Manila Electric Co. · PSE:MER
Manila Electric — Q1 2019 Earnings Presentation
55 slides from Manila Electric's earnings presentation, Apr 29, 2019
Slide 1: Financial and Operating Results
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Slide 2: Slide 2
Slide 3: Electricity Revenues Q1 2019 vs Q1 2018
75,378 70,807 Distribution revenues 14,273 14,081 Electricity Revenues = 73,632 Electricity Revenues = 69,009 Generation & other pass-through charges 59,359 54,928 Non-electricity revenues 1,798 1,746 Q1 2019 Q1 2018
Slide 4: Costs and Expenses; Capital Expenditures
1,878 1,568 6,331 3% 2% Costs and Expenses 9% 58,743 86% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 4,339 Capital Expenditures 3,034 Subtransmission & Distribution Others Facilities 15% 85% Q1 2019 Q1 2018
Slide 5: Core and Reported EBITDA and Income
11.7% 11.5% 11.7% 11.5% Margins 7.4% 6.9% 7.5% 7.5% 8,828 8,688 8,828 8,688 5,598 5,671 5,312 4,917 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Core EBITDA Reported EBITDA Core Income Reported Income
Slide 6: Core and Reported Earnings Per Share
Core and Reported Earnings Per Share (in PhP) 5.03 4.97 4.71 4.36 Earnings Per Share Core Earnings Per share Q1 2019 Q1 2018
Slide 7: Total Debt and Long-Term Debt Repayment Schedule
TOTAL DEBT (in Million PhP) 39,889 31,356 (in Million PhP, Except Ratios) Q1 2019 Q1 2018 24,434 15,964 Cash & Cash Equivalents 36,057 51,905 15,392 15,455 Gross Debt 31,356 39,889 Net Debt (4,701) (12,016) Q1 2019 Q1 2018 Current Portion Non-current Portion Gross Debt/EBITDA 0.89 1.15 LONG-TERM DEB
Slide 8: Operations Report
OPERATIONS REPORT Performance ended March 2019
Slide 9: Operating Highlights
Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 2.3%* 4.5%* 1.2%* 2.1%* 10,381 GWh 6.68 million 6,950 MW 10,993 GWh Ave. Retail S-Factor Rates & GSL** 7.9%* Sustained Service Business P9.13/kWh Improvement Updates *vs. same period, previous year **For GSL, RY2
Slide 10: Details
Details 9 ]
Slide 11: Energy Sales: 1Q 2019
Energy Sales: 1Q 2019 ➢ Up 2.3% vs. 2018 (+236 GWh) Share / for 1Q 2019: 1Q 2018: 7.9% 0.4% RESIDENTIAL 2.2% 8.9% 2.3% 29.0% 1Q 2018: 3,010 GWh 10,145 10,381 9.2% • Slow residential sales 9,077 9,317 growth vs. high base COMMERCIAL 8,092 Total sales volume set in 2018; expected to 39.7% for Fl
Slide 12: Slow residential sales growth vs high growth base (new and ramp-up)
1Q 2019: Slow residential sales growth of 0.4% (+12 GWh) vs. “high growth base” in 2018 (15% growth vs. 2017) largely seen in New & Ramp-up growth of 2018 energized accounts but tempered by decline in Organic (61 GWh decline). New contributed 4 GWh from 64,651 customers (2.6% lower than 2018) which
Slide 13: Slow residential sales growth vs high growth base (organic)
1Q 2019: Slow residential sales growth of 0.4% (+12 GWh) vs. “high growth base” in 2018 (15% growth vs. 2017) largely seen in New & Ramp-up growth of 2018 energized accounts but tempered by decline in Organic (61 GWh decline). New contributed 4 GWh from 64,651 customers (2.6% lower than 2018) which
