PLDT Inc (PHI) 2023 Q2 法說會逐字稿

Okay. Good afternoon, and thank you for joining us today to discuss the company's financial and operating results for the first half of 2023. A copy of today's presentation is posted on our website. For those who've not been able to do so you may download the presentation from the Investor Relations section of our website at www.pldt.com. Kindly note that this briefing is being recorded. A podcast of this event will be available on our website after the call. QR codes for the presentation, the MD&A, the financial statements, as well as the podcaster on the screen and in the confirmation notice's e-mailed to you.

For today's presentation, we have with us our Chairman, Mr. Manny Pangilinan; Mr. Al Panlilio, our President and CEO; Mr. Danny Yu, our Chief Financial Officer and Chief Risk Officer; Attorney Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel; Shailesh Baidwan, President of Maya Philippines and Co-Founder of Maya Bank as well as other members of the PLDT management team. At this point, let me turn the floor over to Mr. Pangilinan to begin the presentation.

Thank you, Melissa. Good afternoon, Chairman. Good afternoon our friends in -- our analyst friends here today here in the hotel and online. Thank you for being here. Happy to report the first semester performance of PLDT Smart. I just want to start by saying that, I guess all the efforts that we've been doing as a company, very proud to say on this chat that we will reaffirm our top position for brand value sustainability perception value. This is critical because brand is always critical in the way we run business and trusting -- it shows me a big trust in the brand and in the company that we have. So most viable brand at PHP 2.6 billion. That's up 2% actually from last year as done by brand finance and the highest -- #1 highest sustainability presentation value with all the sustainability initiatives that we have been doing all this time.

So again, I think core to our business, I'm happy to report that we have been awarded as the -- basically, we are the undisputed fastest integrated network. Both smart and PLDT were recognized by Ookla. This happened about 2 weeks ago -- a few weeks ago here. They came over here. They did say that fixed broadband has been a leader for 5 years in this country. So that's a fit we think that has not been done by any entity for sure in the Philippines, but I think even globally. And then also a fit that we achieved was -- Smart was rewarded with the best mobile network with 3 consecutive semesters, and I think it's also a fit according to Ookla. So very proud of that.

So as we went through the year, and we were able to reinforce even more our core infrastructure. Homes Passed now is up by 6%. You have 17.2 million homes that we pass, and we continue to obviously expand our fiber footprint up 4% compared to last year. And next page, please. Because of all this, I think it is still a solid performance for the first half. Obviously, we can do better on revenues, only growing at 1%, but I think we have a healthy bottom line Telco Core PHP 17.6 billion, 3% up versus last year and EBITDA of PHP 52.1 billion, which is not only SMEs high but also a quarterly high in terms of EBITDA. And we're able to improve also our margin from 52% to 53% EBITDA margin.

So our pillars remain to be focused on strengthening the businesses, the 3 pillars, but also driving steady growth. Individual trying to signify strength in key segments and services. I think what is happening is because we are able to reverse the negative trend for individual and has been showing growth quarter-on-quarter, second quarter higher than the first quarter. So the data revenue for the first semester is up by 4%, traffic is up 15%. Home continues to lead in the market despite the challenges, up 3% on fixed revenue, which includes all the legacy revenues. But if you take -- just take a look at fiber, it's still growing at the double-digit clipped at 11%. And for enterprise, elevating companies by transformation and that's the focus for both enterprise and SMEs. Healthy growth both 28% equal allocation and cloud. And I think we will continue to push this as we speak as this has been the focus in the past few months.

We also obviously embed ESG in our company's DNA. We have a lot of initiatives across environment, social, governance initiatives. For example, in environment, we have an e-waste program where we are disposing off old cell phones with lithium batteries. Making proper disposal is what we intend to do and to make sure that we're able to do that responsibly. And also with social, a lot of diversity, inclusive advocacies that we cut across.

