Manila Electric Co. · PSE:MER
Manila Electric — Q1 2020 Earnings Presentation
49 slides from Manila Electric's earnings presentation, Apr 27, 2020
Slide 1: Financial and Operating Results
FINANCIAL AND OPERATING RESULTS | scans V ORS & BN ASS BRIEEING He G I i WN as
Slide 2: Slide 2
Slide 3: Electricity Revenues 1Q 2020 vs 1Q 2019
75,378 70,029 14,273 Distribution revenues 15,578 Electricity Revenues = 73,632 Electricity Revenues = 67,911 Generation & other pass- 59,359 through charges 52,333 Non-electricity revenues 2,118 1,746 1Q 2020 1Q 2019
Slide 4: Costs and Expenses and Capital Expenditures
6,725 2,080 10% Costs and Expenses 6,587 3% 10% 51,823 77% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 4,339 4,152 Capital Expenditures Others 34% Subtransmission & Distribution Facilities 66% 1Q 2020 1Q 2019
Slide 5: EBITDA and Income Margins
12.0% 11.7% 7.3% 11.7% Margins 8.2% 7.4% 3.7% 7.5% 8,828 8,828 8,408 5,724 5,598 5,671 5,095 2,619 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 1Q 2020 1Q 2019 Core EBITDA Reported EBITDA Core Income Reported Income
Slide 6: Total Debt and Repayment Schedule
TOTAL DEBT (in Million PhP) 40,896 31,356 (in Million PhP, Except Ratios) 1Q 2020 1Q 2019 12,458 15,964 Cash 57,499 36,057 28,438 15,392 Gross Debt 40,896 31,356 Net Debt (16,603) (4,701) 1Q 2020 1Q 2019 Current Portion Non-current Portion Gross Debt/EBITDA 2.0 0.9 LONG-TERM DEBT REPAYMENT SCHEDULE
Slide 7: Earnings Per Share
Earnings Per Share (in PhP) 5.032 5.078 4.967 2.323 Earnings Per Share Core Earnings Per share 1Q 2020 1Q 2019
Slide 8: Report of the Chief Executive: Performance ended March 31, 2020
EPORT OF THE HIEF XECUTIVE Performance ended March 2020 8 of of 31 31
Slide 9: Operating Highlights
Operating Highlights ▪ Reflecting impact of ECQ starting March 17 Energy Customer Net System Peak Sales Count Input (NSI) Demand 4.8%* 3.8%* 3.7%* 9.6%* 10,879 GWh 6.93 million 11,402 GWh 7,614 MW Ave. Retail S-Factor Rates & GSL** 11.0%* Sustained Service Business P8.11/kWh Improvement Updates
Slide 10: Details
Details 10
Slide 11: Energy Sales: 1Q 2020
Energy Sales: 1Q 2020 ➢ Up 4.8% vs. 2019 (+498 GWh) Share / for 1Q 2020: ▪ About 10% (1,117 GWh) estimated beginning Mar. 17 due to ECQ Growth: Growth: 4.8% 11.8% 5.3% 2.3% 10,879 RESIDENTIAL 8.9% 10,381 30.9% 10,145 3,366 GWh Total sales volume COMMERCIAL 2.6% for Flat Streetlights 9,317 acco
Slide 12: Customer Count: 1Q 2020
Customer Count: 1Q 2020 ➢ Up 3.8% vs. 2019 (+251,277 customers) Share / for 1Q 2020: Growth: Growth: 3.8% 3.9% 2.7% 4.5% 6.933 RESIDENTIAL 4.8% 6.682 92.1% 6,386,813 4.5% 6.397 customers COMMERCIAL 6.107 Total customer count 7.7% for Flat Streetlights 530,864 5.842 account for 0.1%, customers
Slide 13: MER Sales in Q1 had decent growth of 4.8%
MER Sales in Q1 had decent growth of 4.8% RES’L(11.8%) led with a double-digit growth; COM’L(5.1%) had decent growth while IND’L(-4.0%) decreased as external factors, Taal eruption in Jan and COVID-19 impact on supply chain in Mar, impacted it COMMERCIAL INDUSTRIAL 4,265 GWh 2,944 GWh ▲ 5.1% ▼ 4.0%
Slide 14: Energy Sales: Q1 2020, Residential
Energy Sales: Q1 2020, Residential RESI leads all sector with 11.8% growth in Q1 Posted double-digit increase in Jan and Feb, remained positive in Mar since most residence are under ECQ 3,363 GWh RESIDENTIAL ▲ 11.8% KEY TRENDS & DEVELOPMENTS Q1 Province % inc GWh 9.1% 247K workers affected in MM due
Slide 15: Energy Sales: Q1 2020, Commercial
Energy Sales: Q1 2020, Commercial COM’L had a decent growth of 5.1% in Q1 4,265 GWh COMMERCIAL ▲ 5.1% KEY TRENDS & DEVELOPMENTS Top 3 Commercial Sector Δ Leechiu Property Consultants lowered its forecast 2020 Q1 (in GWh) (in GWh / %) expects office space supply 44% lower than originally forecasted.
