Manila Electric Co. · PSE:MER
Manila Electric — FY2015 Earnings Presentation
54 slides from Manila Electric's earnings presentation, Feb 26, 2016
Slide 1: Financial and Operating Results
Financial and Operating Results I n v e s t o r s a n d A n a l y s t s B r i e f i ng Year Ended December 31, 2015 February 26, 2016
Slide 2: Media & Investors' Briefing
One Meralco’s Assistance to Mindoro and Sorsogon Provinces after “Nona” Performance ended December, 2015 MEDIA & INVESTORS’ BRIEFING February 26, 2016
Slide 3: 2015 Highlights
2015 Highlights 5.6% 3.8% Growing Energy Sales Expanding Customer Base 2.9% 5.8% Rising Peak Demand Higher Net System Input 18.1% 74.2% IPPs/PSAs Meralco 5.0% WESM Ave. Customer Bill NSI Sources 41.7% Gas “OUTPERFORMS” 37.9%+ Coal Operational Excellence & NSI Fuel Mix Customer Service 4Q HIGHLIG
Slide 4: Meralco Safety Scoreboard
MERALCO MERALCO SAFETY SCOREBOARD | P. have operated for 5 7 O days \ icot time gqgident as of
Slide 5: Energy Sales and Customer Count: 2015FY
Energy Sales: 2015FY Customer Count: 2015FY Exceptional Sales growth, up 5.6% vs. 2014 (+1,964 GWh) Up 3.8% vs. 2014 (+209,343 new customers) 3.8% 3.9% 5.6% 37,124 5.78 5.57 5.37 3.2% 35,160 34,084 in GWh in million customers 2013 2014 2015 2013 2014 2015 Share / for 2015: Share / for 20
Slide 6: Record Energy Sales in 2015
Record Energy Sales in 2015 WARMER EARLY -ENERGIZATION- ROBUST & RELIABLE TEMPERATURE; -PROCESSING- SUBTRANSMISSION – “EL NIÑO” -DESIGN- DISTRIBUTION SYSTEM -FACILITATION- STABLE POWER SUPPY 2015 EARLY -PROSPECTING- INCREASING -PLANNING- POSITIVE CUSTOMER ECONOMIC 37,124 GWh COUNT CONDITIONS 5.6% A
Slide 7: Rising Peak Demand: 2015FY
Rising Peak Demand: 2015FY Meralco Peak Demand up 2.9% vs. 2014 MERALCO PEAK, in MW LUZON PEAK, in MW 2.9% 2.4% 6,298 6,121 8,928 8,717 5,928 8,305 *August 18, 2015 **May 21, 2015 2013 2014 2015 2013 2014 2015
Slide 8: Clark Electric (CEDC): 2015FY
Clark Electric (CEDC): 2015FY Strong growth in Energy Sales and NSI vs. 2014 ENERGY SALES, GWh CUSTOMER COUNT 508.9 1,914 1,819 1,858 436.7 379.5 3.0% 16.5% 2.1% 15.1% 2013 2014 2015 2013 2014 2015 NSI, GWh 584.8 464.0 2015 Sales, Share Count, Share 402.0 26.0% Commercial 37.3% 55.7% 15.4% I
Slide 9: Power Sources: 2015FY
Power Sources: 2015FY Details Contracted Supply (PSAs and IPPs) delivered more energy totaling 29,497 GWh, or 2.4% increase, in spite of increase in power plant outages 37,578 5.8% 39,739 GWh 100.0% 100.0% 7,526 19.0% 18.5% 6,945 RES Spe. Con.*** 730 1.8% 1.9% 725 2.9% 1,092 WESM** 1,986 5.0% 34.
