Manila Electric Co. · PSE:MER
Manila Electric — 9M 2022 Earnings Presentation
39 slides from Manila Electric's earnings presentation, Oct 28, 2022
Slide 1: Nine Months Ended September 30, 2022 Financial and Operating Results
NINE MONTHS ENDED SEPTEMBER 30, 2022 FINANCIAL AND OPERATING RESULTS Investors and Analysts Briefing Media Briefing October 28, 2022
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: Financial Results
NINE MONTHS ENDED SEPTEMBER 30, 2022 FINANCIAL RESULTS October 28, 2022
Slide 4: Financial Summary in PhP, Mn
September 2022 YTD Financial Summary in PhP, Mn With 2021 comparative figures 3
Slide 5: Revenues in PhP, Mn
September 2022 YTD Revenues in PhP, Mn 4
Slide 6: Costs and Expenses in PhP, Mn
September 2022 YTD Costs and Expenses in PhP, Mn 5
Slide 7: Capital Expenditures in PhP, Mn
September 2022 YTD Capital Expenditures in PhP, Mn Consolidated CAPEX grew 12% largely driven by DU-related electric capital projects to support new connections, asset renewals, and load growth. 6
Slide 8: Net Income and EBITDA in PhP, Mn
September 2022 YTD Net Income and EBITDA in PhP, Mn Increase in CCNI driven by strong contribution from power generation and recovery of DU volumes. 7
Slide 9: Power Generation Results of Operations
September 2022 YTD Power Generation Results of Operations Continued CCNI contribution from power generation as a result of PacificLight’s strong performance, SBPL and BulacanSol’s continued delivery to Meralco under 20-year PSAs, offset by losses from GBP. (Php 517 M) Core Net Income PhP 8,971 M PhP
Slide 10: MIESCOR Infrastructure Development Corporation (MIDC)
MIESCOR Infrastructure Development Corporation (MIDC) Milestones reached in common tower business with signing of agreement and initial handover of acquired towers from Globe • A 51-49% JV tower company between MIESCOR and US-based Stonepeak Infrastructure Partners; • November 29, 2021: MIDC was inc
Slide 11: Credit and Debt Profile in PhP, Mn
September 2022 YTD Credit and Debt Profile in PhP, Mn (except ratios) 10
Slide 12: Earnings per Share in PhP per share
September 2022 YTD Earnings per Share in PhP per share Core and reported Earnings per share grew to Php 17.394 and Php 17.530 respectively 11
Slide 13: Operating Results
NINE MONTHS ENDED SEPTEMBER 30, 2022 OPERATING RESULTS October 28, 2022
Slide 14: Operational Highlights
September 2022 YTD Operational Highlights BUSINESS DRIVERS SERVICE PERFORMANCE ELECTRICITY RATE per kWh Energy Sales System Loss Average Retail Rate 36,553 GWh 5.88% PhP 9.43 ▲ 6% vs. 2021 ▲ 0.24%PT, 12-MMA vs. 2021 ▲ 17%, vs 2021 Customer Count System Average Interruption Frequency Index 7.572 M 1.
Slide 15: Consolidated Energy Sales in GWh
September 2022 YTD Consolidated Energy Sales in GWh Surpassed pre-pandemic levels as total energy sales increased 6% vs. 2021 driven by sustained double-digit growth from Commercial segment 36,553 35,005 34,398 32,921 32,539 ▲ 6% 10,677 Industrial 10,268 10,263 29% 9,768 29% 8,827 30% 30% 27% 12,841
Slide 16: DU Energy Sales Profile and Drivers
September 2022 YTD DU Energy Sales Profile and Drivers 2022 2021 2020 GWh RESIDENTIAL ▲ 1%, YTD GWh COMMERCIAL ▲ 14%, YTD GWh INDUSTRIAL ▲ 4%, 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 S
Slide 17: Consolidated Customer Count in M
September 2022 YTD Consolidated Customer Count in M Sustained OSA and PCA performance driven by energizations of mixed-use buildings, condominiums, subdivisions, and retail and telecoms customers Project-covered Applications (PCA) 2021 2022 7.558 7.572 0.011 0.011 Industrial 0.565 912 787 781 794 0.
