Fellow shareholders, a pleasant and safe morning to all!

It has been 30 years since Lopez Holdings was organized on June 8, 1993. Originally named Benpres Holdings Corporation, the company invested in vital infrastructure and world-class services to support the development of the country and its people. Lopez Holdings continues this support through its current investees, First Philippine Holdings Corporation (FPH) and ABSCBN Corporation, which provide valuable and honorable service to all our stakeholders.

For the year 2022, Lopez Holdings reported P5.439 billion in net income attributable to equity holders of the Parent. This is 254% higher than the P1.538 billion in net income attributable to equity holders of the Parent in 2021.

The financial results primarily reflect the recovery in the businesses of units under investee First Philippine Holdings Corporation (FPH), following the easing of community quarantine measures in 2022. Hence, consolidated revenues increased by 36% year-on-year to P170.338 billion from P125.159 billion. Investee ABS-CBN Corporation also reported a smaller net loss, helped by an increase in advertising revenues and the sale of some properties and equipment. This is reflected in the Equity share in net losses from investment accounted for at equity method amounting to P943 million for the year 2022 from an equity share in net losses of P2.848 billion in the previous year.

As of December 31, 2022, Lopez Holdings’ total consolidated assets grew to P428.426 billion from P401.500 billion as of December 31, 2021. This figure mainly includes assets of First Philippine Holdings. Debt-to-equity ratio slightly declined at 0.58x in 2022 from 0.62x in 2021 while the book value per share increased at P19.41 a share at the end of 2022 from a book value of P17.15 a share in 2021.

Since 2017, the Parent Company, Lopez Holdings has had no more direct obligations. However, on a consolidated basis, total liabilities stood at P204.246 billion at year end-2022. First Philippine Holdings benefited primarily from the strong performance of its operating unit, First Gen Corporation. Moving forward, this means that the energy group would have sufficient resources to meet its obligations and fund its committed investments.

Total equity attributable to Parent stood at P78.776 billion as of December 31, 2022 from P65.071 billion year-on-year.

Let us now move to the performance of our investee companies. FPH reported a 26% increase in net income attributable to equity holders of the Parent to P12.676 billion from P10.021 billion in 2021. Recurring net income attributable (RNI) to FPH was at P12.784 billion, 27% higher than P10.055 billion the previous year. Its year-on-year (YoY) consolidated revenues were higher by 36% at P170.338 billion from P125.159 billion.

The favorable performance of the FPH Group was driven by improved earnings across the conglomerate’s core business groups, with power, real estate, and energy solutions showing significant growth.

Its year-on-year (YoY) consolidated revenues were higher by 36% at P170.338 billion from P125.159 billion. The favorable performance of the FPH Group was driven by improved earnings across the conglomerate’s core business groups, with power, real estate, and energy solutions showing significant growth. Sale of electricity accounted for 85% of revenues in 2022 and 2021.

First Gen Corporation (FGEN), a key investee of FPH, forged ahead with its Interim Offshore LNG (liquefied natural gas) Terminal (Project) to accelerate its ability to introduce LNG to the Philippines. The Project will play a critical role in ensuring the energy security of the Luzon Grid and the Philippines, particularly as the indigenous Malampaya natural gas resource declines.

FGEN LNG Corporation (FGEN LNG), a wholly-owned subsidiary of FGEN, requested the Department of Energy to extend the validity of its Permit to Construct, Expand, Rehabilitate and Modify (“PCERM”) for its Interim Offshore LNG Terminal (Project) from September 23, 2022 to March 23, 2023, in accordance with the provisions of the Philippine Downstream Natural Gas Regulations (PDNGR). The delay in the completion of the Project was caused by events and circumstances not within the reasonable control of FGEN LNG.

Separately, FGEN LNG and its Floating Storage Regasification Unit (FSRU) provider, BW FSRU IV Pte Ltd (BW), agreed to move delivery of the FSRU BW Paris from Q1 2023 to the end of Q2 or early Q3 2023. In April 2021, FGEN LNG and BW executed a five-year Time Charter Party (TCP) for the charter of the BW Paris, which will serve to provide LNG storage and regasification services to FGEN’s existing and planned gas-fired power plants and other thirdparty terminal users.

On the other hand, ABS-CBN reported a 2022 net loss of P2.636 billion, 54% lower than the P5.670 billion net loss in 2021. YoY revenues increased by 8% to P19.197 billion from 17.825 billion. Advertising revenues improved by 21% due to election-related placements and regular advertising growth. The company also sold treasury shares and PDRs (Philippine Depositary Receipts) to our ultimate parent, Lopez, Inc., as well as certain land and equipment to external parties.

While lacking a broadcast franchise, ABS-CBN remains committed to serving the Filipino anywhere in the world. With Kapamilya Channel on cable TV and its digital streaming channel “Kapamilya Online Live” on YouTube and Facebook, a content supply agreement with Zoe Broadcasting that allows it to air certain shows on the A2Z Channel and TV5, partnerships like PIE Channel with Kroma Entertainment and BEAM, ABS-CBN is able to generate advertising revenues from its programs.

It is building up content sales and licensing to domestic and international clients—including TV5, GMA Network, AMBS, Netflix, Viu, iQiyi, and WeTV. The Company distributed over 381 titles to various territories in Asia, Africa, the Middle East, and Europe, as well as over-the-top platforms. It continues to utilize various third party platforms like Youtube, Facebook, Tiktok, and Instagram to maximize its reach and generate advertising revenues.

As economies began to open up in 2022, ABS-CBN also resumed staging events and releasing movies in various countries worldwide.

Let me now report on the unaudited financial results for the first quarter of 2023. Lopez Holdings reported P1.666 billion in net income attributable to equity holders of the Parent. This is 96% higher than the P851 million in net income attributable to equity holders of the Parent reported in the first quarter of 2022. The First Philippine Holdings group reported improved earnings while ABS-CBN’s net loss continued to decline.

First Philippine Holdings posted a 32% increase in net income attributable to equity holders of the parent to P4.342 billion P3.295 billion in 1Q2022. It reported a 21% increase in revenues to P42.491 billion from P35.074 billion. Sale of electricity accounted for 85% of revenues in 1Q2023, compared to 83% in 1Q2022.

