Manila Electric Co. · PSE:MER

Manila Electric — H1 2016 Earnings Presentation

38 slides from Manila Electric's earnings presentation, Jul 25, 2016

  1. Slide 1: Financial and Operating Results

    FINANCIAL AND OPERATING RESULTS Investors and Analysts Briefing Half Year Ended June 30, 2016 July 25, 2016

  2. Slide 2: Operations Report

    OPERATIONS REPORT Performance ended June 2016

  3. Slide 3: 2016 New Operating Milestones

    2016 New Operating Milestones HIGHEST EVER HIGHEST NEW SYSTEM MONTH & 1H NUMBER OF PEAK DEMAND ENERGY SALES CUSTOMERS 3,637 GWh & 19,717 GWh 5.91 million 6,748 MW June 2016 June 2016 May 4, 2016 RECORD BEST LOWEST GENERATION LOWEST AVE. SYTEM LOSS CHARGE IN RETAIL RATE IN PERFORMANCE 12 YEARS 7 YEAR

  4. Slide 4: 2016 Operating Highlights

    2016 Operating Highlights 11.1* 4.0%* 7.8%* 10.8%* +1,963.8 +226,448 +491 MW +2,067 GWh customers GWh Customer Meralco Net System Energy Sales Count Peak Demand Input 73.6% IPP/PSA 14.4%** Within 6.6% WESM Regulatory Business 18.1% RES - P1.27/kWh Limits Updates NSI Ave. Retail S-Factor Sources

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  6. Slide 6: Energy Sales and Customer Count: 1H 2016

    Energy Sales: 1H 2016 Customer Count: 1H 2016  Up 11.1% vs. 2015 (+1,964CONSO GWh)  Up 4.0% vs. 2015 (+226,448 Customers) 19,717 5.91 5.68 17,299 17,753 5.48 16,215 16,863 5.28 11.1% 5.11 4.0% 3.8% 2.6% 2.6% 3.6% 4.0% 3.3% in GWh in million customers 2012 2013 2014 2015 2016 2012 2013 2014

  7. Slide 7: Ave. Temperature (°C) monitoring

    Ave. Temperature(°C) monitoring  Warmer temperature vs. same period in 2015/ 2014 30.3 30.5 1H 2016 Ave: 28.8C 30.3 29.5 29.7 29.2 29.9 29.4 28.7 29.1 28.3 28.5 28.5 28.4 28.2 28.2 27.2 27.9 28.0 27.2 27.8 27.0 26.7 27.5 26.9 26.5 25.7 25.0 25.6 1H 2015 Ave: 27.7C 24.7 1H 2014 Ave: 27.7C 2014 20

  8. Slide 8: Clark Electric (CEDC): 1H 2016

    Clark Electric (CEDC): 1H 2016 Energy Sales, GWh Customer Count 269.4 249.8 7.9% 1,974 1,872 5.4% 2015 2016 2015 2016 CEDC’s top 5 sales contributors for 1H 2016 include Phoenix Semiconductor Philippines Corp. (PSPC), Yokohama, SN Aboitiz Power, Premier Central (SM Clark), and Nanox Phils. II NSI,

  9. Slide 9: NSI and Peak Demand: 1H 2016

    NSI: 1H 2016 Peak Demand: 1H 2016  NSI up by 10.8% vs. Mar. 2015 (+2,067.4 GWh)  Meralco Peak Demand of 6,748 MW, 7.8% up vs. 2015 Meralco YTD Peak Demand, MW: 1H 2016 YTD, GWh: 2015 Peak (Aug 18) 6,298 7.1% 6,748 * 7.8% 10.8% 21,221.5 6,257 19,154.1 2015 2016 *May 4. 2016 2015 2016 Luzon YTD P

  10. Slide 10: Power Sources and Fuel Mix: 1H 2016

    Power Sources: 1H 2016 Fuel Mix: 1H 2016 1H 2016 1H 2016 Liquid Fuel, 0.1% SOURCE TYPE OF FUEL GWh Share GWh Share PSA Natural Gas 9,809.7 46.2% PSAs-Total 8,293.7 39.1% 39.1% Coal SEM-Calaca 734.0 3.5% IPP Coal 7,873.1 37.1% Natural Gas 37.1% MPPC-Masinloc 1,124.1 5.3% 34.5% Liquid Fuel* 14.2 0.1%

  11. Slide 11: Average Retail Rate: 1H 2016

    Average Retail Rate: 1H 2016  14.4% lower (-P1.27/kWh) than 1H 2015 average rates  Except FIT-All, all components decreased  Generation Charge, largest component in customer’s bill, 51.1%; Meralco 19.0%; NGCP 11.8%  June 2016 Ave. Retail Rate of P7.36/kWh is lowest since October 2009 (P7.24/kWh)

