- Reduce significantly First Pacific’s Head Office net debt level
- Continue to seek new investment opportunities when appropriate
- Guide PLDT through its digital transformation
- Support Goodman Fielder’s export initiatives and expansion in Asia
- Assist Philex complete the definitive feasibility study for the Silangan project
- Work with management of PacificLight Power Pte. Ltd. (“PLP”) to achieve profitability
- Work with management of Roxas Holdings, Inc. (“RHI”) and First Coconut Manufacturing Inc. (“FCMI”) with the aim of developing these companies as major players in Philippines’ sugar and coconut industries, respectively
- Grow consolidated service revenues, excluding international long distance/national long distance, by increasing wireless service revenues and sustaining double digit gains in the data and broadband businesses
- Meet core income guidance of Pesos 28.0 billion
- Further establish the PLDT group’s fixed and wireless networks’ dominance and reliability to support the data and broadband businesses, with 2016 capital expenditure budget of Pesos 43.0 billion
- Expand the PLDT group’s suite of offers in digital services, particularly via digital platforms and mobile financial services
- Continue to accelerate growth, both organically and inorganically
- Maintain a healthy balance sheet
- Continue the development of major projects in light rail and roads which were won in 2015 bidding
- Bid on further public-private partnership (“PPP”) projects in the Philippines, expand MPIC’s regional presence and pursue opportunities in non- or less-regulated infrastructure businesses
- Resolve tariff claims in the domestic toll road and water businesses as well as other disputes in light rail and electricity distribution
- Establish specialty hospitals in the Philippines to improve patient outcomes while reducing costs to patients
- Increase sales and profit in South East Asia and China
- Improve the sustainability of the profits of the bread business particularly in Australia
- Refinance the debt due in 2016 at a significantly lower net cost
- Complete the definitive feasibility study of the Silangan project
- Continuously improve productivity amidst weak metal prices
- Explore tenements around Padcal mine to extend the mine life
- Diversify its gas portfolio
- Leverage efficiency advantage and operational flexibility to increase its retail portfolio
- Achieve a total contract level of 85-90% for its generation
FP Natural Resources/
- Increase reliability of cane supply
- Lift core net earnings
- Increase ethanol production
- Complete rights issue
Review of 2015 Goals
- Goal: Return Goodman Fielder to earnings growth
Achievement: Ongoing New management from First Pacific and Wilmar International Limited (“Wilmar”) are working closely to stabilize Goodman Fielder’s businesses in Australia while growing the New Zealand and International revenue streams. Higher marketing and capital expenditure has been approved for supporting export initiatives and to overcome earlier shortfalls in spending.
- Goal: To complete the definitive feasibility study for the Silangan project
Achievement: Mostly achieved Most aspects of major work streams of the definitive feasibility study were progressing broadly as planned. Silangan’s management continues to review and analyze consultants’ work as the definitive feasibility study progresses. It is expected to be completed in 2016. The required permits and licenses applications for the execution of the project have been submitted to the government.
- Goal: To evaluate new business opportunities in unregulated sectors
Achievement: Ongoing A number of potential opportunities in consumer/food products and infrastructure are being evaluated at operating company level, with the goal of enhancing First Pacific’s portfolio and boosting shareholder value.
- Goal: Grow consolidated service revenues in 2015 by improving wireless service revenues over 2014, and maintaining double digit increases in the data and broadband businesses
Achievement: Partly achieved PLDT’s consolidated service revenues decreased 1% as the revenue mix continues to undergo a structural transition. Growth in the data and broadband businesses continued, up 15% in 2015, but was fully offset by lower revenues from cellular domestic voice, SMS and value added services (“VAS”), and by lower revenues in the fixed and cellular international voice businesses. Leaving aside international long distance and national long distance revenues, consolidated service revenues increased 2%.
- Goal: Achieve core income guidance of Pesos 35.0 billion
Achievement: Achieved Core net income was Pesos 35.2 billion (US$772.0 million) for 2015, slightly exceeding the guidance target.
- Goal: Increase coverage and capacity of the PLDT group fixed and wireless networks to support the data and broadband businesses, with guidance for 2015 capital expenditure of Pesos 39.0 billion
Achievement: Partly schieved and ongoing The original capital expenditure guidance of Pesos 39.0 billion (US$855.1 million) for 2015 was raised mid-year to Pesos 43.0 billion (US$942.8 million) as the build-out of a more robust data network was accelerated. Capital expenditure for 2015 was Pesos 43.2 billion (US$947.2 million), in line with the revised guidance. The multi-year network build-out anticipates exponential growth in network data traffic resulting from increasing smartphone ownership and data usage, particularly of digital offerings for entertainment (music, video, and games), e-commerce, financial solutions, mobile payments and internet TV. Continuing improvements in network quality and capacity and customer experience are already apparent in third-party surveys.
