Manila Electric Co. · PSE:MER
Manila Electric — FY2019 Earnings Presentation
59 slides from Manila Electric's earnings presentation, Feb 24, 2020
Slide 1: Financial and Operating Results: Investors & Analysts Briefing
FINANCIAL AND OPERATING RESULTS | aa WESTORS & ANALYSTS BRIEFING rik ia ar 34. 2047¢ ie are | he ’ i i ye ‘ WN pie fi it ’
Slide 2: Financial Highlights FY 2019
Slide 3: Electricity Revenues
318,315 318,315 304,454 304,454 Distribution revenues 65,891 Q4 77,189 62,015 Electricity Revenues = 310,098 77,043 Electricity Revenues = 295.389 Q3 76,173 76,867 Generation & other pass- through charges 244,207 233,374 Q2 89,575 79,737 Q1 75,378 70,807 Non-electricity revenues 8,217 9,065 FY 2019
Slide 4: Costs and Expenses and Capital Expenditures
8,730 10,118 27,196 3% 4% Costs and Expenses 9% 241,032 84% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 20,233 Capital Expenditures 13,669 Subtransmission & Distribution Others Facilities 11% 89% FY 2019 FY 2018 4
Slide 5: EBITDA and Income
11.9% 12.2% 12.9% 12.2% Margins 7.5% 7.4% 7.3% 7.6% 40,977 38,026 37,165 37,165 11,215 Q4 8,264 10,601 10,601 Q3 9,883 9,883 23,832 23,285 23,017 22,408 8,979 8,979 5,379 4,964 4,805 5,722 Q2 6,136 6,314 6,239 11,051 11,051 5,835 8,897 8,897 6,719 6,336 6,661 5,934 Q1 8,828 8,688 8,828 8,688 5,5
Slide 6: Total Debt and Repayment Schedule
TOTAL DEBT (in Million PhP) 41,253 40,016 (in Million PhP, Except Ratios) FY 2019 FY 2018 12,745 24,745 Cash 38,262 36,471 28,508 Gross Debt 41,253 40,016 15,271 Net Debt 2,991 3,545 FY 2019 FY 2018 Current Portion Non-current Portion Gross Debt/EBITDA 1.01 1.08 LONG-TERM DEBT REPAYMENT SCHEDULE (in
Slide 7: Core Earnings and Cash Dividends Per Share
Core Earnings and Cash Dividends Per Share (in PhP) 22.780 (131%) 21.145 17.370 19.881 17.934 8.872 16.757 100% 16.990 95% 16.080 15.905 80% 15.859 75% 15.103 14.431 14.470 90% 4.436 13.207 5.964 5.287 12.080 80% 8.380 10.780 6.430 5.220 10.100 70% 3.587 9.250 70% 4.530 13.908 80% 70% 2.890 2.640 4.
Slide 8: Report of the Chief Executive: Performance FY2019
EPORT OF THE HIEF XECUTIVE Performance FY2019 8 of 31
Slide 9: Operating Highlights
Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 5.8%* 4.1%* 4.6%* 5.4%* 46,871 GWh 6.88 million 7,740 MW 49,251 GWh Ave. Retail S-Factor Rates & GSL** 0.9%* Sustained Service Business P8.87/kWh Improvement Updates CONSOLIDATED NUMBERS FOR ENERGY SALES, CUSTOM
Slide 10: Details
Details 10
Slide 11: Energy Sales: FY2019
Energy Sales: FY2019 ➢ Up 5.8% to 46,871 GWh vs. 2018 (+2,558 GWh) Share / for FY2019: Growth: CAGR: 6.0% 5.8% 7.6% RESIDENTIAL 5.3% 46,871 ** 31.1% Growth: 4.9% 14,589 GWh 8.1%* 42,102 44,313 • Driven by sales from 5.8% 40,142 Organic, followed by COMMERCIAL 37,124 Total sales volume for Flat
Slide 12: Energy Sales Driver: FY2019, Residential
