Manila Electric Co. · PSE:MER
Manila Electric — H1 2019 Earnings Presentation
43 slides from Manila Electric's earnings presentation, Jul 29, 2019
Slide 1: Financial and Operating Results: Half Year Ended June 30, 2019
Slide 2: Financial Highlights 1H 2019
Slide 3: Sales Volume, Revenues, Income and EBITDA by Quarter
2019 2018 % Inc (Dec) Q1 Q2 Q1 Q2 Q1 Q2 Sales Volume (GWh) 10,381 12,442 10,145 11,520 2% 8% Revenues 75,378 89,575 70,807 79,737 6% 12% Electric 73,632 87,635 69,009 77,894 7% 13% Distribution 14,273 18,182 14,081 16,582 1% 10% Generation and other pass-through 59,359 69,453 54,928 61,312 8% 13% No
Slide 4: Electricity Revenues
164,953 164,953 150,544 150,544 Distribution revenues 32,455 Electricity Revenues = 161,267 30,663 Electricity Revenues = 146,903 Q2 89,575 79,737 Generation & other pass- through charges 128,812 116,240 Q1 75,378 70,807 Non-electricity revenues 3,686 3,641 1H 2019 1H 2018 1H 2019 1H 2018
Slide 5: Costs and Expenses and Capital Expenditures
4,357 5,945 12,646 3% 4% Costs and Expenses 8% 126,665 85% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 10,706 Capital Expenditures Subtransmission & Others 6,600 Distribution 25% Facilities 75% 1H 2019 1H 2018
Slide 6: EBITDA and Income with Margins
12.1% 11.7% 12.1% 11.7% Margins 7.5% 7.2% 7.3% 8.0% 19,879 19,879 17,585 17,585 Q2 11,051 11,051 8,897 8,897 12,317 12,007 11,973 10,851 6,719 6,336 6,661 5,934 Q1 8,828 8,688 8,828 8,688 5,598 4,917 5,671 5,312 1H 2019 1H 2018 FY 2019 FY 2018 1H 2019 1H 2018 1H 2019 1H 2018 Core EBITDA Reported
Slide 7: Total Debt and Repayment Schedule
TOTAL DEBT (in Million PhP) 39,882 31,263 (in Million PhP, Except Ratios) 1H 2019 1H 2018 24,410 15,946 Cash 27,319 50,778 Gross Debt 31,263 39,882 15,317 15,472 Net Debt 3,944 (10,896) 1H 2019 1H 2018 Current Portion Non-current Portion Gross Debt/EBITDA 0.79 1.13 LONG-TERM DEBT REPAYMENT SCHEDULE
Slide 8: Earnings Per Share and Dividends Declared
REPORTED AND CORE EARNINGS PER SHARE DIVIDENDS DECLARED (in PhP Per Share) (in PhP Per Share) 10.653 10.623 10.928 9.627 5.464 5.311 Earnings Per Share Core Earnings Per share 1H 2019 1H 2018 1H 2019 1H 2018 Pay-out Ratio 50% 55%
Slide 9: Report of the Chief Executive: Performance ended June 2019
EPORT OF THE HIEF XECUTIVE Performance ended June 2019
Slide 10: Operating Highlights
Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 5.3%* 4.3%* 4.6%* 5.9%* 22,823 GWh 6.74 million 7,740 MW 24,299 GWh Ave. Retail S-Factor Rates & GSL** 4.8%* Sustained Service Business P9.25/kWh Improvement Updates CONSOLIDATED NUMBERS FOR ENERGY SALES, CUSTOM
Slide 11: Details
Details
Slide 12: Energy Sales: 1H 2019
Energy Sales: 1H 2019 ➢ Up 5.3% vs. 2018 (+1,158 GWh) Share / for 1H 2019: Growth: Growth: 5.3% 6.4% RESIDENTIAL 5.3% 3.1% 6.5% 22,823 31.3% 11.1% 21,665 7,146 GWh 19,717 20,338 • Coming from flat Q1 17,753 (0.4% growth), COMMERCIAL Total sales volume substantial increase in Q2 led by Organic
Slide 13: Energy Sales: 1H 2019, Residential
