Mr. Froilan Savet, SVP and Head of Networks, Attorney Jose Ronald Valles, SVP and Head of Regulatory Affairs and [audio distortion] CEO of Meralco PowerGen Corp. We will begin the presentation with the financial highlights with operating results [audio distortion] from Meralco PowerGen. Finally, we would conclude the presentation with a few words from our Chairman and CEO. At this point, I would like to turn the floor now to our Chief Finance Officer, Ms. Betty Siy-Yap, for the financial results.
Consolidated core net income, or CCNI, in the first six months of 2024 increased by 21% to PHP 23.2 billion from PHP 19.2 billion in the same period last year, driven by higher sales volume of the distribution utility, higher contribution from retail electricity business, and higher plant availability of power generation in the second quarter of the year. Consolidated reported income, meanwhile, rose by 26% to PHP 22.4 billion from PHP 17.9 billion, while core EBITDA increased by 20% from PHP 33.2 billion to PHP 39.8 billion this year. The gap between CCNI and consolidated reported net income represents accounting amortization of day one gain adjustment equivalent to PHP 1.1 billion, net of foreign exchange gains of PHP 330 million, and other non-recurring gains from the sale of lot at the MGEN level. Consolidated revenues grew by 6% to PHP 237.5 billion from PHP 224.8 billion in 2023, mainly due to higher volumes sold by the distribution utility.
Cost and expenses increased by 5%, the bulk of which deal purchase power, which accounted for 82% of the total. Capital expenditure total close to PHP 20 billion, largely for distribution network projects, development of solar projects, and acquisition and construction of telecommunications tower. Cash and cash equivalent amounted to PHP 86.6 billion, while consolidated debt balance was PHP 99.6 billion. This slide shows the core net income composition of the total CCNI. Our regulated business or the distribution utility business accounted for 55% or PHP 12.8 billion, slightly lower than the 57% achieved last year, but higher by 17% in terms of absolute amount. On the back of a 13% and 10% growth of residential and commercial sales volume.
For our non-regulated businesses, which accounted for the remaining 45%, power generation's contribution was at PHP 6.2 billion, or 27% of total from PHP 6.6 billion or 34% share last year since PLP's margins have come down as the Singapore market stabilizes. This was offset by the increase in RES CCNI from trading gains and improvement in retail prices, and GBP's higher WESM margin and revenues from the reserve market. On the quarterly highlights for the second quarter of 2024, CCNI was at PHP 131.1 billion, 29% higher than last year's PHP 10.2 billion. The new CCNI contribution was at PHP 7 billion, 8% higher versus the PHP 6.5 billion in 2023, with 8% increase in sales volume. Contribution of unregulated business was at PHP 6.1 billion, more than 1.6x the CCNI contribution of PHP 3.7 billion the second quarter of 2023.
Although the blended margin of PacificLight was lower, it generated higher volume at 1,513 GWh versus 1,078 in the same quarter last year, with the scheduled maintenance in 2023 of Unit 20 from April 29 to June 10, and forced outage of Unit 20 resulting in two days forced outage from June 17 to 21. Also, contribution of RES improved with trading gains and better margins as new agreements contain tariff structures with fuel cost recovery protection. Consolidated revenues grew by 6% to PHP 237.5 billion from PHP 224.8 billion in 2023, mainly due to higher volumes sold by the DU. Electric revenues totaled PHP 231 billion or 97% of the total.
Generation, transmission, and other pass-through charges were 7% higher at PHP 181.8 billion, due to higher volume as lower WESM prices decreased in international coal prices and lesser volume purchase using emergency power supply agreement offset the impact of peso depreciation, higher Malampaya natural gas prices, and use of liquefied natural gas by First Gas Santa Rita and San Lorenzo plants. The peso was at 58.61 per US dollar at the end of June this year versus 55.2 in the same period last year. With the ERC-approved interim average rate of PHP 1.35, distribution revenues increased by 9% to PHP 36.4 billion, same as the growth in volume. Energy fee, which totaled PHP 12.8 billion, decreased by 10% due to lower fuel and coal prices, coupled with lower plant availability of Cebu Energy in the first quarter of this year.
