Manila Electric Co. · PSE:MER
Manila Electric — 9M 2020 Earnings Presentation
45 slides from Manila Electric's earnings presentation, Oct 26, 2020
Slide 1: Investors and Analysts Briefing
nvestors and Analysts Briefing October 26, 2020
Slide 2: Financial Highlights 9M 2020
Slide 3: Net Income & EBITDA, Revenues, Expenses, Cash and Borrowings
NET INCOME & CASH AND REVENUES EXPENSES EBITDA BORROWINGS CCNI GROSS REVENUES PURCHASED POWER COST CASH & CASH ₱15,727 14.8% ₱214,208 11.2% ₱156,122 14.9% EQUIVALENTS ₱31,697 28.1% REPORTED INCOME DISTRIBUTION REVENUE OPERATING EXPENSES ₱11,252 38.6% ₱50,699 3.0% ₱20,272 4.8% BORROWING
Slide 4: Electricity Revenues
241,126 241,126 214,208 214,208 49,223 76,173 Distribution revenues 50,699 Q3 71,954 Electricity Revenues = 235,376 Electricity Revenues = 208,434 89,575 Q2 72,225 186,153 Generation & other pass- through charges 157,735 Q1 70,029 75,378 5,774 5,750 Non-electricity revenues 9M 2020 9M 2019 9M 2020 9
Slide 5: Costs and Expenses and Capital Expenditures
18,348 6,094 9% Costs and Expenses 20,272 3% 10% 156,122 78% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 15,703 Generation Capital Expenditures 2,073 19% 10,920 Others 20% Subtransmission & Distribution 61% 9M 2020 9M 2019
Slide 6: Core and Reported EBITDA and Income
11.4% 12.3% 9.2% 12.3% Margins → 7.3% 7.7% 5.3% 7.6% 29,762 29,762 24,332 9,883 9,883 Q3 19,698 8,964 18,453 18,321 15,727 8,303 6,136 6,314 11,051 11,051 5,139 11,252 Q2 6,960 6,300 6,719 4,408 6,336 4,864 Q1 8,408 8,828 8,828 4,225 5,095 5,724 5,598 5,671 2,619 9M 2020 9M 2019 9M 2020 9M 2019 9M
Slide 7: Total Debt and Repayment Schedule
TOTAL DEBT (in Million PhP) 40,860 12,463 31,235 (In Million PhP, Except Ratios) 9M 2020 9M2020 15,951 Cash & cash equivalents 31,697 24,736 28,397 15,284 Gross debt 40,860 31,235 Net debt 9,163 6,499 9M 2020 9M 2019 Current Portion Non-current Portion Gross debt/EBITDA 1.6 0.8 LONG-TERM DEBT REPAYM
Slide 8: Earnings Per Share
Earnings Per Share (in PhP) 16.255 16.373 13.954 9.983 Earnings Per Share Core Earnings Per share 9M 2020 9M 2019
Slide 9: Operating Highlights 9M 2020
Slide 10: Performance Highlights 2020 vs. 2019
PERFORMANCE HIGHLIGHTS seerewsee 10 2020 vs. 2019 BUSINESS DRIVERS SERVICE PERFORMANCE CONSOLIDATED ENERGY SALES SYSTEM LOSS 4,007 GWh 32,539GWh 6.18% ‘0.4%, VS. SEPTEMBER 2020 VI% 4.0.63 PT, 12-MMA CONSOLIDATED CUSTOMER COUNT SYSTEM AVE. INTERRUPTION 7.020 M FREQUENCY INDEX A3% 1.1 7 times 23% NET
Slide 11: September 2020 YTD Consolidated Energy Sales
a © SEPTEMBER 2020 YID CONSOLIDATED ENERGY SALES (in Gwh) Reduction in volumes driven by impact of community quarantine 27% \ndustrial 34% Commercial 39% Residential 2017
Slide 12: September 2020 Monthly Energy Sales
SEPTEMBER 2020 MONTHLY ENERGY SALES (in Gwh) Highest for the year; Growth (0.4%) for the first time post-ECQ driven by higher Residential sales as well as recovery in Commercial and Industrial 3,802 3,953 4,007 3,625 we 3.454 3,719 3,673 2019 i 2020 Average Mix u 3,330 29% % Industrial W 2%pts 2,977
Slide 13: September 2020 DU Energy Sales Profile and Drivers
SEPTEMBER 2020 DU ENERGY SALES PROFILE AND DRIVERS ° Oo RESIDENTIAL 1,000 228%, MID Sf A= _f/~ Cavite NA Rizal 433%, MID 431%, MTD Bulacan ———— Quezon 431% MID 420%, MID * Residential consumption increased further in Sep as online classes were in full swing for private schools + Average temperature
Slide 14: October 2020 Average Consolidated NSI
OCTOBER 2020 AVERAGE CONSOLIDATED NSI (in cwh) © Running average from October 1 to 22 (128.4 GWh) 4.7% lower than September average (134.8 GWh) September October October 2019 Average: 141.2 September 2020 Average: 134.8 October 22 Actual: 134.3 October 1-22 Average: 128.4 16 17 18 19 20 21 22 23 24
Slide 15: September 2020 YTD Consolidated Customer Count
SEPTEMBER 2020 YID CONSOLIDATED CUSTOMER COUNT (in m) © Surpassed 7M customer mark 7.020 0.011 8% 6.818 Industrial Commercial Residential 92% Customer count of Parent is 99.9%, CEDC is 0.1% Flat streetlights account <1%
Slide 16: September 2020 YTD Energization