Energy Sales: 1H 2019, Residential Residential sales continued its growth recovery coming from flat 1Q 2019 (0.4%) improved substantially in 2Q (11.3%). For 1H 2019, Organic led the way with 231 GWh. New contributed 29 GWh from 127,130 newly energized customers, Ramp-up contributed 170 GWh. 2019 7,1
Slide 14: Energy Sales: 1H 2019, Residential
Energy Sales: 1H 2019, Residential Residential sales continued its growth recovery coming from flat 1Q 2019 (0.4%) improved substantially in 2Q (11.3%). For 1H 2019, Organic led the way with 231 GWh. New contributed 29 GWh from 127,130 newly energized customers, Ramp-up contributed 170 GWh. 2019 7,1
Slide 15: Energy Sales: 1H 2019, Commercial & Industrial
Energy Sales: 1H 2019, Commercial & Industrial Both Commercial & Industrial continued growth trajectory similar to 1Q 2019 (1.9% for Commercial; 5.0% for Industrial)* 8,803 GWh INDUSTRIAL 6,397 GWh COMMERCIAL ▲ 5.1% (Excl. Generator Wheeling) ▲ 5.2% REAL ESTATE FOOD & BEVERAGE The industry is foreca
Slide 16: Customer Count: 1H 2019
Customer Count: 1H 2019 ➢ Up 4.3% vs. 2018 (+276,420 customers) Share / for 1H 2019: Growth: Growth: 4.3% 4.4% 2.7% 6.745 RESIDENTIAL 4.8% 6.468 92.1% 6,209,093 4.5% 6.174 customers COMMERCIAL 4.0% 5.910 Total customer count 7.7% for Flat Streetlights 520,135 5.683 account for 0.1%, customers
Slide 17: Ave. Temperature (°C): 1H 2019
Ave. Temperature(°C): 1H 2019 ➢ Ave. Temp for 1H 2019 higher vs. 2018 2017 2018 2019 30.2 30.1 Ave Temp (1H) 28.2°C 28.0°C 28.4°C 30.1 29.7 29.3 29.9 29.9 28.9 28.6 28.8 28.4 28.8 27.8 28.0 27.6 28.2 28.2 28.1 27.1 27.9 27.9 26.6 27.6 27.6 27.0 26.8 26.3 26.2 26.2 26.2 2017 2018 2019 Jan Feb Mar Apr
Slide 18: Clark Electric (CEDC): 1H 2019
Clark Electric (CEDC): 1H 2019 ENERGY SALES, in GWh CUSTOMER COUNT 10.5% 2,389 284.1 2,173 9.9% 257.0 2018 2019 2018 2019 CEDC’s top 5 sales contributors for June 2019 include Advent Energy (Yokohama Tire Phils.), SN Aboitiz Power (Taiyo Nippon Sanso Clark Inc.), Phinma Energy Corp. (Mall), SN Abo
Slide 19: NSI and Peak Demand: 1H 2019
NSI*: 1H 2019 Peak Demand: 1H 2019 ➢ Up 5.9% (+1,357 GWh) ➢ Meralco Peak Demand at 7,740 MW, 4.6% up vs. 2018 YTD, breaching 2018 Peak (7,399 MW) 7,399 MW Meralco, MW: 2018 Peak* 7,740 5.9% GWh 7,399 24,299.2 22,942.2 4.6% *May 23, 2018 2018 2019 2018 2019 (May 23) (June 4) Luzon Peak Demand, MW:
Slide 20: Energy Sources and Fuel Mix: 1H 2019
Energy Sources: 1H 2019 Fuel Mix: 1H 2019 SOURCE 1H 2019 Liquid Fuel, 0.4% GWh Share Coal PSAs-Total 8,074.9 33.2% PSA 29.1% MPPC-Masinloc 898.9 3.7% IPP Natural Gas 33.2% TLI-Pagbilao 678.0 2.8% 28.9% 43.5% SMEC-Sual + CEDC 1,390.1 5.7% Multi-fuel WESM SPPC-Ilijan 3,284.0 13.5% 27.0% 7.9% Panay Ene
Slide 21: Average Retail Rates: 1H 2019
Average Retail Rates: 1H 2019 (Reflects Generator Wheeling adjustments) ➢ 4.8% higher than 2018 average rates (+42¢/kWh); mainly due to Generation and FIT-Allowance charges • Lower Transmission and Taxes/ UC/ Subsidies Charges mitigated impact; • Generation Charge is largest component in customer’s
Slide 22: System Loss Performance: June 2019, 12-MMA
System Loss Performance: June 2019, 12-MMA ➢ 12-MMA ending June 2019 at 5.85% ▪ Although declined by 2.5% vs. June 2018’s 5.71%, still within Rewards level and below cap ▪ Lower by 1.40% pts. vs. newly-set SL cap of 7.25% 7.50%* 7.25%* Jul. 2017 - Jun. 2018 1.40% Jul. 2018 - Jun. 2019 6.06 5.91 5.85