On the other hand, ABS-CBN reported a net loss of P1.218 billion, which is 13% lower than the net loss of P1.397 billion in 1Q2022. It reported unaudited revenues of P4.262 billion, 8% lower than P4.650 billion in the same quarter last year.

Your company is working closely with its investees to identify opportunities and mitigate risks as we all tread the path toward a regenerative future. For FPH, this means collaborating with a host of businesses, communities and institutions in the transition to a decarbonized energy environment. For ABS-CBN, this means collaborating with creative talent, established distribution channels and emerging platforms in the transition to digital media content that showcase the best of the Philippines to global audiences. This is a major pivot for ABS-CBN from being a traditional broadcasting company to a full time content creation entity.

As we look forward toward recovery and growth, we take this opportunity to remember our late leaders whose singular contributions have allowed the company to weather the toughest of adversities. The year 2023 sadly saw the demise of Ambassador Manuel M. Lopez, chairman emeritus of the company as of his death on January 12, 2023, and Oscar M. Lopez, chairman emeritus from 2010 up to 2020, who passed away on April 22, 2023.

Mr. Oscar M. Lopez served as chairman and chief executive officer from 1999 up to 2010. It was under Mr. Oscar M. Lopez’s leadership at the most critical period when the company, then called Benpres Holdings, painstakingly worked to resolve its financial challenges triggered by the Asian Financial contagion. On the other hand, Ambassador Manuel M. Lopez served as chairman and chief executive officer from 2010 up to 2020 and then as chairman emeritus until this year. He oversaw the recovery of your company to financial health, resulting in steady annual returns to shareholders from 2011. He also served the country as Ambassador to Japan under the Aquino Administration, highlighted by the delivery of prompt relief and vital assistance to our fellow Filipinos during the Great East Japan Earthquake in 2011.

We are forever grateful for their unwavering leadership and service. Their vision and values will continue to guide Lopez Holdings on its path toward a regenerative future, creating value for all stakeholders in the service of God and our countrymen.

We thank you, fellow shareholders, for your continued support and for your confidence in your management team.

Salvador G. Tirona
President, Chief Operating Officer
and Chief Finance Officer

The post REPORT OF THE PRESIDENT, CHIEF OPERATING OFFICER AND CHIEF FINANCE OFFICER appeared first on Lopez holdings Corporation.

As we mark the 30th anniversary of Lopez Holdings Corporation, we look back with great admiration to those who started the company. The recent passing of my father Oscar M. Lopez, and my uncle, Manuel M. Lopez, marks the passage of a generation.

It was by their vision, leadership and determined service that the company was able to weather so much turbulence, primary among them the Asian Financial Crisis, that hit just as the company had invested heavily in long-gestation projects. With perseverance and good stewardship, the company regained sufficient financial health to usher the era of regular dividend payments, except for that year (2021) right after ABS-CBN Corporation lost its broadcast franchise.

Recently, the board revisited its company statements and we are now aligned with the First Philippine Holdings group, with our mission “to forge collaborative pathways for a decarbonized and regenerative future.”

What this means, as articulated in Our Chosen Path, is that through our investment in FPH, we shall lead the transition to a decarbonized energy future; nurture inclusive, well-tempered, and creative spaces that elevate surrounding communities and the environment; and build infrastructure that creates resilience and enhances the quality of life in a complex, climate-changed world. And through our investment in ABS-CBN, we shall lead the transition to digital media content productions that inspire, connect and showcase the best of Filipino talent and culture to global audiences.

Adopting this mission and chosen path is both fitting and timely, because it’s undeniable that the climate emergency being faced by humanity is real and in urgent need of action. In the last few years, we’ve employed various platforms, venues, and forums, including our integrated report covers, to highlight the existential threat posed by the climate crisis. Now it feels so much more encouraging as we see a myriad of sectors of society weaving threads from their respective fields into a tapestry of solutions that aims to bring carbon emissions down to zero by 2050. While the challenge is still daunting, we know that, with the right focus, countless solutions will come to light.

The journey to Net Zero will involve three phases that need to be executed within a limited timeframe. More importantly, we must keep in mind that the overriding goal is to “solve the climate emergency”, by mitigating and reversing emissions as well as adapting to its impacts that are already here and intensifying. Because if we don’t get it right, the exponential deterioration of global climate systems and the environment will make it impossible to solve other problems like poverty, inequality, disease, food production, freshwater scarcity, mass migration, social displacement, mass extinction of species, and biodiversity loss, among others. All of this we will feel during our lifetimes and they’re undeniably accelerating as we can see in news reports every single day now.

Recall that Paris COP 21 applauded the agreements that signaled we could limit global warming to 2.0 degrees Celsius if all commitments were met. Since then, the UN IPCC issued a Special Report on Global Warming, followed by its Sixth Assessment Reports from Working Groups I, II and III, all with dire warnings and consequences for a 2-degree Celsius warmer world. Taken together, they underscored the scientific consensus that our targets must not exceed 1.5 degrees by end century. This target is slipping away from us fast but the 1.5 degrees Celsius must still remain our base case.

Consequently, “solving the climate emergency” means deliberately embarking on a journey through these phases.

In PHASE ONE, we REDUCE Greenhouse Gas (GHG) emissions of carbon dioxide, methane, nitrous oxides and fluorinated gases from the current 59 gigatons (Gt) of GHG’s per year, and we see emissions peak by 2025. This is where most efforts are centered today. But we cannot stop there.

Next, in PHASE TWO, we aim further to ELIMINATE all emissions of GHG’s. We must get to Net Zero emissions by 2050.

However in PHASE THREE by 2050, we must begin the arduous task of reducing the concentration of greenhouse gases in the atmosphere. We must get to what is called NET NEGATIVE EMISSIONS. This is best described in the words of NASA climate scientist James Hansen: “If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted…CO2 will need to be reduced…to at most 350ppm.”

For reference, pre-industrialization carbon dioxide levels were at 280ppm and we sailed past 350ppm in 1986. We continued to blow through 400ppm in 2013, the same year Super Typhoon Yolanda, the most powerful typhoon on earth to ever make landfall, announced to the world, through the suffering of millions of Filipinos, that climate change is here and that we better get our acts together now. While the COVID-19 pandemic has given the world a short respite, today emissions are on the rise again and Paris COP 21 targets still aren’t being met.