Energy Sales Driver: FY2019, Residential PARENT-DU ➢ RESIDENTIAL finished the year strong, growing 7.6% to 14,581 GWh ▪ POGO and BPO sector is creating a new breed of condominium dwellers, growing customer base outside MM is also contributing to the growth; RESI, in 2019, added 1,031 GWh KEY INSIGHT
Slide 13: Energy Sales Driver: FY2019, Commercial
Energy Sales Driver: FY2019, Commercial PARENT-DU ➢ COMMERCIAL had a healthy growth of 5.6% reaching 18,172 GWh ▪ Supported by positive business outlook and POGO/BPO; COMM’L, in 2019, added 961 GWh 18,172 GWh COMMERCIAL ▲ 5.6% KEY INSIGHTS & TRENDS Top 3 Commercial Sectors 2019 YTD (in GWh) Δ (in GW
Slide 14: Energy Sales Driver: FY2019, Industrial
Energy Sales Driver: FY2019, Industrial PARENT-DU ➢ INDUSTRIAL moderately grew 3.1% to 13,006 GWh ▪ Driven by construction and consumer-driven industries; IND’L, in 2019, added 396 GWh KEY INSIGHTS & TRENDS INDUSTRIAL 13,006 GWh Excluding Gen. Wheeling ▲ 3.1% GDP growth ended at 5.9% in 2019 Δ Proje
Slide 15: Customer Count: FY2019
Customer Count: FY2019 ➢ Up 4.1% to 6.883 million vs. 2018 (+267,970 customers) Share / for FY2019: CAGR: 4.4% 4.1% Growth: Growth: 4.6% 6.883* 4.2% 2.8% 4.8% 6.615 RESIDENTIAL 4.4% 6.327 92.1% 6.339 million customers COMMERCIAL 6.038 Total customer count 7.7% 5.784 for Flat Streetlights 0.528
Slide 16: Meralco and Luzon Peak Demand: FY2019
Meralco Peak Demand: FY2019 Luzon Peak Demand: FY2019 ➢ Up 4.6% vs. 2018 (+341 MW) ➢ Up 4.3% vs. 2018 (+468 MW) CAGR: 5.3% CAGR: 6.2% 8.2% 4.3% 3.4% 11,344 8.9% 10,876 10,054 6.1% 4.6% 9,726 3.3% 8,928 7.1% 7,740 6,973 7,399 6,748 6,298 in MW in MW 2015 2016 2017 2018 2019 2015 2016 2017 201
Slide 17: Net System Input (NSI): FY2019
Net System Input (NSI): FY2019 ➢ Up 5.4% vs. 2018 (2,517 GWh) 5.4% CAGR: 5.5% 4.7% 49,251 4.1% 46,734 8.0% 44,639 42,866 39,694 in GWh 2015 2016 2017 2018 2019 CONSOLIDATED
Slide 18: Energy Sources: FY2019
Energy Sources: FY2019 ➢ Contracted supply contracts (PSAs and IPPs) delivered total volume of 30,028 GWh (or 61%) in 2019 ▪ Contestable volume grew to 14,349 GWh (29% share) in 2019 49,251 GWh 46,734 GWh 5.4% RES 14,349 (29%) 12,947 (28%) 670 (2%) Special Contracts* 667 (1%) 5,771 (12%) WESM 4,207
Slide 19: Fuel Mix: FY2019
Fuel Mix: FY2019 ➢ Nat. Gas led fuel source in 2019 at 19,601 GWh (40%) followed by Coal at 15,730 GWh (32%) with balance, Multi-fuel ▪ Solar power source gradually increased in 2019 at 50 GWh 46,734 GWh 5.4% 49,251 GWh 14,424 (31%) MULTI-FUEL* 13,542 (27%) 50 (<1%) 3 (<1%) SOLAR 15,730 (32%) 13,97
Slide 20: Average Retail Rate: FY2019
Average Retail Rate: FY2019 ➢ Total Average Rate is ~1% lower vs. 2018 at P8.87kWh 11.5% 0.9% 8.95 8.87 7.1% 8.26 8.03 9.2% 7.50 in P/kWh 2015 2016 2017 2018 2019 PARENT
Slide 21: Average Retail Rate: FY2019 Components
Average Retail Rate: FY2019 ➢ Total Average Rate is ~1% lower vs. 2018 at P8.87kWh due to decreased Transmission Charge and Taxes/ UC ▪ Generation Charge* is the largest component in customer’s bill at 59%, followed by Distribution at 16% P8.95/ kWh 0.9% P8.87/ kWh 1.08 (12%) TAXES, UNIV. CHARGE 0.