- Goal: Expand PLDT group’s digital business segment including the launch of initiatives in mobile payments, financial services, e-commerce and big data
Achievement: Achieved and ongoing The data and broadband businesses contributed revenues of Pesos 49.5 billion (US$1.1 billion) in 2015, including Pesos 1.0 billion (US$21.9 million) from PLDT’s innovations unit, Voyager. PLDT’s mobile payment service PayMaya was re-launched in September 2015 and by year-end had already recorded 150,000 new accounts. PLDT’s mobile financial solutions application, LockByMobile, will be used by Visa to enhance credit card transaction security. Other e-initiatives include online e-commerce businesses, namely TackThis, which helps businesses create online store fronts, and Takatack, an online centralized marketplace. In addition, PLDT’s Enterprise group has started to offer big data analytics and business insights to corporate clients. These all form part of PLDT’s digital pivot and are expected to play a bigger role in revenue generation in the future.
- Goal: Continue to accelerate growth organically and through expansion of business categories
Achievement: Achieved and ongoing Despite weaker macroeconomic conditions, Indofood achieved revenue growth organically and from new business categories.
- Goal: Optimize portfolio
Achievement: Achieved and ongoing Portfolio was optimized with emphasis on innovation, introducing new product categories and increasing the number of new product launches across all market segments to meet consumer demand. The group also entered new categories such as noodles for kids, mug noodles, snack noodles, instant porridge, pudding for babies and ready-to-drink black tea. Around 60 new products, including new categories, were launched across the group.
- Goal: Launch the Automated Fare Collection System for Light Rail Transit (“LRT”) and Metro Rail Transit (“MRT”) lines in Metro Manila
Achievement: Achieved Trials of AF Payments Inc. (“AFPI”)’s Automated Fare Collection System (“AFCS”) at LRT1, LRT2 and MRT3 were successfully completed, and full system acceptance was signed off on 16 December 2015. As at 31 December 2015, approximately 1.3 million contactless payments AFCS’s beepTM cards had been sold.
- Goal: Work with the Philippine Government for the Swiss Challenge on connector road project and bridge project in Cebu
Achievement: Achieved and ongoing The Swiss Challenge processes for Cebu bridge project was completed in December 2015. The Swiss Challenge for the Connected Road/Metro Expressway Link project is expected to be conducted in March 2016. On 5 January 2016, MPTC’s subsidiary received the Notice of Award from the City of Cebu and the Municipality of Cordova for the Cebu-Cordova Bridge Project. The construction is expected to start in 2017 with completion by 2020, and the construction cost is expected to be no more than Pesos 27.9 billion (US$592.9 million).
- Goal: Continue to pursue new water projects outside Metro Manila
Achievement: Achieved and ongoing MetroPac Water Investments Corporation (“MWIC”) is pursuing water infrastructure projects across the Philippines. In 2015, it secured a bulk water project of 170 million liters per day (“MLD”) in Metro Iloilo, a Rehabilitation-Build-Operate-Transfer concession of Laguna Water District, and an operation and management contract for a 100 MLD water treatment plant in Cagayan De Oro City.
- Goal: Restructure MPIC group finances to increase dividend flow to MPIC head office
Achievement: Achieved On 17 April 2015, MPIC acquired an approximately 10% interest in Manila Electric Company (“Meralco”) from Beacon Electric Assets Holdings, Inc. (“Beacon Electric”), which increased MPIC’s direct interest in Meralco to approximately 15%. The transaction enabled Beacon Electric to reduce its debt level to Pesos 12.3 billion (US$261.4 million) as at 31 December 2015 and hence increased its ability to pay dividends.
- Goal: Evaluate new business opportunities to diversify regulatory risk in the Philippines
Achievement: Achieved In the toll roads business, MPTC won the bidding for a 35-year concession operating the Cavite-Laguna Expressway (“CALAx”) project in Manila and the Cebu-Cordova Bridge Project in Cebu. It also invested in CII Bridges and Roads Investment Joint Stock Co. (“CII B&R”) in Vietnam. In the hospital business, it added West Metro Medical Center (“WMMC”) in Zamboanga and Manila Doctors Hospital (“MDH”) in Manila in 2015 and subsequently completed the acquisition of Sacred Heart Hospital of Malolos Inc. (“SHHMI”) in Bulacan in March 2016.