| =z) SEPTEMBER 2020 YID ENERGIZATION Steady recovery in energization of Project Covered Applications (PCA) and Ordinary Service Applications (OSA) 581 436 PCA 395 414 367 340 305 213 187 17.6 17.1 17.2 16.8 Tee) OSAx7000 10.3 9.0 2.0 3.0
Slide 17: September 2020 YTD Consolidated NSI
SEPTEMBER 2020 YID CONSOLIDATED NSI (in GWh) Slightly higher vs. 2019 due to higher demand across all customer segments Parent is 99%, down by 6% vs. 2019 YTD CEDCis 1%, down by 14% vs. 2019 YTD YEAR TO DATE
Slide 18: September 2020 YTD Consolidated NSI Breakdown
SEPTEMBER 2020 YID CONSOLIDATED NSI BREAKDOWN (in Gwh) 34,533 NETSYSTEM | : 7 ~ POWER SOURCES FUEL MIX = PSAs E Special WESM Contracts mac I oer ns
Slide 19: September 2020 YTD Peak Demand
SEPTEMBER 2020 YID PEAK DEMAND (in Mw) Meralco and Luzon peaks lower vs. 2019 driven by COVID-19 11,344 +1 10,570 SEP 2020 PEAK September 8 3 ta vesences 47,100 SEP 2020 PEAK September 4 MERALCO LUZON
Slide 20: September 2020 YTD System Loss Performance
SEPTEMBER 2020 YID SYSTEM LOSS PERFORMANCE (in %, 12-MMA) © Higher by 0.63% points vs. 2019 due to effect of unbilled sales (~106.2 GWh) as of September and due to shift in sales mix towards high loss-to-serve Residential SYSTEM LOSS CAP 7.25% Gam 6.18 2018-2019 2019-2020 05.55 Jun Jec Jan2020 Feb
Slide 21: September 2020 YTD S-Factor Performance (Network)
SEPTEMBER 2020 YTD $-FACTOR PERFORMANCE (NETWORK) $ Continued to achieve rewards levels across all performance indicators SAIFI Forced and Pre-arranged a - d Pre-arranged times in minutes minutes 2019 2020 2019 2020 2019 2020 Rewards < 6.98 Rewards < 144.40 © % Probability of Voltage Violation remai
Slide 22: September 2020 YTD S-Factor Performance (Customer)
SEPTEMBER 2020 YID $-FACTOR PERFORMANCE (CUSTOMER)~ Continued to achieve rewards levels on Average Time to Process Applications and Average Time to Connect AVERAGE TIME TO PROCESS APPLICATIONS in days METO CONNECT 2019 2020 2019 2020 2019 2020 Rewards < 7.90 Rewards < 3.55 Rewards < 13.55 Rewards le
Slide 23: RY2021 Guaranteed Service Levels (GSL)
le RY2021* GUARANTEED SERVICE LEVELS (GSL) Continued to deliver well within performance ceilings GSL1 GSL2 GSL3 Customers experiencing cumulative experiencing a number of on of supply to a customer duration of sustained interruptions stained interruptions a fault on secondary line ot provided on the
Slide 24: September 2020 YTD Networks Capex
SEPTEMBER 2020 YID NETWORKS CAPEX (in PhP, B) 88% of full year CapEx utilized with resumption of projects post-ECO PhP 9.34B NETWORKS CAPEX 2.88 New Connections PhP 8.17B 88% UTILIZATION ants 8.17 2.39 Asset Renewals 2.72 2.27 Load Growth 1.72 0.75 Non-Network 0.52 0.55 Electrification 0.45 Build Bu
Slide 25: Networks Project Updates: San Mateo-Diliman-Marikina Line
NETWORKS PROJECT UPDATES SAN MATEO - DILIMAN - MARIKINA 115 KV LINE © New 8-km sub-transmission line backbone traversing Commonwealth Avenue and Batasan-San Mateo Road © Completed on August 28, 2020 © Itwill serve as source of San Mateo substation targeted to be completed in Q2 2021 © It will accomm
Slide 26: Networks Project Updates: Malolos MVA Bank
NETWORKS PROJECT UPDATES INSTALLATION OF MALOLOS 30 150 MVA BANK © Commissioned on September 28, 2020 © Resolves critical loading of existing 2-150 MVA transformer banks at Malolos Substation @ Addresses constraint during N-1 condition at the substation (remaining bank loading at 139%). It eliminate
Slide 27: Networks Project Updates: Build, Build, Build
NETWORKS PROJECT UPDATES BUILD, BUILD, BUILD Support to Government Priority Projects © Despite the pandemic, 600 poles were relocated to support Government's BBB projects © Priority government projects: North Luzon Expressway- South Luzon Expressway = (NLEX-SLEX) Connector Road Skyway Stage 3 LRT1 C
Slide 28: Networks Project Updates: Meralco Electrification Program
NETWORKS PROJECT UPDATES MERALCO ELECTRIFICATION PROGRAM PROJECTS (PRIORITY 2 AND 3)* MEP Priority 2 & 3 Over-all Completion Percent Completion of MEP Priority 2 & 3 Projects by Province _ Energized cave 55 sites (45%) 42% 100% *For completion not later than December 2020 (Priority 2) and June 2021
