Manila Electric Co. · PSE:MER
Manila Electric — 9M 2023 Earnings Presentation
39 slides from Manila Electric's earnings presentation, Nov 6, 2023
Slide 1: Nine Months Ended September 30, 2023 Financial and Operating Results
(2) MERALCO NINE MONTHS ENDED SEPTEMBER 30, 2023 FINANCIAL AND OPERATING RESULTS Investors and Analysts Briefing November 6, 2023 -O- Sosa ade Me mcent Oise
Slide 2: Financial Results
(Z) MERALCO NINE MONTHS ENDED SEPTEMBER 30, 2023 FINANCIAL RESULTS Bona Walle Ma, cumen
Slide 3: 9M 2023 One Meralco Performance Highlights
9M 2023 One Meralco Performance Highlights Total energy volume handled by One Meralco at 48,308 GWh, 7% higher vs. 2022 53% increase in September 2023 YTD CCNI of One Meralco: * Higher DU CCNI contribution with 4% increase in energy sales, driven by strong Q3 growth in Residential and Commercial vol
Slide 4: 9M 2023 Consolidated Core Net Income (CCNI)
9M 2023 Consolidated Core Net Income (CCNI) amounts in million PhP Power Generation, which accounts for a substantial share of the unregulated business contributed 34% to the CCNI complementing the increase in Distribution Utility income CCNI Breakdown - 9M 2023 vs 9M 2022 30,023 Unregulated busines
Slide 5: 9M 2023 vs 9M 2022 Financial Summary
9M 2023 vs 9M 2022 Financial SUMMALy amounts in mittion PHP Net Income & EBITDA Revenues Expenses Capital Expenditures 30,023 335,231 307,519 21,105 453% vs 19,605 in 2022 46% vs 314,884 in 2022 43% vs 297,296 in 2022 43% vs 20,397 in 2022 123,399 1058 1 248,814 Cash and Borrowings 50,804 253,769 26
Slide 6: 9M 2023 Revenues
9M 2023 Revenues Amounts in Million PhP Gross Revenues Generation, Transmission and others Distribution 51,558 44,338 Energy 20,435 Fee 20,646 . 9,469 Non-electric 8,869 6% increase in gross revenues as contributions 335,231 from the DU increased mainly due to higher volumes, pass-through charges an
Slide 7: 9M 2023 Costs and Expenses
9M 2023 Costs and Expenses amountsin Million PhP Total Costs 307,519 3% increase with higher cost of power and Expenses ’ under the approved Emergency Power 297,296 Supply Agreements (EPSAs) and OPEX xs Purchased 248,814 5% increase with higher replacement power costs due 4VLL Power Costs to the ter
Slide 8: 9M 2023 Capital Expenditures
9M 2023 Capital Expenditures amounts in million PhP Consolidated CAPEX driven by DU CAPEX focused on new connections, asset renewals and load growth, while subsidiaries CAPEX was driven by tower facilities build-out and acquisition. Major network projects completed during the period include the deve
Slide 9: 9M 2023 Net Income
9M 2023 Net Income Amounts in Million PhP Net income driven by DU volume growth of 4% and continuing positive contributions from power generation and retail electricity supply entities. 9M2023 CCNI already 11% higher than FY 2022 CCNI on Yor a a Growth 53% 44% 28,431 27,105 a4 7,500 66% 8,673 50% 85
Slide 10: 9M 2023 EBITDA
9M 2023 EBITDA Amounts in Million PhP 9M2023 Core and Reported EBITDA grew 36% and 32% respectively. Core and Reported EBITDA levels on-track to surpass FY2022 aM Yor a a Growth 36% 32% 51,268 52,002 48,264 37% 31% 16,860 17,022 439% 436% a2 a 12,170 Aces 11,862 awe 2022 2023 2022 2023 Core EBIDTA R
Slide 11: 9M 2023 Power Generation Results of Operations
9M 2023 Power Generation Results of Operations MGen contribution to Meralco CCNI grew to Php 10.2B on account of continued strong performance of PacificLight and San Buenaventura, positive contribution from GBP and MGreen Core Net income Meralco Stake Net Capacity and Location Highlights of Operatio
Slide 12: Cash & Cash Equivalents, Short-term Investments, Gross Debt
Change vs. Sep-23 Sep-22 Dec-22 Sep-22 Dec-22 Cash & Cash Equivalents 73,045 39,618 55,832 84% 31% Short-term Investments 7,194 22,784 17,997 -68% -60% Gross Debt 102,075 90,239 103,833 13% -2% Net Debt 21,836 27,837 30,004 -22% -27% Gross Debt to EBITDA 1.59 1.85 2.00 -14% -21% Net Debt to EBITDA
Slide 13: 9M 2023 Core and Reported Earnings per Share
