Managing Director and CEO's Letter

DEAR SHAREHOLDERS

Notwithstanding the waning but still lingering effects of the global pandemic and a resurgence in inflation led by commodity prices, First Pacific has again managed to deliver successive record highs in turnover, contribution from operations, and recurring profitability.

Contribution from operations in 2022 was again headed by Indofood, with a 12% rise in contribution, led by surging sales at its Noodles and Bogasari (flour) businesses. Its net sales and core profit again reached record highs last year. We expect this to be a continuing trend going forward as Indofood increases the volume, variety, and quality of the consumer food products it provides to consumers around the world.

PLDT’s Home business continued to lead revenue growth to a new record high for PLDT as Philippine consumers continue to demand more data services like streaming and conferencing services. The Philippines’ biggest telecommunications services provider maintained its lead in customer experience in both fixed-line and wireless markets, thereby ensuring a strong foundation for earnings growth in the years ahead.

MPIC continued its post-pandemic earnings growth in 2022, again led by its toll roads and electricity businesses. With a pipeline of more than 100 kilometers of new toll roads to be opened by MPTC this year and later, and Meralco’s plans to install 1,500 megawatts of renewable electricity supply by 2027, these two engines of growth will continue to fire strongly in the years ahead even as MPIC builds out new businesses in agriculture and logistics.

After seeing its earnings pivot from loss to profit in 2021, PacificLight Power saw profitability surge in 2022 on higher power prices and strong demand growth. We expect continuing healthy growth in 2023 as PLP’s increasingly strong contribution to First Pacific results in meaningful dividend payments to its shareholders.

Philex Mining’s earnings were held back by lower copper prices and tonnage milled at its Padcal mine while work continued on its Silangan mining project in Mindanao, in the south of the Philippines, ensuring Philex will continue to produce gold and copper for yet more decades to come.

Closer to home in Hong Kong, Christopher H. Young retired as Chief Financial Officer after decades of service within the First Pacific Group, replaced by our Head of Treasury, Joseph H.P. Ng. I could not be more grateful to Chris for his long and loyal service and wish him well in his future endeavours. After observing Joseph in his first half-year in the post during which he has put his own stamp on our finances with proposed increases in shareholder distributions, I am confident that our finances will continue to be in robust health.

Looking ahead, we have every prospect for continuing increase in our earnings. The markets where we operate expect continuing strong economic growth and the managers in our various companies have planned well to ensure we are well placed to deliver what our customers want, and what our shareholders expect. I remain confident in the outlook for the Company for 2023 and in the many years ahead.

Yours sincerely
Manuel V Pangilinan
Managing Director and Chief Executive Officer
30 March 2023