Non-electric revenues were flat at PHP 6.5 billion due to lower awarded EPC projects of MIESCOR, which was partly offset by higher revenues of MIDC from the increased number of towers. Total costs and expenses were at PHP 212.5 billion. Purchase power cost accounted for 82%. OpEx was 9%, depreciation in combined coal and fuel, and power plant O&M accounted for 4%, with other expenses for the remaining 1%. Purchase power cost increased by 4% to PHP 174.4 billion from PHP 167.5 billion, consistent with the movement in pass-through revenues. Operating expenses increased by 8% on account of rigorous maintenance of DU facilities, including those related to overloaded transformers during the high heat index period, higher costs of software maintenance and subscriptions, and inclusion of the SPNEC expenses this year following Meralco PowerGen's acquisition of a controlling stake in December of 2023.
Depreciation and amortization increased by 12% to PHP 9.2 billion due to the completed capital expenditure projects of the distribution utility, acquired towers under a sale and leaseback arrangement with Globe, completed BTS or build-to-suit towers of MIDC, and the completion of the first phase of PH Renewables or the Baras Power Plant in the first quarter of 2023. The combined coal and fuel and power plant O&M amounted to PHP 7.3 billion, 26% lower, with a decrease in fuel and coal prices, coupled with the scheduled outages of Cebu Energy in the first quarter. Other expenses largely pertains to reversal of provisions with a settlement of RPT or real property taxes, accounting adjustment with respect to IFRIC 23 net of provisions for overrecoveries.
Our consolidated CapEx at the distribution utility level accounted for 56% of the total PHP20 billion capital expenditure, comprised largely of distribution network projects that include new connections, asset renewal, load growth projects. Power generation CapEx accounted for 13%, largely for the development of three solar plants, which are phase two of the Baras Solar Plant, 49 MW of Greenergy, and 18.75 MW of Greentech Bongabon, as well as land acquisition for the Terra Solar project. Subsidiary CapEx represented 31%, majority of which pertains to the towers that were acquired. To this date, for the first six months, the total purchase or additional tower is 475 from Globe. On power generation. Another major earnings contributor would be power generation. Meralco's wholly owned subsidiary, Meralco PowerGen, delivered a total of 7,633 GWh of energy in the six months.
As of end June, MGEN had a total power generation capacity of 2,404 MW net through its diversified power generation portfolio in the Philippines and Singapore. While the contribution of power generation unit of PHP6.2 billion was 93% of last year's achievement, the decline in CCNI of PacificLight was much less than expected. PacificLight recorded a CCNI of SGD 148.7 million or PHP6.4 billion from last year's SGD 221.4 million, mainly due to lower margins from the pool and contracted as the Singapore market stabilizes. SBPL, which is 51% owned by MGEN, has achieved 99% plant availability with the completion of its first-ever major maintenance and has delivered a total of 1,544 GWh of energy during the first six months of 2024, compared with only 1,244 GWh in the same period last year.
It booked core net income of PHP1.7 billion, flat versus last year with outages at the start of the year related to the scheduled maintenance, which resulted in lower capacity fees. Global Business Power generated CCNI of PHP1.5 billion, 78% better compared with 2023. The higher availability of PEDC resulted in better margins from the spot and reserve markets, which offset the lower revenues from the expiration of the ancillary services procurement agreements in April. MGreen delivered PHP131 million of CCNI, 68% better than last year, with total installed capacity of 318.5 MWac. Total energy delivered was 344 GWh, 106% more than 2023.