Slide 23: S-Factor & GSL Performance: 1H 2019 & RY2019
S-Factor & GSL Performance: 1H 2019 & RY2019 (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 PEN
Slide 24: Business Updates & Other Events of Interest
Details Business Updates & Other Events of Interest
Slide 25: Business Updates: Strengthening the Core Business
Business Updates: Strengthening the Core Business CY2019 UPDATES ON NETWORKS CAPEX 8.005 B MA CA Utilization as of June 2019 29% 43% Feb May Jan Mar PhP 8.005 B (67%) Apr Jun SR BBB 2% 18% New Customer Connections / CA NEP & OCI 2,741M P 5.14B 8% • Installed meters 157,945 • CA projects energized
Slide 26: Build, Build, Build! Support to Government Priority Projects
“BUILD, BUILD, BUILD!” Support to Government Priority Projects Jun 2019 272 poles 100% MNTC S10 Other projects expected to 103 poles 71% commence this CY2019: CALAeX • BGC-Ortigas Link 97% A TOTAL OF LRT 2 Extn 128 poles • C6 SEMME 1,810 poles 92% • PNR North 2 Skyway Stage 3 • 2,780 out of C3-R10 R
Slide 27: Southwoods Substation and Cagbalete Microgrid Pilot Project
Business Updates: Strengthening the Core Business Development of Southwoods 115 kV-34.5 kV Substation Cagbalete Microgrid Pilot Project Energized on April 18, 2019 Energized on May 2, 2019 Energization of First MERALCO Customer • Situated in Cagbalete 1 in Mauban, Quezon • Initial capacity of 83
Slide 28: San Jose–Novaliches 115 kV Line and Lucky Nine 115 kV SCF
Business Updates: Strengthening the Core Business Construction of New San Jose – Novaliches 115 kV Line (Ph1) Commissioning of Lucky Nine Properties Inc.'s 115 kV SCF Energized on May 26, 2019 Energized on June 17, 2019 • The project transfers the service of Lucky Nine Properties Inc. (LNPI) • F
Slide 29: Marikina Transformer Replacement and Calamba Substation Switchyard
Business Updates: Strengthening the Core Business Replacement of Power Transformer No. 2 at Marikina Substn. Commissioning of 115 kV Switchyard of Calamba 230 kV-115 kV Energized on June 28, 2019 Substation Energized on June 30, 2019 • Part of the RP3 approved project “Development of Calamba 230
Slide 30: Significant Event: Recognition
Significant Event: Recognition Meralco legal group awarded at In-House Community Counsels of the Year Awards ▪ Meralco Legal and Corporate Governance and Compliance Group awarded the “In-House Community Practice Team of the Year for Integration,” besting in-house counsels across Asia, the Middle E
Slide 31: Business Updates: Significant Events
Business Updates: Significant Events July 23, 2019 CAGBALETE MICROGRID Inauguration Photo courtesy of Power Philippines ▪ Simultaneous opening ceremonies were done in Cagbalete Island and Grand Hyatt Manila in Bonifacio Global City in Taguig and were attended by DOE Sec. Alfonso G. Cusi, ERC Chair
Slide 32: Customer Engagements: Meralco Online