Slide 10: Power Fuel Mix: 2015FY
Power Fuel Mix: 2015FY 41.7% of NSI, sourced from Nat. Gas-fired plants, 37.9% from Coal-fired and 20.7% from hydro, geothermal as well as coal 5.8% 39,739 GWh 100.0% 100.0% 37,578 5,380 8,106 20.4% 14.3% Multi-fuel* 38.9% 14,618 COAL 15,051 37.9% NATURAL 46.8% 17,579 16,583 41.7% GAS 2014 2015 *
Slide 11: Average Retail Rate: 2015FY
Average Retail Rate: 2015FY 12.3% lower than 2014 average rates (-P1.16/kWh); all bill components, except FIT-All, reduced charges For 2015, Generation Charge, largest component in customer’s bill, 54.3%; Meralco 18.1%; NGCP 12.2% P9.42/kWh 12.3% P8.26/kWh 100.0% 11.8% 1.11 100.0% Taxes, Univ C
Slide 12: System Loss Performance: 2015FY
System Loss Performance: 2015FY 12-MMA Dec 2015 at ALL-TIME BEST of 6.47% Improved by 0.02%pts vs. 2014’s 6.49% Customer savings of P4.5Bn or 12¢/kWh in 2015 10.10 9.5% 9.65 9.28 8.5% System Loss Cap 8.61 2008-2015: SAVINGS TO CUSTOMER 7.94 EQUIVALENT TO P22.1 Bn or 9¢/ kWh 7.35 7.04 6.92 6.49
Slide 13: S-Factor Performance: 2015FY
S-Factor Performance: 2015FY All indicators well within REWARDS* range SAIFI, Forced & PAI CAIDI, Forced & PAI SAIDI, PAI Prob. of Voltage (Times) (Minutes) (Minutes) Violations (% not 6.52 93.81 falling w/in limits) 141.27 0.50 94.09 92.87 59.65 58.47 2.66 2.43 2015 vs. 2010: - (improvement) - -
Slide 14: RY2016 GSL Performance: July – December 2015
RY2016 GSL Performance: July – December 2015 All GSL performances are WELL WITHIN set limits REGULATORY GSL STANDARDS Jul – Dec 2014 Jul – Dec 2015 REMARKS INDICATORS No. of Violations per Year (3RP / RY 2015)* (3RP / RY 2016)* (Reward Ceiling) GSL 1 373,658 customers 605 100 OUTPERFORMS GSL 2 18,
Slide 15: Customer Satisfaction Index: 2015FY
Customer Satisfaction Index: 2015FY 8.18 OPERATING 8.5% PERFORMANCE & CUSTOMER 7.79 ENGAGEMENTS CUSTOMER 7.65 SERVICE 7.60 7.54 7.33 TOUCHPOINTS CUSTOMER PROGRAMS 2010 2011 2012 2013 2014 2015 PRODUCTS & SERVICES PARENT
Slide 16: Record Productivity: 2015FY
Record Productivity: 2015FY No. of Employees* 6,203 6.47 6,071 7.5% 5,960 5,898 6.02 5.45 5,766 1.8% 5.71 5,660 4.99 4.83 SPER (Sales per Employee, GWh/Count) CPER (Customer per Employee) 1022 828 870 910 967 5.7% 781 *Includes seconded employees 2010 2011 2012 2013 2014 2015 PARENT
Slide 17: 2015 Business Updates & Other Events of Interest
2015 Business Updates & Other Events of Interest
Slide 18: Completed Major Electric Capital Projects 4Q 2015
Completed Major Electric Capital Projects 4Q 2015 Uprating of LIIP-Balibago 115 kV Line in Sta. Rosa, Uprating of Dasmariñas-FCIE 115 kV Line Laguna Completed Dec. 11, 2015 Completed Dec. 27, 2015 LIIP- Laguna International Industrial Park) Installation of 34.5 kV Metalclad Switchgear at LIIP Replac
Slide 19: Completed Major Electric Capital Projects 4Q 2015
Completed Major Electric Capital Projects 4Q 2015 P1.2Bn PAGCOR-1 Substation Inaugurated Eagle Cement 69 kV Line 2 Interconnection Project Completed Nov. 11, 2015 Commissioned on November 10, 2015 New Substation Metering 2 Technologically-advanced power infrastructure in the country – largest integ
Slide 20: Meralco's Brand of 'Malasakit' & 'Makabayan'
Meralco’s Brand of ‘Malasakit’ & ‘Makabayan’ MINDORO & SORSOGON Electric Distribution System Repairs & Recovery – Typhoon “Nona” December 18-31, 2015 20,000 145 MEN MANHOURS 37 VEHICLES VITAL INSTALLATIONS REENERGIZED DISASTER RELIEF