The volumes were from BulacanSol, a 50 MWac plant, Nuevo Solar, a 68 MW plant in Currimao, and 67.5 MW of the Baras Solar Plant, as well as SP Tarlac or Solar Philippines Tarlac, a 78 MW solar plant, and SP Calatagan, which is a 50 MWac plant. Our consolidated interest-bearing debt stood at PHP99.6 billion, including PHP58.3 billion of debt of our subsidiaries. Meralco's debt maturities are spread through 2039. Net debt as of the end of June 2024 was at PHP 9.7 billion and net debt to EBITDA is at 0.1x . All of Meralco's consolidated debt are peso-denominated. Cash and cash equivalents amounted to PHP 86.6 billion, while short-term investments totaled PHP 3.2 billion. Our long-term cash investments is at close to PHP 14 billion. Our core earnings per share amounted to PHP 20.590, up 21% versus last year. Today, the
But basically, that customer experience being connected in less than two days after submission of the requirements is also a very good performance already. For electricity rate, for the first half of 2024, there is a reduction of 3.8% at PHP 10.27 per kWh , from PHP 10.68 per kWh hour in the first half of 2023. Basically, this reduction was due to the lower WESM cost and lower coal and implemented Malampaya prices as well as due to the residual effect of the significant reduction of generation charges in June following ERC's deferral of PHP 8.4 billion in charges and the splitting of the final May 2024 IPP bill into four equal amortizations. I am now turning you over to my colleagues to discuss the details of these headline numbers, starting with Ferdie Geluz, then Froi Savet, and then Ronald Valles. Thank you.
Yeah. Good afternoon again, everyone. For the details of our sales, our consolidated sales, as mentioned, is at 26,954 GWh. So close to 9% increase versus same period last year, driven by sustained growth of residential and commercial segments, as well as modest recovery of industrial segment. The first half performance was highlighted by breaching 5 billion kWh in the month of May at 5,058 GWh. So this is a new milestone for us. June should have been more than 5 billion kWh also, if not for the typhoon, but we ended just 8 GWh short at 4,992 in June. Residential posted double-digit growth of more than 12%, driven by warmer temperature, as well as still robust energization of new homes. There are longer times spent at home with academic calendar shift and hybrid classes due to extreme heat.
The average temperature rose close to 1 degree Celsius for that period. Of course, that contributed to the double-digit growth of our residential segment. Commercial segment likewise increased close to 10%, 19.9% in first half, with steady consumer demand and business expansions led by real estate, retail, and restaurants and hotels. So real estate grew 10% as office occupancy rate continues to surge, and ongoing mixed-use developments are driving up energy consumption. V2 Properties reported a 24% office leasing surge in first half of this year, fueled by IT-BPM and government leasing activity. Retail trade likewise grew 10%, together with restaurant, that grew 13%, and the growth is fueled by increasing pace of expansions of retail marts as well as chain marts like Alfamart. So hotels grew 14% as tourism continues to rebound, with foreign visitors arrivals up 12% in the first half of 2024.
The hotel industry sentiment is positive, especially in the medium term and long term, with new energizations like Quezon City Solaire, which showed a continued acceleration in terms of consumption. Okada also showed a growth, as well as Makati Shangri-La. Industrial segment bounced back 2.4% on the half with continued recovery of plastics and cement industries, as well as sustained performance of food and beverage, as well as semiconductor industries. So semicon have a modest growth of 3%, with strong demands from Toshiba, Samsung, and Murata that offset the decline of other accounts. So food and beverage grew 5%, plastics 8%, and cement 7%, with a double-digit growth in some key accounts like Solid Cement and Yamamura. For sales mix for the first half, commercial segment lead sales mix at 38%, residential at 34%, and industrial at 28%. That ends my report.
Passing you on to Froi for the networks report.
Good afternoon, everyone. We are pleased to share with you that in the second quarter, we have commissioned five major CapEx projects. First, on May 16, we energized Pallocan West on GIS Substation. This is the first 69 kV GIS substation in the South Area and has an initial capacity of 50 MVA and with two distribution feeders. This new substation will relieve the expected critical loadings of Batangas City Banks 1 and 2, and will address the load growth in Batangas City. Second project was the construction of a new control house at Novaliches substation, which was completed on May 21st. This project replaces the original 44-year-old control house building, which contains critical equipment and devices essential to our substation daily operations. On June 26, we energized the third project, which is the second bank of the Eton Centris 115 kV, 34.5 kV GIS substation.
With this additional 83 MVA capacity, we will be able to serve the growing power demands in Quezon City, including large load customers in Eton Centris and the project of the government, which is MRT 7 in the area. Fourth, we commissioned the Napindan 115 kV switching station, which will serve the CAPASCO, Cathay Pacific Steel Corporation on June 28. This new switching station will provide an alternate source to CAPASCO during an outage of any of these substation types. Lastly, also on June 28, we energized the new 34.5 kV switchgear number 1 that will replace the 30-year-old switchgear at Meycauayan Substation. This will ensure the continuity of reliable service in several barangays in Meycauayan, Bulacan. Thank you. I am now turning you over to Attorney Valles.
