Manila Electric Co. · PSE:MER
Manila Electric — H1 2023 Earnings Presentation
37 slides from Manila Electric's earnings presentation, Jul 31, 2023
Slide 1: Half Year Ended June 30, 2023 Financial and Operating Results
(Z) MERALCO HALF YEAR ENDED JUNE 30, 2023 FINANCIAL AND OPERATING RESULTS Investors and Analysts Briefing July 31, 2023 20: = mh > Bocaal ae Mr, amat\ Hse 7
Slide 2: Financial Results
(2) MERALCO HALF YEAR ENDED JUNE 30, 2023 FINANCIAL RESULTS Investors and Analysts Briefing July 31, 2023 20: : > Bocaal ae Mr, awatO Mees, 7
Slide 3: One Meralco Performance Highlights
1H 2023 One Meralco Performance Highlights Total energy volume handled by One Meralco at 31,571 GWh, 6% higher vs. 2022 47% increase in June 2023 YTD CCNI of One Meralco: * Higher DU CCNI contribution with 3% increase in energy sales, driven by growth in Residential and Commercial volumes during the
Slide 4: 1H 2023 Consolidated Core Net Income (CCNI)
1 H 2023 Consolidated Core Net Income (CCNI) Totals in Php, Mn and segment share in percentages Unregulated businesses share in Meralco CCNI more than doubled versus last year driven by growth in power generation. Regulated DU business still comprised majority of CCNI accounting for 57%. 19,205 Unre
Slide 5: Financial summary by segment
p 47% 13,088 p 13% 199,606 p 11% 187,201 q 0.4% 14,178 p 36% 13,121 p 9% 30,693 p 13% 148,412 p 36% 24,400 p 13% 150,435 p 7% 16,887 p 2% 49,999 p 13% 12,613 q 1% 9,939 p 14% 89,044 p 11% 5,865 5
Slide 6: Revenues
1H 2023 REVENUES inphp, mn 224,820 199,606 13% increase in gross revenues due to higher contribution from the DU and Power Generation. 170,566 150,435 13% increase driven by higher fuel prices, use of liquid fuel by First Gas plants with the Malampaya shutdown from February 4 to 18, peso depreciatio
Slide 7: Costs and Expenses
1H 2023 Costs and Expenses inpnp, mn Total Costs and Expenses Purchased Power Costs OPEX Coal and Fuel Power Plant O&M Depreciation & Amortization Others 18,150 16,887 | 9,880 a 9,939 8,205 | 6,969 3,297 | 4,994 187,201 167,450 148,412 206,982 11% increase driven by higher purchased power costs and
Slide 8: Capital Expenditures
1H 2023 Capital Expenditures inphp, mn Consolidated CAPEX primarily 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 project
Slide 9: Net Income and EBITDA
1H 2023 Net Income and EBITDA inehp, mn Net income and EBITDA growth driven by DU volumes growth of 3% and strong contributions from power generation and retail electricity supply entities. 4 36% 32% 31,404 a 4AT% 36% 2 24,400 16,218 19,205 Q2 10,158 15,186 Qi 11,862 2022 2023 2022 2023 2022 2023 20
Slide 10: Power Generation Results of Operations
1H 2023 Power Generation Results of Operations MGen contribution to Meralco CCNI grew 3x to Php 6.6B on account of PacificLight’s strong performance, positive contribution from GBP and MGreen, and San Buenaventura’s continued delivery under a 20-year PSA. @ PacificLight PhP 8.9 Billion 4.59% vs 2022
Slide 11: 1H 2023 Credit and Debt Profile
1 H 2023 Credit and Debt Profile in Php, Mn (Except Ratios) 1H2028 Total Debt and Breakdown Cash & Cash Equivalents 51,012 49,999 2.0% 101,476 49761 Short-term Investments 11,397 17,960 -37% 89,044 Gross Debt 101,476 89,044 14% Net Debt 39,067 21,085 85% 414% 44,685 Gross Debt to EBITDA 1.62 1.87 -1
Slide 12: Core and Reported Earnings and Dividends
1H 2023 Core and Reported Earnings and Dividends inphp per share Php 8.520 Interim cash dividends declared representing 50% of 1H2023 Core EPS Core and Reported Earnings per Share Dividends per Share aAT% 436% 4M 50% 11612 (ae 5.806 1H 2022 1H 2023 1H 2022 1H 2023 1H 2022 Core EPS Reported EPS 50% p
Slide 13: Operating Results
(2) MERALCO HALF YEAR ENDED JUNE 30, 2023 OPERATING RESULTS Investors and Analysts Briefing July 31, 2023 20: : > Bocaal ae Mr, awatO Mees, 7
Slide 14: Operational Highlights
1H 2023 Operational Highlights DISTRIBUTION Business Drivers Service Performance Electricity Rate per kWh Energy Sales Average Retail Rate 24,792 GWh 5.78% PhP 10.68 3.4% vs 23,968 in 2022 Y 0.08 ppt vs 5.86 in 2022 14.4% vs 9.33 in 2022 7.716 Million 0.644 times A 2.6% vs 7.519 in 2022 V 2.4% vs 0.