And of course, our PLDT Smart Foundation continues to be active across pillars of education. Obviously, disaster response always has been key not only for PSF but for the entire MVP group and special projects, in particular, for example, in this case, Philippine Navy. But all the other programs like scoring the bag and the like are actually still going on. And just recently, next page, please. Again, PLDT and the MVP Group was involved in the response to the victims of Typhoon AGI. We sent relief packs, in fact, today, there's a medical mission that's already working -- or has already gone to -- it's already in Lacoste, but also -- not only Ilocos but also Bulacan and Pampanga, as these are in a lot of victims of the recent rains. So just to say that before I pass on the mic to Danny, just to say that we are pushing to still remain strong at 95%, and we will put out some growth initiatives in the next few months to ensure that we become resilient and also remain resilient until hopefully, we can also -- we're planning out for 100 years in 5 years. So Danny?

Good afternoon. I'll be presenting the financial and operating highlights for the first semester of '23. Service revenues for the first semester of 2023 rose by 1% to PHP 94.5 billion. OpEx, including subsidies and provisions, declined by 2% to PHP 42.4 billion. EBITDA grew by 3% to PHP 52.1 billion, an all-time semestral high. EBITDA margin improved to 53% from last year's 52%. Telco core income excluding the impact of asset sales and Voyager rose to PHP 17.6 billion, up 3% from last year.

On a segment basis, next page. Home continued to be the main driver of growth with a 3% rise in revenue to PHP 30.1 billion. Fiber-only revenues grew 11% to PHP 25.7 billion. Our enterprise business grew by 2% to PHP 23.2 billion. Our individual business remained stable year-on-year with revenues of PHP 40.2 billion despite the absence of election-related benefits in 2022.

Allow me now to go through the segments in greater detail. Home broadband revenues grew by 3%. Fiber revenues which account for 85% of the total Home revenues rose 11%. The Home broadband market remains underpenetrated with unserved demand more at the lower market segments that's more sensitive to price and inflation. Home ARPU is respectable at 1,488, Fiber net adds for the first 6 months of the year stood at 123,000. PLDT's competitive advantages remain to be our superior network, strong brand equity, a portfolio of products at different price points using varied fixed and wireless technologies.

Next piece. Data and ICT remain key drivers of our enterprise business, which was up by 2% to PHP 23.2 billion from the same period last year. Corporate data rose 7% from higher fiber, managed IT and I-GATE revenues. ePLDT/ICT recorded 13% improvement in revenues mainly from data center and cloud services. PLDT Global on the other hand grew 31% from IPLCs, data center, cross-connect and carrier hubbing. Opportunities for growth in enterprise will come from hyperscale data center business and increased focus on digital transformation by corporates, SMEs and government. The capacity utilization of our existing 10 data centers stands at 71% versus practical capacity of 80%. Our 11 data center in Santa Rosa Laguna is expected to go live in the first semester of next year.

Revenues for our individual business remained stable year-on-year with the second quarter registering a 3% rise versus the first quarter. This was supported by a 2% increase in prepaid and a 7% increase in postpaid. Mobile data revenues were higher by 4% at PHP 34.5 billion year-on-year with active data users rising by 2%. Compared with the full year 2022, data usage per sub and data traffic continued to register improvements of 14% and 15%, respectively. After the deadline for SIM registration on July 25 and the 5-day extension, 52.5 million Smart and TNT subscribers had registered, representing about 99% of our active subscriber base and representing about 96% of revenues.

To make up for the potential revenue shortfall, we will accelerate our efforts to optimize revenues and continue to make available great value promo offers supported by network expansion and superior customer experience. Thus, we expect the positive momentum in the first half to be sustained in the second half of the year. In the first half of 2023, 83% of consolidated service revenues were from data and broadband. By service type, mobile data grew 2% year-on-year, while home broadband and corporate data rose by 5% and 7%, respectively. ICT revenues were 13% higher, which included an 11% rise in data service revenues.

