Manila Electric Co. · PSE:MER
Manila Electric — 9M 2019 Earnings Presentation
45 slides from Manila Electric's earnings presentation, Oct 28, 2019
Slide 1: Financial and Operating Results
Slide 2: Financial Highlights 9M 2019
Slide 3: Quarterly financial results summary
Q1 Q2 Q3 (Amounts in Mln PhP, Except Sales Volume) Q1 2019 Q2 2019 Q3 2019 Q1 2018 Q2 2018 Q3 2018 % Inc (Dec) % Inc (Dec) % Inc (Dec) Sales Volume (GWh) 10,381 12,442 12,182 10,145 11,520 11,256 2% 8% 8% Revenues 75,378 89,575 76,173 70,807 79,737 76,867 6% 12% -1% Electric 73,632 87,635 74,109 69,
Slide 4: Revenues 9M 2019 vs 9M 2018
241,126 241,126 227,411 227,411 Distribution revenues 49,224 46,209 Q3 76,173 76,867 Electricity Revenues = 235,376 Electricity Revenues = 221.266 Q2 89,575 79,737 Generation & other pass- 186,152 through charges 175,057 Q1 75,378 70,807 Non-electricity revenues 5,750 6,145 9M 2019 9M 2018 9M 2019 9
Slide 5: Costs and Expenses; Capital Expenditures
6,400 9,092 19,346 3% 4% Costs and Expenses 9% 183,355 84% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 15,701 Capital Expenditures Others 10,048 Subtransmission & 23% Distribution Facilities 77% 9M 2019 9M 2018
Slide 6: EBITDA and Income
12.3% 11.7% 12.3% 11.7% Margins 7.7% 7.3% 7.6% 8.0% 29,762 29,762 26,564 26,564 Q3 9,883 9,883 8,979 8,979 18,453 18,321 18,212 16,686 6,136 6,314 6,239 Q2 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 5,598 4,917 5,671 5,312 9M 2019 9M 2018 9M 2019 9M 2018 9
Slide 7: Earnings Per Share
16.255 16.159 16.373 14.804 Earnings Per Share Core Earnings Per share 9M 2019 9M 2018
Slide 8: Total Debt and Repayment Schedule
TOTAL DEBT (in Million PhP) 40,027 31,238 (in Million PhP, Except Ratios) 9M 2019 9M 2018 24,762 15,953 Cash 24,736 48,122 15,285 15,265 Gross Debt 31,238 40,027 Net Debt 6,502 (8,095) 9M 2019 9M 2018 Current Portion Non-current Portion Gross Debt/EBITDA 0.79 1.13 LONG-TERM DEBT REPAYMENT SCHEDULE (
Slide 9: Report of the Chief Executive
EPORT OF THE HIEF XECUTIVE Performance ended September 2019 of 32
Slide 10: Operating Highlights
Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 6.3%* 4.2%* 4.6%* 5.9%* 35,005 GWh 6.82 million 7,740 MW 36,853 GWh Ave. Retail S-Factor Rates & GSL** 0.9%* Sustained Service Business P9.00/kWh Improvement Updates 10 of 31 CONSOLIDATED NUMBERS FOR ENERGY SALE
Slide 11: Details
Details 11 of 31 11
Slide 12: Energy Sales: 9M 2019
Energy Sales: 9M 2019 ➢ Up 6.3% vs. 2018 (+2,083 GWh) Share / for 9M 2019: Growth: Growth: 6.3% 8.0% RESIDENTIAL 6.0% 4.3% 4.8% 31.2% 9.5% 32,921 35,005 10,920 GWh 30,103 31,401 • Coming from flat Q1 27,496 (0.4% growth), COMMERCIAL Total sales volume substantial increase in Q2 led by Organic
Slide 13: Energy Sales: 9M 2019, Residential
Energy Sales: 9M 2019, Residential RESI leads all sector with 8.0% growth in 9M Recovered the past 2 quarters after a slow start in Q1 YTD Province GWh inc % inc CAVITE ▲1.2 12.5% BATANGAS ▲9.0 11.1% PAMPANGA ▲0.2 10.8% METRO MANILA ▲29.2 10.2% LAGUNA ▲0.9 10.1% RIZAL ▲3.0 9.4% BULACAN ▲1.0 9.4% QUE
Slide 14: Energy Sales: 9M 2019, Commercial
Energy Sales: 9M 2019, Commercial COM’L had a decent growth of 5.7% in 9M 13,484 GWh COMMERCIAL ▲ 5.7% Posted double-digit growths last Apr (11.0%) and Jul (11.5%) POGO (38%) has overtaken IT-BPO (32%) as office space demand driver ▪ Meridian Park, currently has 100% occupancy, of which 60% are leas
Slide 15: Energy Sales: 9M 2019, Industrial
Energy Sales: 9M 2019, Industrial IND’L had a modest growth of 4.3% in 9M INDUSTRIAL 9,757 GWh (excl. Gen. Wheeling) ▲ 2.7% FOOD & BEVERAGE – 6.1% ▪ Zenith Foods( Jollibee Commissary) increased its production following its commissioning last Aug 2018. Zenith contributed additional 21GWh in 2019. ▪ N
Slide 16: Customer Count: 9M 2019
Customer Count: 9M 2019 ➢ Up 4.2% vs. 2018 (+275,268 customers) Share / for 9M 2019: Growth: Growth: 4.2% 4.3% 2.8% 6.818 RESIDENTIAL 4.7% 6.542 92.1% 6,277,866 4.6% 6.252 customers COMMERCIAL 4.1% Total customer count 7.7% 5.978 for Flat Streetlights 524,313 5.742 account for 0.1%, customers
Slide 17: NSI and Peak Demand: 9M 2019