Slide 22: System Loss Performance: FY2019
System Loss Performance: FY2019 ➢ 2019 performance, lowest ever at 5.54% ▪ Improved by 2.3% vs. 2018’s 5.67%; lower by 1.71 pts. vs. current System Loss cap of 7.25%* ▪ Customer savings of P5.2 Bn or 11¢/kWh in 2019 System Loss Cap 9.50% 8.50% 8.61% TOTAL SAVINGS TO CUSTOMER 7.50% P5.2 Bn or P0.11/k
Slide 23: S-Factor Operating Performance: FY2019
S-Factor Operating Performance: FY2019 ➢ ALL S-Factor Indicators are WELL-WITHIN REWARDS* range in 2019; all indicators improved vs. 2018 ▪ Except for SAIDI which is a result of numerous preventive maintenance and ‘BBB’/ ‘PPP’ relocation works System Loss, (%) -12MMA SAIFI, Forced & PAI (Times) SAID
Slide 24: Customer Satisfaction Index (CSI): FY2019
Customer Satisfaction Index (CSI): FY2019 ➢ With a total CSI score of 8.37 for 2019, recovered from 2018 decline and is now at par with 2017’s all-time high score 1.5% 8.39 8.37 8.29 8.25 8.18 in P/kWh 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 8.45 8.39 8.25 8.12 8.22 1. Total Meralco CSI i
Slide 25: Business Updates & Other Events of Interest
Details Business Updates & Other Events of Interest 25 25 of 48
Slide 26: Typhoon Tisoy Impact to Meralco
Business Updates: Strengthening the Core Business Typhoon “Tisoy” Impact to Meralco (December 3-5, 2019 ) Circuit-Segment Tripping ➢ 119 circuits or 16% of Meralco’s 722 operational circuits were affected ➢ 1.62 million customers or 24.4% - affected by sustained interruptions – Unique Circuits Aff
Slide 27: Meralco Contingent Helps ALECO Restoration
Business Updates: Strengthening the Core Business Typhoon “Tisoy”: Meralco Sends Contingent to Bicol to Help ALECO in Restoration (Dec. 8-22) Legaspi City, Albay Manito, Albay
Slide 28: Taal Eruption Impact to Meralco
Business Updates: Strengthening the Core Business Taal Eruption Impact to Meralco (January 12 to 19, 2020) Distribution Circuits/Segments Affected ➢ 45 circuits or 6.2% of Meralco’s 727 operational circuits were affected Momentary Interruption incidents 16 ➢ 183,538 customers or 3% were affected b
Slide 29: Taal Eruption: Meralco Rapid Response
Business Updates: Strengthening the Core Business Taal Eruption Impact to Meralco (January 12 to 19, 2020) ▪ Meralco Rapid Response: • Management meeting for the restoration activities • Mobilized the existing insulator washer basket truck from NDS • Purchased 30 power washers to be retrofitted on
Slide 30: Taal Eruption: Restoration Crew Complement
Business Updates: Strengthening the Core Business Taal Eruption Impact to Meralco (January 12 to 19, 2020) ▪ Meralco Restoration Crew Compliment Personnel Count Regular Vendor Total Vehicle Regular Vendor Total Sta. Rosa / Dasmarinas 244 354 598 Pick-up 63 8 71 SDS 297 484 781 Basket Truck 44 - 44
Slide 31: CY2019 Networks CapEx
Business Updates: Strengthening the Core Business CY2019 Networks CapEx MA 29% CA 43% SR 18% NEP & BBB OCI 2% 8% P 5.14B P 250M P 3.51B P 858M P 2.22B P 48M
Slide 32: CY2019 Completed ECPs
Business Updates: Strengthening the Core Business CY2019 Completed ECPs Increased substation capacity by 598 MVA and circuit length by 108 km 9 SUBSTATION PROJECTS 1.Development of Southwoods (1-83 MVA, Apr. 18) 2.Development of Calamba 230kV-115kV (Jun. 30) 3.Expansion of Filinvest (1-83 MVA, Jul
Slide 33: Build, Build, Build!