Good afternoon. For the regulatory, let us start with the 5RP application of Meralco. You will recall that last September 2023, Meralco filed an omnibus motion to withdraw our 5RP application considering the lapse of almost two years now from the time it was filed without any resolution from the ERC. We also proposed that RY 2023 and 2024 be treated similarly as the lapse period with a 1.3522. Last May 10, 2024, we received an ERC order dated April 16, 2024, where the ERC denied our omnibus motion to withdraw and refile the application. It also directed us to proceed with the original application, but based only on the last two remaining years, that is RY 25 and 26. The order is without prejudice to the ERC's treatment of the lapse period of the 5RP.
The hearings resumed last May 13 and May 14, 2024, where Meralco and other intervenors strongly opposed proceeding with the application based only on two years for being contrary to the existing RDWR rules of 5RP, which is based on four-year forecast. As a consequence, the hearings from May 15- 24 were canceled pending the issuance of an ERC order resolving our opposition. Last May 27, we filed our motion for reconsideration of the order dated April 16, 2024. As an update on our actual weighted average tariff case. Last June 16, 2022, you will recall that the ERC already decided in our AWAT case by approving Meralco's AWAT application.
This AWAT decision resolved to close the lapse period of Meralco from July 1, 2015 to June 30, 2022, through a true-up mechanism, wherein the ERC's last approved final rate for Meralco, equivalent to PHP 1.3522, was adopted and are what in excess of the final rate is refunded to consumers. Several intervenors, NASECORE, Mr. Non, Mr. Junia, filed motions for reconsideration of that decision. The final rate of Meralco, which is the PHP 1.3522, was decided by ERC in a separate case, not the AWAT case, but in the IAR case. This decision of the ERC has become final and executory because no MR or appeal was filed by any party. Last June 13, 2024, the ERC issued an order denying the motions for reconsideration filed by Mr. Non, Mr. Junia, and NASECORE.
In that order, the ERC affirmed that it has the necessary regulatory authority to set the rates of Meralco during the lapse period in the exercise of its quasi-judicial power. Both the IAR, or the interim average rate, and the AWAT cases complied with all the legal and due process requirements, including notices and hearings. On July 18, we received a copy of the petition for review filed by Alfredo Non before the Court of Appeals. We are now awaiting the order of the Court of Appeals insofar as this petition is concerned. With respect to the PSA of Meralco for the 1,200 MW, the ERC, as the winner of the 1,200 MW CSP, SPPC and Meralco filed with the ERC, the power supply agreement for approval. The ERC released an order last May 9, granting the provisional authority to implement the PSA, but imposing several conditions.
First, the PA covers only 910 MW instead of the full 1,200 MW capacity. Meralco and SPPC must continue to honor and implement the 2019 290 MW mid merit PSA. Despite the reduction, Meralco continued or proceeded to implement the 2024 1,200 MW PSA, but limiting our nominations to only 910 MW pursuant to ERC's provisional authority. Last June 26, Meralco and South Premiere Power Corporation jointly filed a motion for partial reconsideration of this order, questioning the ERC's provisional authority, mainly on the grounds that there was a valid assignment already of the 2019 290 MW PSA to Sual. The order of the ERC actually contradicted the power supply procurement plan approved by the Department of Energy, which clearly indicated that the capacity that should be contracted should be 1,200 MW and not 910 MW.
Moving on to the CSP of Meralco, the competitive selection process for the 500 MW RE requirement effective March 2026. Following the CSP commenced on May 25, our bids and awards committee found the bids submitted by the following bidders to be the best bids, with a total offered contract capacities of 500 MW. Shown on the screen are the names of the bidders with the corresponding contract capacity. San Roque Hydropower emerged as the bidder with the lowest offered price. It offered 340 MW at the rate of PHP 7.10 per kWh on delivery rate. San Roque Hydropower is owned by San Miguel. The other two, GigaSol and Santa Cruz Solar, are owned by Ayala, or ACEN. Their total delivered rate are at PHP 8.18 and PHP 8.19 per kWh , which are also below the reserve price of PHP 8.23.