13 9M 2023 Core and Reported Earnings inpne per share Core and Reported EPS at PhP 26.638 and PhP 25.197 per Share, respectively. 53% 4% 26.638 17.394 17.530 9M 2022 9M 2023 9M 2022 Core EPS Reported EPS 25.197 9M 2023
Slide 14: S&P Credit Rating
14 S&P Credit Rating S&P revised Outlook to POSITIVE on stable cash flows and strong financials and reaffirmed ‘BBB-’ rating BBB- Positive BB+ BB Stable Positive B+ B+ Stable Stable Stable Bt B Positive B B- Negative Stable cc Aug Oct Nov Mar May Jul Feb Dec Oct Nov Nov Jun May May Jun May Oct Oct 1
Slide 15: Operating Results
(2) MERALCO NINE MONTHS ENDED SEPTEMBER 30, 2023 OPERATING RESULTS Media Briefing November 6, 2023 -O- Bocaal ae Mr, coment OMe
Slide 16: 9M 2023 Operational Highlights
16 9M 2023 Operational Highlights Business Drivers Energy Sales 38,164 GWh 4% vs 36,553 in YTD 2022 Customer Count 7.771 Million 43% vs 7.572 in 2022 Net System Input 39,958 GWh 44% vs 38,492 in YTD 2022 Meralco Peak Demand 8.44 GW May 9, 2023 44% vs 8.11 in YTD 2022 Service Performance 5.81% 'Y0.07
Slide 17: Energy Sales
yy Sales incwn Grew 4.4% vs. 2022 driven by sustained growth in Commercial and Residential segments, and boosted by recovery of Industrial in Q3 36,553 38,164 35,005 34,298 32,539 2019 2020 2021 2022 2023 Residential ™ Commercial Industrial Parent is 99% | CEDC is 0.1% | Flat Streetlights account fo
Slide 18: ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ▪ ▪
◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ▪ ▪ ▪ o o o o o o o o o o ▪ o o 18
Slide 19: 9M 2023 Consolidated Customer Count
9M 2023 Consolidated Customer Count OSA YTD performance declined as energization normalized following the pandemic catch-up while PCA performance remained stable Project-Covered Applications (PCA) ™2023 = 2022 ™ 2019 base = 470 YTD: 6,849 0.9% vs 2022 Pipeline: 9,158 202 a76 787 768 399 4g 801 780 7
Slide 20: 9M 2023 Consolidated NSI
9M 2023 Consolidated NSI incwn Growth in NSI due to increased economic activity 39,958 38,492 a 4% 36,853 36,150 34,533 2019 2020 2021 2022 2023 m@ IPP/Old PSA mRES ™ New PSA m= WESM ™ Special Contracts @ Multi-Fuel ™ Coal ™ Natural Gas ™ Solar © Liquid Fuel 35% 30% 21% 13% 1% 39% 32% 26% 1% 2%
Slide 21: 9M 2023 Peak Demand
21 9M 2023 Peak Demand incw Meralco and Luzon Peak Demands grew vs. 2022 also driven by increased economic activity Meralco Peak Demand Luzon Peak Demand May 13, 2022 May 9, 2023 May 12, 2022 July 6, 2023
Slide 22: 9M 2023 System Loss in Percent
22 9M 2023 System Loss in Percent Lower September 2023 12-MMA system loss partly due to this month’s larger consumption ramp-down versus previous year 12-MMA System Loss Performance 2022-2023 m 2021-2022 6.5% Regulatory Cap 6.07 6.02 5.62 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 23: 9M 2023 S-Factor Performance and Guaranteed Service Level
23 9M 2023 S-Factor Performance and Guaranteed Service Level Total SAIFI and SAIDI performance improved while there was a slight decline for Total MAIFI due to transient faults and equipment failure. Total SAIFI Total SAIDI Total MAIFI Times | Rewards <1.43 Minutes | Rewards < 157.04 Times | Rewards
Slide 24: 9M 2023 Networks CAPEX
9M 2023 Networks CAPEX insition phe 70% of CAPEX budget was implemented with around 94% spent on new connections, asset renewals, and load growth, while continuing to execute pole relocation works to support various government infrastructure projects 20.28 CAPEX Budget Pole Relocation 975 Build Bett
Slide 25: Project Updates
M 2023 < Project Updates Development of Pulong Sta. Cruz 115 kV Switching Station = Energized on September 24, 2023 = CAPEX Filing: RY2023 = Filed Cost: PhP 139.03 Million = Involves the installation of three-phase 115 kV gas circuit breakers, 115 kV disconnect switches, potential transformers, and
Slide 26: 9M 2023 Average Retail Rate
9M 2023 Average Retail Rate inphe perkwh 12% higher vs. September 2022 rate mainly due to higher generation charge 10.51 Generation = 14.3% increase in Generation: Higher fuel costs, higher 7.04 (67%) WESM prices and offtake, and Peso depreciation. 7 Average Rate 18.6% decrease in Transmission: Lowe