We now need to realize Phases One, Two and Three within the rapidly diminishing timeframe of the next 27 years. Failing to do this over the limited period will trigger irreversible tipping points, the effects of which we are already seeing in news reports from all over the world every day. The clock ticks as we speak. Winning this war and solving climate change will mean staying laser-focused on strategies, tactics and accelerating technologies that are likely to scale within this very critical timeframe of the next 27 years.

Progress through Phases One to Three in the battle to “solve the climate emergency” has many facets beyond just energy. It spans agricultural practices, food production, waste management practices, industrial processes, deforestation, f-gases used in refrigeration and many others. The key elements of the energy transition involves the following: reducing the carbon intensity of electricity, scaling up energy efficiency efforts, electrifying as much of transport and the industrial sectors, using carbon-neutral fuels for other hard-to-reach sectors, and deploying nature-based and man-made carbon capture, use and storage. All these will have immense implications for the central role of the electricity grid. The most important point is that by 2050, we will need 5 times the electricity we use today; and we will need 10-12 times the clean energy in use today.

For now at the FPH Group, our efforts remain focused largely on helping to reduce the carbon intensity of the electricity grid and then ultimately to decarbonize it. We’re making it our mission to shepherd the energy transition to Net Zero.

From a global perspective, we need to clean up the electricity grid’s generation sources with the intent of progressively lowering carbon intensity per kwh. This is done through a combination of renewable energy sources, storage (e.g., batteries or pump hydro), and other complementing low-carbon energy sources. This alone is a complex balancing act. For our country, adding more 24/7 renewable energy sources like hydro and geothermal power to the grid should be encouraged as no-regret options. However, what needs to be done thoughtfully is the addition of more renewable energy sources like solar and wind. Their variable and intermittent nature though necessitates that we match them with more grid capacity and storage to account for the fact that they’re not there when night falls or on cloudy or windless days. However, batteries are only capable of running 3-4 hours and thus fall short of fully providing power for the 10-12 hours before the sun rises or the stretches of cloudy or windless days or even weeks. As such, there is need for a low carbon emission fuel like natural gas to act as the bridge fuel that’s technically more suited for complementing the variable nature of renewable energy.

We view First Gen’s diverse portfolio of clean and renewable energy sources as a key enabler to a greener electricity grid. Our target is to grow our low carbon energy portfolio to 13,000 MW by 2030, of which 9,000 MW will be renewables. The construction of our LNG terminal has reached practical completion, and soon after we expect the commissioning of our floating storage and regasification unit vessel. Of course, over time, we must look toward repowering our natural gas facilities with green fuels like hydrogen as these become more feasible, or they can be decommissioned outright before 2050.

As we clean up our energy grid, we must also move towards scaling up energy efficiency as the “first fuel” and encourage its use everywhere. Today these efforts are still sparse and fragmented but they have great potential. They are the lowest hanging fruit to reduce carbon emissions and are no-brainers because they also bring real cost savings and enhance the bottom lines of our customers.

Yet, as we navigate this energy transition, we must bear in mind the need to keep the lights on and keep power prices affordable for all. At the same time, we must continue to improve access to 24/7 electricity for millions of households in the country who currently do not have it reliably in their lives if we are to even begin uplifting them from poverty.

Decarbonizing and scaling up a green electricity grid over the next three decades is probably the greatest energy transition in the history of mankind. It’s not just changing the electricity system but building a new global energy system with components we have never built before and at a massive scale. This will need nothing short of collaborative action among various players that today consider themselves competitors. And these also need well-coordinated and timely action on the part of regulators who must ensure energy security and be well-versed on the elements that make for a successful and just energy transition.

In addition to creating a future-ready energy system, our being 4th on the world’s climate vulnerability list necessitates that we prepare Philippine cities, communities, and infrastructure for resilience in a climate-changed world. The impacts of the climate crisis as well as climate action that will be demanded of everyone are among the forces in history that will transpire “gradually and then suddenly”. If we’re not prepared and conveniently ignore it, we’ll be overwhelmed and not recognize the world around us in the coming thirty years.

The science tells us we no longer have a choice. We need to act in a systematic and collaborative way if we want to succeed and make serious headway in tackling other issues like hunger, poverty, and the other pressing Sustainable Development Goals of our time. Trying to solve those will be futile if we don’t build for the resilience we need and if we don’t ultimately “solve the climate emergency”.

The forces unleashed by the climate emergency are already creating a future that, by necessity, must look very different from the past. The times call for new paradigms and even social constructs. We will need to measure progress using new metrics and reshape our way of life to thrive in a changed and rapidly changing world. It’s all about reimagining our relationship to the planet and to one another. If humans have such immense power to degenerate the Earth, if we so choose, humanity can also wield the same power to change course and regenerate it not just for the sake of currently living humans but for the millions of other species that co-inhabit our world, today and tomorrow.

The journey to a decarbonized and regenerative future is not purely driven by the bottom line. To our stakeholders, thank you for your support in helping us transform our Company to one that’s truly responsive to the needs not only of our country but of the world.

The post Remarks of Federico R. Lopez, chairman and CEO, at the Lopez Holdings Corporation Annual Stockholders’ Meeting on June 8, 2023 appeared first on Lopez holdings Corporation.

Today it’s undeniable that the climate emergency being faced by humanity is real and in urgent need of action. In the last few years, we’ve employed various platforms, venues, and forums, including our integrated report covers, to highlight the existential threat posed by the climate crisis. Now it feels so much more encouraging as we see a myriad of sectors of society weaving threads from their respective fields into a tapestry of solutions that aims to bring carbon emissions down to zero by 2050. While the challenge is still daunting, we know that, with the right focus, countless solutions will come to light.

The journey to Net Zero will involve three phases that need to be executed within a limited timeframe. More importantly, we must keep in mind that the overriding goal is to “solve the climate emergency”, by mitigating and reversing emissions as well as adapting to its impacts that are already here and intensifying. Because if we don’t get it right, the exponential deterioration of global climate systems and the environment will make it impossible to solve other problems like poverty, inequality, disease, food production, freshwater scarcity, mass migration, social displacement, mass extinction of species, and biodiversity loss, among others. All of this we will feel during our lifetimes and they’re undeniably accelerating as we can see in news reports every single day now.

