Manila Electric Co. · PSE:MER
Manila Electric — FY2022 Earnings Presentation
38 slides from Manila Electric's earnings presentation, Feb 27, 2023
Slide 1: Year Ended December 31, 2022 Financial and Operating Results
YEAR ENDED DECEMBER 31, 2022 FINANCIAL AND OPERATING RESULTS February 27, 2023
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS This presentation is prepared for the parties presently invited for the purpose of discussion. This presentation has consequential limitations and is not a comprehensive discussion about MANILA ELECTRIC COMPANY AND ITS SUBSIDIARIES (Meralco). These materials are restricted to t
Slide 3: Financial Results
YEAR ENDED DECEMBER 31, 2022 FINANCIAL RESULTS February 27, 2023
Slide 4: 2022 Financial Summary
2022 Financial Summary in PhP, Mn With 2021 comparative igures NET INCOME AND CASH AND EBITDA REVENUES EXPENSES BORROWINGS CCNI Gross Revenues Costs and Expenses Cash & Cash Equivalents 27,105 426,529 406,348 55,832 p 10% 24,608 p 34% 318,547 p 41% 289,208 p 1% 55,007 Reported Net Income Distributio
Slide 5: Revenues
2022 Revenues in PhP, Mn Gross Revenues Generation, Transmission and others Distribution Energy Fee Non-electric
Slide 6: Costs and Expenses
2022 Costs and Expenses in PhP, Mn Total Costs and Expenses Purchased Power Costs OPEX Oil and Fuel/ Power Plant O&M Depreciation & Amortization Others
Slide 7: Capital Expenditures
2022 Capital Expenditures in PhP, Mn Consolidated CAPEX grew 55% driven by DU-related electric capital projects to support new connections, asset renewals and load growth, higher subsidiaries CAPEX on account of communication facilities build- out and tower acquisition initiatives, and development e
Slide 8: Net Income and EBITDA
2022 Net Income and EBITDA in PhP, Mn Net income and EBITDA growth driven by strong contribution from power generation, and solid DU performance with 6% increase in energy sales volumes, despite the impact of the 3RP Asset True-Up refund. ▲ 7% ▲ 12% ▲ 10% ▲ 21% Margin 8% 6% 7% 7% 15% 12% 15% 12%
Slide 9: Power Generation Results of Operations
2022 Power Generation Results of Operations MGen contribution increased 4.5x driven by Paci icLight’s strong performance, San Buenaventura and BulacanSol’s continued delivery to Meralco under 20-year PSAs, o set by losses from GBP. Php 12,079 Php 3,534 M Php 228 M (Php 517 (PhpCore2,602 M) Net Incom
Slide 10: MIESCOR Infrastructure Development Corporation (MIDC)
MIESCOR Infrastructure Development Corporation (MIDC) MIDC contributed Php 222M in revenues; reached second closing milestone in 2,180-tower transaction with Globe Telecoms, Inc. November 29, 2021 August 11, 2022 October 13, 2022 December 16, 2022 MIDC was incorporated and MIDC signed a sale and lea
Slide 11: Credit and Debt Profile
2022 Credit and Debt Pro ile in PhP, Mn (except ratios) 2022 2021 Change ▲ 15% Cash & Cash Equivalents 55,832 55,007 1% Short-term Investments 17,997 17,565 2% Gross Debt 103,833 90,668 15% Net Debt 30,004 18,096 66% Gross Debt to EBITDA 2.00 1.95 3% Net Debt to EBITDA 0.58 0.39 49% Gearing Ratio 0.
