Manila Electric Co. · PSE:MER

Manila Electric — 9M 2017 Earnings Presentation

39 slides from Manila Electric's earnings presentation, Oct 27, 2017

  1. Slide 1: Results

    RESULTS ae

  2. Slide 2: Financial Highlights

    FINANGIAL HIGHLIGHTS OM 204117

  3. Slide 3: Quarterly financial highlights

    Q1 2017 Q2 2017 Q3 2017 Q3 2016 % Chg Sales Volume (in GWh) 9,317 11,021 11,063 10,386 7% Revenues 66,576 74,456 73,357 66,360 11% Electricity 64,724 72,685 71,439 64,366 11% Distribution 13,025 15,981 15,676 14,671 7% Generation and other pass-through 51,699 56,704 55,763 49,695 12% Non-electricity

  4. Slide 4: Electricity Revenues 9M 2016 vs 9M 2017

    214,389 5,541 195,164 6,029 44,682 Electricity Revenues = 208,848 42,862 Electricity Revenues = 189,135 164,166 146,273 9M 2016 9M 2017 Generation and other pass-through charges Distribution revenues Non-electricity revenues

  5. Slide 5: Costs and Expenses; Capital Expenditures

    5,231 7,541 18,259 3% 4% Costs and Expenses 9% 162,777 84% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 8,075 5.8% Capital Expenditures 7,634 9M 2016 9M 2017

  6. Slide 6: EBITDA, Net Income and Margins

    26,216 26,268 26,309 26,268 15,676 15,928 14,966 15,370 13.9% 12.6% 13.9% 12.6%  Margins*  7.9% 7.4% 8.3% 7.6% Core EBITDA Reported EBITDA Core Net Income Reported Net Income 9M 2016 9M 2017 * On consolidated electricity revenues

  7. Slide 7: Total Debt and Repayment Schedule

    TOTAL DEBT (in Million PhP) 40,114 40,150 (in Million PhP, Except Ratios) 9M 2016 9M 2017 27,004 24,836 Cash 36,581 46,699 15,314 Gross Debt 40,114 40,150 13,110 Net Debt 3,533 (6,549) 9M 2016 9M 2017 Current Portion Non-current Portion Gross Debt/EBITDA 1.14 1.15 LONG-TERM DEBT REPAYMENT SCHEDULE (

  8. Slide 8: Cash and Investments

    86,791 88,394 5,664 25,164 36,031 25,046 46,699 36,581 9M 2016 9M 2017 Cash Held-to-Maturity Investments Available-for-Sale Investments

  9. Slide 9: Operations Report

    OPERATIONS REPORT Performance ended September 2017

  10. Slide 10: Operating Highlights

    Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 4.3%* 4.6%* 3.3%* 3.7%* 31,401 GWh 6.25 million 6,973 MW 33,454 GWh Ave. Retail S-Factor Rates & GSL 4.8%* Sustained Service Business P7.93/kWh Improvement Updates *vs. same period, previous year

  11. Slide 11: Details

    Details

  12. Slide 12: Energy Sales: 9Mos. 2017

    Energy Sales: 9Mos. 2017  Up 4.3% vs. 2016 (+1,298 GWh) Share /  for 9M 2017: 4.3% RESIDENTIAL 4.7% 9.5% 4.3% 31.3% 4.4% 2.5% 9,815 GWh COMMERCIAL • Increase from new Sales volume for and organic sales 39.4% 27,496 30,103 31,401 Flat Streetlights plus other factors 12,382 GWh 25,616 26,253 acc

  13. Slide 13: Customer Count: 9Mos. 2017

    Customer Count: 9Mos. 2017  Up 4.6% vs. 2016 (+273,899 customers) Share /  for 9M 2017: 4.6% 4.8% 2.6% 4.1% RESIDENTIAL 91.8% 3.8% 5,740,603 Count of Flat customers COMMERCIAL 3.9% 6.25 Streetlight 7.9% 5.98 account for 5.74 496,115 5.53 0.1%, customers 5.33 in Mn 4714 customers INDUSTRIAL cus

  14. Slide 14: Clark Electric (CEDC): 9Mos. 2017

    Clark Electric (CEDC): 9Mos. 2017 ENERGY SALES, in GWh CUSTOMER COUNT 3.0% 5.2% 2,089 414.2 426.7 1,986 2016 2017 2016 2017 CEDC’s top 5 sales contributors for Sept. 2017 include SFA Semicon Phils. - Phoenix Semiconductor Philippines Corp. (PSPC), Advent Energy (Yokohama), SN Aboitiz Power (Taiyo

