2264 per kilowatt-hour last February, relating to the regulatory reset fees.
In addition, our distribution revenue was reduced by PHP 0.0023 per kilowatt-hour, with the reduction representing the regulatory reset fees. Energy fees, which totaled PHP 12.9 billion, increased by 1% from PHP 12.8 billion to PHP 12.9 billion with higher revenues from the reserve market. Non-power subsidiaries revenue was lower due to the deconsolidation of MIDC. The next slide is on cost and expenses. Our total cost and expenses is at PHP 219.7 billion. Purchased power cost accounts for 85%, OpEx represented 10%, and depreciation at 4%, while the combined coal and fuel and power plant O&M accounted for the remaining 2%. Purchased power cost increased by 6% to PHP 185.7 billion from PHP 174.4 billion, consistent with the movement in pass-through revenue charge.
OpEx went up by 11% to PHP 21.7 billion, with the increased manpower and contracted services to meet the DU's workload demands, particularly for the repair and maintenance of distribution facilities to ensure system resilience and reliability. IS/IT-related expenses driven by measures to ensure system stability and integrity of the support operations, as well as increase in labor cost of MGEN to support the expanding portfolio of power generation projects. Higher project costs were also incurred by MIESCOR. Depreciation amortization was lower by 12% due to the deconsolidation of MIDC. Combined coal and fuel power plant O&M amounted to PHP 5.4 billion, 27% lower. Other expenses consisted of present value adjustment for long-term liabilities and net provision reversals with the settlement of our RPT, or Real Property Taxes. For capital expenditures, consolidated amount was at PHP 47.5 billion as of end of June.
Of this amount, 71%, or PHP 33.6 billion, was utilized for the construction of the MTerra Solar Project for Greenergy and Greentech—solar plants. The DU accounted for PHP 14 billion, of which PHP 11 billion was for electric capital project and the balance for non-electric projects. For our power generation results of operations. Backed by the strong performance of its growing power generation portfolio, MGEN ended the first semester with a 52% increase in CCNI contribution at PHP 9.4 billion, with higher revenues from its participation in the reserve market, investment in Chromite Gas Holdings, and commissioning of the new 100 -MW plant in Singapore, as well as higher plant availability across its portfolio. With the increase in the net saleable capacity of 5,068 MW in the Philippines and Singapore from 2,404 MW last year, MGEN delivered a total of 12,644 GWh in the first six months of the year.
Core net income of MGEN's thermal plants grew to PHP 3.6 billion from PHP 1.9 billion only last year and delivered a total of 4,591 GWh , up 4%. Beyond this growth, its thermal fleet continues to play a critical role in ensuring grid reliability, with a substantial portion of the capacity allocated for regulating and contingency reserve. MGEN's LNG investment through Chromite Gas Holdings and Singapore-based PacificLight Power delivered a total of 4,800 GWh and 2,865 GWh , respectively. Overseas, PacificLight commissioned the 100 MW fast-track ancillary services project on May 14, 2025. Meanwhile, MGEN Renewable, or MGreen, delivered a total of 387 GWh , 13% more, driven by the newly operational solar plants. The next slide shows our credit and debt profile. Consolidated interest-bearing debt totaled PHP 204.8 billion, including PHP 89.4 billion of debt from our subsidiaries.
Note that the PHP 115.4 billion DU debt includes PHP 75 billion debt drawn from Chromite transaction, and the PHP 88.3 billion debt of MGEN does not include the planned availment of PHP 110 billion at the Chromite project level, of which MGEN's PHP 40.2 billion share of the proceeds will be upstreamed to shareholders. As of end June, Chromite's debt consists of working capital loan of SPTC of PHP 3 billion and Linseed loan of PHP 15 billion. As of end June, consolidated net debts stood at PHP 103.9 billion and net debt to earnings before interest, taxes, depreciation, amortization of 1.28 x.
Debt maturities are well spread to 2040. All of our debt are in Philippine peso, except for the Singapore debt, which is in their currency. Cash and cash equivalent totaled PHP 91.6 billion, and short-term investment totaled PHP 9.3 billion. Our long-term cash investments totaled PHP 5.2 billion. Our next slide shows our segment information on 100% basis. The charts on this slide shows the performance of our segment on 100% basis, or including all our consolidated and unconsolidated entities.
The total core net income is at PHP 33.8 billion, up 29% versus last year, with DU accounting for PHP 13.9 billion, or 41%, and power generation for 52%, and RES the balance of 7%. Revenues, including revenues of our investees that are accounted for on an equity pick-up basis, amounted to PHP 334 billion, with the DU accounting for PHP 210.6 billion, or 63%, of the total. Power generation at close to PHP 95 billion, or 28%, and RES and the non-power subsidiaries at PHP 28.8 billion, or 9%. Total core EBITDA amounted to PHP 52 billion, with the DU accounting for PHP 25.1 billion, or 48% of the total. Power generation at PHP 23.3 billion, or 45% of total, and RES, the remaining 7%.