Slide 21: Customer Programs & Engagements Highlights 4Q 2015
Customer Programs & Engagements Highlights 4Q 2015 PRODUCTS, SERVICES AND PROGRAMS PARTNERSHIPS, ENGAGEMENTS SOLUTIONS AND TOUCHPOINTS PRES Kuryente Load Meralco Advisory Energizing Partnerships PowerLab Orange Tag AMC Luminaries Power Club Facebook & Twitter Power & Bright Ideas Automated Service A
Slide 22: Core Business Recognition 4Q 2015
Core Business Recognition 4Q 2015 Meralco named Finalist in Platts Global Energy Awards Meralco in top 50 ASEAN Publicly-Listed Companies CRS Head & SVP AS Panlilio represented Meralco in NY ASEAN Corporate Governance Conference and Awards ceremony at Manila Polo Club Meralco named Finalist in two
Slide 23: Core Business Recognition 4Q 2015
Core Business Recognition 4Q 2015 Meralco Orange Fit Wellness Program Fostering a healthier, happier workplace Company’s investment and dedication in enhancing its employees’ quality of life. • Was also recognized by People Management Association of the Phils. (PMAP) as its People Program of the
Slide 24: Meralco's Brand of 'Malasakit' & 'Makabayan'
Meralco’s Brand of ‘Malasakit’ & ‘Makabayan’
Slide 25: Meralco's Brand of 'Malasakit' & 'Makabayan'
Meralco’s Brand of ‘Malasakit’ & ‘Makabayan’
Slide 26: Investors' Briefing
INVESTORS’ BRIEFING February 26, 2016
Slide 27: Outline of the updates
Outline of the updates • Implementation of Performance-Based Regulation (PBR) • ERC confirmation of prior period pass-through charges • Price and Offer Caps in the Wholesale Electricity Spot Market (WESM) • Feed-In Tariff (FIT) Allowance implementation • Interruptible Load Program (ILP) Regulations
Slide 28: Provisional Approval of Interim Average Rate
Provisional-approval of Interim Average Rate (Distribution, Supply, Metering) Average of 3RP 1.5822 Smoothed MAPs Less: 2RP under- (0.1883) recovery Less: Efficiency RY 2015 MAP (0.0129) 1.5562 Carry-over* Interim Average Interim Average 1.3810 1.3810 Rate Rate * Additional reduction made by the Rat
Slide 29: ERC Confirmation of Prior Period Pass-through Charges
ERC Confirmation of Prior Period Pass-through Charges • Last June 1, 2015 ERC resolved the following: • Case No. 2010-135 RC –Recovery of the refunded GRAM 2 amount from January 2007 to September 2010 • Case No. 2011-010 CF – Recovery of net under-recoveries in pass- through charges from June 2003 t
Slide 30: Primary Offer Cap and Secondary Price Cap in WESM
Primary Offer Cap and Secondary Price Cap in the Wholesale Electricity Spot Market (WESM) • Dec. 15, 2014 - ERC promulgated Resolution No. 20, Series of 2014, imposing a secondary price cap of Php6,245/MWh • Dec. 17, 2015 - WESM Tripartite Committee issued Joint Resolution No. 3, Series of 2015 enti
Slide 31: Feed-in-Tariff (FIT) Allowance implementation
Feed-in-Tariff (FIT) Allowance implementation FIT-Allowance is a uniform charge in peso per kWh (Php/kWh) billed to all on-grid electricity consumers nationwide. The FIT-All charge forms part of a Fund which will be used to pay the FIT-eligible developers of Renewable Energy-based power plants. Date
Slide 32: Interruptible Load Program (ILP)
