NEZ International, which is our vehicle for international expansion, started with our Performance-based Leakage Reduction project in Zone 1 of Ho Chi Minh City. We have since expanded our market presence in Vietnam, Thailand, Indonesia, and most recently, in the Kingdom of Saudi Arabia. In the past decade, NEZ International has grown significantly and has underscored its presence in the international water and wastewater industry.

On a consolidated level, NEZ International posted a net loss of Php4.0 billion, largely due to impairment provisions. Specifically, going to our investment in East Water, an additional provision amounting to Php3.6 billion to recognize full impairment of our Thailand investment to reflect current market conditions and outlook. We likewise recognized Php902 million provision for Saigon Water investment. Consistent with our portfolio review process, we continue to assess and rationalize our investments against set financial and performance standards.

Equity share in net income of associates increased by 74% to Php867 million. The increase in equity share in net income of associates was largely driven by the one-time gain in the sale of Tan Hiep, a business unit under Saigon Water. Without the gain, performance would be 21% lower than the previous year because of the higher OPEX of the Vietnam and Thailand investments.