Slide 16: Energy Sales: Q1 2020, Industrial
Energy Sales: Q1 2020, Industrial IND’L decreased by 4.0% in Q1 INDUSTRIAL 2,944 GWh KEY TRENDS & DEVELOPMENTS (excl. Gen. Wheeling) ▼ 4.0% Industrial Sector Δ 2020 Q1 (in GWh) (in GWh / %) Consumer consumption to decline FOOD & BEVERAGE 605 595 10 ▲1.7% on non-essential commodities and activities M
Slide 17: NSI and Peak Demand: 1Q 2020
NSI*: 1Q 2020 Peak Demand: 1Q 2020 ➢ Up 3.7% (+409 GWh) ➢ Meralco Peak Demand up 9.6% vs. 2019 to 7,614 MW Meralco, MW: 7,740 MW 7,614 2019 Peak* 3.7% 9.6% 11,402 10,993 6,950 *June 4, 2019 in GWh 2019 2020 (Mar. 21) (Mar. 10) 2019 2020 Details (2019): Luzon Peak Demand, MW: Parent: 98.8% (11,262
Slide 18: Energy Sources and Fuel Mix: 1Q 2020
Energy Sources: 1Q 2020 Fuel Mix: 1Q 2020 Liquid Fuel 0.002% Special Contracts Natural Gas Solar New PSAs 1.1% 35.8% Coal 0.2% 16.6% Other RESs 32.3% 17.1% Multi-fuel IPPs/ Old PSAs WESM 31.7% 52.2% 13.0% SOURCE GWh Share TYPE OF FUEL GWh Share New PSAs* 1,897.6 16.6% Natural Gas 4,078.0 35.8% Old I
Slide 19: Average Retail Rates: 1Q 2020
Average Retail Rates: 1Q 2020 (Reflects Generator Wheeling adjustments) ➢ 11.2% lower than 2019 average rates (-P1.02/kWh) • Generation Charge is largest component in customer’s bill at 57.8%; Other Bill Components make up the balance of 42.2% Other Bill Components 42.2% 1Q 2019 Overall Ave, P/kWh 1
Slide 20: System Loss Performance: March 2020, 12-MMA
System Loss Performance: March 2020, 12-MMA ➢ 12-MMA ending March 2020 at 5.42%, lowest ever ▪ Improved by 3.2% vs. March 2019’s 5.60% ▪ Lower by 1.58% pts. vs. newly-set SL cap of 7.00% (starting Jan. 1, 2020) 7.25%* 7.00%* Apr. 2018 - Mar. 2019 Apr. 2019 - Mar. 2020 1.58% 5.98 5.48 5.60 5.56 5.42
Slide 21: S-Factor & GSL Performance
S-Factor & GSL Performance: 1Q 2020 & March 2020 (RY2020) 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 D
Slide 22: Business Updates & Other Events of Interest
Details Business Updates & Other Events of Interest 22
Slide 23: Keeping the Lights On: operations during ECQ
▪ Dispersed operation of Back-up Control Centers manned 24/7 by locked down SOEs ▪ Deployment of Networks Emergency Operations Personnel (NEOP) and Skeletal Workforce ▪ Quick response to emergency power outages or system troubles ▪ Quick execution of electric service connections for government agenc
Slide 24: Keeping the Lights On: Dispersed System Control Operations
Business Updates: Keeping the Lights On DISPERSED SYSTEM CONTROL OPERATIONS System Control Center (SCC) – Distributed Control Center Balintawak Sector Meralco Franchise Area NORTH AREA System Control Center (SCC) - Delta Meralco Operating Center - TSB CENTRAL AREA SOUTH AREA System Control Center
Slide 25: Keeping the Lights On: Networks Emergency Operations Personnel
Business Updates: Keeping the Lights On DEPLOYMENT NETWORKS EMERGENCY OPERATIONS PERSONNEL (NEOP) Energy Sourcing Office (ESO) Operations Technology Management Meralco Operating Center - TSB Operating Center - TSB Distribution, Sub-Transmission & Metering Services Crew Sector Compounds and Various
Slide 26: Keeping the Lights On: Maintenance Projects