Consolidated EBITDA for the first semester hit an all-time high of PHP 52.1 billion, up 3% or PHP 1.6 billion compared with the same period last year. This was a result of the PHP 900 million increase in revenues and an PHP 800 million reduction in OpEx. Telco Core for the first 6 months of the year rose 3% to PHP 17.6 billion from last year. Higher EBITDA and lower depreciation fully offset increases in financing costs and income tax provision. On a reported basis, PLDT income rose 10% to PHP 18.6 billion, higher by PHP 1.1 billion year-on-year. This was mainly from the gain of power sales, Forex and derivative gains, partly offset by MRP expenses. Last year, the company recorded a PHP 7.8 billion gain from prescription of preferred shares redemption liability MRP expenses of PHP 4.6 billion. Note that our share in Voyager losses stood at PHP 1.2 billion lower than last year's PHP 1.6 billion.

Today, the Board of Directors approved the payout of an interim cash dividend of PHP 0.49 per share, representing a 60% payout of all of our first half Telco Core income per share of 81. Record days is August '17 with a payout date set for September 1. PLDT's balance sheet remains strong with net debt to EBITDA of 2.48x as of June. We expect this -- we expect to reduce with the receipt of tower sales proceeds in the second half of the year. Gross debt amounted to PHP 270.3 billion, of which 15% are dollar-denominated and 5% unhedged. Interest costs for the first semester stood at 4.32%, while the average life of debt is 6.7 years. Total CapEx for the first semester amounted to PHP 40.8 billion, consisting of network and IT CapEx of PHP 34 billion and business CapEx of PHP 4.2 billion.

Included in the CapEx spend are investment in capacity to drive revenue growth and support continuing rise in network traffic and as well as the construction of our 11 data center among other projects. In line with our objective of bringing down CapEx and aiming for positive free cash flow, CapEx intensity for the first 6 months of 2023 has moderated to 41% from last year's 48%. In addition, the CapEx of PHP 40.8 billion is PHP 11.3 billion lower than EBITDA for the period of PHP 52.1 billion.

The next page shows the usual network highlights. On the fixed network, we passed 17.2 million homes and cover 18,000 barangays representing 43% of the total barangays in the Philippines. Total fiber ports stood at PHP 6.1 million, excluding VDSL of around PHP 1 million. Utilization of these ports remain high as we carefully rationalize the rollout of new ports. PLDT's total fiber footprint remains unparalleled with a total of over 1.1 million kilometers. The population coverage of our 3G, 4G, 5G wireless network stands at 97%, about 83% of the total handsets on the network are LTE.

The last page shows the number of unique 5G devices and 5G traffic increasing from end of 2022. As part of our network optimization to realize operational CapEx and spectrum efficiencies, we reduced the number of our 5G base stations from the end of 2022. Nevertheless, 5G speeds remain faster than the competition based on Ookla speed tests. I will now turn you over to our Chairman for the guidance.

Thank you, Danny. Good afternoon, everyone. So we launched Maya Bank about 12 months back and put it at the heart of our payment ecosystem. And we've had fantastic response to the launch of the bank, and I'll share some of the statistics on that, along with, of course, recognition that we have got amongst not just the peers in Philippines, but globally. The launch of Maya Bank and deepening of Financial Services has, of course, helped us in the consumer business, where by virtue of having a single unified app, we are seeing the performance in terms of customers using us for multiple use cases and the app continues to be rated the best finance app. And on the other side of the payments where we power enterprises to accept Visa, MasterCard, Bank Net, QR PH, that business continues to grow in strength day by day. Today, we process more than 50% of all Visa MasterCard QR PH transactions in the Philippines.

On the next slide, as I mentioned, our plan always was to launch an all-in-one digital banking solution, whether you're a consumer or whether you're an SME. On the consumer side of the house, we've already introduced saving products like the personal goals and Maya Saving our Engagement banking, and we have launched Maya credit, and we will be introducing a buy now pay later, which is already in test mode. And on the SME side, I'll talk in a minute where on the back of providing enabling them to accept payments from all kinds of digital means. We are now adding on other services to allow them to settle that money into a business deposit and on the back of that provide working capital loans. And of course, all of this underpinned by our payment network.