Business Updates: Strengthening the Core Business “Build, Build, Build!” Support to Government Priority Projects A TOTAL OF 3,473 out of 4,949* affected poles were relocated as of December 31, 2019 *Running total
Slide 34: Expansion of Sta. Rosa Substation
Business Updates: Strengthening the Core Business Expansion of Sta. Rosa 2 115 kV – 34.5 kV Substation (3rd 83 MVA Power Transformer Bank) ▪ December 16, 2019 • The project provides an additional 83 MVA Power Transformer bank, 34.5 kV GIS and new Control Room in Sta. Rosa 2 Substation • This will
Slide 35: Expansion of Tagaytay West Substation
Business Updates: Strengthening the Core Business Expansion of Tagaytay West 115 kV – 13.8 kV Substation (2nd Power Transf. Bank, 50 MVA) ▪ December 17, 2019 • The project provides an additional 50 MVA Power Transformer Bank and 13.8 kV Metalclad Switchgear in Tagaytay West Substation • This will
Slide 36: Construction of New Teresa-Tagbac 115 kV Line
Business Updates: Strengthening the Core Business Construction of New Teresa-Tagbac 115 kV Line ▪ December 27, 2019 • This project will address the 37 MVA additional power requirements of the new cement plant of Solid Cement Corporation located in Sitio Tagbac, Antipolo Rizal • It will also reliev
Slide 37: Meralco Electrification Program Projects
Business Updates: Strengthening the Core Business Meralco Electrification Program Projects (Priority 1) ▪ As of December 31, 2019 Number of Count of Energized Estimated Area Status Update Sites Households Project Cost Metro Manila 58 2,011 North* 30 906 45,007,174 27 energized; 1 for energization*
Slide 38: OMF Assistance to Taal Volcano Victims
Business Updates: OMF Assistance to Taal Volcano victims Provided assistance: • Nearly 3,000 families/ 14,600 individuals benefited • Covered 44 Evacuation Centers • Solar Powered Charging Station Deployment • Relief Goods Distribution • Sleeping Mats • Feeding • Medicines • Packed Food
Slide 39: Customer Engagements, Products & Services and Initiatives
Business Updates: Customer Engagements, Products & Services and Initiatives With Meralco’s commitment to provide Energy For All, in 2019, we continued our initiatives to deliver the same quality of service to far-flung areas and urban growth centers. We adopted renewable technologies and Battery Ene
Slide 40: For Our Corporate Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CORPORATE CUSTOMERS We aim to fulfill our promise to be their end-to-end solutions partner. We offer Power Ideas: energy consultation and diagnostics for customized energy solutions for loadside services which we end
Slide 41: For Our Corporate and LGU Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CORPORATE and LGU CUSTOMERS To add credibility to what we offer, we feature successful partnerships with customers who were able to leverage on these power ideas. All these we communicate through various channels. Im
Slide 42: For Our Corporate Customers: Luminaries
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CORPORATE CUSTOMERS Resulting partnership stories were communicated across several touchpoints, with special focus on our Luminaries. We utilize broadsheets, e-DMs, the website, Meralco LinkedIn & Power Club Online.
Slide 43: For Our Corporate Customers: Golf Cup
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CORPORATE CUSTOMERS Understanding that B2B partnerships are sometimes best formed in a casual environment, we continued the Golf Cup Sta. Elena Golf Club | 19 Nov. 2019 193 Customers participated (including MER emplo
Slide 44: For Our Biz Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR BIZ CUSTOMERS For 2019, Biz Partners continued to leverage on the successful partnerships with customers by promoting their stories in FOR OUR BIZ CUSTOMERS forums, customer engagements, digital articles and ads, and
Slide 45: For Our Biz Customers: Power Up Forums
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR BIZ CUSTOMERS The Power Up Forum series remained to be the primary channel that allowed Biz Partner Managers to offer services to unengaged customers. It also provided a chance for customers to meet and seal business
Slide 46: For Our LGU Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR LGU CUSTOMERS For our LGU Partners and Property Developers, we staged 12 Power-Up Forums with a total of 1,466 attendees. We were able to generate a total of 988 leads for MERALCO and its subsidiaries. Programs and S
Slide 47: For Our LGU Partners
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR LGU PARTNERS In 2019, 12 Barangay fora were hosted by the three different areas (North, Central and South Business Areas) for Barangay Officials, City and Municipal Councilors. Also, we conducted 595 Info Campaigns.