Slide 27: Terra Solar Philippines, Inc. (TSP)
Terra Solar Philippines, Inc. (TSP) 850MW RE mid-merit PSA (COD March 2026) " Aug. 10, 2023: ERC issued a Notice of Resolution (dated Aug. 8, 2023) approving with Final Authority the MERALCO-TSPI PSA, with the following modifications and conditions, among others: Particulars | Base Rate | Indexation
Slide 28: PSAs with Masinloc Power Partners and Excellent Energy Resources
28 PSAs with Masinloc Power Partners, Ltd. (ERC Case No. 2021-018 RC) and Excellent Energy Resources, Inc. (ERC Case No. 2021-021 RC) = October 2020 to February 2021, MERALCO conducted CSP in relation to its 1,800 MW (baseload) requirements, pursuant to its DOE-approved 2020 PSPP. The CSP resulted i
Slide 29: Withdrawal of 5RP Application
29 Withdrawal of 5RP Application = March 16, 2022: MERALCO filed its 5RP Application for approval of its Annual Revenue Requirement (ARR) and Performance Incentive Scheme (PIS) for Regulatory Years (RY) 2023 to 2026 (July 1, 2022 to June 30, 2026). The total ARR for 5RP is PhP320.4 billion and the a
Slide 30: Updates on the 1,800 MW and 1,200 MW CSP
Updates on the 1,800 MW (net) and 1,200 MW (net) COD 2024-2025 CSP 1,800 MW (net) CSP * October 27, 2023: MERALCO received the Certificate of Conformity (COC) for the Procurement of 1,800 MW (net) Baseload power requirements from the DOE. On the same date, MERALCO furnished the ERC a copy of the COC
Slide 31: Meralco won Stevie awards in Sustainability Awards Category
Meralco won Stevie awards in the newly introduced Sustainability Awards Category The Stevie Awards are the world's premier business awards honoring achievements and positive contributions of companies worldwide. Sustainability Leadership Award in Asia, Australia, and New Zealand MERALCO Manila Elect
Slide 32: OMF won four Stevie awards
OMF won four Stevie awards in various Categories The Stevie Awards are the world's premier business awards honoring achievements and positive contributions of companies worldwide. Thought Leader of the Year — Government or Non-Profit Corporate Social Responsibility Program of the Year in Asia, Austr
Slide 33: Chief Sustainability Officer recognized at 2023 Stevie IBAs
Meralco Chief Sustainability Officer recognized at the 2023 Stevie IBAs and the 2023 Sustainable Company Awards by Environmental Finance GOLD 2023 STEVIE* ‘WINNER RAYMOND: AVELO Raymond Ravelo First Vice President and Chief Sustainability Officer “Raymond achieved remarkably in just 3 years of leadi
Slide 34: Power Generation Operating Results
MERALCO MGEN GOO POWER GENERATION GLOBAL BUSINESS POWER NINE MONTHS ENDED SEPTEMBER 30, 2023 POWER GENERATION OPERATING RESULTS November 6, 2023 “0 Bocaalale Ms, sent Oise
Slide 35: 9M 2023 Power Generation Operating Highlights
35 9M 2023 Power Generation Operating Highlights Energy Delivered in GWh Year-to-Date Performance 9M 2023 9M 2022 % Change Goo 4,618 4,205 10% GLOBAL BUSINESS POWER 1,962 2,078 v6% ®@ PacificLight 4,337 4,162 4% yon MGREEN 254 87 4.192% Total 11,171 10,532 A6% The Power Generation Group delivered 11
Slide 36: Low-Carbon Energy Transition Journey
_ow-Carbon Energy Transition Journey MGreen’s 68MWac solar power plant project in Currimao, llocos Norte in partnership with Vena Energy’s Pasuquin Energy Holdings Inc., reached full capacity by mid-February 2023. The project has obtained FCATC and is still awaiting issuance of Provisional Authority
Slide 37: Low-Carbon Energy Transition Journey: MGreen acquires stake in SPNEC
Low-Carbon Energy Transition Journey MGREEN /:,SOLAR MGreen acquires majority stake in SPNEC MGen Renewable Energy, Inc. (MGreen), will invest P15.9 billion in SP New Energy Corporation (SPNEC) through the subscription of 15.7 billion common shares and 19.4 billion redeemable voting preferred SPNEC
Slide 38: 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
Slide 39: Thank You!
THANK YOU! Sosa W indy Mm, cumeat Usher pe ™
Manila Electric Company (Meralco) — 9M 2023 Earnings Presentation on 6ix