Manila Electric Co. · PSE:MER

Manila Electric — 1H 2018 Earnings Presentation

36 slides from Manila Electric's earnings presentation, Jul 30, 2018

  1. Slide 1: Financial and Operating Results

    FINANCIAL AND OPERATING RESULTS =e CRESTS? ee a Ye tbls i

  2. Slide 2: Slide 2

  3. Slide 3: Electricity Revenues 1H 2018 vs 1H 2017

    150,544 141,032 30,663 29,006 Electricity Revenues = 146,903 Electricity Revenues = 137,409 116,240 108,403 3,641 3,623 1H 2018 1H 2017

  4. Slide 4: Costs and Expenses and Capital Expenditures

    3,615 4,673 12,243 3% 3% Costs and Expenses 9% 116,330 85% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 6,601 Capital Expenditures 5,279 1H 2018 1H 2017

  5. Slide 5: EBITDA and Net Income Margins

    17,585 17,215 17,585 17,215 11,973 10,851 10,501 10,118 11.7% 12.2% 11.7% 12.2%  Margins  7.2% 7.2% 8.0% 7.4% Core EBITDA Reported EBITDA Core Net Income Reported Net Income 1H 2018 1H 2017

  6. Slide 6: Total Debt and Repayment Schedule

    TOTAL DEBT (in Million PhP) 39,882 40,259 (in Million PhP, Except Ratios) 1H 2018 1H 2017 24,410 24,727 Cash 50,778 45,726 15,472 15,532 Gross Debt 39,882 40,259 Net Debt (10,896) (5,467) 1H 2018 1H 2017 Current Portion Non-current Portion Gross Debt/EBITDA 1.13 1.17 LONG-TERM DEBT REPAYMENT SCHEDUL

  7. Slide 7: Earnings Per Share and Dividends Declared

    REPORTED AND CORE EARNINGS PER SHARE DIVIDENDS DECLARED (in PhP Per Share) (in PhP Per Share) 10.623 9.317 9.627 8.977 8.925 4.436 5.311 5.311 4.489 Pay-out Ratio  55% 50% Earnings Per Share Core Earnings Per share 2018 2017 1H 2018 1H 2017 Regular Special

  8. Slide 8: Share Price and PSE Index

    650 10,000 600 PSE Index 8,764.01 8,475.29 9,000 550 Share Price 7,843.16 8,171.43 8,558.42 7,979.83 7,819.25 7,497.17 7,701.38 7,311.72 8,000 7,230.57 7,193.68 500 6,952.08 6,840.64 450 7,000 Share Price (PhP Per Share) 5,812.73 400 378.00 6,000 5,889.83 PSE Index 350 320.00 355.60 5,000 338.60 336

  9. Slide 9: Operations Report

    OPERATIONS REPORT Performance ended June 2018

  10. Slide 10: Operating Highlights

    Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 6.5%* 4.8%* 6.1%* 5.4%* 21,665 GWh 6.47 million 7,399 MW 22,942 GWh Ave. Retail S-Factor Rates & GSL** 9.0%* Sustained Service Business P8.83/kWh Improvement Updates *vs. same period, previous year **For GSL, RY2

  11. Slide 11: Details

    Details

  12. Slide 12: Energy Sales: 1H 2018

    Energy Sales: 1H 2018  Up 6.5% vs. 2017 (+1,327 GWh) Share /  for 1H 2018: 6.5% 6.0% RESIDENTIAL 5.7% 11.1% 3.1% 31.0% 2.6% 21,665 6,714 GWh 20,338 COMMERCIAL 19,717 Total sales volume • Increase from new and organic sales 39.2% 17,299 17,753 for Flat Streetlights plus other factors 8,502 GWh

  13. Slide 13: Customer Count: 1H 2018

    Customer Count: 1H 2018  Up 4.8% vs. 2017 (+293,974 customers) Share /  for 1H 2018: 4.8% 4.9% 2.7% RESIDENTIAL 4.5% 6.47 91.9% 4.0% 5,946,816 6.17 customers COMMERCIAL 3.8% 5.91 7.8% Total customer count for Flat Streetlights 506,249 5.68 account for 0.1%, INDUSTRIAL* customers 5.48 in Mn 4,7