Our core earnings per share is at PHP 22.655 a share, up 10% versus last year. Today, the board of directors approved the declaration of an interim cash dividend amounting to PHP 11.328 per share, payable on September 22, 2025. This represents a payout of 50% or an implied yield of approximately 5%, using the June 30, 2025, MER closing price. The next slide shows our S&P rating. As mentioned, less than a year since the upgrade last year, S&P Global Ratings has affirmed Meralco's BBB credit rating but revised its outlook to positive from the previous stable, citing our strong business position with the improving scale and profitability as an integrated utility. That ends my report.
Thank you, Ms. Betty. We now move on to the operating results presentation to be led by our executive vice president and chief operating officer, Mr. Ronnie Aperocho, followed by the heads of our different business segments.
Thank you. Good afternoon, everyone. I am pleased to present Meralco's first half operations report, highlighting a period of generally remarkable performance across all key areas. Starting with our energy sales. For the first half of 2025, our energy sales stood at 27,091 GWh , which grew by 0.5% from the previous year, despite the high base due to last year's El Niño and one-day difference versus 2024 leap year. In addition, our energy sales volume growth was tempered by the elevated vacancies in office and condo spaces from POGO exit, along with a muted demand during the midterm elections. The net system input, or NSI, was 28,169 GWh , posting a marginal growth of 0.3% compared with the same period in 2024. Meralco's year-to-date peak demand reached 9.13 GW, recorded last April 23, 2025, 2% lower than last year's 9.32 GW.
The drop can be attributed to last year's unprecedented power demand surge, which normalized this year. Our customer count is growing by 2.5% to reach 8.129 million customers by end of June. On the service performance of the DU, the 12-month moving average system loss for June was 5.88%, a notable 0.19 percentage point improvement over the same period last year and 0.04 percentage point improvement than last month. The improvement was the result of our system loss reduction activities ahead of year-to-date targets and a more favorable sales mix. In terms of system reliability, we recorded double-digit improvements for our performance indicators, SAIDI and SAIFI. Our total SAIFI was better by 13% at 0.477x , while our SAIDI likewise improved by 13% at 50.57 minutes.
The year-to-date average time to connect customers also improved by 6% at 1.41 days over 1.5 days last year, translating to better customer experience with faster energization of service applications. Finally, our average electricity retail rate during the first half of 2025 was PHP 11.41 per kilowatt-hour, higher by 11.1% versus the same reporting period last year, primarily due to the following. First, due to higher generation charge, 13.9% increase from higher Malampaya natural gas prices due to the implementation of new Gas Sale and Purchase Agreement , or GSPA, of First Gas plants. Recovery of previously deferred charges for First Gas plants and depreciation of peso, and increased transmission charges, 25.3% increase from higher ancillary services cost. Thank you. May I turn you over to Freddie Delos for the report on our sales. Thank you.
For the details of the energy sales, as mentioned by Ronnie, it stood at 27,091 GWh , so it is 0.5% versus last year's high base because of El Niño, and where we grew almost 9% last year. We also observed that modest gains from Q1 was offset by colder and wetter Q2. On top of this, there was a downgrade in GDP forecast last April from 6% to 5.5%, driven by uncertainties from the U.S. tariff policy as well as some Middle East tension. In the first segment, this is residential grew a tempered 0.7% with contribution from new customers energized within the last 12 months, boosting a flattish per capita organic sales. In fact, while there were gains in Q1 where residential grew by 3%, we saw a - 1% depression in Q2 due to the May and June months' almost 3% decline.
Commercial posted a marginal year-to-date growth of 0.3% versus almost 10% last year as ramp-up and expansions in retail and restaurants countered the impact of office vacancies brought about by the POGO exit starting January this year. Retail, trade, and restaurants benefited from new malls, wholesale supermarkets, convenience stores, and boosted by openings of additional quick service restaurant franchises and cafes. Real estate is down 2% year -to -date and is affected by persisting vacancies from the POGO exit. Quarter -on -quarter, commercial grew 1.3% in Q1 but declined by almost 0.6% in Q2, highlighted by the almost 3% decline in May. Industrial performance inched up by 0.5% as demand for semicon, cement, and construction materials as well as steel offset operational shifts in the food and beverage.