Slide 18: Consolidated NSI in GWh
September 2022 YTD Consolidated NSI in GWh Higher vs. pre-pandemic performance driven by recovery across all customer segments Power Fuel Sources Mix Special Solar 1% Contracts 1% 3% Liquid Fuel 38,492 6% WESM 36,853 36,150 34,815 34,533 22% New PSA 28% Multi-fuel ▲ 6% 31% RES 32% Coal 40% IPP/ Old
Slide 19: Peak Demand in GW
September 2022 YTD Peak Demand in GW Meralco and Luzon peaks above 2021 due to heightened activities amid Alert Level 1 Luzon 12.11 11.64 Meralco ▲ 4% 8.11 7.81 ▲ 4% May 27, 2021 May 13, 2022 May 28, 2021 May 12, 2022 18
Slide 20: System Loss in %, 12-MMA
September 2022 YTD System Loss in %, 12-MMA Higher due to low base in July 2021 12-MMA; Performance still well within cap 6.5% SYSTEM LOSS CAP 6.14 6.08 6.10 6.03 2020-2021 5.96 5.97 6.07 5.96 6.02 5.88 5.83 5.94 5.89 5.90 5.88 2021-2022 5.85 5.83 5.86 5.75 5.76 5.78 5.64 5.51 5.12 Oct Nov Dec Jan F
Slide 21: S-Factor Performance and Guaranteed Service Levels (GSL)
September 2022 S-Factor Performance and Guaranteed Service Levels (GSL) Continued to deliver within performance ceilings SAIFI times SAIDI in minutes MAIFI times Rewards < 1.43 Rewards < 157.04 Rewards < 7.59 ▼ 9% ▼ 7% ▼ 4% Network 109.892 7.551 7.249 1.154 1.052 102.507 2021 2022 2021 2022 2021 202
Slide 22: Networks CapEx in PhP, B
September 2022 YTD Networks CapEx in PhP, B 62% of CapEx budget utilized with ~90% of spend in new connections, asset renewals, and load growth, while continuing to support government projects PhP 21.91B CapEx Budget 6.92 New Connections Pole Relocation Program BUILD BETTER MORE DPWH ROAD WIDENING 5
Slide 23: Network Project Update: Pamplona Uno Substation
Network Project Update Development of Pamplona Uno 115-34.5 kV GIS Substation • Commissioned 1-83 MVA power transformer bank, 1-115 kV, and 1-34.5 kV GIS on July 12, 2022 as part of RY2020 CAPEX filing (PhP 383M) • Implemented to: - Replace retired Las Piñas 34.5-6.24 kV substation - Relieve critica
Slide 24: Network Project Update: Biñan-San Pedro 115 kV Line
Network Project Update Uprating of Biñan-San Pedro 115 kV Line • Completed uprating of 4.3-km line from 1-795 MCM ACSR to 1-497 SQ MM STACIR on September 16, 2022 as part of RY2022 CAPEX filing (PhP 68.5M) • Implemented to: - Increase line capacity from 900 A to 1,800 A - Address capacity and N-1 de
Slide 25: Average Retail Rate in PhP per kWh
September 2022 YTD Average Retail Rate in PhP per kWh 17% higher vs. 2021 mainly due to higher generation charge 9.43 • 32.3% increase in Generation: Higher fuel costs, Peso depreciation, Average Rate 6.16 and higher WESM prices 65% per Customer Segment • 18.0% increase in Transmission: Higher Ancil
Slide 26: DRTU Refund
September 2022 DRTU Refund Refunded 57% (PhP 27.3B of PhP 48.3B) DRTU 1 DRTU 2 DRTU 3 DRTU 4 True Up of IAR vs. AWAT True Up of IAR vs. AWAT True Up of IAR vs. AWAT True Up of 3RP RAB via from Jul 2015-Jun 2022 Nature of Refund from Jul 2015-Nov 2020 from Dec 2020-Dec 2021 Jul 2011-Jun 2015 rates (r
Slide 27: Regulatory Update: ERC Orders Denying Price Adjustment 1/2
Regulatory Update ERC Orders Denying the Price Adjustment 1/2 • April 18, 2022: South Premier Power Corp. (SPPC) and San Miguel Energy Corp. (SMEC) sent Notices of Change in Circumstances (CIC) to MERALCO. On May 11, 2022, MERALCO joined SPPC and SMEC’s Motions for Price Adjustment that was filed wi
Slide 28: Regulatory Update: ERC Orders Denying Price Adjustment 2/2
