Manila Electric Co. · PSE:MER
Manila Electric — FY2021 Earnings Presentation
40 slides from Manila Electric's earnings presentation, Feb 28, 2022
Slide 1: Year Ended December 31, 2021 Financial and Operating Results
YEAR ENDED DECEMBER 31, 2021 FINANCIAL AND OPERATING RESULTS February 28, 2022
Slide 2: Financial Results
YEAR ENDED DECEMBER 31, 2021 FINANCIAL RESULTS February 28, 2022
Slide 3: 2021 Financial Highlights in PhP, Mn
2021 Financial Highlights in PhP, Mn 3
Slide 4: 2021 Revenues in PhP, Mn
2071 Revenues in PhP, Mn Gross Revenues Electric Revenues 318,547 , 309,238 275,304 63,356 20% a 16% 231,094 73% 60,507 63,356 14,7 , ’ 88) 9,309 56, 2020 2021 Distribution Generation, EnergyFee Non-electric 2020 2021 transmission & others m Distribution Generation, transmission and others m Energy
Slide 5: Cost and Expenses, Capital Expenditures in PhP, Mn
2021 Cost and Expenses, Capital Expenditures in PhP, Mn 5
Slide 6: Net Income and EBITDA in PhP, Mn
2021 Net Income and EBITDA in PhP, Mn 6
Slide 7: Power Generation
2021 Power Generation Php 2.2 B Php 2.6 B Php 512 M Php 26 M Core Net Income Core Net Income Core Net Income Core Net Income 58% 51% 100% 60% Meralco stake Meralco stake Meralco stake Meralco stake • In July 2021, acquired an • Average plant availability of • Fully acquired in March 2021, • 50-MWac
Slide 8: Subsidiaries CCNI Contribution and Performance
2021 Subsidiaries CCNI Contribution and Performance 8
Slide 9: Credit and Debt Profile in PhP, Mn
2021 Credit and Debt Pro ile in PhP, Mn 9 f
Slide 10: Earnings per Share in PhP per share
2021 Earnings per Share in PhP per share 10
Slide 11: Operating Results
YEAR ENDED DECEMBER 31, 2021 OPERATING RESULTS February 28, 2022
Slide 12: Operational Highlights
2021 Operational Highlights BUSINESS DRIVERS SERVICE PERFORMANCE ELECTRICITY RATE per kWh Energy Sales System Loss Average Retail Rate 46,073 GWh 5.85% PhP 8.24 ▲ 6% vs. 2020 ▼ 0.23%PT, 12-MMA vs. 2020 ▲ 4%, vs 2020 Customer Count SAIFI 7.410 M 1.409 times ▲ 4% vs. 2020 ▼ 6% vs. 2020 Net System Inpu
Slide 13: Consolidated Energy Sales in GWh
2021 Consolidated Energy Sales in GWh Grew 6% vs. 2020 driven by recovery in Industrial, ramp up in Commercial, and sustained growth in Residential 46,871 46,073 43,572 ▲ 6% 44,313 42,102 13,799 13,782 Industrial 30% 12,176 30% 28% 18,483 14,766 15,234 Commercial 39% 34% 33% 14,589 16,488 16,913 Res
Slide 14: DU Energy Sales Profile and Drivers
2021 DU Energy Sales Pro ile and Drivers 2019 2020 2021 GWh RESIDENTIAL ▲ 3% GWh COMMERCIAL ▲ 3% GWh INDUSTRIAL ▲ 13% 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 Jan Feb Mar Ap
Slide 15: Consolidated Customer Count in M
2021 Consolidated Customer Count in M Increase in customer base driven by all-time highs on PCA (7K) and OSA (232K) energization Project-covered Applications (PCA) 7.410 2020 7.130 0.011 Industrial 670 670 2021 0.011 0.555 651 641 633 607 8% Commercial 0.540 576 580 583 522 466 455 474 435 396 414 4
Slide 16: Consolidated NSI in GWh
2021 Consolidated NSI in GWh Higher vs. 2020 driven by recovery across all customer segments Power Fuel Sources Mix Special Solar 1% Contracts 1% 49,251 48,325 4% Liquid Fuel 8% WESM 45,919 16% Other RES 27% Multi-fuel ▲ 5% 23% New PSA 34% Natural Gas IPP/ 52% Old PSA 35% Coal 2019 2020 2021 16
Slide 17: Peak Demand in MW
2021 Peak Demand in MW Meralco and Luzon peaks higher vs. 2020 due to easing community quarantine restrictions Luzon Meralco 11,640 11,103 ▲ 5% 7,614 7,808 ▲ 3% March 10, 2020 May 27, 2021 March 9, 2020 May 28, 2021 17
Slide 18: System Loss in %, 12-MMA
2021 System Loss in %, 12-MMA Improvement (0.23% points) vs. 2021 due to sales mix skewing to C&I and driven by initiatives to reduce system loss and unbilled energy sales 6.5% SYSTEM LOSS CAP 6.44 6.19 6.18 6.14 6.10 6.08 2021 6.03 5.97 5.96 5.96 5.88 5.89 5.83 5.85 5.72 5.75 5.66 5.64 5.54 2020 5.