The term of this PSA is for 10 years. The tariff structure is a straight energy price without any escalation for a period of 10 years and with a minimum energy of the equivalent to 45% of the plant capacity factor. Please note that this CSP is in compliance with Meralco's requirement under RE Law to procure Renewable Energy Certificates equivalent to 45% PCF or 1,971,000 MWh or REC certificate. Now on the franchise renewal update, as you know, there are three pending bills before the House of Representatives, simultaneously filed by Congressman Joey Salceda, Rufus Rodriguez, and former Speaker Lord Allan Velasco. They all authored the renewal of the franchise of Manila Electric Company.
After the initial hearings on May 13, 2024, and May 21, 2024, we have been advised that they will call another final hearing for the resumption of the session in the week after the SONA. We're expecting that any time in the week of August 12, 2024. Finally, you will see here the filings of formal expressions of support from business groups, industry associations, and advocacy group, all calling for a renewal of Meralco's franchise. They have been filed before the House Committee on Legislative Franchises on various dates. Thank you very much.
Thank you for the update. At this point, we would like to recognize the presence of our Chairman and CEO, Mr. Manuel V. Pangilinan. Hi, sir. To proceed with presentation, we'll transfer the floor to Mr. Manny Rubio, who will discuss the power generation business.
Thank you. Good afternoon, everyone. For the power generation group, I am pleased to report that the group delivered higher energy for the first half of the year, 7,600 GW compared to 7,400 GW same period last year, despite the scheduled maintenance of all of the plants actually half of first quarter of 2024. GBP delivered energy that is 7% lower than last year because of moderation and its plant outage. However, worth noting is that three units of GBP, one unit in CEDC and two units in PEDC, a total of 40 MW, have been given certificate of NDCP to provide contingency reserve, so that it can participate in the co-optimized market once it runs, hopefully by August of this year. San Buenaventura reported a 1,554 GWh generation, 24% compared to last year.
PacificLight saw a slight decrease because of an upgrade that they did in the first quarter, a turbine efficiency upgrade that made PacificLight one of the most efficient units in Singapore, something that is quite valuable in a very competitive merchant market in Singapore. Lastly, MGreen, the renewable energy unit of MGEN, delivered a total of 344 GWh of energy, supported by the operations of SPNEC subsidiaries , SP Tarlac, and SP Calatagan. in May, PacificLight was granted the right to build, own, and operate a 100 MW hydrogen ready gas turbine with the fast start generation capacity by the Energy Market Authority or EMA. It is contracted by the Energy Market Authority and to be delivered later in 2025. This development aligns with our commitment to providing dependable, reliable, and sustainable power to Singapore's rising energy demand. This is the equivalent of our dispatchable reserve in Singapore.
During the same period, MGreen's Greentech Solar Energy, or GSEI, and Greenergy for Global Inc., GGI, secured 15-year term project financing from Security Bank. GSEI's 18.75 MWac solar plant in Bongabon was granted PHP 791 million loan, while GGI's 49 MWac solar plant in Cordon, Isabela, was able to secure a PHP 2 billion funding. Moreover, our 75 MWac solar project with Mitsui in Baras, Rizal, is currently undergoing testing and commissioning of the project's phase two. Phase one has been generating at the full capacity since April 2023. In June, MGreen and Vena Energy closed an investment agreement for the development, construction, and operation of the 450 MWac solar project in Pangasinan through 3 Barracuda Energy Corp. The project is expected to commence its construction by the third quarter of 2024 and achieve commercial operations by fourth quarter of 2025.
For Terra Solar, we are happy to share that it has completed 54% overall early project development as of second week of July. Key progress areas include land control. PV land is 49% complete, and the transmission line right of way is 34% complete. Premise for redevelopment is 58% complete. Solar farm development is 88% complete. Procurement, 61% complete. Interconnection development is 35% complete. While PV site clearing is ongoing at 23%. The Terra Solar project remains on track for key milestones, with significant progress anticipated in the coming months. Completion targets for major components are set for December 2024 and January 2025, which are basically awarding of EPCs for transmission lines and EPC for the PV portion and the battery. The project is expected to be completed in two phases, phase one to be delivered hopefully by Q1, scheduled Q1 2026, and phase two by Q2 2027.
