Manila Electric Co. · PSE:MER
Manila Electric — Q1 2023 Earnings Presentation
36 slides from Manila Electric's earnings presentation, Apr 24, 2023
Slide 1: First Quarter Ended March 31, 2023 Financial and Operating Results
FIRST QUARTER ENDED MARCH 31, 2023 FINANCIAL AND OPERATING RESULTS April 24, 2023
Slide 2: 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 3: First Quarter 2023 Financial Results
FIRST QUARTER ENDED MARCH 31, 2023 FINANCIAL RESULTS April 24, 2023
Slide 4: Q1 2023 Financial Summary
Q1 2023 Financial Summary in PhP, Mn With Q1 2022 comparative igures NET INCOME AND CAPITAL EBITDA REVENUES EXPENSES EXPENDITURES CCNI Gross Revenues Costs and Expenses CAPEX 9,047 105,642 98,383 5,113 p 40% 6,442 p 23% 85,905 p 24% 79,421 q 14% 5,971 Reported Net Income Distribution Revenue Purchas
Slide 5: Revenues
Q1 2023 Revenues in PhP, Mn 23% increase in gross revenues 2023 105,642 driven by higher fuel costs and Gross Revenues 2022 85,905 volume growth 80,251 28% increase driven by the use of liquid fuel by First Gas plants Generation, 2023 with the Malampaya shutdown from February 4 to 18, higher Transmi
Slide 6: Costs and Expenses
Q1 2023 Costs and Expenses in PhP, Mn 23% increase in total costs and 2023 98,383 expenses driven by higher Total Costs and Expenses 2022 79,741 purchased power cost, and coal and fuel/power plant O&M. 2023 78,619 28% increase with higher WESM purchases and higher coal and Purchased gas prices; Mala
Slide 7: Capital Expenditures
Q1 2023 Capital Expenditures in PhP, Mn Consolidated CAPEX primarily driven by DU CAPEX focused on new connections, asset renewals and load growth while subsidiaries CAPEX was driven by communication facilities build-out. Major networks projects completed during the period include the 14% energiza
Slide 8: Net Income and EBITDA
Q1 2023 Net Income and EBITDA in PhP, Mn Net income and EBITDA growth driven by continued strong contribution from PLP and SBPL, turnaround of GBP, and 2% increase in DU energy sales volumes. ▲ 33% ▲ 28% 16,140 ▲ ▲ 26% 15,186 40% 12,170 11,862 9,047 8,071 6,442 6,381 Q1 2022 Q1 2023 Q1 2022 Q1 2023
Slide 9: Power Generation Results of Operations
Q1 2023 Power Generation Results of Operations MGen contribution to Meralco CCNI grew 3x to Php 3.7B on account of Paci icLight’s strong performance, positive contribution from GBP, and San Buenaventura’s continued delivery under a 20-year PSA. Core Net Income Php 5,399 Php 911 M Php 295 (Php 517 M
Slide 10: Credit and Debt Profile
Q1 2023 Credit and Debt Pro ile in PhP, Mn (except ratios) Q1 2023 Q1 2022 Change ▲ 19% Cash & Cash Equivalents 57,875 58,034 -0.3% Total Debt Short-term Investments 17,889 15,974 12% 102,200 Gross Debt 102,200 86,048 19% 102,200 86,048 Net Debt 26,436 12,040 120% 50,218 Gross Debt to EBITDA 1.68 1.