Some of the manufacturing of food and beverage were decentralized outside the franchise, and it somehow affected our energy sales. For Q1, industrial grew a slight 0.2%, and we observed a slight uptick in Q2 to 0.9%, brought about by the increase of steel. Steel actually is negative on quarter one, but because of favorable economic conditions for smelting operations and lower cost of scrap, I think smelting operations for the steel industry resumed in quarter two. While semicon sustained increase driven by strong demand in storage devices and microchips. For sales mix year -to -date, residential stood at 36%, commercial at 37%, and industrial at 26%. Our consolidated customer count currently stands at 8.13 million. This is actually a 200,000 customer base increase versus same period last year, continued by strong energization of service applications.
I think at this point in time, that being said, we remain cautiously optimistic about accelerating growth in the second half. Given the current trends and momentum behind our initiatives, we project full-year growth to land within the 1.2% range. This is actually a downgrade from the distribution utility 4.5% estimate that we gave during the first quarter. This assumes a 2% to 4% expansion in demand as we continue to see uptick in recovery in the industrial segment. I think for the last two months, industrial segment is growing at 2% to 3%, and we expect some sort of recovery in the industrial sector as well as upbeat in the construction activities as well as a slight rebound in the office space demand in Q4.
Because the base for office space actually suddenly declined in September with the announcement of the July POGO exit starting January 2025. I think we saw a sharp decline in September. That being said, the kind of normalization as some of the spaces are being rented out and recovering slowly. Despite a slow start, Meralco is charging ahead with solid fundamentals and strategic execution, and we are confident in delivering growth even in a challenging macroeconomic environment. We are actively executing strategic measures, including faster energization of pipeline projects, streamlining of service applications, and fast tracking of high-profile big-ticket initiatives to drive volume uplift. That ends my report, and I now turn you over to the network's report.
Thank you, Mr. Delos. To continue for DU our CapEx projects second quarter of the year, we energized nine major CapEx projects for system adequacy and system reliability. Commissioned four projects contributing a total of 459 MVA additional capacity to our system. These are the expansion of Bridgetowne substation in Pasig City and Makati GIS substation in Makati City. Third would be the development of Aseana 115 kV, 34.5 kV GIS substation. This one in Pasig City. The fourth one is the uprating of 230 kV, 115 kV Tayabas 100 MVA power transformer to 300 MVA in Tayabas . These projects will support the load growth, improve service reliability in the cities of Pasig, Makati, Parañaque, Pasay; portions of Quezon City; and the municipalities in Quezon and Laguna provinces. On top of these capacity addition projects, we have five major CapEx projects for system security or reliability improvement projects.
This is geared to improve our sub-transmission system backbone. With a total CapEx of PHP 957 million, we have completed the development of Regalado 115 kV GIS switching station in Quezon City, the very first indoor switching station in Meralco and, of course, also in the Philippines. This also connected ST Telemedia Global Data Centres to our 115 kV system. Second would be the reliability improvement of Abubot substation in Las Piñas, Cavite, and the uprating of Malolos- Calumpit and Malolos -Tabang 69 kV lines in Bulacan. The fifth one was the uprating of portion of Dila-Real 115 kV line. Collectively, these projects strengthen the sub-transmission system in Bulacan and Laguna sectors, effectively enhancing the operational switching flexibility during contingencies for portions of Quezon City, Caloocan, and Cavite Province. Thank you.
Thank you, Mr. Aperocho, Mr. Delos , and Mr. Savet. We now proceed to the highlight from MGEN, to be presented by Mr. Emmanuel Rubio, MGEN President.
Thanks, PJ. Good afternoon, everyone. I will begin my report with our reporting on our top priority across all sites, health and safety. In the first half of 2025, we maintained a safe working environment with over 8.9 million safe man-hours, both for employees and contractors. While we recorded zero lost-time accidents, zero recordable cases, and no fatalities, we had two first aid cases, both minor incidents and occurred in March and April, which were immediately addressed on-site. This serves as important reminders that safety requires constant vigilance. We remain fully committed to strengthening our health and and safety measures and building an even safer workplace for everyone, especially considering that we have over 10,500 contractors working today in MTerra Solar in the provinces of Bulacan and Nueva Ecija.
As of end June, the overall MGEN Thermal Group delivered 4,591 GWh of energy, marking a 4% increase driven by stable operations across our portfolio. Energy delivered from San Buenaventura Power grew by 17% and 1,803 GWh , while Global Business Power recorded 2,788 GWh . GBP continues to play a critical role in ensuring grid reliability, with a substantial portion of capacity allocated to regulating and contingency reserve support in Visayas. MGEN's investment through Chromite Gas Holdings and Singapore-based PacificLight Power delivered 4,800 GWh and 2,865 GWh, respectively. Lastly, MGEN Renewable Energy, or MGreen, delivered 387 GWh , a 13% increase from a year ago, driven by newly operational solar plants and more than 98% average plant availability across our green portfolio.
