Manila Electric Co. · PSE:MER
Manila Electric — FY2023 Earnings Presentation
42 slides from Manila Electric's earnings presentation, Feb 26, 2024
Slide 1: Full Year 2023 Financial and Operating Results
Osa aN lp, ML coment Of see (2) MERALCO FULL YEAR ENDED DECEMBER 31, 2023 FINANCIAL AND OPERATING RESULTS Investors and Analysts Briefing February 26, 2024
Slide 2: Financial Results
(Z) MERALCO FULL YEAR ENDED DECEMBER 31, 2023 FINANCIAL RESULTS Investors and Analysts Briefing February 26, 2024 6 Sosa ade Me mcent Oise
Slide 3: Full year 2023 highlights
➢ Total energy volume handled by One Meralco at 64,264 GWh, 6% higher vs. 2022 ➢ 37% increase in CCNI to PhP 37.1 billion: • Higher DU CCNI contribution with 4% increase in energy sales from growth in Residential and Commercial volumes, completion of the Distribution Rate True-up Refund, and prudent
Slide 4: Key financial figures
p 36.9% 27,105 p 4.0% vs. 426,529 q 29.5% 42,597 p 33.7% vs. 28,431 p 0.2% 406,348 p 48.3% 55,832 p 25.5% vs. 51,301 4 q 4.2% 103,833
Slide 5: CCNI contribution by regulated and unregulated business
While CCNI contribution of the Distribution Utility increased in terms of absolute amount, percentage share to total CCNI declined with the higher contributions from Power Generation and RES Unregulated business share increased to 36% from 24% a year ago as performance of Power Generation and RES co
Slide 6: Gross Revenues
4% increase in gross revenues, largely from the DU due to growth in volumes, higher Gross 2023 pass-through charges and normalized Revenues 2022 distribution rate with the completion of the Distribution Rate True-up Refund 3% increase with the higher cost of replacement power for Generation, 2023 th
Slide 7: Total Costs and Expenses
Flat as the slightly higher Total Costs Purchased Power Cost was offset and Expenses by lower Coal & Fuel/Power Plant O&M and flat OPEX 2% increase with higher replacement power Purchased costs due to the termination of the SPPC and Power Costs SPI PSAs, increase in the fuel component and energy fee
Slide 8: Consolidated CAPEX
Consolidated CAPEX driven by distribution network improvement projects, renewable energy investments, and facilities for the towers and telecommunications businesses Largely Networks CAPEX that covered new connections, asset renewals, q 29% and load growth projects, as well as pole relocation works
Slide 9: MGen contribution to Meralco CCNI
MGen contribution to Meralco CCNI grew to Php 9.7B on account of continued strong performance of PacificLight and San Buenaventura; positive contributions from GBP and MGreen PhP 16.2 Billion PhP 2.5 Billion PhP 505 Million PhP 67 Million* Core Net income p 34% vs. 2022 q 30% vs. 2022 p 119% vs. 202
Slide 10: SPNEC's assets and liabilities recognized with the P15.9 billion transaction
SPNEC’s assets and liabilities were recognized with the P15.9 billion transaction in December Dec-23 Dec-22 %△ PPE 269,839 243,323 11% Investments 39,881 33,383 19% Intangibles 53,351 21,691 146% Other noncurrent assets 60,212 66,577 (10%) Cash 82,789 55,832 48% Receivables 48,395 54,683 (11%) Other
Slide 11: Cash, short-term investments and debt
Dec-23 Dec-22 %△ 2023 Total Debt and Breakdown Cash & cash equivalents 82,789 55,832 48% Short-term investments 7,544 17,997 (58%) Gross debt 99,446 103,833 (4%) Net debt 9,113 30,004 (70%) 46% Gross debt/EBITDA 1.5 2.0 (24%) Net debt/EBITDA 0.1 0.6 (76%) Gearing ratio 0.1 0.3 (73%) 46% Interest exp
Slide 12: Core EPS and dividends per share
2023 Core EPS was at Php 32.925, 37% versus Php 24.048 in 2022; dividend of Php 19.755 representing 60% of Core EPS p 37% p 17% 2022 2023 2022 2023 12 Core EPS Dividends per Share
Slide 13: Operating Results
(Z) MERALCO FULL YEAR ENDED DECEMBER 31, 2023 OPERATING RESULTS Investors and Analysts Briefing February 26, 2024 6 Sosa ade Me mcent Oise
Slide 14: FY 2023 Operational Highlights
FY 2023 Operational Highlights Business Drivers Service Performance Electricity Rate Energy Sales Average Retail Rate 51,044 GWh 5.88% PhP 10.55 per kWh 44.4% vs 48,916 in YE 2022 40.11 ppt vs 5.77 in YE 2022 10.8% vs 9.52 in 2022 7.828 Million 1.194 times 42.6% vs 7.626 in 2022 ‘¥8.2% vs 1.300 in Y
Slide 15: Energy sales
yy Sales incwn Grew 4.4% vs. 2022 driven by sustained growth in Commercial and Residential segments 48,916 51,044 46,871 46,073 43,572 2019 2020 2021 2022 2023 Residential ™ Commercial Industrial Parent is 99% | CEDC is 0.1% | Flat Streetlights account for < 1%