Recall that Paris COP 21 applauded the agreements that signaled we could limit global warming to 2.0 degrees Celsius if all commitments were met. Since then, the UN IPCC issued a Special Report on Global Warming, followed by its Sixth Assessment Reports from Working Groups I, II and III, all with dire warnings and consequences for a 2-degree Celsius warmer world. Taken together, they underscored the scientific consensus that our targets must not exceed 1.5 degrees by end century. This target is slipping away from us fast but the 1.5 degrees Celsius must still remain our base case.

Consequently, “solving the climate emergency” means deliberately embarking on a journey through these phases.

In PHASE ONE, we REDUCE Greenhouse Gas (GHG) emissions of carbon dioxide, methane, nitrous oxides and fluorinated gases from the current 59 gigatons (Gt) of GHG’s per year, and we see emissions peak by 2025. This is where most efforts are centered today. But we cannot stop there.

Next, in PHASE TWO, we aim further to ELIMINATE all emissions of GHG’s. We must get to Net Zero emissions by 2050.

However in PHASE THREE by 2050, we must begin the arduous task of reducing the concentration of greenhouse gases in the atmosphere. We must get to what is called NET NEGATIVE EMISSIONS. This is best described in the words of NASA climate scientist James Hansen: “If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted…CO2 will need to be reduced…to at most 350ppm.”

For reference, pre-industrialization carbon dioxide levels were at 280ppm and we sailed past 350ppm in 1986. We continued to blow through 400ppm in 2013, the same year Super Typhoon Yolanda, the most powerful typhoon on earth to ever make landfall, announced to the world, through the suffering of millions of Filipinos, that climate change is here and that we better get our acts together now. While the COVID-19 pandemic has given the world a short respite, today emissions are on the rise again and Paris COP 21 targets still aren’t being met.

We now need to realize Phases One, Two and Three within the rapidly diminishing timeframe of the next 27 years. Failing to do this over the limited period will trigger irreversible tipping points, the effects of which we are already seeing in news reports from all over the world every day. The clock ticks as we speak. Winning this war and solving climate change will mean staying laser-focused on strategies, tactics and accelerating technologies that are likely to scale within this very critical timeframe of the next 27 years.

Progress through Phases One to Three in the battle to “solve the climate emergency” has many facets beyond just energy. It spans agricultural practices, food production, waste management practices, industrial processes, deforestation, f-gases used in refrigeration and many others. The key elements of the energy transition involves the following: reducing the carbon intensity of electricity, scaling up energy efficiency efforts, electrifying as much of transport and the industrial sectors, using carbon-neutral fuels for other hard-to-reach sectors, and deploying nature-based and man-made carbon capture, use and storage. All these will have immense implications for the central role of the electricity grid. The most important point is that by 2050, we will need 5 times the electricity we use today; and we will need 10-12 times the clean energy in use today.

For now at the FPH Group, our efforts remain focused largely on helping to reduce the carbon intensity of the electricity grid and then ultimately to decarbonize it. We’re making it our mission to shepherd the energy transition to Net Zero.

From a global perspective, we need to clean up the electricity grid’s generation sources with the intent of progressively lowering carbon intensity per kwh. This is done through a combination of renewable energy sources, storage (e.g., batteries or pump hydro), and other complementing low-carbon energy sources. This alone is a complex balancing act. For our country, adding more 24/7 renewable energy sources like hydro and geothermal power to the grid should be encouraged as no-regret options. However, what needs to be done thoughtfully is the addition of more renewable energy sources like solar and wind. Their variable and intermittent nature though necessitates that we match them with more grid capacity and storage to account for the fact that they’re not there when night falls or on cloudy or windless days. However, batteries are only capable of running 3-4 hours and thus fall short of fully providing power for the 10-12 hours before the sun rises or the stretches of cloudy or windless days or even weeks. As such, there is need for a low carbon emission fuel like natural gas to act as the bridge fuel that’s technically more suited for complementing the variable nature of renewable energy. We view FPH’s diverse portfolio of clean and renewable energy sources as a key enabler to a greener electricity grid. Our target is to grow our low carbon energy portfolio to 13,000 MW by 2030, of which 9,000 MW will be renewables. The construction of our LNG terminal has reached practical completion, and soon after we expect the commissioning of our floating storage and regasification unit vessel. Of course, over time, we must look toward repowering our natural gas facilities with green fuels like hydrogen as these become more feasible, or they can be decommissioned outright before 2050. As we clean up our energy grid, we must also move towards scaling up energy efficiency as the “first fuel” and encourage its use everywhere. Today these efforts are still sparse and fragmented but they have great potential. They are the lowest hanging fruit to reduce carbon emissions and are no-brainers because they also bring real cost savings and enhance the bottom lines of our customers. Yet, as we navigate this energy transition, we must bear in mind the need to keep the lights on and keep power prices affordable for all. At the same time, we must continue to improve access to 24/7 electricity for millions of households in the country who currently do not have it reliably in their lives if we are to even begin uplifting them from poverty.

Decarbonizing and scaling up a green electricity grid over the next three decades is probably the greatest energy transition in the history of mankind. It’s not just changing the electricity system but building a new global energy system with components we have never built before and at a massive scale. This will need nothing short of collaborative action among various players that today consider themselves competitors. And these also need well-coordinated and timely action on the part of regulators who must ensure energy security and be well-versed on the elements that make for a successful and just energy transition.

In addition to creating a future-ready energy system, our being 4th on the world’s climate vulnerability list necessitates that we prepare Philippine cities, communities, and infrastructure for resilience in a climate-changed world. The impacts of the climate crisis as well as climate action that will be demanded of everyone are among the forces in history that will transpire “gradually and then suddenly”. If we’re not prepared and conveniently ignore it, we’ll be overwhelmed and not recognize the world around us in the coming thirty years. The science tells us we no longer have a choice. We need to act in a systematic and collaborative way if we want to succeed and make serious headway in tackling other issues like hunger, poverty, and the other pressing Sustainable Development Goals of our time. Trying to solve those will be futile if we don’t build for the resilience we need and if we don’t ultimately “solve the climate emergency”.