Overall, MGEN delivered a total of 12,644 GWh of energy in the first half of 2025, 66% increase compared to the same period last year. This significant growth was driven by improved dispatch across our plants, consistently high plant availability, increased capacity contributions, particularly with the successful integration of Chromite Gas Holdings, and our team's continued commitment to operational excellence and reliability across the portfolio. Building on this momentum, we now turn to our growth projects. The development of MTerra Solar project, as one of the world's largest integrated 3,500 -MW solar plant and 4,500 MWh of battery energy storage systems, is ongoing, with phase one overall project completion rate at 54% as of end June 2025. Land acquisition and conversion for phase one is almost complete, while phase two stands at 42%.
On transmission, 88 of 89 500 kV tower sites have been secured, with the remainder just waiting document completion from the seller. In just eight months since the project groundbreaking in November 2024, MTerra Solar has achieved a major construction milestone with 778 MW of solar PV cells now installed on-site. This significant achievement not only surpassed the project's target of 750 MW at this stage but also positions MTerra Solar as the largest solar PV installation of its kind in the Philippines to date, demonstrating the project's speed and strong momentum. MTerra Solar also mobilized more than 11,000 workers at its peak, with over 7.5 million safe man-hours recorded since the project commencement, highlighting the scale and complexity of the construction efforts.
It plays a key role in supporting the country's goal of achieving a 35% renewable energy share in the power generation mix by 2030 and 50% by 2040. With phase one on track for completion by early 2026 and phase two targeted the following year, MGEN is set to exceed its 1,500 MW attributable renewable energy capacity goal by 2027, three years ahead of the original 2030 timeline. As we integrate more renewables into the grid, LNG emerges as an essential transitional fuel that can address our baseload requirements while reducing greenhouse gas emissions. One key investment, Chromite Gas Holdings, with its integrated LNG facility in Batangas City, which MGEN owns 40.2% of, provided strong performance as a result of the approval of SPPC's 219 -MW PSA on April 1st and the commercial operations of all the Excellent Energy's Unit 3 by 425 -MW units by April 30.
In addition, the terminal LFC completed its regasification terminal and achieved 2,400 MW gas send-out capacity starting June 1, allowing it to fully service the requirements of SPPC and Excellent Energy. While we aim to expand the LNG-to-power business in the Philippines, we have been steadily growing our energy capacity overseas. PacificLight commissioned a new 100 -MW fast-start and ancillary services project on Jurong Island. Powered by Siemens Energy gas turbines, the plant will deliver critical support to the grid during unplanned outages or system disturbances, the equivalent of dispatchable reserves in our country. As part of growing our thermal portfolio, MGEN is pursuing the development of Atimonan One Energy Inc., a 1,200 -MW ultra-supercritical coal-fired power plant.
It just secured the Department of Energy's reaffirmation of its status as a committed project, which followed the agency's confirmation that the project remains outside of the coverage of the coal moratorium policy. Our investment in Atimonan reflects our commitment to providing cost-effective and reliable power supply to meet the growing demands of Luzon. The Atimonan Energy Power Plant will be constructed using high-efficiency, low-emission technology that utilizes high temperatures and pressures to maximize energy production while minimizing fuel consumption. This is one of the latest technologies in the world that is critical in achieving lower carbon emissions from thermal plants and the only one in the Philippines. We will employ advanced and efficient technologies to ensure our operations support economic societal development, all while adhering to the company's commitment to sustainability.
Through MGEN's thermal and renewable energy arms, we entered into two power supply agreements with EvoEnergi Inc., a newly licensed retail electricity supplier. Under the agreements, MThermal and MGreen will supply energy sufficient to serve 62,000 households from both renewable and thermal sources. This reflects a shared commitment to advancing energy reliability and sustainability through strategic partnerships with the competitive retail electricity market. As part of our broader commitment to strengthen grid reliability, MGEN is set to develop a 49-MW battery energy storage system in Toledo, Cebu. This facility will play a key role in ensuring reliable and balanced power delivery across the Visayas grid, particularly in maintaining the quality and safety of electricity reaching end users.
The Toledo BESS project is expected to complete its first phase with 25 MW, 40 MWh capacity by 2026, and the balance to be completed in 2027, subject to regulatory clearances. We remain committed to powering the good life by creating meaningful sustainability and community impact through our four pillars. First pillars are people. MGEN is now a member of the Philippine Financial and Inter-Industry Pride, or PFIP, strengthening a commitment to diversity, equity, inclusion, and belonging in the workplace. This also coincided with the formal launch of MGEN's DEIB policy, providing a clear roadmap to fostering a culture where authenticity, inclusion, and mutual respect are deeply embedded. Next, through power. We delivered 387 GWh of clean energy in the first half of the year, which powered roughly 322,500 homes.