Regulatory Update ERC Orders Denying the Price Adjustment 2/2 • Dissenting opinion (of Commissioners Lumbatan and Fuentes) viewed that claims should be granted based on following grounds: 1. PSAs allow parties to claim a temporary price adjustment for specific period based on CIC – as CIC provision
Slide 29: Regulatory Update: Staggered Recovery of Nov. 2013 Supply Month
Regulatory Update Supreme Court (SC) Updates: Staggered Recovery of Nov. 2013 Supply Month G.R.Nos.210245,210255,and210502 • August 3, 2021: The SC, voting 6-5 with two (2) Justices abstaining, issued Decision affirming the December 9, 2013 letter approval of ERC which granted MERALCO authority to s
Slide 30: Regulatory Update: NPC-MERALCO Settlement Agreement 1/3
Regulatory Update Supreme Court (SC) Updates: NPC-MERALCO Settlement Agreement (SA) 1/3 G.R.No.212268 Background • November 21, 1994: MERALCO and NPC entered into a Contract for the Sale of Electricity (CSE) effective for a period of ten years (January 1, 1995 to December 31, 2005). CSE included a M
Slide 31: Regulatory Update: NPC-MERALCO Settlement Agreement 2/3
Regulatory Update Supreme Court (SC) Updates: NPC-MERALCO Settlement Agreement (SA) 2/3 G.R.No.212268 Background • April 15, 2004: Joint Application for approval of pass-through provision in SA filed with ERC o Proceedings completed but remains suspended o OSG questioned validity of SA • November 23
Slide 32: Regulatory Update: NPC-MERALCO Settlement Agreement 3/3
Regulatory Update Supreme Court (SC) Updates: NPC-MERALCO Settlement Agreement (SA) 3/3 G.R.No.212268 Resolution dated September 28, 2022: • CA correctly upheld jurisdiction of RTC over the Petition for Declaratory Relief. o Parties are not precluded from resorting to alternative modes of resolution
Slide 33: One Meralco recognized with 7 Stevie Awards 1/2
One Meralco recognized with 7 Stevie Awards 2 Gold Stevies in Corporate Social Responsibility (CSR) and Use of Social Media Categories 1/2 GOLD GOLD The Stevie Awards are the OMF School Electrification Program: Meralco Corporate Partners world's premier business Energizing the Country’s Off-Grid Vib
Slide 34: One Meralco recognized with 7 Stevie Awards 2/2
One Meralco recognized with 7 Stevie Awards 4 Silvers and 1 Bronze in Annual Report, CSR, and Non-Profit Categories 2/2 SILVER SILVER SILVER Meralco 2021 Annual Reports: OMF Household Electrification Program: One for Trees: Empowering People and Bayanihan, Malasakit, and Kalinga Powering-Up Communit
Slide 35: Power Generation Operating Results
NINE MONTHS ENDED SEPTEMBER 30, 2022 POWER GENERATION OPERATING RESULTS October 28, 2022
Slide 36: Power Generation Highlights
September 2022 YTD Highlights Energy Delivered in GWh YTD YTD • MGen-GBP Group delivered 9,929 GWh, a 6% decline % change 2022 2021 from previous year’s 10,515 GWh largely due to outages • GBP’s energy delivered stood at 3,601 GWh, lower than 3,601 3,802 ▼ 5% 3,802 GWh in 2021 on account of the impa
Slide 37: Renewable Energy Development 1/2
Renewable Energy Development 1/2 • Target of 1,500 MW renewable energy (RE) capacity in next 5-7 years • RE Projects under construction: - 75 MWac solar in Baras, Rizal (in partnership with Mitsui) - 68 MWac solar in Ilocos Norte (in partnership with Vena Energy) PH Renewables, Inc. (PHRI) secures P
Slide 38: Renewable Energy Development 2/2
Renewable Energy Development 2/2 • RE Projects under Development: - 45 MWac solar in Cordon, Isabela (in partnership with Mitsui) • Other RE Projects under Pre-Development: - Construction of first large-scale wind farm - Solar/Storage developments that can compete in mid- merit space 37
Slide 39: Thank You
THANK YOU & AC be
Manila Electric Company (Meralco) — 9M 2022 Earnings Presentation on 6ix