Slide 19: S-Factor Performance and Guaranteed Service Levels (GSL)
2021 S-Factor Performance and Guaranteed Service Levels (GSL) Continued to deliver well within performance ceilings SAIFI times SAIDI CAIDI in minutes Rewards < 6.98 in minutes Rewards < 144.40 Network ▼ 6% ▼ 15% ▼ 9% • % Probability of Voltage Violation at 1.501 1.409 163.003 108.618 98.428 0.10 (w
Slide 20: Networks CapEx in PhP, B
2021 Networks CapEx in PhP, B 86% of CapEx budget utilized in light of community quarantine restrictions while supporting BBB projects and exceeding target for pole retirement PhP 19.08B CapEx Budget 7.31 New Connections Pole Relocation Program BUILD, BUILD, BUILD (BBB) DPWH ROAD WIDENING 6.16 16.39
Slide 21: Networks Project Updates
Networks Project Updates Completed Major CAPEX Projects to improve capacity and ensure reliability Commission CAPEX Period Amadeo Substation Cainta Substation Date (2021) (PhP, M) 1. Uprating of Saog-Veinte Reales- October 24 88.3 RY2021 Malinta 115 kV line 2. Expansion of Amadeo 230-115 kV October
Slide 22: Super Typhoon Odette Restoration Assistance
Super Typhoon Odette Restoration Assistance • CEBU - Deployed 86 personnel and 21 vehicles from December 21, 2021 to January 22, 2022 to assist Visayan Electric Company (VECO) and Mactan Electric Company (MECO) in cities of Cebu, Talisay and Lapu-Lapu, and municipality of Cordova - Energized facilit
Slide 23: Average Retail Rate in PhP per kWh
2021 Average Retail Rate in PhP per kWh 4% higher than 2020 average rate due to higher generation, system loss, distribution, and FIT-All charges • 10.0% increase in Generation: Higher fuel costs, and higher WESM charges Average Rate • 10.3% decrease in Transmission: Lower Ancillary Service charge,
Slide 24: Regulatory Updates: CSP for 170 MW
Regulatory Updates Competitive Selection Process (CSP) for 170 MW covering contract period from February 26 to July 25, 2022 • December 23, 2021: Invitation to Bid with Terms of Reference approved by DOE for CSP of 170 MW (net) peaking capacity published in The Philippine Star and posted in DOE’s CS
Slide 25: Regulatory Updates: CSP for Terra Solar Unsolicited Proposal
Regulatory Updates Competitive Selection Process (CSP) for 850 MW Unsolicited Proposal from Terra Solar Philippines, Inc. (Terra Solar) • January 21, 2022: DOE approved revised Invitation to Bid and Bid Requirements and posted in CSP E-Portal. Proposed rate of Terra Solar is PhP5.7000 per kWh at 50%
Slide 26: Regulatory Updates: CSP for 180 MW
Regulatory Updates Competitive Selection Process (CSP) for 180 MW covering contract period from February 26 to July 25, 2022 • December 14, 2022: MERALCO submitted to DOE for its review and approval proposed Terms of Reference (TOR) for procurement through CSP of 180 MW (net) baseload capacity cover
Slide 27: Regulatory Updates: Amendments to the Public Service Act
Regulatory Updates Amendments to the Public Service Act CA 146 Approved Version MERALCO/PEPOA Recommendation Provision Rati ied on February 2022 Sec. 16 (l) Remove requirement for depreciation fund for Insertion of “AS MAY BE REQUIRED BY THE PROPER ADMINISTRATIVE public utilities AGENCY” grants ERC
Slide 28: Regulatory Updates: 5RP Reset
Regulatory Updates 5RP Reset • SCHEDULE • SCHEDULE Release of PBR Rules December 2021 March 11, 2022, Reset Application Filing Group A DU Filing of Reset March 11, 2022* - Proposals Application ‣ Customer growth forecast Public Hearings at ERC March-May 2022 ‣ Performance targets ‣ Opening Regulator