Our unwavering commitment to implementing impactful programs was also recently recognized with MTerra Solar project garnering global acclaim at the Asia-Pacific Stevie Awards, clinching two Gold Stevies for innovation in energy and sustainability and sustainability and climate protection services. For planet, we continue to make an impact through our brighter initiative, where we've installed more than 70 solar-powered streetlights across seven barangays, MTerra Solar's host communities in Nueva Ecija. Finally, prosperity. Through our back-to-school programs, MGEN supported more than 47,000 beneficiaries across 72 schools in 11 provinces, donating over PHP 1.9 million worth of goods, including classroom and office supplies, audiovisual equipment, raincoats, storybooks, and school essentials. We've also graduated 487 out of 630 scholars for Terra Transform, a skills training program for residents geared toward the construction needs of the MTerra Solar project. To date, 213 of them have already been hired by our EPC contractors.
All these initiatives and recognitions reflect a belief that the energy transition should uplift, empower, and include the very communities where we operate. On a final note, MGEN's solid performance in the first half of 2025 reflects the strength and agility of our growing generation portfolio. From the thermal and LNG to renewables and storage, we are scaling up our investments that push our growth and profitability forward and ultimately delivering value to all our stakeholders. MGEN is well-positioned to sustain momentum. We remain steadfast in our vision to lead the Philippines transition to secure, affordable, and sustainable energy future. It is our clear commitment that everything we do today contributes to powering a better tomorrow, not just for ourselves, but for the generation to come. Thank you.
Thank you for your presentation, Mr. Rubio. We will now open the floor for questions. For those who are attending online, you may raise your questions in two ways. Raise your virtual hand, and wait to be recognized before speaking. Alternatively, you may type your questions in the chat box, and we'll read them on your behalf. To start with, we received earlier questions on the distribution side. Meralco's average retail rate increased by 11% to PHP 11.40 per kilowatt in the first half of this year. What trends do you foresee for retail rate in the second half, given the global fuel volatility? In relation to that, there was a question on with first half consolidated energy sales volume up 1% out of full year volume growth.
So on the first question on the distribution tariff. The total retail rate, rather. First of all, on the distribution side, the rate remains to be at PHP 1.35 at the moment. We are expecting that PHP 1.35 will continue until the end of the year. So there will be no change in the distribution tariff. But with respect to the other pass-through charges, particularly the generation charges, we might experience some changes, particularly increases in the generation costs due to the effects of the depreciation of the peso and the increases in the fuel prices globally.
All right.
I think I some sort of alluded to the year-end volume projection. As mentioned, we expect full-year growth to land within the 1%-2% range, wherein second half we see some sort of stronger second half of 2% to 0.4% expansion in demand. As we see further upside in the potential macroeconomic turnaround and as well as on back of the upbeat construction activities and rebound in office space by Q4.
Do you have a question on the floor?
Hi, good afternoon. Martin Marty from First Metro. I would just like to ask if you can expound on the positive news for the Atimonan plant, as well as the possibility for a separate listing for MGreen.
I will answer that. Well, Atimonan has been initially issued a clearance by DOE early this year. Atimonan being part of the permitted projects outside of the moratorium, with certain conditions that by 2050 that it has to actually be able to fire a different fuel other than coal. Well, basically that. It was recalled for review, without much detail, when we got the letter. But when the letter was issued again, the DOE, they affirmed that the Atimonan energy power plant is not covered by the 2020 coal moratorium and allowing the project to move forward with permitting and development through the e-BOSS, the permit system, because it can be considered as an energy project of national significance given the size.
Again, there is no detailed issuance with regard to or there is no detailed explanation on the reissuance of the permit, except that DOE is looking forward to really adding capacity to the grid that can meet emissions requirement and provide low-cost energy. We are committed to actually making sure that if we offer this plan, that this is going to be one of the lowest-cost [inaudible] plant that will be out there. Second question?
Second question is on MGreen and the possibility for listing.
I think the last time we issued a statement with regard to MGreen going public was in March 2025. We have not changed our position so far; it is still under review. It is just one of the options for us to generate funds for project. Terra Solar one is fully funded. If ever, we are looking at probably considering listing of MGreen when we do Terra Solar two . We said that we will push with Terra Solar two development once we have delivered Terra Solar one, phase one, which is expected to be around late February or early March of 2026. Meanwhile, we are actually developing and enhancing the pipeline projects of MGreen through land banking.
Yes, we have another question on the floor from Janine Gaza of J.P. Morgan Securities
Thanks, PJ, and good afternoon, and thank you for the briefing. My first question relates to the tariff reset. Would you be able to give us an update where it is currently and how is the conversations going so far with the new set of ERC commissioners?