NSI*: 9M 2019 Peak Demand: 9M 2019 ➢ Meralco Peak Demand remained at 7,740 MW, recorded on ➢ Up 5.9% (+2,038 GWh) June 4, 2019, while Luzon remained at 11,344 MW Meralco, MW: 7,399 MW 7,740 5.9% 36,853 GWh 2018 Peak* 34,815 7,399 4.6% 7,116 MW Sept. 5, 2019 Peak *May 23, 2018 2018 2019 2018 2019 (
Slide 18: Energy Sources and Fuel Mix: 9M 2019
Energy Sources: 9M 2019 Fuel Mix: 9M 2019 Liquid Fuel 0.3% 9M 2019 Solar Natural Gas SOURCE 41.2% 0.1% GWh Share PSAs-Total 12,079.0 32.8% MPPC-Masinloc 1,310.0 3.6% PSA IPP 32.8% 28.2% Coal TLI-Pagbilao 1,094.6 3.0% Multi-fuel 31.0% SMEC-Sual + CEDC 2,003.8 5.4% WESM 27.5% SPPC-Ilijan 4,373.1 11.9%
Slide 19: Average Retail Rates: 9M 2019
Average Retail Rates: 9M 2019 (Reflects Generator Wheeling adjustments) ➢ O.9% higher than 2018 average rates (+8¢/kWh); mainly due to Generation and FIT-Allowance charges • Lower Transmission and Taxes/ UC/ Subsidies Charges mitigated impact; • Generation Charge is largest component in customer’s b
Slide 20: System Loss Performance: Sept. 2019, 12-MMA
System Loss Performance: Sept. 2019, 12-MMA ➢ 12-MMA ending Sept. 2019 at 5.55% , still within Rewards level ▪ Improved by 2.1% vs. Sept. 2018’s 5.67% ▪ Lower by 1.70% pts. vs. newly-set SL cap of 7.25% (start Jan. 1, 2019) 7.50%* 7.25%* Oct. 2017 - Sept. 2018 1.70% Oct. 2018 - Sept. 2019 5.99 5.74
Slide 21: S-Factor & GSL Performance
S-Factor & GSL Performance: 9M 2019 & RY2020 (for GSL) ➢ Sustained service improvements vs. past levels* SAIFI, Forced and PAI (Times) GSL1 : Customer experiencing a cumulative duration of Ave. Time to Process App. (Days) sustained service interruptions in a Regulatory Year that REWARDS DEADBAND PEN
Slide 22: Business Updates & Other Events of Interest
Details Business Updates & Other Events of Interest 22
Slide 23: Strengthening the Core Business: Networks Capex
Business Updates: Strengthening the Core Business CA CY2019 UPDATES ON NETWORKS CAPEX 43% MA 29% 11.042 B Utilization as of September 2019 Feb May Jan Mar Aug Apr Sep Jun Jul BBB PhP 11.042 B (92%) 2% SR New Customer Connections / CA 18% NEP & OCI 3,852M P 5.14B 8% • Installed meters 241,982 • CA
Slide 24: Construction of New Clark City Interim Distribution Facilities
Business Updates: Construction of New Clark City (NCC) Interim Electrical Distribution Facilities 4 Major Construction Works of NCC Interim Electrical Distribution Phase 1A Project A. 33MVA, 69kV-13.8kV D. 69kV sub-transmission NCC Interim substation line (c/o BCDA) Started: 10 April 2019 Started:
Slide 25: Construction of New Clark City Interim Distribution Facilities
Business Updates: Construction of New Clark City (NCC) Interim Electrical Distribution Facilities HOSPITAL ENERGIZED 09/15 ENERGIZED 09/15 ENERGIZED 08/23 ENERGIZED 09/28 ENERGIZED 08/23 ENERGIZED ENERGIZED 09/08 09/08 Complete 13.8kV Underground Line Corridor at NGAC
Slide 26: New Clark City Project Milestones
Business Updates: Construction of New Clark City (NCC) Interim Electrical Distribution Facilities Project Milestones: • 23 August 2019 – the NCC interim electrical distribution system was fully operational. • As of 13 October 2019 – the Stadium , Aquatic Center and Govt. Building electrical facili
Slide 27: Expansion of Filinvest GIS Substation
Business Updates: Expansion of Filinvest 115 kV - 34.5 kV GIS Substation (2nd Bank) Date: July 30, 2019 Before After Splicing of underground cables • The commissioning of this RP4 project will address the expected critical loading of Filinvest Transformer Bank 1 and Ayala Alabang Transformer Bank
Slide 28: Development of Bridgetowne GIS Substation
Business Updates: Development of Bridgetowne 115 kV-34.5 kV GIS Substation ▪ Energized on September 30, 2019 • A Smart GIS Substation constructed using the IEC 61850 communication protocol • Will relieve the expected critical loading of the nearby Hillcrest, Cainta, and SM-Shangrila substations •
Slide 29: Meralco Electrification Program Projects
Business Updates: Meralco Electrification Program Projects (Priority 1) ▪ As of October 4, 2019 Estimated Estimated Area Number of Sites Number of Status Update Project Cost Households Metro Manila 81 12,839 81,528,931 13 energized; 14 ongoing construction; North 41 3,975 32,914,243 14 ongoing PRO