The forces unleashed by the climate emergency are already creating a future that, by necessity, must look very different from the past. The times call for new paradigms and even social constructs. We will need to measure progress using new metrics and reshape our way of life to thrive in a changed and rapidly changing world. It’s all about reimagining our relationship to the planet and to one another. If humans have such immense power to degenerate the Earth, if we so choose, humanity can also wield the same power to change course and regenerate it not just for the sake of currently living humans but for the millions of other species that co-inhabit our world, today and tomorrow.

The journey to Net Zero is not purely driven by the bottom line. To our stakeholders, thank you for your support in helping us transform our Company to one that’s truly responsive to the needs not only of our country, but of the world.

The post Remarks of Federico R. Lopez,chairman and CEO, at the First Philippine Holdings Corporation AnnualStockholders’ Meeting on May 29, 2023 appeared first on Lopez holdings Corporation.

THE PRESIDENT’S REPORT
ABS-CBN STOCKHOLDERS’ MEETING
25 May 2023

Magandang umaga po mga Kapamilya:

At one point in our history, ABS-CBN was the country’s largest broadcaster. Our collection of towers, transmitters, and frequencies allowed us to broadcast our signal to more than 90% of TV households. When our franchise was not renewed, we lost our ability to use these assets. We were effectively no longer a broadcaster.

But broadcasting never defined ABS-CBN. What we did best was to tell stories. Stories that informed and inspired. Stories that entertained and connected. Stories that galvanized people to action and stories that ignited change. The heart and soul of ABS-CBN is in storytelling.

Today, we have sharpened our focus on being unsurpassed storytellers. We know that depends on working with the country’s premiere talent in acting, writing, directing, producing, reporting, and music. We embrace the country’s best talent and are open to finding new ways of working with anyone who has a unique and meaningful story.

We have decided to shed off all assets that are not relevant to storytelling. This will allow us to raise cash to improve our production quality and quantity and to improve returns to shareholders by becoming an asset-light of content-rich company.

The old ABS-CBN used our own platforms to deliver our stories to our audiences. The new ABS-CBN is learning to partner with many different platforms to reach our previous audience and to expand to a new set of viewers. To be a Kapamilya no longer means watching Channel 2. Today, you can enjoy watching our shows or movies on several broadcasters, multiple streaming platforms, and various online sites. If we do our job right, by the end of our transformation, we hope to increase our viewership to a far larger base than what we had before. Partnerships have power; we aim to harness that in our quest to reach a larger audience.

We also harbor ambitions to reach an international audience and establish the ABS-CBN name in the global arena. Last year, in partnership with Nathan Studios, we produced a series entitled Cattleya Killer, which will premiere globally on Amazon Prime. This follows our co-production with Electric Entertainment for the series Almost Paradise, which was filmed in Cebu and aired on the WGN Network. These are small steps that are helping us learn how to write and produce for global markets. They are also medium-term investments in building new capabilities and markets for your company.

For now, we continue to improve the performance of our core business. For TV, Ang Probinsyano generated combined primetime ratings of 18% and an audience share of 38%. Our theatrical business seems to be on the road to recovery, with one of our movies, Partners in Crime, generating 177M in box office receipts last December. The movie also became the number one viewed title for Netflix Philippines in its first week of release on the platform. While another of our movies, An Inconvenient Love, ranked number 9 on Netflix globally for non-English movies.

Online, our viewership has also been improving. Last year, 137M people subscribed to our YouTube channel, while 20M people used our iwantfc service. Another 11M people visited us on our group of websites.

As we regain our stride in storytelling, we expect our business to continue to improve as well. Advertising revenues have grown side by side with ratings. In 2022, we registered a 21% improvement in ad sales to 6.4B from just 5.3B the year before. We were able to keep production costs relatively flat, with only a 3% growth from the prior year. We also generated extraordinary income of 3B from the sale of various properties, which helped offset the increase in our financing costs. As a result, our net losses declined from 5.7B in 2021 to 2.6 B last year. We are confident in the upward trend of our numbers and expect 2023 to be even better than last year. It is still an uphill climb to profitability, but the light at the end of the tunnel has become sharper and brighter.

While we are not yet where we want to be, we are certainly well on our way. For now, I would like to recognize the four groups that have made all these progress possible:

To our partners, without whom, we would not have made it this far: our partner broadcasters, our partner studios, our partner production companies, various online streamers, advertisers, and financial institutions. Thank you.

To our audiences, both here and all over the world, who have followed our stories across all the platforms. Maraming salamat.

To our people, who continue to fight for our recovery and who have gone far beyond the call of duty in their work performance.

And finally to you, our shareholders, for continuing to believe in us. Please know how grateful we are that you continue to support ABS-CBN. We reiterate our commitment to regain profitability and to emerge a better and stronger company in the near future. Likewise, even as we transition from broadcaster to storyteller, we remain faithful to our mission of being in the service of the Filipino. On behalf of the men and women of ABS-CBN, thank you, dear shareholders, for continuing to be a true Kapamilya.

The post Remarks of Carlo L. Katigbak, president and CEO, at the ABS-CBN Corporation Annual Stockholders? Meeting on May 25, 2023 appeared first on Lopez holdings Corporation.

Chairman’s Message
First Gen Corporation
Annual Shareholders’ Meeting
17 May 2023

Today it’s undeniable that the climate emergency being faced by humanity is real and in urgent need of action. In the last few years, we’ve employed various platforms, venues, and forums, including our integrated report covers, to highlight the existential threat posed by the climate crisis. Now it feels so much more encouraging as we see a myriad of sectors of society weaving threads from their respective fields into a tapestry of solutions that aims to bring carbon emissions down to zero by 2050. While the challenge is still daunting, we know that, with the right focus, countless solutions will come to light.

The journey to Net Zero will involve three phases that need to be executed within a limited timeframe. More importantly, we must keep in mind that the overriding goal is to “solve the climate emergency”, by mitigating and reversing emissions as well as adapting to its impacts that are already here and intensifying. Because if we don’t get it right, the exponential deterioration of global climate systems and the environment will make it impossible to solve other problems like poverty, inequality, disease, food production, freshwater scarcity, mass migration, social displacement, mass extinction of species, and biodiversity loss, among others. All of this we will feel during our lifetimes and they’re undeniably accelerating as we can see in news reports every single day now.