Slide 12: Core Earnings per Share and Dividends
2022 Core Earnings per Share and Dividends in PhP per share Meralco continues to provide shareholder value with inal cash dividend declaration of Php 11.028 per share, bringing total 2022 payout to P16.834, representing 70% of Core EPS. Payout 80% 75% 65% 70% 70% Ratio 12 f
Slide 13: Operating Results
YEAR ENDED DECEMBER 31, 2022 OPERATING RESULTS February 27, 2023
Slide 14: Operational Highlights
2022 Operational Highlights BUSINESS DRIVERS SERVICE PERFORMANCE ELECTRICITY RATE per kWh Energy Sales System Loss Average Retail Rate 48,916 GWh 5.77% PhP 9.52 ▲ 6% vs. 46,073 in 2021 ▼ 0.08%PT, 12-MMA vs. 5.85% in 2021 ▲ 16% vs. 8.24 in 2021 Customer Count System Average Interruption Frequency Ind
Slide 15: Consolidated Energy Sales in GWh
2022 Consolidated Energy Sales in GWh Surpassed pre-pandemic levels with 6% growth vs. 2021 mainly driven by double-digit growth from Commercial segment 48,916 46,871 46,073 44,313 43,572 ▲ 6% 14,221 Industrial 13,799 13,782 29% 13,156 30% 12,176 30% 30% 28% 17,403 Commercial 18,483 14,766 15,234 36
Slide 16: DU Energy Sales Profile and Drivers
2022 DU Energy Sales Pro ile and Drivers 2022 2021 2020 GWh RESIDENTIAL ▲ 1%, YTD GWh COMMERCIAL ▲ 14%, YTD GWh INDUSTRIAL ▲ 3%, YTD 2,000 2,000 2,000 1,500 1,500 1,500 1,000 1,000 1,000 500 500 500 0 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 17: Consolidated Customer Count
2022 Consolidated Customer Count in M Sustained higher energization performance vs. 2021 7.625 7.410 2021 Project-covered Applications (PCA) FY: 9,030 2022 ▲ 30% 0.011 0.011 Industrial Pipeline: 7,586 0.569 7% Commercial 912 793 795 0.555 787 780 774 756 722 724 706 662 651 670 670 641 633 619 607 ▲
Slide 18: Consolidated NSI in GWh
2022 Consolidated NSI in GWh Higher vs. 2021 on the back of sustained Commercial growth Power Fuel Sources Mix Special Solar 1% Contracts 1% 3% Liquid Fuel 51,271 6% WESM 49,251 48,325 46,734 45,919 21% New PSA 28% Multi-fuel ▲ 6% 31% RES 32% Coal 41% IPP/ Old PSA 36% Natural Gas 2018 2019 2020 2021
Slide 19: Peak Demand in GW
2022 Peak Demand in GW Meralco and Luzon peaks above 2021 due to heightened post-pandemic activities Luzon 12.11 11.64 Meralco ▲ 4% 8.11 7.81 ▲ 4% May 27, 2021 May 13, 2022 May 28, 2021 May 12, 2022 19
Slide 20: System Loss in %, 12-MMA
2022 System Loss in %, 12-MMA Improvement (0.08% points) vs. 2021 as sales continue to approach pre-pandemic mix (i.e., higher C&I) Achieved 5.77%—15th consecutive year of lower-than-cap performance, 6.5% SYSTEM LOSS CAP resulting in PhP 4.7B or PhP 0.1 per kWh worth of customer savings in 2022 6.14
Slide 21: S-Factor Performance and Guaranteed Service Levels
2022 S-Factor Performance and Guaranteed Service Levels (GSL) Continued to deliver within performance ceilings SAIFI times SAIDI in minutes MAIFI times Rewards < 1.43 Rewards < 157.04 Rewards < 7.59 ▼ 8% ▼ 7% ▼ 6% Network 1.410 1.300 138.774 128.419 9.714 9.122 2021 2022 2021 2022 2021 2022 Average
Slide 22: Networks CapEx
2022 Networks CapEx in PhP, B 87% of CapEx budget utilized with majority of spend in new connections, asset renewals, and load growth while continuing to support government projects PhP 21.91B CapEx Budget 6.92 New Connections Pole Relocation Program 6.66 BUILD BETTER MORE DPWH ROAD WIDENING PhP 19.
Slide 23: Network Project Updates: FCIE-TMC 2 115-kV Line
Network Project Updates Re-conductoring and uprating of FCIE-TMC 2 115-kV Line • Completed re-conductoring of 15-km line from 1-795 MCM aluminum conductor steel-reinforced (ACSR) cable to 1-497 SQ MM super thermal alloy conductor invar reinforced (STACIR) on October 25, 2022 as part of RY2021 CAPEX
Slide 24: Network Project Updates: North Caloocan GIS Substation
Network Project Updates Development of North Caloocan 115-34.5 kV GIS Substation • Completed commissioning of new 83 MVA power transformer, 115 kV GIS, 34.5 kV GIS, 4 new feeders, and other substation equipment on November 29, 2022 as part of RY2020 CAPEX iling (PhP 442M) • Implemented to: - Unload
Slide 25: Network Project Updates: La Mesa Switching Station