Slide 29: September 2020 YTD Average Retail Rate
SEPTEMBER 2020 YID AVERAGE RETAIL RATE PhP 0.96 reduction vs. September 2019 YTD 9.00 PhP/kWh SEP YTD 2019 8. 04 PhP/kWh 10% Generation (0.790 © 17% decrease in Generation charge with the implementation of new PSAs and invocation of FM claims during the community quarantine periods. Lower WESM and f
Slide 30: CSP Update: 1,800 MW (Net) COD 2024-2025
>) CSP UPDATE: 1,800 MW (NET) COD 2024-2025 ¢ In September 2020, TPBAC approved for publication and posting at DOE CSP Portal the Invitation to Bid with Terms of References table and Bid Requirements for 1,800 MW (net) COD 2024-2025 CSP. The first and second publication were on October 1 and 8, resp
Slide 31: DOE Update: Grace Period for Power Sector Bills
DOE UPDATE: ADVISORY ON PROVIDING GRACE PERIOD TO ALL POWER SECTOR BILLS FALLING DUE DURING THE PERIOD OF COMMUNITY QUARANTINE Republic Act No. 11494 or the “Bayanihan to Recover as One Act" or “Bayanihan Act 2” was signed into law on September 11, 2020 and made effective on September 14,2020 Sectio
Slide 32: Other Business Updates
OTHER BUSINESS UPDATES cuit |
Slide 33: 2019 Meralco Sustainability Report Awarded
2019 MERALCO SUSTAINABILITY REPORT AWARDED BRONZE STEVIE IN BEST ANNUAL REPORT CATEGORY eso, tes 2011 - First time a stand-alone Sustainability Report (SR) has won the award since 2011 2017 - Meralco last won in this category 2020 ~ First time a maiden SR has won a Stevie - Only Filipino SR to win t
Slide 34: One Meralco Foundation Won Stevies for COVID-19 Initiatives
ONE MERALCO FOUNDATION ALSO WON 4 STEVIES FOR COVID-19 INITIATIVES iS) "4 4 Online campaign allowing Meralco employees to Providing nutritious vegetables to frontliners and the homeless contribute to OMF's work while at home while invigorating livelihood of vegetable farmers Partnering with eSakay t
Slide 35: Meralco PowerGen Corporation Overview of Operations
Meralco PowerGen Corporation Overview of Operations 26 October 2020
Slide 36: San Buenaventura Power Limited Co. (SBPL)
36 San Buenaventura Power Limited Co. (SBPL) 500MW (gross) Supercritical Coal-Fired Power Plant in Mauban, Quezon ▪ First operational supercritical coal power plant in the Philippines ▪ Commercial operations started on September 26, 2019 ▪ Net generation at 3,042 GWH from September 2019 to September
Slide 37: Atimonan One Energy, Inc. (A1E)
37 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) ▪ A1E will participate in Meralco’s Competitive Selection Process for its 2024/2025 requirements – bi
Slide 38: MGEN Renewable Energy, Inc. (MGreen)
38 MGEN Renewable Energy, Inc. (MGreen) ▪ MGreen was established to serve as MGen’s subsidiary for its renewable energy investments. ▪ MGreen targets around 1,000 MW to 2,000 MW of renewable energy projects over the next 5-7 years. ▪ The focus is on the development of a portfolio of utility scale so
Slide 39: PowerSource First Bulacan Solar, Inc. (PFBSI)
PowerSource First Bulacan Solar, Inc. (PFBSI) 50MWac Solar Power Plant in San Miguel, Bulacan Total Project Cost: PhP4.25 Billion Site footage as of October 15, 2020 ▪ MGen’s first solar investment covering a total land area of 72 hectares ▪ Currently 40%-owned by MGen Renewable Energy, Inc. (MGreen
Slide 40: Mounting of Solar PV Panels
Mounting of Solar PV Panels Confidential 40
Slide 41: Substation Building and Main Control Building
Substation Building (front) and Main Control Building (back) Confidential 41
Slide 42: Main Transformer
Main transformer Confidential 42
Slide 43: Lifting and Installation for Capacitor Bank – Switchyard
Lifting and installation for capacitor bank – switchyard Confidential 43
Slide 44: competitive uncertainties and contingencies which are beyond MERALCO’s control.
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on October 26, 2020. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same materi
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Manila Electric Company (Meralco) — 9M 2020 Earnings Presentation on 6ix