Looking forward, we anticipate further progress in our efforts to low carbon transition as we continue to dedicate ourselves to providing cleaner and more sustainable energy to the Philippine market. Thank you very much.
Thank you, Manny, for the presentation. We will now proceed with the Q&A. For our analysts and investors, kindly state your name and the company that you represent before asking your question. In order to facilitate a more seamless discussion, please state the name of the executive you would like to address the question. To those who are joining us via MS Teams, which I believe is close to above 100 participants, you may raise your virtual hand and please wait to be recognized before you speak. Alternatively, you may also type your questions in the chat box, and I will be reading them for the executives. For those who are here at the Pacific Room, you may raise your hand, and we will give you the mic. The floor is now open for your questions.
Hello, good afternoon, everyone. I'm Jeline Gaza from JP Morgan. My first question relates to the generation segment and to Sir Manny. I've noticed that Global Business Power Corporation had strong earnings for the second quarter. Is this sustainable? How much of the total net income is attributable to the profits from the reserve market or any PATC related one-offs, if ever?
[inaudible] First question. We believe that profit is sustainable given that the fixed price contracts have been resolved, which actually was the reason for the poor performance in the last two years. The revenue, or the income, actually, the income from the co-optimized market in the two months that the co-optimized market was running for, if I'm not mistaken, 10 MW of one PEDC unit, was around PHP 450 million. Of course, we don't know yet the new price forecasts for the co-optimized market, given that there have been baseload capacities that have been certified, including CEDC and PEDC for Visayas. But our estimate is that for baseload contingency reserve in Visayas, it will only be able to provide maybe as much as 80 MW from a 150 MW demand. So I think the diesel units in Visayas will still run.
That should give you an idea of how much clearing prices would be in the co-optimized market.
Hello. My second question is on regulatory. Can you please comment on any projected changes in EPIRA and how you are expecting this to transform given the pending bills that we have at the Lower House and at the Senate? Thank you.
There are actually various bills pending before the Congress for the amendment or, s orry. Can you hear me without a mic? Anyway, there are pending bills in the House of Representatives. The one that is very prominent is the bill filed by former speaker Lord Allan Velasco and still pending deliberation, but it's mainly focused on the restructuring of the Energy Regulatory Commission. Insofar as that bill is concerned, we have actually expressed our full support for that bill because, as you can see, many of the issues that are haunting us today in terms of the regulatory is with respect to the delays in how cases are being resolved. We believe that restructuring the agency is one of the ways to address that problem.
The proposal is to add more commissioners or more members of the commission to help in unclogging the docket of the commission. The other bills are mainly on the grid limits, but we have submitted our comments there. We're actually asking for the lifting of the grid limits, considering that we believe that the grid limits do not serve the purpose of the government of encouraging more investors to come in, because there are only actually limited investors today in power generation and distribution and in supply. If you increase the grid limits, then you're actually discouraging more investors to come in. We're actually asking or proposing, instead of increasing the limit, reducing or lifting the limit on grid limits, the cross-ownership provision, and also the contracting capacity limits.
But we are still studying the other aspects of EPIRA which we can comment on, and we will probably be able to finish this in a week from now and submit that to the House of Representatives or to the Department of Energy for consideration. Thank you.
How about SBN 2348? Is that the Senate Bill 2348 by Senator Tulfo? Is that something that-
Is that the one on the indigenous fuel?
The one about the market share limits.
Yes. That's the same. That's the same as the House bill. It has the same focus as the House bills filed before the House of Representatives, the limiting cross-ownership provision. We are also making representations to the Senate insofar as that is concerned, and we're essentially proposing to lift the limit on ownership and grid limits and the prohibition on cross-ownership.
Thank you for that. My last question is on the LNG deal. Can we please have any updates about the remaining hurdles, such as the approval of the PCC as well as the Excellent PSA? Thank you.