Slide 14: Shift in Commercial growth drivers; Industrial drivers consistent
1Q 2019: For a change, slight shift in Commercial growth drivers while Industrial sector drivers remained consistent. COMMERCIAL INDUSTRIAL REAL ESTATE- 4.8% NON-METALLIC- 9.4% ▪ The Phil. real estate industry is forecast to maintain its growth and remain resilient in ▪ Increased production of cemen
Slide 15: Customer Count: 1Q 2019
Customer Count: 1Q 2019 ➢ Up 4.5% vs. 2017 (+284,720 customers) Share / for 1Q 2019: 4.5% 6.682 4.8% 2.8% RESIDENTIAL 6.397 92.0% 6,149,915 6.107 customers COMMERCIAL 5.842 Total customer count 7.7% for Flat Streetlights 516,648 5.626 account for 0.1%, INDUSTRIAL* customers in Mn 4,833 customers
Slide 16: Ave. Temperature (°C): 1Q 2019
Ave. Temperature(°C): 1Q 2019 ➢ Ave. Temp for 1Q 2019 lower vs. 2018 2017 2018 2019 30.1 Ave Temp (Mar. YTD) 26.6°C 27.1°C 26.8°C Ave Temp (FY) 28.2°C 27.9°C 26.8°C 29.7 29.3 29.9 28.9 28.6 28.8 28.4 28.8 27.8 28.0 27.6 28.2 28.2 28.1 27.1 27.9 27.9 26.6 27.6 27.6 27.0 26.8 26.3 26.2 26.2 26.2 2017
Slide 17: Clark Electric (CEDC): 1Q 2019
Clark Electric (CEDC): 1Q 2019 ENERGY SALES, in GWh CUSTOMER COUNT 9.9% 8.7% 2,357 132.1 2,168 120.2 2018 2019 2018 2019 CEDC’s top 5 sales contributors for March 2019 include Advent Energy (Yokohama Tire Phils.), SN Aboitiz Power (Taiyo Nippon Sanso Clark Inc.), SN Aboitiz Power (Nanox 2), Phinma
Slide 18: NSI and Peak Demand: 1Q 2019
NSI*: 1Q 2019 Peak Demand: 1Q 2019 ➢ Up 2.1% (+226 GWh) ➢ Meralco Peak Demand at 6,950 MW, 1.2% up 7,399 MW Meralco, MW: 2018 Peak* 2.1% GWh 6,867 6,950 10,992.8 1.2% 10,766.8 *May 23, 2018 2018 2019 2018 2019 (Mar. 6) (Mar. 21) Luzon Peak Demand, MW: 10,876 MW 2018 Peak** 9,936 10,180 2.5% *Net
Slide 19: Energy Sources and Fuel Mix: 1Q 2019
Energy Sources: 1Q 2019 Fuel Mix: 1Q 2019 SOURCE 1Q 2019 GWh Share Coal PSAs-Total 3,423.9 31.2% 27.2% PSA IPP Natural Gas MPPC-Masinloc 344.7 3.1% 31.2% 28.4% 43.3% TLI-Pagbilao 411.8 3.8% SMEC-Sual + CEDC 605.8 5.5% WESM Multi-fuel 9.1% 29.5% SPPC-Ilijan 1,402.9 12.8% Panay Energy 55.7 0.5% RES Sa
Slide 20: Average Retail Rates: 1Q 2019
Average Retail Rates: 1Q 2019 (Reflects Generator Wheeling adjustments) ➢ 7.9% higher than 2018 average rates (+67¢/kWh); mainly due to Generation, FIT-All and System Loss charges • Lower Distribution and Transmission Charges mitigated impact; • Generation Charge is largest component in customer’s b
Slide 21: System Loss Performance: March 2019, 12-MMA
System Loss Performance: March 2019, 12-MMA ➢ 12-MMA ending March 2019 at 5.60% ▪ Improved by 5.2% vs. March 2018’s 5.91% ▪ Lower by 1.65% pts. vs. newly-set SL cap of 7.25% (start Jan. 1, 2019) 8.50% (System Loss Cap, January 2010-May 2018) 7.50%* 7.25%* Apr. 2017 - Mar 2018 1.65% Apr. 2018 - Mar.