For the tariff reset, as you are aware, the Energy Regulatory Commission suspended all the proceedings in our 5-RP reset in light of that Supreme Court decision on the unbundling of Meralco. The ERC also held a public consultation on the valuation methodology that would apply for the valuation of the regulatory asset base in connection with our 5-RP reset. But the ERC has yet to conclude the public consultation and has yet to issue any order in relation to the 5-RP of Meralco, whether it intends to continue or proceed with the rest of the proceedings or will suspend it indefinitely. My view, personally, is that I think the 5-RP will continue at least until the end of the year.
We haven't spoken to the regulators on this point, but considering that the 5-RP should have started last July 1, it's too late already because there are many other things that need to be done for the 5-RP process to continue. I don't think they will be able to make a decision before the end of the year. I think the PHP 1.35 that we are currently charging will continue until the end of the year.
Thank you, Valles. My next question is for Ms. Betty. May I ask, please, how much is the contribution of the Chromite asset to Meralco as of first half? May I also clarify if this already includes the cost of debt for the acquisition and how it was apportioned in the PHP 9.4 billion generation earnings contribution? Thanks, Ms. Betty.
We have a question online from Gio de la Rosa of Regis. Can you enlighten us on how CCNI for the distribution utility business was up year-on-year while distribution revenue was virtually unchanged?
Hi, Gio. The CCNI grew because also of our share in equity earnings of our investments. That would include PacificLight, San Buenaventura, ATEC, and Chromite. That's a major contributor. Overall, CCNI, if you look at the segment information that we provided, the driver is power generation.
Thank you for that, Ms. Betty. We have another question from Karisa Magpayo of Macquarie Securities. What was the blended margin of PacificLight in first half 2025, and how did this change year-on-year?
This year is about SGD 86 compared with last year's SGD 87.
Two more questions from Karisa. How much provision for booking first half 2025? The third question is, what were the non-recurring items in first half 2025 that were stripped out for that quarter ending?
The difference between core and reported would be the day one gain, when we account for the present value of our liabilities and foreign exchange. Those are the two major items. What was your question on—
How much provision for booking first half?
About [inaudible]. Let me compute. [inaudible] - 6. Wait, 1.3. Give me a second.
We'll come back to your question. Karisa . We have another question here. On customer account growth, with the same energization of new customers, do we expect this growth trend to be continued in the second half of 2025? Which segments are showing the strongest momentum?
Well, we anticipate the growth trend to continue for the second half of 2025. While we ended 2024 at 8.04 million, we're forecasting an 8.2 - 8.22 million. There's a slight slowdown in terms of numbers for the second half, basically because of real estate. There's a slowdown of real estate construction. But what we're seeing is while there's a slowdown in real estate condo transactions, we are seeing larger application in terms of the commercial segment. But in terms of volume, I think the driver is still really residential because it actually accounts for 92% of the total volume. So volume-wise, it's larger, but in terms of demand, the industrial commercial actually picks up the demand. So I think we'll end up around 180,000 customers, better compared to 2024 numbers.
Karisa , the number is PHP 3.3 billion.
Thank you, Ms. Betty. The follow-up question is part two to that question earlier on collection efficiency and digital adoption. Collections improved alongside billed amounts. Can you comment on the traction of digital payment channels like Meralco Online and show interactive details?
Well, for Meralco Online, I think we saw volumes because we recently launched the new version of My Meralco app. It has better features. So I think we are now seeing around PHP 3.5 billion payments via Meralco Online, with around 600,000 transactions every month. But overall, including all the channels of Meralco, actually digital payments account for 55% of the total payment transactions. But in terms of amount, it is actually around 45%. So the larger amounts are being paid over the counter, technically because of some issues, especially on the large accounts because of the CWT. So it is a bit manual, but we are also incorporating it in our future builds for digital payments. As far as digital engagement, as far as Meralco customer engagement is concerned, which includes all the others, like complaints, billing inquiries.
Actually, our digital transactions account for around 70% of the total customer engagement, including self-service, because of our web and the new My Meralco app.
Thank you for the answers. We have another question online from Peter Garnace of Unicapital . I believe the first two questions have been answered. The third question is, when do we expect SPNEC to turn EBITDA positive?
We expect SPNEC to be EBITDA positive when we deliver phase one of Terra Solar. Even before we do commercial operations, please know that we will be also generating capacity during commissioning to be supplied to the WESM. That will, in turn, also generate cash.
In line with that, Mr. Rubio, another set of questions on power generation. We saw PowerGen's contribution to core net income jump PHP 9.8 billion year -to -date. Can you talk more about how plant availability, reserve markets, and Chromite's ramp-up are shaping full-year outlook?