On the next slide, if I can just give some color on the digital banking progress that we have made at Maya. So the numbers as of first half, we have over 2.3 million depositors who have placed PHP 25 billion worth of deposit with us, and we've been able to disburse over PHP 10 billion worth of loans to our customers. And if you look at the statistics, as published by the BSP as of end of first quarter, as of end March, the charts below the green is Maya's share as a percentage of the total share amongst the 6 digital banks. So share 61% of total accounts, 71% of the total depositors and 46% of the balances. Of course, we were the last one to receive the digital bank and the pretty much first one out of the door. This by is expanding rapidly as the other banks continue to grow and launch new products, but our push, of course, will continue to make sure we keep a leadership position in this space with new innovative products.

So as I mentioned on the consumer side of the house, that was our first port of call, where we were off to the races by providing services. Our next area where we are pushing on the next slide, please, is on the SME side of the house. So we've launched a bundle for this extremely large and important segment and deeply underserved segment in the Philippines are 1 to 3 grow bundle. What that allows you is to accept all forms of payments, so you can digitize your payments, which is number one. On the back of that, you can connect that to your Maya business deposit account where you earn interest rate, you can pay salaries of your employees, you can pay your suppliers through that bank account. And as we see the transactions at your end, over a course of 90 days we can start lending you working capital on the back of that. This is our next thrust area even as we made good progress on the consumer side and continue to push our next area port of call, is really growing our SME business. And with that, I will hand you over to the Chairman on the guidance.

I guess this is the outlook, So I'll just read through this. In terms of services revenue growth, the outlook is low single-digit growth for the full year. EBITDA is quite similar, low single-digit growth for the full year. Telco Core is a range of PHP 33.5 billion to PHP 34 billion anticipated for the full year. CapEx between PHP 80 billion to PHP 85 billion. And that's a focus on deleveraging, I think you saw the net debt-to-EBITDA ratio as of June 30 being 2.48. We should anticipate that, that should drop to around 2.3 by year-end, in part because of healthier EBITDA for the year and proceeds from the tower sales for balance of the year. Thank you.

So we're now ready to take your questions. (Operator Instructions) Allow me to take questions on the floor first before we go to those online. Anyone? Just raise your hand. No question. So let's go to the questions that we received online. There's a question from CLSA Derek. There are 3 questions so we will start with the first one. What pulled down the growth in enterprise revenues when ICT revenues rose 13% year-on-year. There's a question goes out to Mitch.

Thank you, Melissa. So our -- we actually grew 13% in the first half, but that was pulled down by the decline of legacy services like our voice services and discontinued services, like, for example, the Department of Education load that we provide to all the teachers nationwide. And due to the face-to-face learning, they stop already the service. But all in all, we still grew by PHP 600 million in the first half, bringing our revenues to PHP 33.2 billion.

The next question from Derek is, can you give us updates on the Sky cable acquisition?

We're still awaiting the approval of the PCC for the transaction. So I think there's a scheduled meeting sometime next week so that we can settle any outstanding issues with the PCC. But we've submitted the a lot of documents that they requested. So we'll -- that's the only thing basically that's outstanding, I believe, at this point in time.

The next question and the last question from Derek. For Maya, the loan book has tripled year-to-date. What are the names like now and is there a new time line for profitability?

Sorry, what was the first part Melissa?

For Maya, the loan book has more than tripled year-to-date. What are the names like now and is there a new time line for profitability, the names?

Yes. So at this stage we are very pleased with the way the loan book is performing. As you know, this was -- first, we started with our existing customers for whom we had rich data on their transaction history and using our internally developed AI credit scoring models. We've been disbursing them loans, and we're seeing over 80% of them coming back month-on-month for repeat. So the names, I won't be able to share the exact numbers, but the extremely low, in fact, our margins are very, very healthy on the loan book. The idea is to keep expanding and adding newer products. Our first product is a short tenor line of credit. We are adding now on top of that installment loans and expanding to other segments like the SME.

As regards to profitability, absolutely the whole plan of introducing products like the loans products, these are high-margin products, -- they help us to deepen the customer relationship and we see that the usage of the loan customers, not just on the loan side, but then they use us for all the payments and other use cases. So we make a lot more ARPU per customer once they start taking loans from us. So the idea is as we expand the loan book to help us create higher-margin products to push towards profitability. Already all our businesses are segment EBITDA positive. Now our pushes towards group EBITDA profitability, which we are aiming for the second half of 2024.