Slide 29: Successful Hosting of CEPSI 2021
Successful Hosting of CEPSI 2021: The Energy Digicon of Asia-Paci ic CONFERENCE OF THE ELECTRICITY POWER SUPPLY INDUSTRY (CEPSI), November 2021 • Largest biennial conference of government and business leaders, experts, and professionals in power and energy industry in East Asia and Paci ic • Staged
Slide 30: #PoweringTheGoodLife
#PoweringTheGoodLife 2020 Sustainability Report (SR) internationally recognized with GOLD Rank by Asia Sustainability Reporting Rating (ASRRAT) 2021 • 2nd international award* received by 2020 SR: Live Life • Highest ranked Filipino SR ASRRAT • Second straight ASRRAT Gold rank • Ratings system initi
Slide 31: Green Mobility Program: Expanded Deployment of EVs
#PoweringTheGoodLife Green Mobility Program: Expanded Deployment of Electric Vehicles (EVs) in Sector Of ices and Business Centers PROGRAM HIGHLIGHTS ”Through this Program, we express our full support behind • 69 EVs to be rolled out in 10 Sector the Philippines’ important transition to electri ied
Slide 32: Meralco now constituent of FTSE4Good Indices
#PoweringTheGoodLife Meralco now constituent of FTSE4Good Emerging Markets and ASEAN 5 Indices FTSE4Good Index Series • Launched in 2001 by Financial Times Stock Second PH power company to be Exchange (FTSE) Russell included in FTSE4Good Index Series • Market-leading ESG index for investors who seek
Slide 33: Improvements in Meralco's ESG ratings
#PoweringTheGoodLife Improvements in Meralco’s ESG ratings: FTSE, Sustainalytics, and MSCI Financial Times Stock Sustainalytics MSCI Exchange (FTSE) ESG Rating ESG Rating Russell ESG Ratings • 7,200+ companies rated according to • 12,000+ companies rated on inancially • 8,500+ companies rated on gen
Slide 34: Power Generation Operating Results
YEAR ENDED DECEMBER 31, 2021 POWER GENERATION OPERATING RESULTS February 28, 2021
Slide 35: MERALCO PowerGen Corporation
MERALCO PowerGen Corporation March 31, 2021 Full Acquisition of Global Business Power Corporation May 12, 2021 Commercial Operations: 55MWac BulacanSol June 30, 2021 Groundbreaking Ceremony: 75MWac Solar Plant in Baras, Rizal July 1, 2021 Acquisition of additional 30% in PLP bringing effective owner
Slide 36: Generation Capacity in MW
2021 Generation Capacity in MW Coal TECH GROSS ATTRIBUTABLE 59% San Buenaventura Power Coal 500 255 Paci ic Light Power LNG 800 464 BulacanSol Solar 55 (ac) 33 (ac) TOTAL 1,355 752 2,446 MW GROSS CAPACITY TECH GROSS ATTRIBUTABLE 1,532 MW Cebu Energy Dev’t Corp. Coal 246 128 ATTRIBUTABLE CAPACITY Pan
Slide 37: Highlights: Energy Delivered in GWh
2021 Highlights Energy Delivered in GWh • MGEN Group delivered 6% year-on-year increase in energy sales 2021 2020 % change • SBPL’s plant availability improved to an average of 4,931 4,929 ▲ 0% 89.48% from 82.39% in 2020 • Paci icLight’s capacity factor improved to 78% from 3,234 3,070 ▲ 5% 67% in 2
Slide 38: Renewable Energy Development
Renewable Energy Development • Target of 1,500 MW renewable energy (RE) capacity in next 5-7 years • RE Projects under construction: - 75 MWac solar in Baras, Rizal (in partnership with Mitsui) - 68 MWac solar in Ilocos Norte (in partnership with Vena) - 45 MWac solar in Cordon, Isabela (in partners
Slide 39: Financial and Operating Results
YEAR ENDED DECEMBER 31, 2021 FINANCIAL AND OPERATING RESULTS February 28, 2022
Slide 40: 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
Manila Electric Company (Meralco) — FY2021 Earnings Presentation on 6ix