Manila Electric Co. · PSE:MER
Manila Electric — H1 2021 Earnings Presentation
38 slides from Manila Electric's earnings presentation, Jul 26, 2021
Slide 1: Half Year June 30, 2021 Financial and Operating Results
HALF YEAR JUNE 30, 2021 FINANCIAL AND OPERATING RESULTS July 26, 2021
Slide 2: Financial Results
HALF YEAR JUNE 30, 2021 FINANCIAL RESULTS July 26, 2021
Slide 3: Financial Summary
FINANCIAL SUMMARY Amounts in million pesos COSTS & MGEN & NET INCOME & CASH & REVENUES EXPENSES, EBITDA BORROWINGS SUBSIDIARIES CAPEX Core Net Income Gross Revenues Purchased Power Cost Cash and Cash MGen Php 11,399 Php 149,097 Php 106,043 Investments 8% 8% 2% Php 110,410 Php 327 Distribution Revenu
Slide 4: Revenues
REVENUES Amounts Amounts ininmillion million pesos pesos Gross Electric Revenues Gross Revenues Revenues Electric Revenues 149,097 138,347 31,486 144,840 144,840 3% 21% 31,486 134,724 134,724 4,897 3% 21% ▲ 8% ▲ 8% 108,457 ▲ 8% ▲ 8% 73% 105,266 108,457 108,457 105,266 75% 108,457 78% 149,097 78% 75%
Slide 5: Costs and Expenses, Capital Expenditures
COSTS AND EXPENSES, CAPITAL EXPENDITURES Amounts Amounts ininmillion million pesos pesos Capital Expenditures Capital Expenditures Costs Costsand and Expenses Expenses 13087 13,087 132,462 131,339 ▲ 1% ▲ 1% 106,043 6859 6,859 106,043 80% 80% 131339 132462 ▲▲91% 91% 12% 12% 15,713 4% 4% 2% 2% 0.2% 0.
Slide 6: Net Income and EBITDA
NET INCOME AND EBITDA Amounts Amounts ininmillion million pesos pesos Core Coreand andReported NetIncome Reported Net Income Core Coreand andReported EBITDA Reported EBITDA 23,287 23,287 22,839 22,839 15,368 15,368 11,266 11,266 11,055 11,055 11,399 11,399 ▲▲ 52% 11,395 11,395 10,588 10,588 9,949 9,
Slide 7: Power Generation
POWER GENERATION Amountsininmillion Amounts million pesos pesos except except powerpower plant capacity plant capacity in MW in MW Core net income (loss) Core net income (loss) 1H 1H 2020 2020 1H2021 1H 2021 707 707 546 546 389 389 ▲ ▲ 202% 202% ▲ 29% ▲ 29% 129 ▲ 36% 129 ▲ 36% 0 0 (44) (28) -44 -28
Slide 8: CIS Bayad Center, Inc.
CIS BAYAD CENTER, INC. 57 millionpayment 57 million payment transactions transactions in 1Hthe in 1H 2021, 2021, Bayad BayadCCNI Contribution CCNI Contribution the highest highest in history in history Amounts Amounts ininmillion million pesos pesos 60 60 Added 58 new billers to reach 415 billers Ad
Slide 9: Radius Telecoms, Inc.
RADIUS TELECOMS, INC. Radius RadiusCCNI Contribution Serving Serving a atotal total of of 3,171 3,171 corporate corporate circuits circuits and a number and a growing CCNI Contribution of Red Fiber Amounts Amounts ininmillion million pesos of Red Fiber growing numberbroadband internet broadband inte
Slide 10: Credit and Debt Profile
CREDIT AND DEBT PROFILE Amounts Amounts ininmillion million pesos pesos Total TotalDebt Debt Breakdown Breakdown Long LongTerm TermDebt RepaymentSchedule Debt Repayment Schedule 91,662 12235.3672 12,235 27,654 27,654 13,108 13,108 7725.7073 7,726 7464.0722 7,464 40,816 91662 ▲ 5823.9541 5,824 ▲ 125%
Slide 11: Earnings per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS Amounts Amounts ininpesos pesosperper share share Core and Core andReported Reported Earnings per Earnings per Share Share Dividends per Dividends perShare Share and Pay-outRatio and Pay-out Ratio 12 12 100% 100% 10.1133 9.3938 10.113 90% 9.394 8.8267 10 8.827 80% 9
Slide 12: Operating Results
HALF YEAR JUNE 30, 2021 OPERATING RESULTS July 26, 2021
Slide 13: First Half (1H) 2021 Operational Highlights
First Half (1H) 2021 Operational Highlights BUSINESS DRIVERS SERVICE PERFORMANCE ELECTRICITY RATE per kWh Energy Sales System Loss Average Retail Rate 22,663 GWh 5.83% PhP 7.92 ▲ 7% vs. 2020 ▲ 0.17 %PT, 12-MMA ▼ 3%, vs. 2020 Customer Count SAIFI 7.274 M 0.655 times ▲ 4% vs. 2020 ▼ 0.4% vs. 2020 Net
Slide 14: 1H 2021 Consolidated Energy Sales in GWh