  12. Slide 12: System Loss Performance: June 2016, 12-MMA

    System Loss Performance: June 2016, 12-MMA  12-MMA ending June 2016 at 6.46%  Improved by 0.14% pts. vs. June 2015’s 6.60%  Lower by 2.04% vs. SL cap of 8.5% 8.5% SL CAP, 2010-PRESENT Jul 2014 - Jun 2015 Jul 2015 - Jun 2016 2.04% 6.70 6.54 6.6 6.47 6.44 6.46 Jul Aug Sep Oct Nov Dec Jan Feb Mar Ap

  13. Slide 13: S-Factor & GSL Performance: 1H 2016 & RY2016

    S-Factor & GSL Performance: 1H 2016 & RY2016 (for GSL)  Except for Ave. Time to Connect (Deadband), all S-Factor indicators well within rewards range; All GSL performances are well within set limits SAIFI, Forced and PAI (Times) GSL1 : Customer experiencing a cumulative duration of Ave. Time to Pro

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  15. Slide 15: Business Updates: Aligning with Gov't. Initiatives

    Business Updates: Aligning with Gov’t. Initiatives Coordination Meeting with DOE Sec. Alfonso G. Cusi  Sec. Afonso G. Cusi: “Let Us Prioritize the Marginalized” (DOE Press Release, 07 July 2016) − Discussed how to help the marginalized people in MM/ nearby provinces to access and enjoy the power co

  16. Slide 16: Business Updates: Aligning with Gov't. Initiatives

    Business Updates: Aligning with Gov’t. Initiatives Updates:  As of July 21, 2016: ENERGIZED 2,009 SERVICES INFORMATION CAMPAIGN ISLA PUTING BATO BASECO GAYA-GAYA (TOWERVILLE)

  17. Slide 17: Business Updates: Aligning with Gov't. Initiatives

    Business Updates: Aligning with Gov’t. Initiatives Updates:  Meralco continues to provide electric service to our customers despite some CHALLENGES where DOE can help Financial difficulty of the customer to cover the cost of load-side facilities (house wiring, common metering walls, etc.) Oppositio

  18. Slide 18: Business Updates: Major Capital Projects

    Business Updates: Major Capital Projects Expansion of Masinag Substation Commissioning of Banawe GIS Substation Masinag, Antipolo City; May 27, 2016 Banawe Ave. corner Del Monte Ave., Brgy. Manresa, QC; June 29, 2016  Commissioning of the new 83 MVA transformer bank no. 2 will provide additional ca

  19. Slide 19: Business Updates: Major Capital Projects

    Business Updates: Major Capital Projects Dev’t. of Sitio Gitna 115 kV Switching Station Pag-asa Steel Interconnection Project Kaybiga, Caloocan City; June 8, 2016 A Sandoval Ave., Pinagbuhatan, Pasig City; May 24, 2016  Will serve the load requirements of Metrodragon Steel Corp. (40 MW) and  The n

  20. Slide 20: Business Updates: Customer Initiatives & Programs/Events

    Business Updates: Significant Business/ Customer Initiatives & Programs/ Events Orange Tag Awareness 28,826 ACTIVATED As of June 30 Datem Homes (Horizon) Cainta, Rizal (97 PREPAID units for activation) Meralco with NHA execs

  21. Slide 21: Business Updates: Customer Initiatives & Programs/Events

    Business Updates: Significant Business/ Customer Initiatives & Programs/ Events Meralco Wins Company of the Year! Meralco’s Kuryente Load and Salba Bote Meralco wins at PR Awards Asia 2016 Win at the 2016 Asia-Pacific Stevie Awards  Hong Kong: Meralco brought home the country’s first ever GOLD AWAR

  22. Slide 22: Business Updates: Customer Initiatives & Programs/Events

    Business Updates: Significant Business/ Customer Initiatives & Programs/ Events Meralco Wins In-House Community Legal Team of the Year for Property and Infrastructure  In-House Community Counsels of the Year Awarding Ceremonies held last May 27, 2016 at Hong Kong Jockey Club, Hong Kong.  The Meral

  23. Slide 23: Project Updates

    The information as contained herein may neither be reproduced nor used, in whole or in part, for any other purpose nor furnished to any person(s) without express written permission from MERALCO PowerGen Corporation PROJECT UPDATES as of 25 July 2016