Recall that Paris COP 21 applauded the agreements that signaled we could limit global warming to 2.0 degrees Celsius if all commitments were met. Since then, the UN IPCC issued a Special Report on Global Warming, followed by its Sixth Assessment Reports from Working Groups I, II and III, all with dire warnings and consequences for a 2-degree Celsius warmer world. Taken together, they underscored the scientific consensus that our targets must not exceed 1.5 degrees by end century. This target is slipping away from us fast but the 1.5 degrees Celsius must still remain our base case.

Consequently, “solving the climate emergency” means deliberately embarking on a journey through these phases.

In PHASE ONE, we REDUCE Greenhouse Gas (GHG) emissions of carbon dioxide, methane, nitrous oxides and fluorinated gases from the current 59 gigatons (Gt) of GHG’s per year, and we see emissions peak by 2025. This is where most efforts are centered today. But we cannot stop there.

Next, in PHASE TWO, we aim further to ELIMINATE all emissions of GHG’s. We must get to Net Zero emissions by 2050.

However in PHASE THREE by 2050, we must begin the arduous task of reducing the concentration of greenhouse gases in the atmosphere. We must get to what is called NET NEGATIVE EMISSIONS. This is best described in the words of NASA climate scientist James Hansen: “If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted…CO2 will need to be reduced…to at most 350ppm.”

For reference, pre-industrialization carbon dioxide levels were at 280ppm and we sailed past 350ppm in 1986. We continued to blow through 400ppm in 2013, the same year Super Typhoon Yolanda, the most powerful typhoon on earth to ever make landfall, announced to the world, through the suffering of millions of Filipinos, that climate change is here and that we better get our acts together now. While the COVID-19 pandemic has given the world a short respite, today emissions are on the rise again and Paris COP 21 targets still aren’t being met.

We now need to realize Phases One, Two and Three within the rapidly diminishing timeframe of the next 27 years. Failing to do this over the limited period will trigger irreversible tipping points, the effects of which we are already seeing in news reports from all over the world every day. The clock ticks as we speak. Winning this war and solving climate change will mean staying laser-focused on strategies, tactics and accelerating technologies that are likely to scale within this very critical timeframe of the next 27 years.

Progress through Phases One to Three in the battle to “solve the climate emergency” has many facets beyond just energy. It spans agricultural practices, food production, waste management practices, industrial processes, deforestation, f-gases used in refrigeration and many others. The key elements of the energy transition involves the following: reducing the carbon intensity of electricity, scaling up energy efficiency efforts, electrifying as much of transport and the industrial sectors, using carbon-neutral fuels for other hard-to-reach sectors, and deploying nature-based and man-made carbon capture, use and storage. All these will have immense implications for the central role of the electricity grid. The most important point is that by 2050, we will need 5 times the electricity we use today; and we will need 10-12 times the clean energy in use today.

For now at the FPH Group, our efforts remain focused largely on helping to reduce the carbon intensity of the electricity grid and then ultimately to decarbonize it. We’re making it our mission to shepherd the energy transition to Net Zero.

From a global perspective, we need to clean up the electricity grid’s generation sources with the intent of progressively lowering carbon intensity per kwh. This is done through a combination of renewable energy sources, storage (e.g., batteries or pump hydro), and other complementing low-carbon energy sources. This alone is a complex balancing act. For our country, adding more 24/7 renewable energy sources like hydro and geothermal power to the grid should be encouraged as no-regret options. However, what needs to be done thoughtfully is the addition of more renewable energy sources like solar and wind. Their variable and intermittent nature though necessitates that we match them with more grid capacity and storage to account for the fact that they’re not there when night falls or on cloudy or windless days. However, batteries are only capable of running 3-4 hours and thus fall short of fully providing power for the 10-12 hours before the sun rises or the stretches of cloudy or windless days or even weeks. As such, there is need for a low carbon emission fuel like natural gas to act as the bridge fuel that’s technically more suited for complementing the variable nature of renewable energy.

We view First Gen’s diverse portfolio of clean and renewable energy sources as a key enabler to a greener electricity grid. Our target is to grow our low carbon energy portfolio to 13,000 MW by 2030, of which 9,000 MW will be renewables. The construction of our LNG terminal has reached practical completion, and soon after we expect the commissioning of our floating storage and regasification unit vessel. Of course, over time, we must look toward repowering our natural gas facilities with green fuels like hydrogen as these become more feasible, or they can be decommissioned outright before 2050.

As we clean up our energy grid, we must also move towards scaling up energy efficiency as the “first fuel” and encourage its use everywhere. Today these efforts are still sparse and fragmented but they have great potential. They are the lowest hanging fruit to reduce carbon emissions and are no-brainers because they also bring real cost savings and enhance the bottom lines of our customers.

Yet, as we navigate this energy transition, we must bear in mind the need to keep the lights on and keep power prices affordable for all. At the same time, we must continue to improve access to 24/7 electricity for millions of households in the country who currently do not have it reliably in their lives if we are to even begin uplifting them from poverty.

Decarbonizing and scaling up a green electricity grid over the next three decades is probably the greatest energy transition in the history of mankind. It’s not just changing the electricity system but building a new global energy system with components we have never built before and at a massive scale. This will need nothing short of collaborative action among various players that today consider themselves competitors. And these also need well-coordinated and timely action on the part of regulators who must ensure energy security and be well-versed on the elements that make for a successful and just energy transition.

In addition to creating a future-ready energy system, our being 4th on the world’s climate vulnerability list necessitates that we prepare Philippine cities, communities, and infrastructure for resilience in a climate-changed world. The impacts of the climate crisis as well as climate action that will be demanded of everyone are among the forces in history that will transpire “gradually and then suddenly”. If we’re not prepared and conveniently ignore it, we’ll be overwhelmed and not recognize the world around us in the coming thirty years.

The science tells us we no longer have a choice. We need to act in a systematic and collaborative way if we want to succeed and make serious headway in tackling other issues like hunger, poverty, and the other pressing Sustainable Development Goals of our time. Trying to solve those will be futile if we don’t build for the resilience we need and if we don’t ultimately “solve the climate emergency”.

