"We have re-imagined the company with new purpose, vision and mission. We are drawing on our heritage as an industry pioneer in sustainability practices and reporting to further focus on, and embed Environment, Social and Governance or ESG into our business strategies."

Moving to our domestic operations beyond the East Zone under Manila Water Philippine Ventures, the contribution of our North and Central Luzon clusters kept business performance resilient in the face of the pandemic. Philippine Ventures revenues for 2021 declined slightly by 1% to Php4.1 billion. This was mostly on account of Boracay Water’s operations being hampered by travel restrictions to the island, as well as lower supervision fees generated by Estate Water due to a slowdown in sanctioned greenfield projects. Consequently, EBITDA decreased by 15% to PhP1.1 billion. In all, Philippine Ventures ended the year with a net loss of Php476 million – improving slightly from its net loss position of Php480 million in 2020.

Lastly, for our international businesses under Manila Water Asia Pacific, the equity share of net income of our associates more than doubled to Php570 million. This was led by the contribution of East Water in Thailand with its bounce back from the impact of drought and the COVID pandemic in 2020, along with the continued exceptional performance of our Thu Duc Water and Kenh Dong Water operations in Vietnam. Supported by these gains, Asia Pacific posted net income of Php317 million for 2021, 185% higher than the previous year.

Looking back at the year that was, I can proudly say that the challenges we faced did not overwhelm us, but instead served as an opportunity to showcase the unflagging strength and resolve of our people. In the brief time that I have been working here, the Manila Water brand of service, care and commitment to excellence which has distinguished the company throughout the years has brightly shone through. These are the values which helped the company weather numerous headwinds in the past. Today, these values will keep us resilient amidst regulatory challenges and the continuing impact of the pandemic.

"Our path to becoming a global Filipino water company is set and is steadily taking shape, with our three growth pillars – namely the East Zone; Non-EZ PH and Non-EZ International, driving our trajectory."

As we celebrate our milestone 25 years in the business, it is on these values and on the broad shoulders of the company’s women and men that we build an even stronger Manila Water. We have re-imagined the company with new purpose, vision and mission. We are drawing on our heritage as an industry pioneer in sustainability practices and reporting to further focus on, and embed Environment, Social and Governance or ESG into our business strategies. We will streamline operations and rationalize operating expenses. Cost discipline will be reinforced to ensure the delivery of results through a smarter and leaner deployment of resources. We have many major infrastructure projects in the pipeline in the coming years and we will expand our skillset to be the best in execution and delivery. We will continue to be ever mindful of our many stakeholders, including our regulators, to lessen any drag on our operations. We will work to improve our financial performance as well and introduce innovations that are thoughtful, swift, effective and most importantly, long-lasting to ensure the continued enhancement of shareholder value.

For the East Zone, we will continue to deploy capital aggressively but prudently to comply with our service obligations. Last year, total consolidated capital expeditures reach a high of Php 16.9 billion, with the East Zone spend at Php13.9 billion, its highest deployment of capital expenditures to date. We aim to surpass this in 2022 and if current trajectory is any indication, we are truly on our way to succeeding here. Headline projects expected include the 80 MLD Calawis water project in Antipolo, Rizal as well the commencement of Phase 2 of the 250 MLD East Bay Water Treatment Plant along Laguna Lake. Phase 1 is currently under construction. Needless to say, even as we close out these major infrastructure projects, we will continue to deliver, as we have been doing, uninterrupted water to our customers 24x7 and provide sewerage and santitation services.

Our path to becoming a global Filipino water company is set and is steadily taking shape, with our three growth pillars – namely the East Zone; Non-EZ PH and Non-EZ International, driving our trajectory.

For the Non-East Zone, we will focus on executing on the key wins generated last year such as the 200 MLD Bulk Water Project for Pangasinan province. We will actively pursue expansion initiatives within our key hubs in Laguna, Cebu and Davao, and explore new areas of business in Central and Northern Luzon. We will continue to push our Estate Water and Technical Ventures groups to enlarge their existing business portfolio and secure more wins, respectively.

And for our international business, the primary focus will be to execute our two Management Operations and Maintenance Contacts in the Kingdom of Saudi Arabia in the best way possible together with our partners. To recall, we have secured the right to operate two clusters in the Kingdom which account for about 25% of the water supply in the country. Closer to home, we plan to grow our Southeast Asia footprint and rationalize operations where prudent. We will also evaluate opportunities in new territories across both greenfield and brownfield projects. We are fortunate that we will be able to tap into the expertise and exposure of our affiliated ports businesses that are active in 20 countries.

I am inspired by the strength shown by our core business in Manila. Faced with seemingly insurmountable challenges in the recent years, our people persevered and channeled their efforts to the most important part of our business: serving our customers. Now, with the Revised Concession Agreement and our Franchise in place, we look forward to our continued collaboration and engagement with government in providing reliable service to even more communities.

Beyond the challenges we have bravely faced, our solid foundation will keep us resilient against the storms that will come our way. This very same foundation will continue to support us as we aim for greater and better hings, and as we pursue our vision to become a global leader in providing quality water and environmental services, supportive of sustainable development.

Thank you.

Jose Victor Emmanuel A. de Dios

President and CEO