Apart from the contribution of Chromite, which Betty already mentioned, the terminal is already able to supply 2,400 MW, equivalent of 2,400 MW, equivalent of a gas sendout. The ones that really move the needle are the participation of the thermal plants, particularly PEDC and CEDC, in the optimized market. These two units of PEDC are actually supplying contingency reserve, as well as the three units in CEDC. The average price of contingency reserve in Cebu is hovering anywhere between PHP 6 -PHP 7 per kilowatt-hour. While the regulating reserves, which PEDC unit 3 is supplying for 30 MW almost on a consistent basis, prices around maximum PHP 24-PHP 25 . That's why we were able to justify and the board approved our investment in a 40 MWh battery.
We believe enough to beat the marginal plant, to at least make the prices a bit rational to ensure the sustainability of the market of this one. Having said that, we will be testing our San Buenaventura plant in Luzon to provide also regulating and contingency reserve. Given that reserve prices for contingency and regulating in Luzon are also high, not as high as Visayas, but active enough for us to participate in that. And on availability, the average availability now that we have in our thermal plants are above 90%. The lowest ones, but are catching up because of the plant outage in January, and in February are plants in Mindanao, in joint venture with Alsons, the Sarangani plants. And all the solar plants are above 98%.
Thank you for that detailed response, Mr. Rubio. Just want to check on-site participants if you have any questions. We have a few more unanswered questions online.
Good afternoon. Lee Young from FF Securities. Just one question. Can you provide context on how operational shifts in food and bev offset the industrial sales?
Well, I think for food and beverage, there's some sort of decentralization. There are some that scale down the operations in our franchise and put up some sort of manufacturing plants outside the franchise, so for ease of distribution. And one thing that we also noted is for most of this sub-segment, food and beverage in the industry, especially the breweries, they're putting up solar on our rooftops. That also impacted our sales in terms of gigawatt-hour sales.
Thank you.
Thank you. We have a virtual hand raised online. Can we open the floor for Germaine Guinto of Maybank Securities? Hello, Germaine ? Hey, Germaine , you can carry on.
Okay. Thank you for the opportunity, sir. I just have three questions. Sorry if I missed this, but was there any updated guidance on provide securities contribution for the full year? Should we expect higher than the initially guided PHP 5 billion-PHP 6 billion contribution guidance side of the year, or should we be still the same?
I will answer that. I think we are tracking towards achieving that number. We are tracking achieving that number.
Thank you. My second question is, if possible, can we get some color on potential project costs for the Atimonan and possible timeline guidance of when it is being commercialized?
What we're doing now. Sorry. What we're doing now. We're good? Yeah. What we're doing now is that we actually didn't stop the project development work on Atimonan. We believe the country needs it and that the DOE will eventually allow the plant to be built. What we're doing is we are actually making the plant ready to participate in any auction. We're timing it probably by around September or early October, with energy unit or we're even looking at RES underwriting a certain portion. We're also coordinating with DOE with regard to DOE's plan of implementing a baseload capacity auction. I don't think , though, that it will be this year, but maybe next year.
That's the timeline that we're looking for Atimonan, that I think we will be able to participate in an auction by around September to early October, given where we are with project development. As far as cost is concerned, it's any coal plant, but we're aiming to actually develop this at around $2 million - $2.2 million per megawatt. Slightly higher because it's an ultra-supercritical coal, but with a lower OpEx because of lower fuel consumption.
Germaine , I hope you had your question.
Hello. Amazing. Thank you, sir. This plant should offer the lowest costs for consumer, right? Does that mean this plant is expected to have better margins than that of the traditional coal and gas plants? If so, by how much?
Well, when it participates in an auction, that auction will happen around October. We believe that this is going to be the most competitive supply for baseload supply in the country.
Thanks, Germaine . I hope we answered your questions.
Will you be able to provide any outlook on PacificLight's lending market for the full year? Should we expect it to remain stable at current levels?
Well, actually, the number that we have achieved so far is slightly lower than last year. However, even if the margins are actually declining, given the entry of Meranti, a 600-MW plant, it's being offset by a new capacity, the 100-MW standby plant, fast-start plant. That's being paid at full capacity fee by the EMA. Having said that, we're also seeing increasing demand. In fact, in the recent three or four weeks, we're seeing prices actually go up a little bit. Just not sure if it's actually going to be sustainable for the rest of the year, but it's a positive sign.
All right. Thank you so much.
Thank you, Germaine , for the questions. Still within the topic of PacificLight, we have a question from Karisa Magpayo of Macquarie. Of the PHP 6.8 billion for net income of PacificLight in the first half, how much was from operation of the 100-MW fast-start?
The 100-MW fast-start was SGD 500 million.
Thank you for that. We have a question from Jessica Tayoto. What is the update of the remaining balance of the distribution rate through refunds and the expected timeline for full disbursement?