The forces unleashed by the climate emergency are already creating a future that, by necessity, must look very different from the past. The times call for new paradigms and even social constructs. We will need to measure progress using new metrics and reshape our way of life to thrive in a changed and rapidly changing world. It’s all about reimagining our relationship to the planet and to one another. If humans have such immense power to degenerate the Earth, if we so choose, humanity can also wield the same power to change course and regenerate it not just for the sake of currently living humans but for the millions of other species that co-inhabit our world, today and tomorrow.

The journey to a decarbonized and regenerative future is not purely driven by the bottom line. To our stakeholders, thank you for your support in helping us transform our Company to one that’s truly responsive to the needs not only of our country but of the world.

The post Remarks of Federico R. Lopez, chairman and CEO, at the First Gen Corporation Annual Stockholders’ Meeting on May 17, 2023 appeared first on Lopez holdings Corporation.

ABS-CBN Annual Shareholders’ Meeting
The President’s Report
28 July 2022

Dear shareholders of ABS-CBN, mga Kapamilya, good morning.

First of all, we recognize our responsibility to protect the investment you have made in our company. I realize that our stock price today means that many of you have lost money or have experienced drastic reductions in the value of your investment. Let me assure you that we are committed to achieving the full potential of ABS-CBN and substantially improving the price of your shares.

For now, we have taken several steps to improve your company’s performance. The commercial partnerships we have signed with companies like Zoe and TV5 have resulted in an improvement in our ratings. From a low of 1.1% after our shutdown, we now achieve 4.1% rating, with primetime growing from 2.1% to 9.6%. This gives us an audience share on primetime of 27% vs. our competition’s 58%.

In terms of revenues, your company delivered 17.8 billion in revenues for 2021. Last year we achieved advertising sales of 5.3 billion vs.7.1 billion in 2020. Please note, however, that we were still broadcasting on television and radio for the first four months of 2020. If we look instead at our second-half sales in 2020 vs. our second-half sales in 2021, we grew ad revenues by 65%.

We are very encouraged by the growth of our digital and international businesses. Digital revenues were at 2.3 billion in 2021, increasing by 48% from 2020. Our websites attracted 109 million unique users from all over the world – close to three time the number of users compared to the previous year.

International revenues now account for 19% of total revenues, and we continue to exert efforts to expand this revenue stream.

Our costs also continue to come down. From a high of 33.6 billion in 2020, our total expenses in 2021 came down to just 23.3 billion, a 31% reduction in spending.

We also continue to find ways to reduce debt. We started 2020 with 26 billion in interest-bearing loans and have reduced that to 21.5 billion in 2021. For this year, we are currently already at 18.4 billion and we hope to reduce debt further to 14 billion or less.

Consequently, our net losses have decreased from an extraordinary 13.5 billion in 2020 to 5.7 billion in 2021. We ended 2021 EBITDA positive versus the negative EBITDA of 6.2 billion in 2020. These improvements and the continuing upward trajectory in financial performance are indicators that a return to profitability is possible in the near term.

Despite our challenging financial situation, we have not forgotten our mission of serving the Filipino. The various programs of ABS-CBN Foundation continued to find ways to raise funds and provide assistance to our kababayan – from typhoon relief efforts, educational support, environmental impact projects and through Bantay Bata.

Our biggest priority today is ensuring that ABS-CBN continues to tell excellent stories. That’s why we focus on keeping our best talent across the organization—creative, performing, production, journalistic, and managerial. Let me take a moment to express our gratitude to all our Kapamilya that have committed their support to our company, despite the many sacrifices we have asked them to make. We are nothing without you.

We want to tell our stories to as many people as possible. To this end, we have started signing partnerships for our shows to air on A2Z, TV5, and GMA. We have also done deals to air our content globally through digital platforms like Netflix, Viu, and iWantfc.

We are determined to build a future for ABS that does not solely rely on broadcasting. Instead, we are doubling down on excellent storytelling that reaches a wider audience on any network or on any platform. More importantly, by continuing to improve our skills, we hope to be recognized as world-class storytellers, reaching and resonating with audiences worldwide. There is every reason to believe Filipino storytellers will shine on the world stage. We have the heart, the passion, and the competence to be global content creators.

To our dear shareholders, the fact that you are still with us today, more than two years after we lost our franchise, says a lot about your commitment to our future. Thank you for supporting us and believing in what we do. We commit to rewarding your faith in us, both financially and in the shared joy of achieving our dreams together.

Maraming salamat, Kapamilya.

The post Remarks of Carlo L. Katigbak, president and CEO, at the ABS-CBN Corporation Annual Stockholders? Meeting on July 28, 2022 appeared first on Lopez holdings Corporation.

Good morning.

Although the COVID-19 pandemic halted life as we knew it in 2020, the nationwide vaccination program and subsequent easing of mobility restrictions in 2021 has led to a welcome recovery in economic activity for the country. Philippine gross domestic product (GDP) grew by 5.6 percent last year, after shrinking by 9.5 percent the previous year.

We are now in the middle of 2022, and barring any new more virulent COVID-19 variants, it seems like the Philippines is headed toward an endemic COVID-19 situation where we learn to live with the virus without the restrictive lockdowns that have constrained the economy these last two years.

As we emerge from this pandemic, we see the Russia-Ukraine crisis posing yet another risk to global growth. Energy and commodity supply chain disruptions is generating a lot of pressure on prices everywhere and has not spared the Philippines, and we will likely breach the Central Bank inflation targets for the year. The country’s debt-to-GDP ratio pre-pandemic was 39 percent but has now climbed to 63.5 percent given a lot of necessary pandemic spending.

Amidst these interesting times, we will continue to pursue our businesses with vigor.

For the Communication Group under ABS-CBN, we are slowly but surely regaining our bearings as we target to bring our content to broader audiences via partnerships with local and international platforms. We are gratified at the response we have been receiving from our loyal Kapamilya across the globe. They have continually encouraged us to produce content that entertains, informs and inspires our viewers to be their best selves, while at the same time promoting the very best of Filipino talent.