Network Project Updates Development of La Mesa 115 kV Switching Station Phase 1 • Completed commissioning of gas circuit breaker, 3 sets of disconnect switches, standard connection, and metering facilitating for STMicroelectronics Inc. (STMI) on December 18, 2022 as part of RY2023 CAPEX iling (PhP 1
Slide 26: Average Retail Rate
2022 Average Retail Rate in PhP per kWh 16% higher vs. 2021 mainly due to higher generation charge 9.52 • 31.8% increase in Generation: Higher fuel costs, Peso depreciation, Average Rate higher WESM prices 6.34 66% • 19.1% increase in Transmission: Higher Ancillary Service and Power per Customer Seg
Slide 27: DRTU Refund
2022 DRTU Refund Refunded 81% (PhP 38.8B of PhP 48.3B) DRTU 1 DRTU 2 DRTU 3 DRTU 4 True Up of IAR vs. True Up of IAR vs. True Up of IAR vs. True Up of 3RP RAB via AWAT from Jul 2015- Nature of Refund AWAT from Jul 2015- AWAT from Dec 2020- Jul 2011-Jun 2015 rates Jun 2022 (remaining Nov 2020 Dec 202
Slide 28: Regulatory Update: 300 MW Emergency PSA with GNPD
Regulatory Update 300 MW EMERGENCY PSA (EPSA) with GNPD • January 25, 2023: GNPower Dinginin Ltd. Co.’s (GNPD) last day of delivery under EPSA signed on December 14, 2022 • January 26, 2023: MERALCO agreed to GNPD’s EPSA extension offer under similar terms and conditions under December 2022 EPSA, ex
Slide 29: Regulatory Update: 180MW Baseload and 300MW Peaking CSPs
Regulatory Update Updates on 180MW Baseload and 300MW Peaking CSPs MERALCO’s 2022 Power Supply Procurement Plan (PSPP) • The 180 MW Baseload will cover (i) expected increase in demand as economy recovers from Covid-19 pandemic, and (ii) reduced capacity of natural gas- ired power plants under existi
Slide 30: Regulatory Update: SMEC and SPPC PSAs (1/2)
Regulatory Update Update on San Miguel Energy Corp. (SMEC) and South Premiere Power Corp. (SPPC) PSAs (1/2) • September 29, 2022: ERC issued Orders denying Joint Motions for Price Adjustment iled for South Premier Power Corporation (SPPC) and San Miguel Energy Corporation (SMEC) PSAs • November 4, 2
Slide 31: Regulatory Update: SMEC and SPPC PSAs (2/2)
Regulatory Update Update on San Miguel Energy Corp. (SMEC) and South Premiere Power Corp. (SPPC) PSAs (2/2) SPPC • January 25, 2023 (received by MERALCO on Jan. 27, 2023): CA’s 13th Division granted SPPC’s prayer for Writ of Preliminary Injunction (“WPI”), upon posting of ₱100 Million bond, and shal
Slide 32: All-time best score on 2022 S&P ESG Rating
#PoweringTheGoodLife Meralco achieves all-time best score on 2022 S&P ESG Rating… S&P Global Corporate Meralco’s 2022 Rating Highlights: Sustainability Assessment (CSA) • Record-high score • Across-the-board increases in Environmental, Social, ~6,700 of the world’s largest companies participate in t
Slide 33: CDP Assessments and Bloomberg Gender Equality Index
#PoweringTheGoodLife … as well as on CDP Assessments and Bloomberg Gender Equality Index 1 2 3 Bloomberg Gender Equality Index (GEI) Bloomberg GEI is the only ESG assessment in the CDP Climate Change CDP Water Security world focused on gender equality in the workplace. Assessment Assessment 18,700+
Slide 34: Sustainability Report Gold Rank by ASRRAT 2022
#PoweringTheGoodLife 2021 Sustainability Report (SR) internationally recognized with third straight GOLD Rank by Asia Sustainability Reporting Rating (ASRRAT) 2022 • 2nd international award* received by 2021 SR: Kalinga ASRRAT • 1 out of only 2 Filipino companies recognized • Ratings system initiate
Slide 35: Power Generation Operating Results
YEAR ENDED DECEMBER 31, 2022 POWER GENERATION OPERATING RESULTS February 27, 2023
Slide 36: FY 2022 Highlights
FY 2022 Highlights Energy Delivered in GWh • MGen-GBP Group delivered 13,424 GWh, 2% lower than 2022 2021 % change 13,690 GWh posted in 2021 largely due to outages • GBP capped energy delivered at 4,928 GWh, a slight 4,928 4,931 ▼ 0.1% decline vs. 4,931 GWh in 2021 as plants recover from impact of T
Slide 37: 1,500MW Renewable Energy by 2027
1,500MW Renewable Energy by 2027 Low-Carbon Time Capsule Laying Ceremony Energy Transition for 68 MWac solar project in Ilocos Norte SOLAR w/ BESS FEBRUARY AUGUST Q1 2023 WIND HYDRO MGREEN signs joint Secures Php 2.65 venture with VENA Billion, 15-year term Bulacan 55 MWac ENERGY for 68MWac project
Slide 38: Thank You
THANK YOU & AC be
Manila Electric Company (Meralco) — FY2022 Earnings Presentation on 6ix