Slide 48: For Our Residential Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR RESIDENTIAL CUSTOMERS To ensure ease and speed in energizing their homes, we encouraged our Residential customers to work with electrical contractors Certified by Meralco. A GMM for the contractors was held on May 27
Slide 49: Meralco Online Operational Metrics
Business Updates: Customer Engagements, Products & Services and Initiatives After the launch of Meralco Online in 2018, Operational metrics from September 12, 2018 to December 31, 2019 showed good results Service Application Meralco Online Paperless Billing 594,100 354,797 19,039 38% APPLICATIONS MO
Slide 50: One Meralco Sustainability Agenda
Business Updates: One Meralco Sustainability Agenda • We will operationalize our sustainability strategy, addressing 4 focus areas PLANET PEOPLE POWER Embedding Internalizing Embedding sustainability a Electricity for all, mindset and fostering a environmental sustainability culture inclusivityminds
Slide 51: One Meralco Sustainability Agenda: #PoweringTheGoodLife
Business Updates: One Meralco Sustainability Agenda • Our initiatives will be driven through an overarching sustainability campaign Resource Waste Direct Emission Reduction Efficiency Management Community Workplace Electrification Excellence #PoweringTheGoodLife 51
Slide 52: One Meralco Sustainability Agenda: The Good Store
Business Updates: One Meralco Sustainability Agenda The Good Store is… • Marketplace for plastic alternatives, locally-farmed organic produce, and food products. • Promotes zero-waste, ethically made, and cause-driven products and local business. • Platform for workshops and talks that advocate sust
Slide 53: Meralco PowerGen Corporation Overview of Operations
Meralco PowerGen Corporation Overview of Operations
Slide 54: San Buenaventura Power Limited Co. (SBPL)
Meralco PowerGen Corporation 54 Updates on Growth and Expansion San Buenaventura Power Limited Co. (SBPL) 500MW (gross) Supercritical Coal-Fired Power Plant in Mauban, Quezon Total Project Cost: PhP 56.2 Billion ▪ First operational supercritical coal power plant in the Philippines ▪ Commercial opera
Slide 55: Atimonan One Energy, Inc. (A1E)
Meralco PowerGen Corporation Updates on Growth and Expansion Atimonan One Energy, Inc. (A1E) 2x600 MW (net) Ultra Supercritical (the first in the Philippines) Coal-Fired Power Plant in Atimonan, Quezon Total Project Cost: <PhP160 Billion (<USD 3.0 Billion) ▪ Awaiting final terms of reference and wil
Slide 56: MGEN Renewable Energy, Inc. (MGreen)
Meralco PowerGen Corporation Updates on Growth and Expansion In 2019, MGEN Renewable Energy, Inc. (MGreen) was established to serve as MGEN’s subsidiary for its renewable energy investments. • MGreen targets around 1,000 MW of renewable energy projects over the next 5-7 years. • MGreen secured equit
Slide 57: PowerSource First Bulacan Solar, Inc.
Meralco PowerGen Corporation Updates on Growth and Expansion PowerSource First Bulacan Solar, Inc. 50MWac Solar Power Plant in San Miguel, Bulacan Total Project Cost: PhP4.25 Billion ▪ 40%-owned by MGEN Renewable Energy, Inc. (MGreen) ▪ MGreen’s first solar investment ▪ Signed an engineering, procur
Slide 58: MGen Other Investments
Meralco PowerGen Corporation Other Investments GLOBAL BUSINESS POWER CORPORATION (GBPC) ▪ MGen holds 14% equity interest in GBPC, the largest independent power producer in the Visayas with an existing portfolio totaling 854 MW (coal and diesel plants). ▪ GBPC has a 50% interest in Alsons Thermal Ene
Slide 59: Disclaimer
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on February 24, 2020. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same mater
Manila Electric Company (Meralco) — FY2019 Earnings Presentation on 6ix