Slide 15: Consolidated Energy Sales
1H 2023 Consolidated Energy Sales incwn All-time high sales driven by continued increase in Commercial and Residential volumes 24,792 23,968 2019 2020 2021 2022 2023 MResidential ™ Commercial m™ Industrial Parent is 99% | CEDC is 0.1% | Flat Streetlights account for < 1%
Slide 16: p p q
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Slide 17: Consolidated Customer Count
1H 2023 Consolidated Customer Count inmittions Growth in customer base with continuous energization Customer Count per Segment Project-Covered Applications (PCA) YTD: 4,532 ¥ 12% vs 2022 ™ Residential ™ Commercial Industrial ™2023 = 2022 ™ 2019 base = 470 Pipeline: 8,775 _ 7.519 7.716 paid me 73 | i
Slide 18: Consolidated NSI
1H 2023 Consolidated NSI incwn Growth in NSI due to increased social engagements, including in-person attendance at offices, schools, and similar settings 26,007 Gi @ IPP/Old PSA 25,289 24,299 23,868 22,458 Energy plies 428% Sources ™ New PSA > @WESM ™ Special Contracts Coal @ Multi-Fuel pul ™ Natur
Slide 19: Peak Demand
1H 2023 Peak Demand inew Meralco and Luzon Peak Demands grew vs. 2022 also driven by increased economic activity Meralco Peak Demand Luzon Peak Demand 2.6% May 13, 2022 May 9, 2023 May 12, 2022 May 9, 2023
Slide 20: System Loss
1H 2023 System Loss inx Lower June 2023 (0.08% point) vs. 2022 system loss 12-MMA System Loss Performance 2022-2023 ™ 2021-2022 6.5% Regulatory Cap Jul Aug Sep Oct Nov Dec Jan Feb Apr May Jun 20
Slide 21: S-Factor Performance and Guaranteed Service Level
1H 2023 S-Factor Performance and Guaranteed Service Level Continued to deliver well within performance ceilings Total SAIFI Total SAIDI Times | Rewards < 1.43 Minutes | Rewards < 157.04 Network Osco Maen 0.644 ESP 63.429 2022 2023 2022 2023 Average Time to Process Applications Average Time to Connec
Slide 22: Networks CAPEX
1H 2023 Networks CAPEX inzition pnp 47% of CapEx budget utilized with majority of spend in new connections, asset renewals, and load growth while continuing to support government projects 20.28 CAPEX Budget New Connections 662 Asset Renewal 627 Load Growth 4q7 Non-Network i 183 =x 0.200 (275%) BBB/P
Slide 23: Network Project Updates
1H 2023 Network Project Updates Substation Development Projects Development of San Ildefonso 69 kV - 13.8 kV Substation Energized on April 30, 2023 San Ildefonso substation has an initial capacity of 50 MVA It will serve the load growth in the municipalities of San Ildefonso and San Miguel in the pr
Slide 24: 1H 2023 Network Project Updates
IH 2023 Network Project Updates System Expansion and Improvement Projects Conjunctive Project to NGCP’s Zapote 5° 300 MVA PXF Bank Energized on April 18, 2023 * Meralco installed the associated 115 kV facilities conjunctive to NGCP’s installation of the 5th Zapote 300 MVA power transformer bank in L
Slide 25: Average Retail Rate
1H 2023 Average Retail Rate inphe per kwh 14% higher vs. 1H 2022 rate mainly due to higher generation charge 10.68 1H 2023 Generation 9.33 7.28 (68.2%) 1H 2022 Al 4% Transmission 0.74 (6.9%) + 24.7% increase in Generation: Higher fuel costs, peso depreciation, and higher WESM prices and purchases. N
Slide 26: Distribution Rate True Up (DRTU) Refund
Distribution Rate True Up (DRTU) Refund Refunded 102% (PhP49.1B of PhP48.3B) D DRTU 2 DRTU 3 DRTU 4 5 True Up of IAR vs. AWAT from True Up of IAR vs. AWAT from True Up of IAR vs. AWAT from True Up of 3RP RAB via Jul. Nature of Refund Jul. 2015 - Nov. 2020 Dec. 2020 - Deo. 2021 20T—Jun. 2015 rates Ul
Slide 27: PSAs with San Miguel Energy Corp. and South Premier Power Corp.