Any questions from the floor before we take part from the online participants? If there are none, the next set of questions are from (inaudible) of Abacus Securities. Were there any reversals in asset impairment in the second quarter? And what is the nature of it?

There is none.

The second question, given the slight sequential decline in quarter 2 service revenues, where do you expect the bottom line growth to come from moving forward? Given the slight sequential decline in second quarter service revenues, where do you expect bottom line growth to come from moving forward?

Well, I think the targets really for us is higher in the second half. As we expect a lot of the long-cycle contracts, for example, contracts with enterprise, we expect that to happen in the second half. We're also seeing a positive trend in wireless that has grown from first quarter to second quarter by 3%, and we could -- we are -- I believe that growth will continue in the second half. And I think for Home, showing 11% growth in fiber that remain to be the focus on revenues for Home. So just a bit of catch-up for Home on installation as we are able to roll out more parts in greenfield, and that's also supposed to happen in the second half.

There's a raised hand from GP of JPMorgan.

Yes. So my first question is on the increase in finance costs year-on-year of around 20%. So what is really driving this?

Fully on the accretion of liabilities arising from our sales.

Okay. Got it. And the other thing is, are there any one-off costs that are impacting the EBITDA? And also if you could share the accelerated depreciation that's recorded in second quarter?

Could you repeat your question? You were saying was there any one-off costs impacting EBITDA after that...

Yes, the second part was, is there any accelerated depreciation that is recorded in the second quarter?

For the second quarter, there is none. There's no absolute depreciation for the second quarter. What was your first question again? Sorry, I didn't get it.

Yes.

Well, the only nonrecurring items, I think I mentioned earlier is the gain on sale of stratosphere. That's around PHP 3 billion, then partly offset by the MRP costs of around PHP 1.8 billion. There was also a gain on Forex hedging and derivatives of around PHP 1.2 billion. That's for the first semester.

Okay. But with the gain on sale of stratosphere impact the EBITDA?

Yes, in the sense that with stratosphere there will be a reduction in depreciation online. But there's also an increase in financing costs arising from the accretion of these liabilities. Is that your question?

No, actually, I meant if anything that is impacting the operating expenses.

Whether stratosphere impact operating expenses, the sale of towers impacts operating expenses? Is that your question?

Yes.

Yes.

Do you have any other follow-up questions?

No, that's it. Thank you.

Hussaini, you have your handy raised?

Yes. Several questions from me. First is on guidance. Now as the revenue -- sorry, the EBITDA growth guidance is lowered from mid- to low single digit. Just wanted to understand what is driving then the lift in Core Telco net income guidance? The second question is on the mobile side. I see that the guidance for the mobile in the second half is -- or the outlook in second half is better than the first half. So what is driving that? Are we seeing any price increase efforts in the market? And how are your competitors, especially the new players responding to that? And on the enterprise side, I read in the press release, the PLDT is going for the 12th data center. So just wanted to understand that, are we already seeing customer traction for the 11th data center? And are there any plans to monetize data center in the coming years. Thank you.

The first question is on the EBITDA guidance from mid to low.

We're expecting better revenues in the second semester combined with a reduction of operating expenses. So that will drive the EBITDA in the -- for the full year of 2023.

So Francis on the mobile. The second question is the second half outlook looking better than what it was in the first.

Okay. For the second half, there are a few factors that we're looking at that's why we're more optimistic. The first one, during the first half, because of SIM registration we have seen our churn rates reduced by around -- as much as 35%. So we expect that to continue in the second half -- second semester. We've also seen our ARPU grow by at least 7.5%, also because we're getting more quality subscribers because of SIM registration. And we did a lot of revenue optimization initiatives to maximize the revenue of our subscribers. So we expect that to continue in the second semester.

Third point, we're going to further invest on improving our network experience that's going to happen, assuming in the second semester. So we expect some revenue definitely to come from that one. And lastly, I think there's an opportunity now to further drive activation because not only did we lose or we have unregistered subs more so from our competition. So there's a big sea of unregistered subs in the next few months. And finally, if I may add from a macro perspective, the inflation is also the outlook -- the forecast of the inflation is much better as compared to the same period last year and even better than the first semester. So those are the key pieces why we're more confident with the second half.