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Slide 17: FY 2023 Consolidated Customer Count
FY 2023 Consolidated Customer Count All-time High PCA Performance Project-Covered Applications (PCA) YTD: 9,277 42% vs 2022 ™2023 = 2022 ™ 2019 base = 470 Pipeline: 8,450 922 B76 769 20 113 i 01 0 72 a0 750 74 908 790 ree esa 2 235 ttt | tt | | Oct Nov Dec Ordinary Service Applications (OSA) YTD: 23
Slide 18: Network Project Updates
FY 2023 Network Project Updates Replacement of 34.5 kV Switchgear No.1 at San Pablo 2 Substation Energized on October 15, 2023 CAPEX Filing: RY2023 Filed Cost: PhP 33.21 Million Anew 34.5 kV gas insulated switchgear (GIS) (Schneider brand) was installed at San Pablo 2 Substation to replace its GIS N
Slide 19: Network Project Updates
FY 2023 Network Project Updates Construction of PAGCOR 1-CBP1A 115 kV Line Energized on November 8, 2023 CAPEX Filing: RY2019 (Php 249.01 Million) Involves the construction of a new 2.1-km 115 kV line. Improves the reliability of the 115 kV sub-transmission system (Sector 3) Enables cutting-in of th
Slide 20: Network Project Updates
FY 2023 Network Project Updates Development of FBGC-2 115kV-34.5 kV GIS Substation = Energized on December 7, 2023 = CAPEX Filing: RY2019 (PhP 413.98 Million) = Includes the installation of 115 kV and 34.5 kV GIS and an 83 MVA power transformer, the construction of a new 0.3 km 115 kV line, and one
Slide 21: Generation Charge refund due to FGPC-Sta. Rita's new GSPA
Generation Charge refund due to FGPC-Sta. Rita’s (FGPC-SR) new Gas Sale and Purchase Agreements (GSPA) = As response to MERALCO’s letters on use of LNG for the Gas Plants and the New GSPA for Sta. Rita, the ERC letter dated February 12, 2024, stated that “[it is] constrained from giving any clearanc
Slide 22: Change in Circumstances Claims by ACEN Corporation
Change in Circumstances (CIC) Claims by ACEN Corporation (ACEN) for the 110 MW Mid-Merit PSA and 200 MW Baseload PSA February 1, 2024: MERALCO received CIC notices from ACEN reflecting the final amounts of its claims based on discussions between the parties, as follows: . CIC Claims Portion Baseload
Slide 23: Rate Impact for 6-month Cost Recovery Period
Rate Impact for 6-month Cost Recovery Period Baseload CIC M PhP 618.38 Mid-Merit CIC M PhP 8776 TOTAL CIC M PhP 706.14 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Baseload MPnP 29.93 117.69 117.89 117.69 117.69 117.69 Mid-Merit M PhP 8776 0.00 0.00 0.00 0.00 0.00 TOTAL MPhP 117.69 117.69 117.69 117.69
Slide 24: CIC Claims by Sual Power Inc. and South Premiere Power Corp.
CIC Claims by Sual Power Inc. (SPI) for 330 MW BL PSA and South Premiere Power Corp. (SPPC) for 670 MW BL PSA = August 18, 2023: SPPC and SPI sent MERALCO Notices of Additional CIC Claim, requesting MERALCO’s cooperation in filing Joint Motions for Price Adjustment for the following: o SPI: Php14,62
Slide 25: Competitive Selection Process for 1,800 MW PSA
Competitive Selection Process (CSP) for Procurement of PSA for Contract Capacity of 1,800 MW (net), COD 2024-2025 = December 27, 2023: Bids submission and Opening of Bids Power Suppliers with the Best Bid Prices BIDDER OFFERED CONTRACT FUEL TOTAL HEADLINE TOTAL LCOE CAPACITY, MW TYPE RATE, Php/kWh R
Slide 26: Competitive Selection Process for 1,200 MW PSA
Competitive Selection Process (CSP) for Procurement of PSA for Contract Capacity of 1,200 MW (net), for period from Dec. 26, 2023 * January 23, 2024: Bids submission and Opening of Bids OFFERED CONTRACT BIDDER FUEL TOTAL HEADLINE TOTAL LCOE CAPACITY, MW TYPE RATE, Php/kWh RATE, Php/kWh South Premier
Slide 27: Awarded by DOE for Full Compliance as DU and Supplier
O Awarded by DOE for Full Compliance as DU and Supplier = December 6, 2023: DOE Virtual Awarding Ceremony for Compliant Energy Sectors under DOE’s reportorial requirements for F.Y. 2022 held via MS Teams. = Among 31 DUs (of 140 total DUs) deemed as Compliant Electric Power Industry Participant: o DU
Slide 28: Power Generation Operating Results
MERALCO MGEN GOO POWER GENERATION GLOBAL BUSINESS POWER FULL YEAR ENDED DECEMBER 31, 2023 POWER GENERATION OPERATING RESULTS Investors and Analysts Briefing February 26, 2024
Slide 29: FY 2023 Power Generation Operating Highlights