PCC? We've received an approval for the first phase, but we haven't heard from PCC whether this will go to the second phase. Hopefully, it doesn't go to the second phase, but we're confident that we'll probably close this matter out by around September. The PSAs, as reported by Ronald. For SPPC, 910 was given approval by the Energy Regulatory Commission, and we filed for a motion for reconsideration to bring it up to 1,200. We have no approval yet for the Excellent Energy 1,200.
Thank you, sir. Thank you.
Thank you, Jeline, for the question. We have a question online from Melissa Leong from UBS. Melissa, we will unmute you now.
Just two questions from me. The first one is, maybe I missed out, but could you advise on what is Meralco's stakes in the LNG terminal in Batangas? The second question is, maybe you could share a little bit more of the impact from the recent typhoon, and if all power are restored. That is it. Thank you.
I will reply to the first question. The ownership is to a joint venture with Aboitiz Power. We own 67%. The joint venture owns 67%, and of the 67%, we own 60%, so roughly around 40.2%. For the impact of the typhoon.
Yeah. Thanks for your question. We are happy to report that yesterday around noontime, all of our customers who were affected by the typhoon had already been restored, so we are back to business as usual as we speak. To share with you, around 662,000 accounts or Meralco customers were affected. 75% of that was flood-related, and the remaining 25% was due to other causes like tree branches, like fallen poles and the likes. We are happy to report that because of our very hardworking linemen or our people, we are able to restore power as soon as possible. Thank you.
Okay. Thank you very much.
Yes, on the ownership. I think the question about the ownership of, is that the same? Okay. Is that the same as the gas plants? When you break down the attributable ownership, Meralco will be the single largest shareholder at 40.2%. Aboitiz will be the smallest at 26.8%. The next largest is 33%. San Miguel is selling 67% to a joint venture company between ourselves, Meralco, and Aboitiz, where we own 60% of 67%, and Aboitiz for the balance of the 40%. San Miguel will continue to own 33% of that Ilijan gas complex.
Hi, Melissa. I hope we answered your question.
Yep. Thank you very much. That's very helpful.
Okay. Proceeding to the next question. We have a question from Greg Ilag of BDO Securities. What drove the increase in the full year guidance from PHP40 billion to PHP43 billion? That is the first question. Second is, can we have the percentage contribution of generation to core income for second quarter alone? Then third, what drove the higher cash balance in first half 2024?
At PHP23 billion. We believe that on the distribution side, that would be stable growth. Although, of course, La Niña will probably bring down a little bit our sales volume compared to the months of May, for example, wherein we hit 5,000 GWh. But it will still be sustainable. In fact, in the third quarter, that is when the industries would prepare for Christmas season, so you expect that volume to grow also. On power generation, as Manny had mentioned, we expect a sustained results from GBP, from PacificLight, and San Buenaventura. In the case of PacificLight, the loss that they had expected was not that low. So we think that is also sustainable as the Singapore market stabilizes. The other factor that contributed to our CCNI for the first half was the contribution of RES.
There were margins that RES was able to achieve trading gains that they did, but of course, the thrust is really to increase their customers or to recover customers or get new customers that they have lost during the height of the FCRA issues. The second question was?
The third question is, what drove the higher cash balance in the first half 2024?
Well, I'll go to the second question first. On power generation, the share for the second quarter is about PHP 3.5 billion in 2024 and PHP 2.9 billion in 2023. What drove the higher cash balance? Last year, we still had the refund of the distribution rate true-up. Remember, that's a total of PHP 48.9 billion that we had to refund, starting 2022. That went on up to May. A portion of the refund was through May of last year, too.
In terms of the distribution business, we don't see any f oreseeable issues that could affect negatively the performance of the DU moving forward. I think demand has been pretty good. It may falter a bit in the second half, because remember the first half, the demand was aided by the heat wave. So there were a lot of people buying and using air condition. So we had, for this year, exceptional two months of demand during the heat wave. So we're not sure whether that will happen the second half, most likely not. But generally speaking, both the volume and the profitability of the DU in the second half will be in the high single-digit rate. The first half, it was 9% sales volume increase and 9% increase in profitability attributable to the DU. Now, speaking to the rest, they're 100% first half, and in many ways accounted for the decline. Can you hear me?