Business Updates: Keeping the Lights On PROACTIVE EXECUTION OF DS & STS MAINTENANCE PROJECTS Replacement of Replacement of Replacement of Installation of LBS DT Spot Testing Rotten Cross-Arms Rotten Pole Insulators Tree Trimming PMT of Power 115 kV HO Bushing Sealing of S/S Safety Activities Trans
Slide 27: Keeping the Lights On: Emergency Response
Business Updates: Keeping the Lights On QUICK RESPONSE TO EMERGENCY POWER OUTAGES EXECUTION OF SR-ECP PROJECTS Outage Management and Restoration Works in various locations San Jose 115kV Lines – MSERV EPC Project (March 21, 2020) 27 of 35
Slide 28: 2020 Luzon Demand-Supply Outlook
Business Updates: 2020 Luzon Demand-Supply Outlook 2nd Quarter (April – June) MONTH April May June WEEK 14 15 16 17 18 19 20 21 22 23 24 25 26 Existing Capacity, in MW 14,388 14,572 13,607 13,607 13,173 13,173 13,173 13,173 13,173 13,541 13,541 13,541 13,541 Capacity on Outage, MW 2,032 2,732 1,972
Slide 29: CY2020 Updates on CapEx
Business Updates: CY2020 Updates on CapEx 29 of 35
Slide 30: Keeping Our Customers Engaged
Keeping Our Customers Engaged 30
Slide 31: Engaging Customers during COVID-19
Engaging Customers during COVID-19 March 16 March 20 March 21 30-Day Payment Extension Meter Reading and Bill Delivery Suspension Closure of All Business Centers Bill Estimation No Maintenance Activities #KeepingTheLightsOn April 6,8 & 13 April 11 & 20 April 22 & May 4 SMS to 1.3M customers on billi
Slide 32: How to Register to Meralco Online
How to Register to Meralco Online • Increase acquisition and service enrollment by aiding customers Objective in registration • Increase service enrollments and reactivate deactivated accounts Target Market All residential customers 6 Caption You can now use your Facebook or Google account to sign u
Slide 33: How to Pay (overdue ECQ) Bills
How to Pay (overdue ECQ) Bills Objective Encourage customers to pay their overdue bills by: a. Highlighting the view and pay bills benefit of Meralco Online b. Providing different payment Start powering through your partners pile of overdue bills! Pay your bills convenience Target Market Customers w
Slide 34: How to Apply for Service
How to Apply for Service Objective Communicate that Meralco is open and has modified its service application process for safer transactions Target Market Residential customers building a house (with 90% completion) or newly built house for energization. Caption Caption We’ve made service application
Slide 35: Additional Updates: One Meralco Response to COVID-19
ADDITIONAL UPDATES #KeepingTheLightsOn One Meralco Response to COVID-19 35 of 35
Slide 36: COVID-19 support for hospitals and institutions
ENERGIZED 17++ HOSPITALS, GOVERNMENT AGENCIES, VITAL INSTITUTIONS INCLUDING MERALCO PROVIDES SUBSIDY IN THE INSTALLATION & ENERGIZATION OF TEMPORARY TREATMENT FACILITIES ELECTRICITY BILLS OF PASIG LGU ELECTRICAL FACILITIES TO SERVE THE FIGHTING COVID-19 TEMPORARY SHELTERS FOR HEALTH CARE MORTU
Slide 37: COVID-19 support for frontliners and donations
WELCOMED 32 FRONT LINERS FROM THE eSAKAY & OMF PARTNERED WITH THE DOTR MEDICAL CITY TO OUR MULTI- PURPOSE and SOME LGUs IN DEPLOYING eVEHICLES HALL (MPH). TO TRANSPORT HEALTH WORKERS AND RAISED P1.8 M FROM EMPLOYEES VIA OMF’S ▪ Converted into a temporary sleeping hall, ESSENTIAL PERSONNEL. “HE