- Goal: Complete the definitive or bankable feasibility study of the Silangan project
Achievement: Ongoing Most aspects of the definitive feasibility study were completed in 2015, the major one being the completion of the bulk sample collection and the processing pilot plant test work. The peer review and validation of other components by study partners is expected to be completed in 2016.
- Goal: Secure stable financing for the development of the Silangan project
Achievement: Pending The process will be initiated upon the completion of the definitive feasibility study.
- Goal: Seek a strategic partner for the development of the Silangan project
Achievement: Pending An environment of low metal prices increases the difficulty of adequately pricing the project’s underlying value. The search for a strategic partner is on hold until the definitive feasibility study and required regulatory permits are completed and approved, respectively.
- Goal: Declare additional resources and reserves for Padcal mine and resources in the surrounding area
Achievement: Archieved and ongoing A Competent Person’s report was issued in March 2015, declaring additional resources of 111 million tonnes at the 800-600 meter level of Padcal mine, of which 20 million tonnes of reserves at the 800-700 meter level was declared in October 2015. The additional mineral reserve declaration extends Padcal’s mine life for two years to 2022. In addition, an initial inferred resource estimate of 21.7 million tonnes is identified in the Bumolo project, which will require additional exploration works to increase its quality and quantity. Exploration for further resources in the Padcal mine vicinity is relentlessly pursued.
- Goal: Update mineral resources of the Silangan project
Achievement: Ongoing The Joint Ore Reserves Committee and Philippine Mineral Reporting Code compliant mineral resources reports for Boyongan based on the completed additional drilling and metallurgical test works are currently being updated. This is an important component of the definitive or bankable feasibility study of the project.
- Goal: Sell 80% of PLP’s generation through vesting contracts and retail load
Achievement: Achieved The full-year target was revised upward to 85-90% in August 2015. For the year as a whole, 88% of power generated was sold to retail customers and through futures market, contracts for difference to cover other generation companies’ outage and vesting contracts, and the remaining 12% was sold in the merchant market.
- Goal: Maintain high levels of operational reliability and safety
Achievement: Achieved PLP’s power plant availability further improved to 97.1% in 2015 despite an annual inspection shutdown for 12 days for the first unit in June 2015. The probability of failure (power plant trips) has further declined to 0.019% and 0.001% (unchanged at minimum ratio) for the first and second units, respectively. PLP’s second unit also achieved a significant milestone of 20 months of operations without a single incident of forced outage.
- Goal: Improve plant efficiency through new initiatives
Achievement: Achieved The installation of variable speed drives for the boiler feedwater pumps was completed for Unit 10 and commenced operation in November 2015, improving efficiency by reducing plant auxiliary power consumption by 14,000 megawatt hours annually. The installation for Unit 20 was completed in January 2016.
FP Natural Resources/
- Goal: Optimize plant efficiency and capacity utilization
Achievement: Ongoing RHI spent Pesos 1.1 billion (US$24.1 million) in capital expenditure in 2015 to improve efficiency of RHI sugar mills, Central Azucarera Don Pedro Inc. (“CADPI”) and Central Azucarera de la Carlota, Inc. (“CACI”), and to increase capacity of ethanol plant, Roxol Bioenergy Corporation (“RBC”).
- Goal: Diversify into sugar-related businesses
Achievement: Ongoing RHI is constantly on the lookout for opportunities to grow its business beyond sugar. In 2015, the RHI group fortified its leadership in the ethanol business by acquiring 93.7% of a former competitor San Carlos Bioenergy, Inc. (“SCBI“), a bioethanol company located in San Carlos City, Negros Occidental, Philippines. The combined production capacity of RBC and newly acquired SCBI made RHI the biggest ethanol manufacturer in the Philippines.
- Goal: Improve farm efficiency which accounts for 70% of production costs
Achievement: Ongoing RHI set up Agri-Business Development Corporation (“ADC”) to assist sugar planters in improving their yields. As part of the ADC’s farm mechanization assistance program, ADC procured mechanical harvesters and tractors to help sugarcane planters. ADC also entered into agreements with leading universities such as the University of the Philippines Los Banos in Laguna, University of St. La Salle in Bacolod City and De La Salle University in Manila, for research and development in sugar and its by-products, and improvements in farm productivity.
- Goal: Institutionalize a culture of excellence
Achievement: Ongoing RHI organized its Commercial Operations unit to centralize procurement of feedstock and marketing of sugar and ethanol within the RHI group. Other initiatives included trainings on project management and coaching, as well as overseas trips for key leaders to benchmark RHI’s operations with leading sugar ethanol companies in Brazil, Thailand and the U.S.