Slide 11: Core Earnings per Share
Q1 2023 Core Earnings per Share in PhP Core and Reported Earnings per Share grew to P8.027 and P7.161, respectively ▲ 40% ▲ 26% 8.027 7.161 5.715 5.661 Q1 2022 Q1 2023 Q2 2022 Q2 2023 11 Core Earnings per Share Reported Earnings per Share
Slide 12: First Quarter Ended March 31, 2023 Operating Results
FIRST QUARTER ENDED MARCH 31, 2023 OPERATING RESULTS Investors and Analysts Brie ing Media Brie ing April 24, 2023 f f
Slide 13: Operational Highlights
Q1 2023 Operational Highlights BUSINESS DRIVERS SERVICE PERFORMANCE ELECTRICITY RATE per kWh Energy Sales System Loss Average Retail Rate 11,287 GWh 5.62% PhP 10.41 ▲ 2% vs. 11,069 in 2022 ▼ 0.40%PT, 12-MMA vs. 6.02% in 2022 ▲ 17% vs. 8.89 in 2022 Customer Count System Average Interruption Frequency
Slide 14: Consolidated Energy Sales in GWh
Q1 2023 Consolidated Energy Sales in GWh Grew 2% vs. 2022 driven by sustained growth of Commercial segment, as economic and business activities stabilized towards pre-pandemic levels 11,069 11,287 10,879 10,381 10,473 ▲ 2% 3,336 Industrial 3,135 3,443 30% 3,212 29% 3,261 31% 31% 31% 3,781 4,213 Comm
Slide 15: DU Energy Sales Profile and Drivers
Q1 2023 DU Energy Sales Pro ile and Drivers 2023 2022 2021 GWh RESIDENTIAL ▼ 3%, YTD GWh COMMERCIAL ▲ 11%, YTD GWh INDUSTRIAL ▼ 3%, 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 Jun Jul Aug Sep Oct Nov
Slide 16: Consolidated Customer Count
Q1 2023 Consolidated Customer Count in M Continued growth in customer base albeit slight decline in PCA and OSA performance 7.668 Project-covered Applications (PCA) YTD: 2,358 2022 7.463 0.011 2023 ▼ 3% 0.011 Industrial Pipeline: 8,422 0.571 8% Commercial 912 876 0.559 787 769 780 774 793 795 756 72
Slide 17: Consolidated NSI in GWh
Q1 2023 Consolidated NSI in GWh Slightly higher vs. 2022 on the back of sustained Commercial growth Power Fuel Sources Mix Special Solar 1% Contracts 1% 11,690 11,817 5% Liquid Fuel 11,402 16% WESM 10,993 10,981 ▲ 1% 17% New PSA 43% Multi-fuel 32% RES 29% Coal 34% IPP/ Old PSA 22% Natural Gas 2019 2
Slide 18: Peak Demand in GW
Q1 2023 Peak Demand in GW Meralco and Luzon peaks slightly declined vs. 2022 due to cooler temperature Luzon 11.65 11.50 Meralco ▼ 1% 7.82 7.73 ▼ 1% March 23, 2022 March 24, 2023 March 23, 2022 March 24, 2023 18
Slide 19: System Loss
Q1 2023 System Loss in %, 12-MMA Improvement (0.40% points) vs. 2022 driven by lower consumption ramp-up and system loss reduction initiatives 6.5% SYSTEM LOSS CAP 2021-2022 6.07 2022-2023 5.96 6.02 5.88 5.89 5.83 5.94 5.85 5.83 5.90 5.88 5.90 5.86 5.75 5.78 5.81 5.76 5.64 5.76 5.77 5.72 5.51 5.62 5
Slide 20: S-Factor Performance and Guaranteed Service Levels
March 2023 S-Factor Performance and Guaranteed Service Levels (GSL) Continued to deliver well within performance ceilings SAIFI times SAIDI in minutes MAIFI times Rewards < 1.43 Rewards < 157.04 Rewards < 7.59 ▼ 13% ▼ 8% ▼ 7% Network 0.277 1.631 0.240 25.366 23.341 1.511 2022 2023 2022 2023 2022 202
Slide 21: Networks CapEx
Q1 2023 Networks CapEx in PhP, B 22% of CapEx budget utilized with majority of spend in new connections, asset renewals, and load growth while continuing to support government projects PhP 20.28B Pole Relocation Program CapEx Budget 6.62 New Connections BUILD BETTER MORE DPWH AND LGU 168 298 POLES P
Slide 22: Network Project Update
Network Project Update Energization of STMicroelectronics, Inc.’s (STMI) Gas-Insulated Switchgear (GIS) Substation • January 3, 2023: Completed commissioning of customer-owned GIS Substation containing 115 kV GIS High-Voltage Switchgear, 2-30 MVA Power Transformers, 4.16 kV Medium-Voltage Switchgear
Slide 23: Network Project Update: Pole Relocation Works
Network Project Update Pole Relocation Works Metro Rail Transit Line 7 (MRT-7) • 22.8-km railway from North Avenue in Quezon City to San Jose del Monte in Bulacan with 14 stations • January 6, 2023: Installed 12 poles and retired 5 poles to clear facilities affected by construction of MRT-7 Batasan
Slide 24: Network Project Update: Real 115-34.5 kV Substation