1H 2021 Consolidated Energy Sales in GWh Improvement by 7% versus last year with Industrial back to pre-pandemic level 22,663 22,823 ▲7% vs. 2020 21,139 21,665 20,338 6,656 6,781 Industrial 29% 5,523 30% 26% 8,951 7,430 7,440 Commercial 35% 33% 39% 8,115 8,370 Residential 7,146 39% 37% 32% Parent is
Slide 15: 1H 2021 DU Energy Sales Profile and Drivers
1H 2021 DU Energy Sales Pro ile and Drivers 2019 Actual 2020 Actual 2021 Actual GWh RESIDENTIAL ▲ 3%, YTD GWh COMMERCIAL ▲ 0.2%, YTD GWh INDUSTRIAL ▲ 23%, YTD 2,000 2,000 2,000 1,500 1,500 1,500 1,000 1,000 1,000 500 500 500 0 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May J
Slide 16: 1H 2021 Consolidated Customer Count
1H 2021 Consolidated Customer Count in M Increase in customer base driven by higher PCA and OSA energization Project-covered Applications (PCA) 7.274 2020 2021 6.975 0.011 Industrial 0.011 576 580 583 474 522 0.549 8% Commercial 0.533 466 455 435 433 414 400 396 367 340 ▲ 4% 324 305 217 186 JAN FEB
Slide 17: 1H 2021 Consolidated NSI in GWh
1H 2021 Consolidated NSI in GWh Higher vs. 2020 due to recovery of Industrial and Commercial segments Power Fuel Sources Mix Special Solar 1% Contracts 0% 2% Liquid Fuel 23,868 7% WESM 22,458 16% Other RES 26% Multi-fuel ▲ 6% 23% New PSA 39% Natural Gas 53% IPP/ Old PSA 33% Coal 2020 2021 17
Slide 18: 1H 2021 Peak Demand in MW
1H 2021 Peak Demand in MW Meralco and Luzon peaks higher vs. 2020 due to easing community quarantine restrictions Luzon Meralco 11,640 11,103 ▲ 5% 7,614 7,808 ▲ 3% March 10, 2020 May 27, 2021 March 9, 2020 May 28, 2021 18
Slide 19: 1H 2021 System Loss in %, 12-MMA
1H 2021 System Loss in %, 12-MMA Higher by 0.17% points vs. 2020 due to shift in sales mix towards higher loss-to-serve Residential segment 6.5% SYSTEM LOSS CAP starting January 2021 6.44 2020-2021 6.19 6.18 6.10 6.14 6.08 6.03 5.96 5.97 5.96 5.88 5.83 2019-2020 5.74 5.72 5.65 5.66 5.55 5.55 5.55 5.
Slide 20: 1H 2021 S-Factor Performance and Guaranteed Service Levels
1H 2021 S-Factor Performance and Guaranteed Service Levels (GSL) Continued to deliver well within performance ceilings for most indicators SAIFI times SAIDI CAIDI in minutes Rewards < 6.98 in minutes Rewards < 144.40 Network ▼ 0.4% ▼ 11% ▼ 11% • % Probability of Voltage Violation at 0.658 0.655 72.8
Slide 21: 1H 2021 Networks CapEx in PhP, B
1H 2021 Networks CapEx in PhP, B 38% of full year CapEx utilized with Meralco Electri ication Program achieving 100% energization PhP 19.08B CapEx Budget 7.31 New Connections Meralco Electri ication Program 2.90 536 SITES* 4.83 Asset Renewals 100% ENERGIZED PhP 7.28B 1.89 38% Utilization 3.76 Load G
Slide 22: Networks Project Update: Interconnection of BulacanSol
Networks Project Update Interconnection of BulacanSol (PFBSI) 55 MW Solar Power Plant • Commissioned on April 24, 2021 • 55 MWac, Large VRE Embedded Generator • Located in Barangays Labne, San Jose, and Tibagan, San Miguel, Bulacan • 4.3 km 69 kV line from San Miguel Substation to SMSPP; Terminating
Slide 23: Networks Project Update: Replacement of Dolores Power Transformer
Networks Project Update Replacement of Dolores Power Transformer Bank No. 1 • Commissioned on May 16, 2021 • CAPEX iling of PhP 77.33M in RY2021 • Implemented to replace deteriorating 41-year-old transformer bank at Dolores Substation with new 100- MVA transformer bank with On-Load Tap Changer (OLTC
Slide 24: Networks Project Update: Expansion of Banawe Substation
Networks Project Update Expansion of Banawe 115-34.5 kV GIS Substation, Bank 2 • Commissioned on June 29, 2021 • CAPEX iling of PhP 192.94M in RY2021 • Implemented to solve projected critical loading of Banawe Bank 1 and Balintawak Bank 5 • Provides additional capacity to accommodate load applicatio
Slide 25: 1H 2021 Average Retail Rate in PhP per kWh
1H 2021 Average Retail Rate in PhP per kWh 3% lower due to lower generation, transmission and system loss charges • 1.3% decrease in Generation charge due to lower WESM charges, lower fuel prices, and Peso appreciation Average Rate 8.19 per Customer Segment 7.92 • 7.5% decrease in Transmission charg
Slide 26: Regulatory Updates: PCC Preliminary Inquiry on 1,800 MW CSP