  15. Slide 15: NSI and Peak Demand: 9Mos. 2017

    NSI*: 9Mos. 2017 Peak Demand: 9Mos. 2017  Up 3.7% at 33,454 GWh  Meralco Peak Demand of 6,973 MW (breached 2016 Peak) Meralco YTD, MW: 6,748 MW 3.7% 2016 Peak* 6,973 33,454.1 GWh 6,748 32,258.9 3.3% Sept. 8, 2017 Peak is 6,886 MW *May 4, 2016 2016 2017 2016 2017 (May 4) (June 14) Luzon YTD Peak

  16. Slide 16: Energy Sources and Fuel Mix: 9Mos. 2017

    Energy Sources: 9Mos. 2017 Fuel Mix: 9Mos. 2017 Liquid Fuel, SOURCE 9M 2017 2.2%* GWh Share Coal PSAs-Total 11,305.2 33.8% PSA 34.4% 1,231.0 3.7% IPP SEM-Calaca 33.8% 29.9% Natural Gas MPPC-Masinloc 1,292.1 3.9% 36.8% TLI-Pagbilao 1,216.2 3.6% Multi-fuel SMEC-Sual + CEDC 2,123.8 6.4% WESM 26.6% SPPC

  17. Slide 17: Average Retail Rates: 9Mos. 2017

    Average Retail Rates: 9Mos. 2017 (Reflects Generator Wheeling adjustments)  4.8% higher than 2016 average rates (+37¢/kWh); mainly due to Generation and FIT-All charges • For 2017, Generation Charge, largest component in customer’s bill, 54.3%; Meralco 18.0%; NGCP 10.0% BILL COMPONENT 9M 2016 9M 20

  18. Slide 18: System Loss Performance: September 2017, 12-MMA

    System Loss Performance: September 2017, 12-MMA 12-MMA ending September 2017 at 6.05%, lowest ever • Improved by 5.5% vs. September 2016’s 6.40% NEW RECORD • Lower by 2.45% pts. vs. SL cap of 8.5% 8.5% SL CAP, 2010-PRESENT 2.45% 6.48 6.45 6.45 6.40 6.44 6.06 6.11 6.05* Oct Nov Dec Jan Feb Mar Apr M

  19. Slide 19: S-Factor & GSL Performance

    S-Factor & GSL Performance: 9Mos. 2017 & 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

  20. Slide 20: Business Updates & Other Events of Interest

    Details Business Updates & Other Events of Interest

  21. Slide 21: Impact of Tropical Storm Maring on Reliability

    Business Updates: Significant Events/ Customer Initiatives & Programs Impact of Tropical Storm ‘Maring’ in Reliability Performance  Sept. 11 (5PM) Maring developed from a  September 12, 2017 Low Pressure Area into a Tropical Depression (TD) with Max. sustained winds of 45 kph near center and gusti

  22. Slide 22: Impact to Circuit Trippings of TD Maring

    Business Updates: Significant Events/ Customer Initiatives & Programs Impact to Circuit Trippings of TD Maring (Doksuri)  Tropical Depression Maring was felt in the franchise area starting at  Portions of some circuits were also de-energized due to 0149H of Sept. 12, 2017. rising floodwaters…  Th

  23. Slide 23: Impact to NSI, Sales and System Loss of TD Maring

    Business Updates: Significant Events/ Customer Initiatives & Programs Impact to NSI, Sales and System Loss of TD Maring (Doksuri) ESTIMATED UNSERVED ENERGY:  Estimated unserved energy (NSI) due to reduced demand is 14,792 MWh NSI (GWh) Sales (GWh) System Loss 14.792 GWh 11.554 GWh 0.06 ppts SEPT. R

  24. Slide 24: Strengthening the Core Business

    Business Updates: Strengthening the Core Business (via CapEx for Enhanced Capacity & Power Quality) Uprating of 115kV Power Circuit Breakers Development of Lucena 115 kV-34.5 kV Substn. at Balintawak Substn.  September 29, 2017 (RY 2016 Project; ERC-Approved Budget – P478.91 M )  September 04, 201

  25. Slide 25: Construction of Paco Delivery Point's Additional 115 kV Lines

    Business Updates: Strengthening the Core Business (via CapEx for Enhanced Capacity & Power Quality) Construction of Paco Delivery Point’s Additional 115 kV Lines  September 30, 2017 (RY 2015 Project; ERC-Approved Budget – PhP 144.76 M) 1 • The project will shift Legazpi and Kamagong Substations fro

  26. Slide 26: Distribution Code Compliance and Stevie Awards

    Business Updates: Significant Events/ Customer Initiatives & Programs MERALCO is the 1st D.U. deemed 100% compliant One Meralco & OMF Recognized in with the Philippine Distribution Code Stevie International Business Awards • First time a DU was declared FULL compliance already for all 45 standards.