Slide 30: Customer Engagements: CBG Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CBG CUSTOMERS Businesses, LGUs urged CUSTOMER ENGAGEMENTS to adapt sustainability for business longevity Meralco SVP and Head, Networks, RoLA; Head of TV5 News and Information, Luchi Cruz-Valdes, Meralco FVP and Head
Slide 31: Customer Engagements, Products & Services and Initiatives
Business Updates: Customer Engagements, Products & Services and Initiatives Eric H., JG Summit President Lance Meralco Chairman MVP, giving the Gokongwei, and Meralco President and The Panel discussion moderated by Luchi Cruz-Valdes welcome remarks CEO, RCE 31 VSG with The Net Group President Raymon
Slide 32: Customer Engagements: Energy Efficiency Law
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CBG CUSTOMERS CUSTOMER ENGAGEMENTS Gearing-Up for RA 11285 Energy Efficiency and Conservation (EE&C) Law DOE’s Art Habitan giving the keynote presentation on the DOE’s Art Habitan in discussions with CBG’s Cecille Sp
Slide 33: Customer Engagements: ER 1-94 Power Up Forum
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CBG CUSTOMERS CUSTOMER ENGAGEMENTS Lighting Up Communities for Progress: ER 1-94 Power Up Forum (Genco Forum) DOE Director Mario Marasigan discussing the revised Host Chito Zagala with panelists UED Head Lawrence Fer
Slide 34: Customer Engagements: Biz Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR BIZ CUSTOMERS Objective: Open doors to customers by introducing services from Biz Partners Group and Meralco subsidiaries PUF No. 8 When: Sept. 11 Where: Seda Vertis North Speakers: Jolliant RNN Corporation Owner Noe
Slide 35: Customer Engagements: Biz Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR BIZ CUSTOMERS Objective: Open doors to customers by introducing services from Biz Partners Group and Meralco subsidiaries PUF No. 9 When: Sept. 27 Where: Hotel Marciano Speakers: From L-R: Meralco Biz South Area Head
Slide 36: Customer Engagements: LGU Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR LGU CUSTOMERS Power Up Forum: with Quezon City Barangay Captains from Districts 2, 6 and 8 When and Where: September 18 in Q.C. ✓ Discussed: Meralco Online, Energy Efficiency and Beyond-The- Meter Services Barangay C
Slide 37: Battery Energy Storage System Event
Business Updates: Customer Engagements, Products & Services and Initiatives BATTERY ENERGY STORAGE SYSTEM (BESS) EVENT Date: September 06, 2019 Locations: BESS Site in San Rafael Bulacan & Meralco Lopez Building Lobby Meralco Lopez Lobby: • Attended by top executives and employees from Meralco and H
Slide 38: Customer Engagements: Residential Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR RESIDENTIAL CUSTOMERS RATES: DECREASED by P0.53 /kWh *residential customer consuming 200kWh / mo RATES INFO CAMPAIGN Sep 12-13 Sep 13 Sep 12 440,480 Views Average Watch Time: 54secs 24,753 Reached ER: 1.07% VIEWS: 3,
Slide 39: Meralco PowerGen Corporation Overview of Operations
Meralco PowerGen Corporation Overview of Operations 28 October 2019
Slide 40: San Buenaventura Power Limited Co. (SBPL)
Meralco PowerGen Corporation 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 ▪ Started commercial
Slide 41: 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) ▪ Committed Project and Certified Energy Pr
Slide 42: MGEN Renewable Energy, Inc. (MGreen)
Meralco PowerGen Corporation Updates on Growth and Expansion MGEN Renewable Energy, Inc. (MGreen) targets around 1,000 MW of renewable energy projects over the next 5-7 years. • On September 30, the company secured equity funding amounting to PhP424 Million for various solar projects under developme
Slide 43: 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 44: 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 45: competitive uncertainties and contingencies which are beyond MERALCO’s control.
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on October 28, 2019. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same materi
Manila Electric Company (Meralco) — 9M 2019 Earnings Presentation on 6ix