  14. Slide 14: Ave. Temperature (°C): 1H 2018

    Ave. Temperature(°C): 1H 2018  Ave. Temp for June 2018/ 1H 2018 lower vs. 2017 30.3 30.5 30.1 29.7 29.3 29.9 29.5 28.7 28.9 28.8 28.4 28.4 28.3 28.8 28.6 27.9 28.5 27.7 27.1 27.6 28.2 28.1 27.2 26.7 27.8 27.6 26.6 27.0 2016 2017 2018 26.2 26.2 Ave Temp (1H) 28.8°C 28.2°C 28.0°C 2016 2017 2018 Jan F

  15. Slide 15: Clark Electric (CEDC): 1H 2018

    Clark Electric (CEDC): 1H 2018 ENERGY SALES, in GWh CUSTOMER COUNT 8.9% 6.5% 2,173 2,173 2,041 2,040 282.2 237.1 257.0 257.0 (w/o (w/o (w/o PSPC) (w/o PSPC) PSPC) 8.4% PSPC) 6.5% 2017 2018 2017 2018 CEDC’s top 5 sales contributors for June 2018 include Advent Energy (Yokohama Tire Phils.), SN Ab

  16. Slide 16: NSI and Peak Demand: 1H 2018

    NSI*: 1H 2018 Peak Demand: 1H 2018  Up 5.4% (+1,181 GWh)  Meralco Peak Demand of 7,399 MW , 6.1% up Meralco YTD, MW: 6,973 MW 5.4% GWh 2017 Peak* 7,399 22,942.2 6,973 21,761.4 6.1% *Jun 14, 2017 2017 2018 2017 2018 (June 14) (May 23) Luzon YTD Peak Demand, MW: 10,054 MW 2017 Peak** 10,876 10,054

  17. Slide 17: Energy Sources and Fuel Mix: 1H 2018

    Energy Sources: 1H 2018 Fuel Mix: 1H 2018 SOURCE 1H 2018 Liquid Fuel, GWh Share 0.2%* Coal PSAs-Total 7,253.4 31.6% 31.1% PSA IPP SEM-Calaca 729.1 3.2% Natural Gas 31.6% 28.1% MPPC-Masinloc 871.2 3.8% 38.2% Multi-fuel TLI-Pagbilao 814.5 3.6% 30.5% WESM SMEC-Sual + CEDC 1,461.3 6.4% 12.1% SPPC-Ilijan

  18. Slide 18: Average Retail Rates: 1H 2018

    Average Retail Rates: 1H 2018 (Reflects Generator Wheeling adjustments)  9.0% higher than 2017 average rates (+73¢/kWh); mainly due to Generation, Taxes, SL and FIT-All charges • Only Distribution Charge remained the same for the period; • Generation Charge is largest component in customer’s bill a

  19. Slide 19: System Loss Performance: June 2018, 12-MMA

    System Loss Performance: June 2018, 12-MMA  12-MMA ending June 2018 at 5.71%, an all-time low  Improved by 6.5% vs. June 2017’s 6.11%  Lower by 1.79% pts. vs. SL cap of 7.50% 8.50% (System Loss Cap, January May 2018) 7.50%* Jul 2016 - Jun 2017 Jul 2017 - Jun 2018 1.79% 6.45 6.20 6.11 6.06 5.91 5.

  20. Slide 20: S-Factor & GSL Performance: 1H 2018 & RY2018

    S-Factor & GSL Performance: 1H 2018 & RY2018 (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

  21. Slide 21: Business Updates & Other Events of Interest

    Details Business Updates & Other Events of Interest

  22. Slide 22: Strengthening the Core Business: CapEx Projects

    Business Updates: Strengthening the Core Business: CapEx Projects (for Enhanced Capacity & Power Quality) Commissioning of New Biñan-ROHM-LIIP 115 kV Line (RY2017 with PA) Completed: June 18, 2018 Stringing works along SLEX Substation works inside NGCP Binan  Project provides an additional outlet f