At the FPH Group, We continue to fortify our various business platforms and exploring more effective solutions to help our own customers navigate the new normal. We’re also redesigning our offices and facilities for hybrid work that integrate remote work habits honed during the pandemic with rebuilding our face-to-face corporate communities.

However, our collective battle for the planet’s climate continues. In February 2022, the UN IPCC released the Working Group II’s Sixth Assessment Report (“AR6”, written by 270 researchers from 67 countries, and approved by 195 governments) declaring that (to quote the New York Times): “The dangers of climate change are mounting so rapidly that they could soon overwhelm the ability of both nature and humanity to adapt, creating a harrowing future in which floods, fires and famine displace millions, species disappear and the planet is irreversibly damaged. “Any further delay in concerted anticipatory global action,” the report says, “will miss a brief and rapidly closing window of opportunity to secure a livable and sustainable future for all.”

Recall that following the release of  Working Group I’s Sixth Assessment Report in August 2021, UN Secretary General Antonio Guterres gave a stern warning that this was a Code Red for Humanity. The latest report he now describes as an Atlas of Human Suffering. It’s undeniable that our planet’s climate is changing, primarily from human-caused emissions of burning fossil fuels, and it’s changing faster and more dangerously than we thought.

At the conclusion of Glasgow 26th Conference of Parties (COP26) last November 2021, the general feeling was that the conference over delivered, given the political headwinds, but under delivered in relation to what the science still demands of us. Now, remember that at Paris 21st Conference of Parties (COP21) in 2015 the world applauded soft agreements that pledged actions toward a global warming threshold of 2.0 degrees Celsius with many seeking to limit warming to 1.5 degrees Celsius.

Hardly any of those pledges are being met today, which still puts the world on course for a planet that’s 3-4 degrees Celsius warmer by the end of the century. Clearly, catastrophic and uninhabitable. However, even the 2.0 degrees Celsius target applauded in Paris will change our planet beyond recognition: close to 99 percent of coral reefs will disappear, extreme heat, and 1-in-100 year flooding events will become regular occurrences, existentially threatening all coastal cities.

Given the Philippines is among the ten most vulnerable nations on Earth to climate risks mainly due to its geographic location and archipelagic structure, we should be among the most driven to amplify calls for commitments to a 1.5 degree Celsius world.

So what does keeping to 1.5 degrees Celsius really mean? The science tells us we only have about 300-400 gigatons-worth of greenhouse gases (GHG) left to emit before we exceed that number. Since the world currently emits 51 gigatons of greenhouse gas each year, we only have around 6-8 years remaining before we lose all chances of hitting that goal of limiting warming to 1.5 degrees Celsius and being left to contend with a harsher 2.0 degrees Celsius world or worse. The UN IPCC AR6 makes this very clear: the window is closing fast.

All these make our Mission of “forging collaborative pathways for a decarbonized and regenerative future” more urgent. While originally crafted at FPH, we believe that this Mission is the best way to align all our decisions and actions with our core values as the Lopez group of companies. Our desire is to be at the forefront of the transition to a net zero economy by 2050, given our substantial investments in power and energy.

Many in the power industry have since declared their preference for clean and renewable energy. Our own transition to a decarbonized future will be anchored in the next few years by First Gen’s efforts to bring in liquefied natural gas (LNG). When complete, our LNG terminal in Batangas City will allow us to import natural gas from around the world, thus providing consumers with clean, reliable energy that will also displace power produced by dirty coal, even after our indigenous supply in Malampaya is exhausted.

In line with the Philippine Energy Plan of 2020-2040, natural gas will also serve as an enabler of intermittent renewable energy like wind and solar, which will help keep the lights on when these sources are not available. We see LNG as the bridge fuel that will make wind and solar power more reliable, increasing demand and hastening widespread adoption of these platforms onto our power systems.

EDC’s geothermal assets, being the only 24/7 renewable energy technology available, will be essential in keeping the lights on as we transition to a Net Zero future. EDC’s geothermal portfolio spread across strategic locations in the grid will be critical in helping balance the grid, supply significant baseload renewable energy, and even protect consumer prices from external shocks, being indigenous. In April 2022, we inaugurated our 3.6-MW Mount Apo 3 project in Mindanao and we are underway in completing the  29-MW Palayan binary power plant in Manito, Albay. Further expansions are also lined up in the next few years as well as greenfield development in the medium to longer term. By developing more geothermal plants, we gain advantage from the continuous renewable electricity production to supplement more intermittent sources such as wind and solar.

Through First Gen,  we are also planning to significantly expand our wind and solar portfolio over the coming years. The demand for wind and solar will not just come from grid operators serving large urban areas; it will also come from off-grid communities with little or no access to 24/7 electricity, households looking to cut their carbon emissions, and contestable customers operating commercial and industrial establishments.

Even as we fulfill our role of bridging the entry of more renewable energy to the grid, we are also planning our own decarbonization. To meet that net zero carbon future, our natural gas plants will eventually need to be repowered, possibly with clean hydrogen, as technology develops and attain commerciality. In the same vein, we are pursuing energy efficiency schemes as well as taking stock of other technologies that will further advance our net zero goal.

However, beyond just halting any additional warming is the Herculean task of preserving, rebuilding, and more importantly regenerating the planet and everything we’re losing. This is why we believe sustainability is no longer enough in a world that’s badly in need of healing and renewal.  We specifically chose to use the word Regenerative in our recrafted mission, with all the responsibility that it carries.

Being regenerative, however, isn’t just about renewing the environment. Above all else, it’s about healing the wounds inflicted on our communities and societies from decades of flawed economic thinking and the resulting policies that have widened inequalities making the dream of prosperity for billions of people even more out of reach.

Admittedly, this is a tough time to be in business. I would even say, the toughest I can remember in the last four to six decades. The road will be filled with curve balls. But life isn’t just about the presence or absence of difficulties, it’s all about how we deal with those inevitabilities that matters. How we do that, is what will make it such an exciting and fulfilling time to build businesses that meet the challenges of the 21st century.

We thank you and hope for your continued and unwavering support.

The post Remarks of Federico R. Lopez, chairman and CEO, at the Lopez Holdings Corporation Annual Stockholders’ Meeting on July 14, 2022 appeared first on Lopez holdings Corporation.