Network Project Update Development of Real 115-34.5 kV Substation • March 30, 2023: Completed commissioning of Real 115-34.5 kV Substation in Calamba City, Laguna as part of RY2021 CAPEX Filing (PhP 263.95M) • Implemented to: - Unload adjacent Calamba Substation - Provide added capacity that will be
Slide 25: Average Retail Rate
Q1 2023 Average Retail Rate in PhP per kWh 17% higher vs. 1Q2022 rate mainly due to higher generation charge • 32.7% increase in Generation: Higher fuel costs, higher WESM Average Rate prices, and Peso depreciation. No delivery from Ilijan-baseload for 10.41 1Q2023 due to PSA suspension. per Custome
Slide 26: Distribution Rate True Up (DRTU) Refund Update
Refund Distribution Rate True Up (DRTU) Refund Update Refunded 93% (PhP 44.7B of Php48.3B) DRTU 1 DRTU 2 DRTU 3 DRTU 4 True Up of IAR vs. True Up of IAR vs. True Up of IAR vs. True Up of 3RP RAB via AWAT from Jul 2015- Nature of Refund AWAT from Jul 2015- AWAT from Dec 2020- Jul 2011-Jun 2015 rates
Slide 27: Regulatory Update: Pass-through (Over)/Under-Recoveries
Regulatory Update Pass-through (Over)/Under-Recoveries (OUR) PhP 7,982.96M Net Under-Recovery for calendar years 2020, 2021, and 2022 (O)UR per billing component in million PhP • Under ERC Rules, Luzon DUs are scheduled to ile their respective OUR ilings by March 31, Generation 6,413.16 2023 Transmi
Slide 28: Regulatory Update: Emergency Power Supply Agreements
Regulatory Update Emergency Power Supply Agreements (EPSAs) • December 14, 2022 and February 3, 2023: MERALCO executed EPSAs with GNPD for 300 MW with term until January 25, 2023 and February 25, 2023, respectively. Despite MERALCO’s efforts, however, it was unable to secure an extension thereafter
Slide 29: Regulatory Update: Baseload CSP PSAs Notice of Termination
Regulatory Update 1,800 MW Green ield Baseload CSP resulting PSAs – Notice of Termination Masinloc Power Partners Co. Ltd. (MPPCL) – 600 MW and Excellent Energy Resources Inc. (EERI) – 1,200 MW • March 2, 2021: PSAs with MPPCL and EERI signed, with applications iled with ERC on March 18, 2021 and Ma
Slide 30: #PoweringTheGoodLife: Anvil Awards
#PoweringTheGoodLife Meralco’s sustainability efforts recognized at 58th Anvil Awards The Anvil is awarded by the Public Relations Society of the Philippines (PRSP) to outstanding public relations programs, tools, and practitioners in the country Powering the Good Life: Kalinga: 2021 Meralco #Mbrace
Slide 31: #PoweringTheGoodLife: APAC Stevies
#PoweringTheGoodLife Meralco 2021 Reports collectively recognized at APAC Stevies with Silver Award The APAC Stevies are a premier business awards competition honoring achievements and innovative contributions of organizations in the 29 countries in Asia Paci ic Annual Report Sustainability Report O
Slide 32: Power Generation Operating Results
FIRST QUARTER ENDED MARCH 31, 2022 POWER GENERATION OPERATING RESULTS Investors and Analysts Brie ing Media Brie ing April 24, 2023 f f
Slide 33: Highlights: Energy Delivered
Q1 2023 Highlights Energy Delivered in GWh • MGen-GBP Group delivered 3,577 GWh, higher than 2023 2022 % change 3,194 GWh a year ago. Improved performance was on account of increased plant availability coupled with 1,473 1,215 ▲ 21% strategically timed preventive maintenance activities • GBP energy
Slide 34: 1,500MW Renewable Energy by 2027: 68MW Solar Plant
1,500MW Renewable Energy by 2027 68MW Solar Plant Inauguration Nuevo Solar Energy Corporation (“NSEC”), a joint venture between MGen Renewable Energy, Inc. (MGreen) and Vena Energy, inaugurated its 68-megawatt solar farm project TOTALin Currimao, Ilocos Norte last March 30, 2023. 34
Slide 35: 1,500MW Renewable Energy by 2027: PHRI Update
1,500MW Renewable Energy by 2027 PHRI - Update MGreen’s 75 MWac solar plant project in Baras, Rizal, in partnership with Mitsui’s local unit Mit- Renewables Philippine Corporation, has energized 67.5 MWac (Phase 1) of the project, and has started generating power since March 27, 2023. The plant is e
Slide 36: Thank You
THANK YOU & AC be
Manila Electric Company (Meralco) — Q1 2023 Earnings Presentation on 6ix