PSAs with San Miguel Energy Corp. (“SMEC”) (330 MW) and South Premier Power Corp. (“SPPC”) (670 MW) = April 18, 2022: SMEC and SPPC each sent Notices of CIC claiming that the Ukraine-Russia conflict, other geopolitical/ economic factors and NPC gas restrictions (for SPPC) caused adverse impact on th
Slide 28: Court of Appeals' Joint Decision
Court of Appeal’s Joint Decision = July 14, 2023: MERALCO received CA's (13th Division) Joint Decision dated Jun. 27, 2023 (the “Joint Decision’). In the Joint Decision, the CA: o ANNULLED/SET ASIDE the ERC Orders which: (i) denied Price Adjustment Motions and (ii) directed MERALCO to exhaust all op
Slide 29: Termination of PSAs with SPPC and Sual Power Inc.
Termination of PSAs with SPPC & Sual Power Inc. (“SPI”) [formerly, SMEC] = July 17,2023: SPPC and SPI sent Notices of Termination of PSAs to MERALCO o SPPC: Pursuant to the Joint Decision of the CA dated June 27, 2023, which made permanent the writ of preliminary injunction issued to SPPC, SPPC’s po
Slide 30: Emergency Power Supply Agreement (EPSA) for 330 MW
Emergency Power Supply Agreement (“EPSA”) for 330 MW July 17,2023: MERALCO sent Request for Proposal (“RFP”) letters to several power suppliers for the replacement emergency power supply for 330 MW, covering the period from August 26, 2023, to March 25, 2024, subject to ERC provisional approval/inte
Slide 31: June 2023 Sustainability Performance
June 2023 Sustainability Performance Maintained all-time best scores in 2023 MSCI and FTSE ESG ratings = 8,500+ companies rated on general and industry- MSCI SE EE eS ee ies = Rating system: ESG RATINGS CCC or 0 (lowest) > AAA or 10 (highest) BBB BBB a driven by strong performance in “Opportunities
Slide 32: June 2023 Sustainability Performance
June 2023 Sustainability Performance Recognized as ‘in-line’ with Paris Agreement’s 2°C world in newly-launched climate scores of ESG raters MSCI & & Implied Temperature Rise Rating SUSTAINALYTICS Low Carbon Transition Rating an intuitive, forward-looking metric, expressed in degrees Celsius, a fram
Slide 33: Power Generation Operating Results
AMGEN GOO HALF YEAR ENDED JUNE 30, 2023 POWER GENERATION OPERATING RESULTS Investors and Analysts Briefing July 31, 2023 x O nent OMe Bocaalale Ms, 7
Slide 34: Power Generation Operating Highlights
1H 2023 Power Generation Operating Highlights Energy Delivered in GWh Year-to-Date Performance 1H 2023 1H 2022 % Change 3,095 2.716 414.0% canes evens oven 1,244 1,368 v91% ®@ PacificLight 2,893 2,710 44% woe MGREEN 166 63 163.4% Total 7,398 6,917 47.0% Power Generation Group delivered 7,398 GWh for
Slide 35: 1,500 MW Renewable Energy by 2027
1,500 MW Renewable Energy by 2027 MGreen’s 75MWac solar power plant project in Baras, Rizal, in partnership with Mitsui’s local unit Mit-Renewables Philippine Corp., has completed commissioning tests for its 67.5 MWac (Phase 1) of the project and plans to declare COD within Q3 2023. Phase 1 has been
Slide 36: Thank you very much!
Thank you very much! Bona Walle Ma, cumen
Slide 37: 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 discussion about MANILA ELECTRIC COMPANY AND ITS SUBSIDIA comprehensive RIES (Meralco). These materials are restricted to
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