FY 2023 Power Generation Operating Highlights Energy Delivered in GWh Year-to-Date Performance Plant FY 2023 FY 2022 % Change Goo 5,867 5,156 2% lenis ron 2,360 2,765 v15% @ PacificLight 5,719 5,619 A2% wow MGREEN 347 12 4.210% Total 14,293 14,252 40.2% The Power Generation Group delivered 14,293 GW
Slide 30: Low-Carbon Energy Transition Journey
Low-Carbon Energy Transition Journey 2023 Milestones Inauguration of Nuevo Solar Energy Corporation, a 68-MWac (net) solar plant in partnership with Vena Energy’sPasuquin Energy Holdings Inc. last March 31, 2023 MGreen’s 75 MWac solar plant project in Baras, Rizal, in partnership with Mitsui’s local
Slide 31: Sustainability
Investors and Analysts Briefing
Slide 32: One Meralco's Long Term Sustainability Strategy
One Meralco’s Long Term Sustainability Strategy: A just, orderly, and affordable transition to clean energy as we drive to be coal-free before 2050 Horizon 3: 2041-50 Horizon 2: 2031-40 “Drive deep decarbonization Horizon 1: and achieve sustainability 2021-30 “Accelerate green energy leadership in t
Slide 33: Horizon 1 twin commitments in contracting and generation
2021-30 Horizon 1 is marked by our twin commitments in contracting and generation Horizon 1: Twin Commitments by 2030 2021-30 A Contract 1,500 MW of RE supply “Initiate low-carbon transition to serve the country’s growing energy demand with greener power” B Build 1,500 MW of attributable RE capacity
Slide 34: Contract 1,500 MW of RE supply
2021-30 A Contract 1,500 MW of RE supply One Meralco has already contracted 1,880 MW of RE in compliance with DOE’s Renewable Portfolio Standards PLANT TECHNOLOGY Contracted RE supply, MW Solar Philippines Tarlac Corporation Ph1 Solar PowerSource First Bulacan Solar, Inc. Solar Solar Philippines Tan
Slide 35: Build 1,500 MW of attributable RE capacity
2021-30 B Build 1,500 MW of attributable RE capacity MGen’s current pipeline stands at 3,971 MW of gross capacity, equivalent to 1,442 MW of attributable capacity MGen’s RE Pipeline, MW Gross Attributable 3,971 2,500 758 857 1,442 472 614 212 1 TOTAL Solar +2 BESS1 Solar 3 Wind 4 1. Does not include
Slide 36: PHP 101B sustainable capital investments through 2030
2021-30 In sum, we will deploy PHP 101B in sustainable capital investments through 2030 2021-30 CapEx, PHP B 101 54 43 47 4 TOTAL Regulated1 Non-regulated2 1. Storm hardening, RE integration, Reduction in system loss, Ester oil in DTs, Energy efficiency and EVs; Regulated capex subject to approval o
Slide 37: LTSS Horizon 1 emissions reduction targets
2021-30 LTSS Horizon 1: We target to reduce our 2030 baseline Scope 1 emissions by 30% and our baseline total emissions by 20% 48.7 20% Total emissions, 38.9 MtCO2e 29.7 Scope 3 Scope 2 25.1 Scope 1 2.9 2.6 30% 16.1 11.2 2030 Baseline 2030 Target1 1. 2030 target is latest projection as of January 20
Slide 38: Promoting well-being of communities with clean electricity
Beyond decarbonization, we aim to promote the well-being of communities with clean electricity as an enabler Impact Areas Education reach Water access Access to quality Livelihood Disaster resilience Off-grid public schools Households provided with healthcare productivity and recovery energized pota
Slide 39: Improved or maintained ESG ratings and indices
Meralco improved or maintained its score in two (2) ESG ratings and its constituency in three (3) International ESG indices ESG Ratings ESG Indices Financial Times Stock Exchange (FTSE) Russell ESG Ratings 3.1 —32 a 2.6 2020 2021 2023 Higher than Philippine and energy sector averages, with strong pe
Slide 40: 2023 Sustainability Achievements and Awards
2023 Sustainability Achievements and Awards #Mbrace : Gender Diversity and Inclusion Program In support of CEO Statement of Support for the UN Women’s Empowerment Principles " Eiroweament “Improving diversity and inclusion in the workplace should not just be a pro-forma PRINCIPLES In baie of sustain
Slide 41: 2023 Sustainability Achievements and Awards
2023 Sustainability Achievements and Awards Programs, Campaigns, and Corporate Reports THE INTERNATIONAL | BUSINESS AWARDS| AWARDS fi Gold Stevies + Manila Electric Company: Sustainability Leadership Award in Asia, ANZ (Lone Winner, First-ever Awardee) + Raymond B. Ravelo: Sustainability Hero of the
Slide 42: 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
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