Interruptible Load Program (ILP) Under the ILP, a customer may voluntarily reduce its load requirement from the grid usually by shifting its requirement to its generator set. Date Event Feb. 18 and Meralco conducted ILP Dry Run Exercises in preparation for the summer Mar. 6, 2015 season, as directed
Slide 33: Updates as of February 2016
Updates as of 26 February 2016
Slide 34: San Buenaventura Power Limited Co. (SBPL) 455-MW Coal Plant
San Buenaventura Power Limited Co. (SBPL) 455-MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon Power Supply Agreement with Meralco SBPL accepted on 30 May 2015 the Energy Regulatory Commission approval for the Power Sales Agreement (“PSA”) between Meralco and SBPL. Financing T
Slide 35: SBPL: Construction
San Buenaventura Power Limited (SBPL) 455-MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezo Construction The consortium of South Korea’s Daelim Industrial Co. Ltd. And Japan’s Mitsubishi Corporation was tapped as the engineering, procurement and construction contractor (“EPC”) for t
Slide 36: SBPL: Recognition
San Buenaventura Power Limited (SBPL) 455-MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon Recognition The Company on 03 February 2016 was awarded the “Asia Pacific Power Deal of the Year” by Thomson Reuters Project Finance International. SBPL was recognized after it closed a la
Slide 37: Redondo Peninsula Energy (RP Energy) 2x300-MW Coal Plant
Redondo Peninsula Energy, Inc. (RP Energy) 2x300-MW CFB Coal-Fired Power Plant in Subic, Zambales Environmental Case RP Energy received the Supreme Court’s decision dated 03 February 2015, denying the Writ of Kalikasan case filed against its planned power project. The high court upheld the val
Slide 38: RP Energy: Off-takers and Construction
Redondo Peninsula Energy, Inc. (RP Energy) 2x300-MW CFB Coal-Fired Power Plant in Subic, Zambales Off-takers RP Energy will negotiate a PSA with Subic Enerzone and Meralco for the sale of electricity generated from the power station. The Company will also study the possibility of supplying ele
Slide 39: Atimonan One Energy (A1E) 2x600-MW Coal Plant
Atimonan One Energy, Inc. (A1E) 2 x 600-MW Supercritical Coal-Fired Power Plant in Atimonan, Quezon Permits The Certificate of Non-Overlap in favor of A1E was secured from the National Commission on Indigenous People (“NCIP”) on 26 May 2015 The Environmental Compliance Certificate (“ECC”) was
Slide 40: Global Business Power Corporation (GBPC)
Global Business Power Corporation (GBPC) MGen holds a 22% equity interest in GBPC, the largest independent power producer in the Visayas. GBPC owns a power generation portfolio totaling 854 MW. 702 MW coal plants in the Visayas (552 MW in operations and 150 MW under construction) 144.5 MW di
Slide 41: PacificLight Power Pte. Ltd. (PLP)
PacificLight Power Pte. Ltd. (PLP) 2x400MW LNG Combined Cycle Facility in Jurong Island, Singapore PLP has been operating the 800MW natural gas facility since February 2014. Through PacificLight Energy Ptd Ltd (PLE), the Compant supplies electricity to industrial and retail customers in Singapor
Slide 42: PacificLight Power: Hybrid Energy Solution
PacificLight Power Pte. Ltd. (PLP) 2x400MW LNG Combined Cycle Facility in Jurong Island, Singapore PLE is the first Singapore power retailer to introduce a hybrid energy solution in partnership with global solar solutions provider, Renewable Energy Corporation (REC). Known as the “PLEdge to RECh