It's over 36 months for the PHP 19.9 billion. That covers the difference between AWAC and the approved rate from July 1, 2022, up to December 2024. That's over 36 months. We have refunded three months already of about PHP 1.7 billion.
Thank you, Ms. Betty. In regulatory sale, what is the status of PSAs, especially those pending ERC approval?
There are, I think, at least three that we are still waiting for approval from the ERC. Up to now, there's no movement yet on these cases. These are, I think, the Masinloc PSA, and then there's another one with, I'm not sure if GNPD has gotten the approval already. There are other two cases I can't remember. I will give you the complete list of those pending with the ERC.
Thank you, Valles. From Gregg Ilag of BPI Securities. Thanks for the call. Can we get more details on the profit contribution of Chromite in the second quarter 2025 alone? Is it higher or lower than first quarter 2025?
We expect the earnings of Chromite to be higher than the first quarter, given that the only time we were able to do a full gas send-out was June 1, and the delivery of the plants were staggered on Excellent Energy. Now that we are on full capacity, we also have to schedule an outage of SPPC, but that is not going to affect the numbers significantly, that the second half will remain to be higher than the first half.
Thank you, Emmanuel. Another question from Gregg. What are the profit drivers that Meralco is looking at in the second half to hit the profit targets?
The bulk of the contribution would be coming from power generation, given that we will have the full six months for Chromite. Note that in the first half, it had staggered COD dates for units one, two, and three. So bulk of it. We will also have the full six months for the fast-start from Singapore. Lasso is coming in—
The two [inaudible] plants, 70 MW, delivered July.
Yeah. These are Bongabon and—
The Cordon.
Cordon.
The commissioning energy coming from Terra Solar around December.
Hi, Jessica. Going back to your question on the pending PSAs with ERC. These are the pending PSAs. We have the MPCL, or the Masinloc PSA, for 500 MW. That is baseload. Another one, 100 MW with GNPD of Aboitiz, that is baseload. Another 400 MW with GNPD, that is mid-merit. Then we have the San Roque Hydro for 340 MW mid-merit that has been decided but is the subject of a motion for reconsideration filed by the generator, which is still pending at the ERC. Finally, is the 21 MW filed by SESI, which is also mid-merit. That is it. Thank you.
Thank you, Valles. We have a MGEN-related question from Eunice Dolatre of SB Equities. How many more power gen projects are still pending to expect online this year? Second—
Well, the commissioning of Terra Solar one, and then early next year will be the JV with VinEnergo, 400 MW solar, supplying MPower. That is 2026. For this year, I think we have delivered already what we can deliver. We will get the full year, Betty mentioned, the full six months of [Iri], the full six months of Cordon, and Bongabon, and the commissioning of Terra Solar.
I forgot who asked me the question on fast-start. Sorry, it is 0.5 million. Sorry.
We'll tie up the question from Jonathan, the two of videos charities. Can you share with us MGEN's spot exposure for 2025 for Philippines only and across the entire portfolio, including PacificLight?
The uncontracted capacity of MGEN for PEDC and CEDC, we were deliberate about for holding them out because it's participating in the optimized market in the Visayas. When we see prices to go down with the entry of new plants, particularly our battery in Cebu that we expect to commission by around August of 2026, then that's the time we will be looking at shifting our capacity. The MGEN rest is also looking at operating products like WESM plus premium, putting a cap and putting a door, given that the WESM is forecasted to stay at the current levels, especially when we inject Terra Solar capacity.
Thank you, Emmanuel. We have a question from Paulo DeCastro, BPI of BPI Asset Management. Will we know what growth increase in energy sales were flat year-on-year?
It's additional capacity because last year, a couple of our plants were down. San Buenaventura, PVC, and PacificLight. Yeah.
And of course, the new capacity, Chromite.
We have one more question online, but before we read that, do we have any questions on site? Okay, going back to Catherine Delatour . On your balance sheet, can you share your comfortable optimal debt metrics given traffic in debt levels? Thank you.
Well, first, if you look at the parent company numbers, the debt looks high. There is a second step that we are doing with respect to Chromite. We are pushing down the debt to the operating company level. We should be able to complete that transaction within the year. The target is within the year. So we will be pushing down about, at least our share, would be about PHP 44 billion of what we had contracted. So, that is it. Well, I think if we look at debt to EBITDA, we should be comfortable at 2.5x. And we are looking at that would be a consolidated number.
Thank you, Ms. Betty. Those are our questions for now. Thank you everyone for your questions. Before we appreciate those, please be informed that an audio recording of today's briefing will be available on our website under the Investor Relations section. Thank you once again for attending today's briefing. Stay safe, and we look forward to seeing you again in our third quarter and nine months briefing. Thank you.