  23. Slide 23: Business Updates: DPWH Relocation Projects

    Business Updates: DPWH Relocation Projects *2018 target is 1,519 poles which include the 983 poles committed to RDC especially the 4 identified roads /arteries involving 302 poles: 1. Manila South Road 2. Manila Batangas Road 3. Daang Maharlika-Lucena Road, and 4. Sta Rosa-Tagaytay Ulat Road

  24. Slide 24: Business Updates: PPP and Govt. Relocation Projects

    Business Updates: PPP and Govt. Relocation Projects (Build, Build, Build Program ) 2018 Count of Count of as of May as of June PROJECTS Completed Projects Projects Affected Completed % Comp. Affected Completed % Comp. PPP PROJECT 1 LRT2 East Extension 9 5 140 123 88% 140 123 88% 2 Skyway Stage 3 125

  25. Slide 25: Business Updates: DOTr Priority Railway Projects

    Business Updates: DOTr Priority Railway Projects Initial Total Relocation Estimate: PhP 14.155 Bn • PhP 9.916 Bn (Charged to DOTR) • PhP 4.239 Bn (Charged to Meralco as Proj. Cost, subject to ERC approval)

  26. Slide 26: Sitio Electrification Program with the DOE

    Business Updates: Sitio Electrification Program with the DOE

  27. Slide 27: Significant Events / Customer Initiatives & Programs

    Business Updates: Significant Events/ Customer Initiatives & Programs RATES INFO CAMPAIGN RATES: : decrease of P0.13* due to decrease in generation charge. FiT-ALL increased by PHP0.07. Good News Tip (TV and Radio): Use an LED bulb instead of an incandescent bulb. A 9-watt LED is as bright as a 60-

  28. Slide 28: Significant Events / Customer Initiatives & Programs

    Business Updates: Significant Events/ Customer Initiatives & Programs 28 As of June 2018, we activated 95,731 PRES customers PRES customer AkPU for Jun is 165kWh. This is 6.5% higher than same month last year 165 155 154 145 143 147 139 136 138 133 129 124 127 140 136 136 136 136 132 134 135 130 135

  29. Slide 29: Significant Events / Customer Initiatives & Programs

    Business Updates: Significant Events/ Customer Initiatives & Programs ATTENDEES Robinson’s Retail, Mini Stop, Mercury Drug COMPANIES 7 Jun, TSB Monolith Corp., EEI Constn. and CM Pancho Corp. BIZ FORUM Greenmist Property ATTENDEES 21 Jun AM, Power Lab 20 Jun, Marco Polo Hotel Development Corp Megawi

  30. Slide 30: Significant Events / Customer Initiatives & Programs

    Business Updates: Significant Events/ Customer Initiatives & Programs Utilities and Leisure & ENERGIZING PARTNERSHIP Entertainment industries PROGRAMS (EPP) with LGUs 9 May, Lopez Mini Theater ATTENDEES Sheila Valderrama of Marby Food Ventures TOTAL and Gerry Santos of Mr. Freeze Globe, PLDT, Smart

  31. Slide 31: 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 30 July 2018

  32. Slide 32: San Buenaventura Power Limited Co. (SBPL)

    San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon  Philippines’ 1st supercritical coal-fired power project  31st month of construction; COD: Q3 2019  89.83% EPC Overall Work Progress as of June 2018 SWFGD Aeration Pond, Electrical Control

  33. Slide 33: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600 MW (Net) Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon  Committed Project with DOE, with application for Energy Project of National Significance lodged on April 27, 2018  Registered as Preferred Pioneer Enterprise by the Board of Investments a

  34. Slide 34: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600 MW (Net) Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon  MGen established a Joint Venture with the Electricity Supply Board of Ireland (ESBI), a leading third party service provider in O&M services worldwide.  This will allow for a transfer of

  35. Slide 35: Redondo Peninsula Energy, Inc.

    Redondo Peninsula Energy, Inc. 2x300 MW (Net) CFB coal-fired power plant in Subic, Zambales  Still awaiting approval of the PSA with Meralco for the 225-MW capacity of the plant. Application for ERC approval filed on April 29, 2016 but remains unresolved up to the present. The unresolved PSA applic

  36. Slide 36: Disclaimer

    This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on July 30, 2018. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same materials

Manila Electric Company (Meralco) — 1H 2018 Earnings Presentation on 6ix