Slide 38: One Meralco Sustainability Agenda
Business Updates: One Meralco Sustainability Agenda Meralco’s marketplace for sustainable lifestyle choices • Weekend market for eco-friendly goods (e.g., SUP alternatives, sustainably-farmed produce, and zero-waste products, etc.) • Platform for talks and workshops on sustainable living (e.g., plan
Slide 39: One Meralco Sustainability Agenda
Business Updates: One Meralco Sustainability Agenda “I am happy to know that in the corporate “Just like Meralco, we believe in “The Good Store ay isa sa mga world, especially in the energy sector, we sustainability. And so, we will be magagandang proyekto ng Meralco na have the lead corporation, Me
Slide 40: One Meralco Sustainability Agenda: Women Empowerment Principles
Business Updates: One Meralco Sustainability Agenda X Meralco pledges its support to the UN’s Women Empowerment Principles (WEP) In support of UN Sustainability Development Goal 5 (Gender Equality), Meralco is a pioneer signatory in the Philippines for WEP. UN Women to support Meralco in: • Assessin
Slide 41: One Meralco Sustainability Agenda: Digitization
Business Updates: One Meralco Sustainability Agenda Drove and rolled out key digitization initiatives to empower and sustain our employees and customers HEIGHTENED WORKFORCE MONITORED EMPLOYEE ENHANCED CUSTOMER PRODUCTIVITY HEALTH AND WELLNESS SERVICE AND EXPERIENCE MS Teams MS One Drive Code Light
Slide 42: Thank You
#KeepingTheLightsOn THANK YOU 42 of 42 Energization of Rizal Memorial Stadium, converted into a government COVID19 medical facility
Slide 43: Meralco PowerGen Corporation Overview of Operations
Meralco PowerGen Corporation Overview of Operations 27 April 2020
Slide 44: San Buenaventura Power Limited Co. (SBPL)
Meralco PowerGen Corporation 44 Updates on Growth and Expansion 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;
Slide 45: Atimonan One Energy, Inc. (A1E)
Meralco PowerGen Corporation 45 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) ▪ Awaiting final terms of reference and
Slide 46: MGEN Renewable Energy (MGreen)
Meralco PowerGen Corporation 46 Updates on Growth and Expansion MGEN Renewable Energy, Inc. (MGreen) was established to serve as MGEN’s subsidiary for its renewable energy investments. • MGreen targets around 1,000 MW of renewable energy projects over the next 5-7 years. • The focus is on the develo
Slide 47: PowerSource First Bulacan Solar, Inc.
Meralco PowerGen Corporation 47 Updates on Growth and Expansion PowerSource First Bulacan Solar, Inc. 50MWac Solar Power Plant in San Miguel, Bulacan Total Project Cost: PhP4.25 Billion ▪ 40%-owned by MGEN Renewable Energy, Inc. (MGreen) ▪ MGreen’s first solar investment ▪ Signed an engineering, pro
Slide 48: Other Investments
Meralco PowerGen Corporation 48 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 49: Disclaimer
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on April 27, 2020. 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 2020 Earnings Presentation on 6ix