April 24, 2024 


Fellow shareholders, my colleagues on the board and management, good morning to all of you.

2023 saw some reprieve from the global energy crisis, with fuel prices coming off from historic highs. With that said, energy demand continues to grow, and the imperative to transition from fossil fuels to clean energy remains intact.

The company continues to execute on its renewables expansion across our key markets in the Philippines, Australia, Vietnam, India, Indonesia, Laos and the U.S. ACEN currently has around 4.7 GW of renewables capacity in operations and under construction. In addition, the company has signed agreements or won competitive tenders worth over 1 GW of capacity. This effectively surpasses the company’s goal of reaching 5 GW of renewables by 2025, or almost two years ahead of schedule.

Attributable output from ACEN’s renewable energy plants increased 32 percent in 2023 to 4,474 GWh. As a result, attributable EBITDA for the year grew 31 percent to ₱18.8 billion.

Reported net income for 2023 stood at ₱7.4 billion. This represented a decline versus 2022 reported net income of ₱13 billion, which included around ₱8.6 billion in net noncash items. Taking out all non-cash items, ACEN’s profitability increased 150 percent year over year, driven by nearly three-fold increase in core operating earnings.

The Philippines continues to be our core market, accounting for about 40 percent of our generation portfolio. Our Philippine renewables output increased by 35 percent to 1,145 GWh with the commissioning of new solar and wind farms. Our retail electricity business ACEN RES also grew by 54 percent to 218 MW. The significant increase in capacity resulted in a stronger net seller position for the Philippine business, amidst elevated electricity prices. This resulted in a robust financial performance.

Overseas, Australia is our largest market, comprising around 20 percent of our generation portfolio capacity. We successfully commenced operations of our first project in Australia, the 521 MW New England Solar farm, one of the largest solar farms in Australia. Construction progress is also underway for the 520 MW Stubbo solar farm, which is around halfway to completion.

Our large construction projects in the Philippines, Australia and India faced execution challenges, mostly related to grid connection, extreme weather and right of way issues. However, many of these plants successfully commenced full operations by the end of 2023. In fact, six new projects worth 1.6 GW have recently started operations and are expected to deliver close to full year output in 2024.

Today, ACEN has over 3.3 GW of capacity in operations and under commissioning, and about 1.5 GW of capacity under construction. We expect to continue our rapid expansion through 2024 as we work towards our aspiration to reach 20 GW of renewables capacity by 2030.

To support the strong growth trajectory, the company successfully raised ₱25 billion of perpetual preferred shares in 2023. This included a fixed for life coupon with no step up, the first of its kind in the country. This additional equity further strengthens our balance sheet and allows us to leverage the growth momentum.

Meanwhile, ACEN continues to play a leading role in the energy transition in the region. In addition to scaling up renewables, the company is also pioneering efforts in early coal retirement.

At the COP28 in Dubai last December 2023, ACEN, together with the Rockefeller Foundation’s Coal to Clean Credit Initiative (CCCI) and the Monetary Authority of Singapore (MAS), announced an exciting collaboration to implement the world’s first coal-to-clean credit pilot project.

The initiative will help road test the new methodology being developed by CCCI, and hopefully jumpstart the market for transition credits. Transition Credits are high-integrity carbon credits that are granted to projects that enable the early retirement of coal plants and their replacement with clean energy, while ensuring a just transition.

This initiative complements ACEN’s Energy Transition Mechanism for the 246 MW SLTEC coal plant, which targets a retirement date of 2040 or after 25 years of plant operations. The transition credit initiative will potentially accelerate the transition of coal to cleaner technology by 10 years or as early as 2030.

If successful, this can be scaled up and replicated by other coal fired power plants – not only in the Philippines but across the globe.

Before I end my report, I would like to acknowledge some key transitions in the board.

I would like to thank our chairman Mr. Delfin Lazaro and our director Mr. Rene Almendras, both of whom were former energy secretaries of the Republic. The company was very fortunate to benefit from their wisdom and support.

As leaders who understand the critical importance of energy security, both Del and Rene have been strong advocates of ACEN’s aggressive renewables expansion in the Philippines, including our investments in large scale infrastructure to enable giga scale renewable projects that move the needle for the company and the country. Del and Rene have also consistently provided guidance on balancing growth with strong risk management and a robust balance sheet.

On behalf of all my colleagues, we thank Del and Rene for having consistently championed and guided ACEN throughout the years.

We also welcome the opportunity to work with our incoming directors, Mr. Gerardo Ablaza and Mr. Jaime Urquijo. Both Gerry and Jaime are no strangers to the company, having previously been with ACEN board and management, respectively.

I would also like to thank Atty. Mon Hermosura for his exceptional contributions as Corporate Secretary, and welcome his successor, Atty. Franchette Acosta.

In closing, I thank our board of directors for its guidance, our management team and all our employees for their engagement and rigor, our business partners, shareholders, and our many stakeholders for their continued trust and support.