Slide 43: Financial Highlights FY 2015
Mi, MERALCO Financial Hichlights FY 2015
Slide 44: Consolidated Revenues
Consolidated Revenues (in Million PhP) 266,336 258,399 4,596 8,626 Electricity Revenues = 261,740 Electricity Revenues = 249,773 205,367 194,710 56,373 55,063 2014 2015 Distribution Revenues Generation & Other Pass-through Charges Non-Electricity Revenues
Slide 45: Consolidated EBITDA and Net Income
Consolidated EBITDA and Net Income (in Million PhP) 33,120 32,927 30,926 31,124 18,887 19,098 18,128 18,053 7% 5% 4% 6% 12.4% 12.0% 12.4% 12.0% Margins 6.8% 7.3% 6.8% 7.4% Core EBITDA Reported EBITDA Core Net Income Reported Net Income 2014 2015
Slide 46: Meralco Subsidiaries
Meralco Subsidiaries MER Company Description Stake A DU in the Clark Economic Zone, a 320 km2 airport-driven urban Clark Electric Distribution 65% center and location of high-end IT-enabled industries aviation and Power Corporation logistics enterprises, tourism and other sectors. Meralco PowerGen 1
Slide 47: Subsidiaries Contribution
Subsidiaries Contribution (in Million PhP) Others, 59, MIESCOR, 6% MSERV, 232, 1,008 130, 13% 23% 690 CEDC, 173, 17% CIS, 215, 21% Radius, 201, 20% 2014 2015
Slide 48: Costs and Expenses / Capital Expenditures
Costs and Expenses/Capital Expenditures (P mn) 6,910 11,628 3% 5% 24,336 10% Costs and Expenses 192,117 82% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses Capital Expenditures 2015 11,303 10% 2014 12,582
Slide 49: Other Significant Transactions
Other Significant Transactions Indra Philippines Inc. • Meralco sold its 84,012 common shares of stock in Indra Philippines Inc. to Metro Pacific Investments Corp. for P326.5 mn. • The sale represents 24.95% of the outstanding capital stock of Indra and reduced Meralco’s stake to 24.95%. Pampanga II
Slide 50: Credit and Debt Profile
Credit and Debt Profile GROSS DEBT (in Million PhP) 30,042 30,308 (in Million PhP except ratios) 2014 2015 Cash 69,469 50,840 27,743 27,370 Gross Debt 30,042 30,308 2,299 2,938 2014 2015 Net Debt (39,427) (20,532) Current Portion Non-current Portion Gross Debt/EBITDA 0.91 0.97 LT LOAN REPAYMENT SCHE
Slide 51: Earnings per Share and Cash Dividends
Earnings per Share and Cash Dividends REPORTED AND CORE EARNINGS PER SHARE (in P) 16.02 16.08 16.94 16.76 15.19 14.43 15.27 15.10 13.21 10.78 11.76 8.59 2010 2011 2012 2013 2014 2015 Earnings Per Share Core Earnings Per Share DIVIDENDS DECLARED OUT OF CORE EARNINGS FOR THE YEAR (in Peso per share) A
Slide 52: Dividend Yield
Dividend Yield 18.00 Year-End Stock Price Dividends Declared During The year 320.0 16.00 15.25 14.00 260.6 256.0 247.2 251.0 228.0 12.00 12.36 10.00 10.20 8.00 8.10 7.80 6.00 6.95 4.00 2.00 - 2010 2011 2012 2013 2014 2015 DIVIDEND 3% 3% 3% 4% 5% 5% YIELD
Slide 53: Cautionary Statements
Cautionary Statements This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on February 26, 2016. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (ME
Slide 54: Investors and Analysts Briefing
One Meralco’s Assistance to Mindoro and Sorsogon Provinces after “Nona” Investors and Analysts Briefing February 26, 2016
Manila Electric Company (Meralco) — FY2015 Earnings Presentation on 6ix