Thanks Francis, maybe if I can -- just have one follow-up here. So based on all the points you enumerated, is the growth in the second half will be driven by market share? Or you are of the view that the overall industry will grow at a healthy pace?

I think a lot of it will be driven by maximizing the revenue per subscriber from our end. Because of SIM registration, I think driving -- stealing some share will be more challenging from both parties, from both players. So I think the key to driving the further growth -- let's say we're not going to steal share because I guess -- I think that's where the network experience would come in. At the end of the day, consumers choose the better Telco with the better network experience. But I think a huge part of the growth now unlike before where we relied a lot on driving activation would be driving the attention and driving the ARPU of our current subscribers.

Hussaini, are you okay with that? We'll go to the data center question.

Hussaini, thank you for the question. So with regards to data center 11, which is the first true hyperscaler data center in the country, we are on schedule, we're on track. We expect customers to be able to move in by the first quarter with full facility readiness by the second quarter of 2024. There's been a lot of interest. We've actually entertained some customers to come in and do a due diligence already on the site, and we are entertaining these as we speak. With regards to data center 12, we want to build ahead of demand, and we're in the process now of going through a very rigid site selection process to ensure that the 12 data center that we're planning to build fits all of the requirements for both hyperscalers and enterprise customers that we intend to target.

And there was a question on the monetization of our data center.

Yes, just -- I guess I can take that. As you said on the data center -- in terms of monetization of auto data center, we are exploring, looking for a partner to be -- to bring in into ePLDT data center business only, maybe 3 factors. One is we believe if we can bring a partner, we can actually drive top line even more if we can be part of the platform of this partner that we're looking at. Second is to really improve also operations in terms of they were used to operating hyperscaler data centers. And that's something we can learn from, be more efficient, be more cost effective. And lastly, of course, capital as we continue to build out 12 and maybe in the future, 13 and 14. So that's something that I think we are able -- we want to have a partner come in and address those 3 factors for us.

Are there any questions from people who are here? Is there's a hand raised?

John Renz, from Security Bank. Did I expect any one-offs in the third quarter regarding this typhoon or this weather? That's all.

(inaudible) the typhoon?

We actually don't see any yet. I don't think it's going to be as bad as Odette, last year. There might be a few areas affected but I think restoration is not as difficult as the one in Odette. Jeremiah, you want to add something?

Just to add to that, l was actually spot on in terms of the number of households that have been impacted. So today, we currently have about 16,000 households that we're still in the middle of actually restoring services too. So when you look at the size and the scale of that versus the debt or other calamities that we've had in the past, it's significantly lower. So this is something that we will do as a matter of, I guess, a regular operation. We don't necessarily see any large one-off costs associated with it.

I just want to clarify something because earlier there was apparently a question whether there was -- there are one-off items on the EBITDA. My answer is no. There is none. Because any one-off or nonrecurring gain is shown after Telco Core income before reported net income.

Any other questions from the floor? Please, the mic in the middle. Thank you.

Steven here from China Bank Securities. I just wanted to ask if you could provide more color on the lower depreciation charges for the first half. And for my second question is PLDT planning to venture into prepaid fiber similar to what competitor has been doing? Thank you.

Why was the lower depreciation in the first half?

Last year, we had an accelerated depreciation of certain assets such as like 3G, VDSL, transport equipment, about 51 billion were written up in 2022. So that had an impact on our depreciation this year.

Under the prepaid fiber?

Sure. Just in terms of prepaid fiber. So we are looking at all of our options, and prepaid fiber includes one of them when it comes down to our fiber monetization strategy. As you know, we actually have a slightly different strategy to what our competition is doing. We currently sit at about the 60% port utilization level. Very, very different to what our competition is doing much significantly lower. So one of the things we're doing in looking at prepaid is actually being very, very targeted in our approach to ensure that we're using the prepaid offering as something for -- to better utilize in a specific area to ensure that we don't necessarily drive further commoditization of the sector and that we are able to actually extract as much value from the existing assets that we've already put out there.