Slide 22: S-Factor & GSL Performance: 1Q 2019 & RY2019
S-Factor & GSL Performance: 1Q 2019 & RY2019 (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
Slide 23: Business Updates & Other Events of Interest
Details Business Updates & Other Events of Interest
Slide 24: Meralco's Immediate Disaster Response for Porac
Business Updates: Meralco’s Immediate Disaster Response for Porac Helped promptly mobilized critical equipment & crews for Search and Rescue in Porac, Pampanga (after 4/22 Earthquake) ▪ DOE & Pampanga Gov. Pineda’s call for help in providing gensets, lighting and heavy equipment ▪ With Management’
Slide 25: Strengthening the Core Business: CY2019 Networks Capex
Business Updates: Strengthening the Core Business CY2019 UPDATES ON NETWORKS CAPEX 3,050M (25%) 12.026 B CA 43% MA Feb Mar Jan 29% New Customer BBB 2% Connections / CA SR P 5.14B 18% NEP & OCI 8% • Installed meters 78,633 • CA projects energized 1,570 1,331M • Replaced overloaded DT 167 26% Build
Slide 26: Major System Requirement Line-up for CY2019
MAJOR SYSTEM REQUIREMENT LINE-UP FOR CY2019 as of March 31, 2019 89.2% completed Expansion of Filinvest 19.9% completed 16% completed 115 kV-34.5 kV GIS Substation (2nd Bk) Conjunctive MERALCO Project to the Installation of Zapote (Las Piñas) 5th 300 MVA PXF Construction of San Jose Delivery Constru
Slide 27: Business Updates: 'BBB' Projects
Business Updates: PNR North 1 38 km MRT 7 22.8 km ‘BBB’ Projects 51 Affected Poles 370 Affected Poles/69wo 3 Ongoing WO/Target:2019 58% Comp /Target:2019 Php 4.78 M Php 74.57 M No Conflict Areas 5 Conflict Areas A TOTAL OF MNTC Segment 10 LRT 2 Extension 5.58 km 4.19 km 272 Affected Poles/40WO 128
Slide 28: Summary of Project Details
SUMMARY OF PROJECT DETAILS Relocated/ Installed Affected Poles Project DOTr / DPWH’s Poles Build, Build, Build Status of DOTr / Status of Meralco Length Project Target Cost in Cost in Project DPWH’s Project Relocation Works (km) Completion Count Millions Count Millions (PhP) (PhP) NLEX Harbor Link S
Slide 29: NLEX Harbor Link Segment 10 (C3-R10 Section)
Relocation design scheme conflict between NLEX Harbor Link Project NLEX Harbor Link Segment 10 (C3-R10 Section) (use of overhead spun cable) and DoTr PNR North 1 (use of HDD) at C3 Road corner PNR Track. MAJOR CHALLENGES ➢ C3-R10 Project target opening schedule - Dec 2019 ▪ NLEX Corp. requests to co
Slide 30: PNR North Project Updates (Package 1 and Package 2)
PNR NORTH 1 PROJECT UPDATES (PACKAGE 1 and PACKAGE 2) Malolos Package 2 ➢ Package 2 awarded to Sumitomo Guiguinto Balagtas Bocaue to ➢ Contract signed last January 25, 2019 Malolos (~ 15 km) Bocaue ➢ Ground breaking last February 15, 2019 (PNR N1) Marilao Meycauayan Valenzuela Package 1 ➢ Package 1
Slide 31: LRT Line Extension Project: Priority Areas of LRMC
LRT LINE 1 EXTN PROJECT 1A Roxas Blvd. corner Redemptorist Rd. PACKAGE 1 Limited relocation scheme due to Redemptorist Rd. water inland channel and CAAP height limit PRIORITY AREAS OF LRMC BY APRIL 2019 Major Risk on areas that will experience prolonged power interruptions on bottlenecks customers b
Slide 32: BGC-Ortigas Center Road Link Project
BGC-ORTIGAS CENTER ROAD LINK PROJECT PASIG: Construction of 4-lane (2 lanes each direction) bridge across Pasig River connecting Lawton Ave. in Makati City and Sta. Monica St. in Pasig City. DPWH – Ongoing ROW Acquisition and Finalization of Design MAKATI & BGC: Viaduct structure traversing Lawton A