It more than made up any profitability. So we don't expect the margins to be less. The trading margins are less, but they will be good, let's say. So both the rest of the second half, probably lower than the first half. Now, we will have other big enough with the generation. Because the first two months of generation were the hit of the plants, the November and December of GBP were shut down for expanding maintenance. The [audio distortion] first quarter was by GBP, and now that we have pretty relational steady second quarter was better for generations. And the second half, they spent in maintenance in the second half much better than the summer. So we expect that the missing development in the second half will be close enough to protect similarly with the first half. The first half is going to be prospective in the second half. Three.
Look at that.
Can't hear you, man.
Thank you, sir, for that detailed answer. Before we proceed to the next question online, do you have anything on the floor? Jarred?
Hi, thank you. Jarred Go from AB Capital. I have a question for Sir Manny. Just on Terra Solar, it's a fairly large undertaking with a battery component. Do you have any indication of what the CapEx spend will look like in the coming years to build this sort of project?
Currently, the online numbers have put the mic. Probably we use the mic.
Estimated budget for the total project, transmission, PVs, and energy storage, around PHP 195 billion. We are ready to award, hopefully by both transmission EPC and PV EPC and the best EPC by September, October of this year. We haven't opened actually the envelopes for the PVs and batteries, so the request for down payments, I'm sure, would be quite significant and front-loaded. Let's assume 20%, 30% to start. That will be the initial projection for the Terra Solar spending.
Can I ask another question?
Generally speaking, the PHP 195 billion will be funded with 30% equity and 70% debt. The equity we're trying to raise, or we will need to raise, is around approximately PHP 60 billion. The balance of PHP 135 billion will be debt. I think Betty has done a good job in forming a consortium with local banks to fund the PHP 135 billion. This PHP 60 billion of equity will be split into 60% SPNEC, which is the owner of Terra Solar, 100% owner of Terra Solar at the moment. We're talking to a group of at least five investors. The objective is for them to pick up 40% of the PHP 60 billion. So roughly PHP 36 billion for Meralco in equity and PHP 24 billion for the foreign investor. There's a big but.
In selling the 40% equity in Terra Solar, we are asking for a premium because we have done a lot of work, et cetera. They are coming in really quite late in the game, where a lot of the components of the project done by Lean Leviste and by our people, led by Manny here. By the time they come in, the meal is about cooked, ready for eating. So we are asking for a premium. That premium will reduce the PHP 36 billion quite substantially that Meralco has to pony up into the project. So don't worry about the cash flow of Meralco.
Thank you for that. We go back online. Question from German de la Paz of Metrobank Trust. Any updates on the search for a partner for Terra Solar? Search for a partner for Terra Solar.
The bids are supposed to be in August 15, right? Bids. There will be bidders. We told them they have to make a bid, a binding offer by August 15 this year. I guess internally, that will be vetted and sieved by management, and then they should develop two or three final names and then put it to the board as to who the winner is. The first runner-up, the second runner-up, and whoever it is, whatever you call it. But the initial numbers that they indicated are quite attractive already. As I said, it will reduce the kind of equity that we need to put up. They are quite well-known names.
Currently, we don't have any questions on the online. Calling for one more round here on the floor. We don't have questions on the floor, but obviously, the management is very excited for the prospects of Meralco moving forward, and we look forward to seeing everyone again in the third quarter briefing. I would like now to call on our Chairman, Mr. Manny Pangilinan, for some of the final words.
Thank you. I think I've spoken enough, so thank you so much, and we look forward to seeing you on the third quarter. When do we announce? October something or November?
November.
October 28th. Okay, see you on October 28th.
October 28th.
Is it too far to come here for you guys? Because PLDT has more analysts whenever we announce, and we have better numbers now, don't we? Maybe we should hold it in Makati. Are you mostly based in Makati? No. BGC. Maybe we should hold it in BGC. Better face the folks. So we can have a dialogue with you. You seem to be shy. My experience with you, people here don't ask a lot of questions. Okay, thank you. Thank you so much.