  27. Slide 27: Solar PSA and DWSA Signings

    Business Updates: Significant Events/ Customer Initiatives & Programs Meralco & Solar Phils. Tarlac Corp. (SPTC) Meralco & Citicore Energy Solutions, Inc. (CESI) Sign PSA at a Headline Rate of P2.9999/kWh Sign DWSA  Power Supply Agreement (PSA) for the sale and purchase of solar power from plant be

  28. Slide 28: Customer Programs: Kload and Orange Tag

    Jan-16 2,672 20,525 Feb-16 1,399 21,924 Mar-16 1,291 23,215 Apr-16 457 23,672 May-16 2,206 25,878 Incremental Jun-16 3,137 29,015 Jul-16 1,903 30,918 Aug-16 1,585 32,503 Sep-16 2,571 35,074 Oct-16 973 36,047 Cumulative Nov-16 2,091 38,138 Dec-16 2,844 40,982 Jan-17 1,761 42,743 Feb-17 2,696 45,439 T

  29. Slide 29: Customer Stories and Touchpoint Programs

    Business Updates: Significant Events/ Customer Initiatives & Programs Communicate Customer Stories Programs to Delight Customers Touchpoint Theme: The Meralco Luminaries As end-to-end energy solutions partner Customer eXperience Engine (CXE) Release 1- I-JOIN (Online Service Application) Payment Pro

  30. Slide 30: Customer Initiatives / Significant Events

    Business Updates: Significant Events/ Customer Initiatives & Programs Customer Initiatives / Significant Events JOLLIBEE FOODS CORP. (JFC) PDRF BUSINESS CONTINUITY ASEANA-MERALCO-MIESCOR PLANNING underground facility (civil works) SOUTH TECHNICAL FORUM FOR LAGUNA LGUS GERMAN-PHILIPPINE CHAMBER OF CO

  31. Slide 31: Meralco Employer and Innovation Recognition

    Business Updates: Significant Events/ Customer Initiatives & Programs MERALCO is 2017’s No. 1 Company "MERALCO has a culture of innovation“ - “Filipinos Want To Work For" First Pacific Leadership Academy • Awarded during the 2017 MVP Group Innovation Conference at FPLA • “If you have an innovation e

  32. Slide 32: 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 27 October 2017

  33. Slide 33: San Buenaventura Power Limited Co. (SBPL)

    San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon  Construction of the power project is now on its 23rd month and on schedule for commercial operations in mid-2019. SWFGD Aeration, Intake Structure, Water Treatment and Electrical Control Bu

  34. Slide 34: Redondo Peninsula Energy, Inc. (RP Energy)

    Redondo Peninsula Energy, Inc. (RP Energy) 2x300 MW CFB Coal-Fired Power Plant in Subic, Zambales  Power Supply Agreements (PSA) for the 1st 300 MW signed with Meralco (225 MW) and Aboitiz Energy Solutions, Inc. (75 MW) in April 2016. Application for approval of the Meralco PSA submitted to the ERC

  35. Slide 35: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600 MW Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon  Environmental Compliance Certificate (ECC) obtained in October 2015  Power Supply Agreement (PSA) for the 2 x 600 MW power plant with Meralco signed in April 2016. The PSA is awaiting ERC appro

  36. Slide 36: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600 MW Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon  Turnover of resettlement housing for the affected families was completed last March 8.  Construction of a 1.6-km Access Road to the project site ongoing and is expected to be operational by end

  37. Slide 37: St. Raphael Power Generation Corporation (SRPGC)

    St. Raphael Power Generation Corporation (SRPGC) 2x350 MW Pulverized Coal-Fired Power Plant in Calaca, Batangas  MGen and Semirara Mining and Power Corp. entered a Joint Venture Agreement for a 50-50 stake in the planned 2x350 MW coal power plant in Calaca, Batangas in 2016.  A PSA was signed by S

  38. Slide 38: Other Investments

    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 in June signed an agreement with the Alcantara Group for the acquisit

  39. Slide 39: Cautionary Statements

    Cautionary Statements This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on October 27, 2017. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MER

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