Thanks, Jeremiah. Any other questions on the floor? We'll entertain questions that are e-mailed. This one is from Arthur Pineda of Citi. What is driving the reduction in revenue and EBITDA guidance for the year? I guess it's similar to what Hussaini asked that the initial guidance for the year set out at mid-levels and then our updated guidance is on low single digit.

So the guidance for growth of revenue and EBITDA similar to the first semester? The bottom line is higher.

Then the second question from Arthur. Fiber broadband net adds remain relatively soft. How do you see this as changing into the second half? Are you seeing your competitors gain from prepaid fiber?

Okay. Thanks for the question, it was Arthur, I think? So our focus in the first half has really been around sweating our assets. We have 6.1 million ports, and we've been very much focused in monetizing as much of that as we possibly can. That's seen us take 2 approaches. #1 is switching. So really looking at how do we have compelling switching plans for our customers so that they move over from our competition. And the second one is also looking at prepaid fiber. So we are looking at prepaid fiber as an alternative and a way for us to be able to help drive improvement in net adds moving forward.

In terms of, are we seeing any impact from competition with regards to prepaid fiber? Competition has also been very, very selective with their prepaid fiber offering. So it's not something that they've been offering nationally. From what we've seen on the ground they've been very, very selective in the areas that they do offer prepaid as well, and they've been very, very targeted, prominently targeted at areas where they have capacity. Now they have -- admittedly, they have actually a lot more capacity than PLDT because we are -- they're currently sitting on average about 20% and we are sitting at about the 60% level. So whilst we will be venturing into the prepaid space, we are just looking very selectively at these particular areas.

The next question from Arthur. Voyager's loss has narrowed further quarter-on-quarter. I guess it's similar to the earlier question. What are your expectations on the timing for profitability and what milestones need to be achieved?

Yes. As I mentioned, all the businesses are now segment EBITDA positive. So we are now trying to make sure that the whole company is EBITDA positive, which, as I mentioned, in the second half of 2024, we will get there as we continue to launch and scale up new products with high margins, especially products like lending, as we expand into other segments. At this stage, the loan book is growing. But as we can see, the deposits are -- have grown very fast. The good news is these customers are transacting, so they're giving us a lot of rich data on them, which helps us in our credit scoring model in turn to start lending to them. So that's one part. And the second is by helping to grow the deposit base, it continues to provide us with a very healthy cost of fund base on which as we grow the lending book over the period of the next 12 months, that helps us the balance sheet that we need. So that is the plan in the second half 2024.

And his final question. How should we look at the manpower related charges -- reduction charges into the second half? This has actually declined quarter-on-quarter. Is this done and dusted or are there still more in the second half of '23?

Jane, the Head of People Group.

We don't expect for the second -- for the balance of year any additional. But what we're doing is really focusing on the upscaling and rescaling of our workforce, primarily in areas that are relevant now and very much aligned to the business needs. So far, if ever we have that do not be as significant as previous year.

Thanks, GPO. There's one on the queue from Giorgio Gonzales of PEP. Any further update to the CapEx overrun? Has the total sum been pared down further from what was indicated in the first quarter? How much of the first half CapEx is from the overrun?

What we're going to do is to just announce to you when everything has been completed because we need to reflect in our financials any additional settlements that we enter into. So until then, we prefer not to say anything more.

Thanks, (inaudible). Any last questions from the floor? There are none on the queue. Last chance. So if there are no further questions, we will now turn the floor back to Mr. Pangilinan for his closing remarks.

Thank you for joining us for this briefing. And we'd like to invite you for the FIFA World Cup starting was 25, correct? First game of Gilas against the Dominican Republic at 8:00 p.m., broadcast live nationwide and globally. So we look forward to 1 or 2 Philippine victories, we hope. So thank you, and we look forward to seeing you again on the third quarter briefing.

That concludes today's briefing. As always, should you have any further questions or clarifications, please reach out to PLDT Investor Relations. Thank you for your participation. Stay safe.