Slide 33: C5 Southlink Expressway Project (Phase 1)
C5 SOUTHLINK EXPRESS WAY PROJECT (PHASE 1) MAJOR CHALLENGES ➢ C5 Southlink Expressway Phase 1 will have its soft opening on June 2019 ➢ The rights of way needed for the Relocation of Facilities involves other offices, namely, MIAA and NHA ➢ Relocation of 2–34.5kV Primary Metering Facilities (MACROAs
Slide 34: Customer Experience: Online Payments and Mobile App
Business Updates: Overall CXE performance continued growth trajectory; addressed temporary issues. SEP 2018 to APR 28, 2019 Operational Metrics ONLINE PAYMENTS MERALCO (AMOUNT) ONLINE MOBILE Validated (APP DOWNLOADS) PAYMENTS (VOLUME) MERALCO Validated ONLINE 489M 270,772 (ACCOUNTS) +60.60% PAPERL
Slide 35: Outage Functionalities Helped Ease Inbound Customer Calls
Business Updates: Outage Functionalities Helped Ease Inbound Customer Calls on Red Alert Days MLDs are shown only as “unplanned” in Meralco Online, but detailed in the Internal Outage Map of CXE.
Slide 36: 8th Luminaries
Business Updates: 8th Luminaries 6 Mar 2019 Rizal Ballroom, Makati Shangri-la
Slide 37: 8th Luminaries: 2018 Luminaries
Business Updates: 8th Luminaries “A celebration of partnerships that transform lives.” This year’s theme zeroed-in on heartfelt stories of transformation that contribute to our dream of a more progressive Philippines LGU: Cities of Biñan and Makati OUR 2018 LUMINARIES: BIZ: Jolliant RNN Corp. & Ch
Slide 38: Isla Verde Solar PV Plant Contract Signing
Business Updates: Significant Events/ Customer Initiatives & Programs CUSTOMER ENGAGEMENTS/ PARTNERSHIPS: Contract Signing for Operation and Maintenance of Isla Verde Solar PV Plant (22 Jan- Batangas City Hall) Partnership highlights: • Meralco shall have the right to operate and maintain the plan
Slide 39: Rates Info Campaign
Business Updates: Significant Events/ Customer Initiatives & Programs RATES INFO CAMPAIGN RATES: INCREASED by P0.09 /kWh *residential customer consuming 200kWh / mo Mar 8-11 Mar 11-13 Mar 8-14 903 Views Average Watch Time: 27,614 Reached 37secs ER: 0.66% Views: 271 Good News for the Month: Meralco
Slide 40: Bright Ideas for Residential Customers
Business Updates: Significant Events/ Customer Initiatives & Programs BRIGHT IDEAS FOR OUR RESIDENTIAL CUSTOMERS Objective: Encourage the use of washing machines couched with the Bright Idea of using inverter technology for energy efficiency Benefit to customer: • Spend more time doing the things
Slide 41: Customer Engagements: Biz Partners Group
Business Updates: Significant Events/ Customer Initiatives & Programs CUSTOMER ENGAGEMENTS Objective: open doors to unengaged customers by introducing Biz Partners Group and subsidiaries Rizal Pasig Marikina Zone Mar 26, Marco Polo Ortigas Customer panelists: • Mr. Luis Cruz Jr. of Kalinisan Steam
Slide 42: Customer Engagements: Contractor Partners
Business Updates: Significant Events/ Customer Initiatives & Programs CUSTOMER ENGAGEMENTS GMM for CONTRACTOR partners 19 March 2019 Objectives: Lighthouse, Meralco Center 1. Reinforce campaign for online service application through www.meralco.com.ph COMPANIES CONTRACTOR companies 2. Encourage co
Slide 43: Communication Initiatives: Mid-term Election Preparations
Business Updates: Significant Events/ Customer Initiatives & Programs COMMUNICATION INITIATIVES MID-TERM ELECTION PREPARATIONS • Press conferences (May 2019) • Inclusion in May edition of Meralco Advisory • Press releases in major newspapers • Media rounds, which include TV and radio interviews •