Business Updates: Customer Engagements, Products & Services and Initiatives Meralco Online is continually growing and has remained stable from any major issues. SEP 2018 to JUNE 30, 2019 Operational Metrics ONLINE PAYMENTS MERALCO (AMOUNT) ONLINE MOBILE Validated (APP DOWNLOADS) PAYMENTS (VOLUME) ME
Slide 33: Customer Engagements: Corporate Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR CORPORATE CUSTOMERS What: Gearing Up for the Energy Efficiency and Conservation Law When: June 28, 2019, 1:30pm – 5:00pm Where: The Grand Hyatt Manila, BGC, Taguig ATTENDEES COMPANIES Energy experts explained how t
Slide 34: Customer Engagements: Biz Customers Campaign
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR BIZ CUSTOMERS We implemented a multimedia campaign featuring customer testimonials to inform Biz customers about our energy solutions for businesses and encourage them to partner with us. Website users rose to 8,15
Slide 35: Customer Engagements: Biz Customers Event
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR BIZ CUSTOMERS Objective: Open doors to unengaged customers by introducing services from Biz Partners Group and Meralco subsidiaries ATTENDEES COMPANIES Quezon City Zone 4 Jun, Seda Vertis North Leads generated for
Slide 36: Customer Engagements: Residential Customers
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR RESIDENTIAL CUSTOMERS RATES: DECREASED by P0.19 /kWh RATES INFO CAMPAIGN *residential customer consuming 200kWh / mo June 10 - 11 June 11 June 9 1,600 Views Average Watch Time: 46secs 33,657 Reached ER: 1.11% VIEWS
Slide 37: Customer Engagements: Residential Service Partners
Business Updates: Customer Engagements, Products & Services and Initiatives FOR OUR RESIDENTIAL SERVICE PARTNERS CONTRACTOR PROGRAM Construction Safety and Health Seminar Date June 24 – 27, 2019 Highlig COSH Seminar, a requirement for the hts PCAB license application, was held for CBM contractors
Slide 38: Meralco PowerGen Corporation: Overview of Operations
Meralco PowerGen Corporation Overview of Operations 29 July 2019
Slide 39: San Buenaventura Power Limited Co. (SBPL)
Meralco PowerGen Corporation Updates on Growth and Expansion San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon Total Project Cost: PhP 56.2 Billion ▪ First supercritical coal power plant in the Philippines ▪ Over-all EPC progress at 99.79% a
Slide 40: Atimonan One Energy, Inc. (A1E)
Meralco PowerGen Corporation 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) ▪ Committed Project and Certified Energy Pr
Slide 41: Renewable Energy Growth Plans (MGreen)
Meralco PowerGen Corporation Updates on Growth and Expansion ▪ The company believes renewable energy will play a significant role in the Philippine energy mix going forward. • Through recently incorporated MGEN Renewable Energy, Inc. (MGreen), the company targets around 1,000 MW of renewable energy
Slide 42: Other Investments: GBPC and PacificLight Power
Meralco PowerGen Corporation 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 Ene
Slide 43: Disclaimer
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on July 29, 2019. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same materials
Manila Electric Company (Meralco) — H1 2019 Earnings Presentation on 6ix