  24. Slide 24: San Buenaventura Power Limited Co. (SBPL)

    San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon  Construction of the project is ongoing, with commercial operations targeted in 2019.  The consortium of South Korea’s Daelim Industrial Co. Ltd. and Japan’s Mitsubishi Corporation was sele

  25. Slide 25: San Buenaventura Power Limited Co. (SBPL)

    San Buenaventura Power Limited Co. (SBPL)  Recognition SBPL received international recognitions for its landmark P42.15-billion funding, which is the Philippines’ largest all-peso project finance facility to date.  Awarded the “Asia-Pacific Power Deal of  Awarded the “Best Power Deal” by The the

  26. Slide 26: Redondo Peninsula Energy, Inc. (RP Energy)

    Redondo Peninsula Energy, Inc. (RP Energy) 2x300-MW CFB Coal-Fired Power Plant in Subic, Zambales  Engineering, Procurement and Construction (EPC) Contract  Currently negotiating the EPC Contract for Phase 1 (300 MW Project)  Will also include an option for a second 300 MW unit; for construction

  27. Slide 27: Redondo Peninsula Energy, Inc. (RP Energy)

    Redondo Peninsula Energy, Inc. (RP Energy)  Interconnection  The Energy Regulatory Commission approved the transmission line interconnection for the project (from the RPE Site to Hermosa Substation) in May 2015.  Rights-of-way for the transmission line for Phase 1 (from RPE Site to Hanjin) has be

  28. Slide 28: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600MW Supercritical Coal-Fired Power Plant in Atimonan, Quezon  Power Supply Agreement (PSA)  The electricity generated by the project is covered under a Power Supply Agreement between A1E and Meralco, signed in April 2016. The PSA in undergoing review and approva

  29. Slide 29: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600MW Supercritical Coal-Fired Power Plant in Atimonan, Quezon  Engineering, Procurement and Construction (EPC)  Bids were received from four potential EPC Contractors in late 2015. These are currently under assessment.  Awarding of EPC contract targeted by the f

  30. Slide 30: Other Investments

    Other Investments PROJECTS UNDER DEVELOPMENT ST. RAPHAEL POWER GENERATION CORPORATION (SRPGC)  MGen and Semirara Mining and Power Corp. entered a Joint Venture Agreement to develop the 2x350 MW SRPGC coal plant in Calaca, Batangas.  A Power Supply Agreement was signed by SRPGC and Meralco in April

  31. Slide 31: Other Investments

    Other Investments PROJECTS IN OPERATION 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). PACIFICLIGHT POWER PTE LTD (PLP)  PLP has been operat

  32. Slide 32: Slide 32

  33. Slide 33: Consolidated Revenues

    Consolidated Revenues (in PhP Million) 134,008 128,804 3,719 4,035 Electricity Revenues = 130,289 Electricity Revenues = 124,769 102,252 96,578 28,037 28,191 1H 2015 1H 2016 Distribution Revenues Generation & Other Pass-through Charges Non-Electricity Revenues

  34. Slide 34: Costs and Expenses/Capital Expenditures

    Costs and Expenses/Capital Expenditures (in PhP Million) 3,466 3,605 12,330 3% 3% Costs and Expenses 11% 95,438 83% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 5,270 Capital Expenditures 1H 2015 4,512 14.4% 1H 2016

  35. Slide 35: Consolidated EBITDA and Net Income

    Consolidated EBITDA and Net Income (in PhP Million) 19,630 19,693 17,951 18,044 11,640 11,747 10,388 10,768 14.6% 13.9% 14.7% 14.0%  Margins  8.7% 8.1% 8.8% 8.4% Core EBITDA Reported EBITDA Core Net Income Reported Net Income 1H 2015 1H 2016

  36. Slide 36: Credit and Debt Profile

    Credit and Debt Profile TOTAL DEBT (in PhP Million) 40,046 (in PhP Million except 1H 2015 1H 2016 29,962 ratios) 26,998 Cash 53,636 40,999 27,381 13,048 Gross Debt 29,962 40,046 2,581 1H 2015 1H 2016 Net Debt (23,674) (953) Current Portion Non-current Portion Interest Expense 602 615 LONG-TERM LOAN

  37. Slide 37: Earnings per Share and Cash Dividends

    Earnings per Share and Cash Dividends REPORTED AND CORE EARNINGS PER SHARE (in PhP) ● Earnings Per Share ● Core Earnings Per Share 10.42 10.33 9.55 9.22 In its meeting today, the Board of Directors approved total cash dividends of P13.480 per share to all shareholders of record as at August 24, 2016

  38. Slide 38: Cautionary Statements

    Cautionary Statements This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on July 25, 2016. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALC

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