Regulatory Updates Philippine Competition Commission (PCC) Preliminary Inquiry on 1,800 MW green ield baseload CSP, COD 2024-2025 Complaint iled by BUKLURAN NG MANGGAGAWANG FILIPINO, et. al. (“BUKLURAN”) • March 25, 2021: MERALCO and TPBAC received PCC’s preliminary inquiry and meeting request • PCC
Slide 27: Regulatory Updates: P4P Petition for Certiorari
Regulatory Updates Power for People (P4P) Coalition’s Petition for Certiorari with Application for issuance of TRO and/or Preliminary Injunction against 1,800 MW CSP Petition for Certiorari dated February 17, 2021 P4P’s Allegations and Grounds • DOE and MERALCO’s TPBAC acted with grave abuse of disc
Slide 28: #PoweringTheGoodLife
#PoweringTheGoodLife 2019 Meralco Sustainability Report (SR) recognized with GOLD Stevie • Gold Award for Innovation in Annual Reports • 3rd international award by maiden 2019 SR • Only Filipino SR to win in 2021 Asia-Paci ic Stevies Silver Stevie Silver Stevie Bronze Stevie Fitting The Bill: Meralc
Slide 29: Significant improvements in Meralco's 2021 ESG ratings 1/2
#PoweringTheGoodLife Signi icant improvements in Meralco’s 2021 ESG ratings 1/2 Meralco’s Sustainalytics Ratings Sustainalytics ESG Risk Ratings 44.4 42.8 40.7 severe severe • 12,000+ companies assessed on material severe 31.5 Environmental, Social, and Governance risks high and on how these impact
Slide 30: Significant improvements in Meralco's 2021 ESG ratings 2/2
#PoweringTheGoodLife Signi icant improvements in Meralco’s 2021 ESG ratings 2/2 Meralco’s FTSE Russell Ratings Financial Times Stock Exchange (FTSE) Russell ESG Ratings 3.0 2.6 • Helps investors of over 7,200 companies understand 2.2 exposure to and management of ESG issues across multiple dimension
Slide 31: Power Generation Operating Results
HALF YEAR JUNE 30, 2021 POWER GENERATION OPERATING RESULTS July 26, 2021
Slide 32: San Buenaventura Power Limited Co. (SBPL)
San Buenaventura Power Limited Co. (SBPL) 500MW (gross) Supercritical Coal-Fired Power Plant in Mauban, Quezon ▪ Joint venture of MGen with New Growth B.V., a wholly owned subsidiary of Thailand’s Electricity Generating Public Co. Ltd. (EGCO) ▪ First operational supercritical coal plant in the Phili
Slide 33: Atimonan One Energy, Inc. (A1E)
Atimonan One Energy, Inc. (A1E) 2x600 MW (net) Supercritical Coal-Fired Power Plant in Atimonan, Quezon ▪ Other offtake options for plant’s capacity are currently being explored, including participation in next round of MERALCO’s Competitive Selection Process and/or a tie- up with MPower ▪ Site prep
Slide 34: Powersource First Bulacan Solar, Inc.
Powersource First Bulacan Solar, Inc. 50MWac/80.9MWdc Solar Power Plant in San Miguel, Bulacan ▪ In January, MGreen increased its shareholding in PFBSI to 60% following the buyout of Sunseap’s shares ▪ MGen’s irst solar power plant commenced commercial operations on May 12, 2021 ▪ Net generation at
Slide 35: Global Business Power Corporation (GBP)
Global Business Power Corporation (GBP) ▪ On December 23, 2020, MGen acquired holdings of Beacon Power Holdings, Inc. (56%) and JG Summit Holdings, Inc. (30%) in GBPC through separate Share Purchase Agreements ▪ Transactions closed on March 31, 2021; MGen presently owns 100% of GBP ▪ GBP, a leading
Slide 36: PH Renewables, Inc. Solar Power Plant
PH Renewables, Inc. 115 MWdc Solar Power Plant in Baras, Rizal ▪ GBP subsidiary PH Renewables, Inc. conducted groundbreaking ceremony for its solar power plant on June 30, 2021 ▪ Solar project, with a capacity of 115 MWdc, is GBP’s irst foray into renewable energy and Luzon market ▪ Targets to comme
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 comprehensive discussion about MANILA ELECTRIC COMPANY AND ITS SUBSIDIARIES (Meralco). These materials are restricted to t
Slide 38: Half Year June 30, 2021 Financial and Operating Results
HALF YEAR JUNE 30, 2021 FINANCIAL AND OPERATING RESULTS July 26, 2021
Manila Electric Company (Meralco) — H1 2021 Earnings Presentation on 6ix