Slide 44: Communication Initiatives: Mid-term Election Preparations
Business Updates: Significant Events/ Customer Initiatives & Programs COMMUNICATION INITIATIVES MID-TERM ELECTION PREPARATIONS ➢ Meralco has been performing necessary measures to ensure reliable power distribution to voting & counting places: ✓ reviewing past troubles involving precincts and polli
Slide 45: Meralco-Japanese Venture to Power New Clark City
MERALCO – JAPANESE* VENTURE TO POWER NEW CLARK CITY Jan 18 2019 BCDA ISSUED THE NOTICE OF AWARD (NOA) TO MERALCO MARUBENI CONSORTIUM AS THE WINNING PRIVATE SECTOR PARTICIPANT (PSP) FOR THE JOINT VENTURE DEVELOPMENT OF THE ELECTRIC POWER DISTRIBUTION SYSTEM *Marubeni, Chubu Electric, & Kansai Electri
Slide 46: New Clark City: Construction and Site Development Update
NEW CLARK CITY Construction and Site Development Update ATHLETIC STADIUM INTERIM SUBSTATION ATHLETE’S Village & GOV’T. HOUSING GOVERNMENT BUILDING June 2019 TARGET COMPLETION AQUATIC CENTER of SUBSTATION, OVERHEAD AND UNDERGROUND LINE WORKS
Slide 47: New Clark City: NGAC Complex Underground Layout
NEW CLARK CITY Construction and Site Development Update NGAC Complex Underground (UG) Layout
Slide 48: NCC Interim Phase Project
NCC Interim Phase Project Date started: 11 April 2019 • Inspection of concreting of Underground Ducting, done by BCDA-contractor (MTD Alloy) Simultaneous duct works around Concrete encasement: 12 April 2019 NGAC: 17 April 2019
Slide 49: New Clark City: Joint Venture Agreement Signed
NEW CLARK CITY April 2019 JOINT VENTURE AGREEMENT (JVA) BETWEEN BCDA AND THE MERALCO MARUBENI CONSORTIUM WAS SIGNED 3 APRIL 2019. CEREMONIAL SIGNING OF THE JVA WILL BE HELD ON 30 APRIL 2019 AT SHANGRI-LA BGC. BCDA PRESIDENT VINCE DIZON AND OFFICERS FROM MERALCO, MARUBENI, CHUBU ELECTRIC, AND KANSAI
Slide 50: Meralco PowerGen Corporation Overview of Operations
Meralco PowerGen Corporation Overview of Operations
Slide 51: MGen: San Buenaventura Power Limited Co. (SBPL)
Meralco PowerGen Corporation 51 Updates on Growth and Expansion San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon Total Project Cost: PhP 56.2 Billion ▪ BOI-registered pioneer supercritical pulverized coal power plant ▪ Over-all EPC progress
Slide 52: MGen: Atimonan One Energy, Inc. (A1E)
Meralco PowerGen Corporation 52 Updates on Growth and Expansion Atimonan One Energy, Inc. (A1E) 2x600 MW (net) Ultra Supercritical (the first in the Philippines) Coal-Fired Power Plant in Atimonan, Quezon Total Project Cost: <PhP160 Billion (<USD 3.0 Billion) ▪ Committed Project and Certified Energy
Slide 53: MGen: Renewable Investments
Meralco PowerGen Corporation 53 Updates on Growth and Expansion RENEWABLE INVESTMENTS Solar ▪ MGen is focused on development of a portfolio of utility scale solar generation projects to supply the Luzon grid, and the customers of Meralco, with competitive tariff. ▪ MGen believes solar generation wil
Slide 54: MGen: Other Investments
Meralco PowerGen Corporation 54 Other Investments 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). ▪ GBPC has a 50% interest in Alsons Thermal
Slide 55: Disclaimer
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on April 29, 2019. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same material
Manila Electric Company (Meralco) — Q1 2019 Earnings Presentation on 6ix