Manila Electric Co. · PSE:MER
Manila Electric — FY2017 Earnings Presentation
45 slides from Manila Electric's earnings presentation, Feb 26, 2018
Slide 1: Results
RESULTS | Sasa
Slide 2: Financial Highlights FY 2017
FINANCIAL HIGHLIGHTS FY 2047
Slide 3: Quarterly financial highlights 2017
2017 Q1 Q2 Q3 Q4 Q4 2016 %Δ Sales Volume (in GWh) 9,317 11,021 11,063 10,701 10,039 7% Revenues 66,576 74,456 73,357 68,167 62,017 10% Electricity 64,724 72,685 71,439 66,324 60,071 10% Distribution 13,025 15,981 15,676 14,918 14,008 6% Generation and other pass-through 51,699 56,704 55,763 51,406 4
Slide 4: Electricity Revenues FY2017 vs FY2016
282,556 257,181 59,600 56,870 Electricity Revenues = 275,172 Electricity Revenues = 249,206 215,572 192,336 7,384 7,975 FY 2017 FY 2016
Slide 5: Costs and Expenses; Capital Expenditures
7,520 8,533 25,567 3% 3% Costs and Expenses 10% 214,558 84% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 12,127 11,584 Capital Expenditures FY 2017 FY 2016
Slide 6: EBITDA and Net Income Margins
34,638 33,956 34,474 34,049 20,213 20,384 19,583 19,176 12.6% 13.6% 12.5% 13.7% Margins* 7.3% 7.9% 7.4% 7.7% Core EBITDA Reported EBITDA Core Net Income Reported Net Income * On consolidated electricity revenues FY 2017 FY 2016
Slide 7: Total Debt and Repayment Schedule
TOTAL DEBT (in Million PhP) 40,256 40,347 (in Million PhP, Except Ratios) FY 2017 FY 2016 24,786 26,999 Cash 45,937 46,656 Gross Debt 40,256 40,347 15,470 13,348 Net Debt (5,681) (6,309) FY 2017 FY 2016 Current Portion Non-current Portion Gross Debt/EBITDA 1.17 1.18 LONG-TERM DEBT REPAYMENT SCHEDULE
Slide 8: Cash and Investments
91,246 93,189 4,768 10,186 4,360 36,181 36,347 45,937 46,656 FY 2017 FY 2016 Cash Held-to-maturity investments Available-for-sale investments Time deposits
Slide 9: Dividend Yield
Dividend Yield 350.00 45.00 328.60 320.00 40.00 300.00 260.60 265.00 35.00 251.00 256.00 247.20 250.00 228.00 30.00 25.08 200.00 25.00 in PhP in PhP 150.00 18.23 20.00 15.00 100.00 15.25 16.21 13.79 12.36 10.00 10.20 50.00 7.80 8.10 5.00 6.95 - - 2010 2011 2012 2013 2014 2015 2016 2017 Year-end stoc
Slide 10: Operations Report
OPERATIONS REPORT Performance ended December 2017
Slide 11: Operating Highlights
Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 4.9%* 4.8%* 3.3%* 4.1%* 42,102 GWh 6.33 million 6,973 MW 44,639 GWh Ave. Retail S-Factor Rates & GSL** 7.1%* Sustained Service Business P8.03/kWh Improvement Updates *vs. same period, previous year **For GSL, RY
Slide 12: Details
Details
Slide 13: Energy Sales: FY2017
Energy Sales: FY2017 Up 4.9% vs. 2016 (+1,960 GWh) Share / for FY2017: CAGR10Y: 4.9% CAGR5Y: 5.1% 4.9% RESIDENTIAL 4.9% 31.0% 4.6% 8.1% 13,060 GWh 5.6% 42,102 COMMERCIAL 3.2% 40,142 GWh • Increase in organic and Sales volume for new/ ramp-up sales 39.4% 37,124 16,597 GWh Flat Streetlights 35
Slide 14: Sales Efforts that Contributed to Sales Growth
SALES EFFORTS THAT CONTRIBUTED TO SALES GROWTH
Slide 15: Commercial and Industrial Sales Growth Drivers
4.7% 4.5% COMMERCIAL INDUSTRIAL % Share to total growth % Share to total growth 16,378GWh 11,821GWh +730GWh +511GWh REAL ESTATE (8.4%) SEMICON (5.6%) Largest demand for office spaces coming from BPOs at 48% but this is a decline from 80% in 2016. POGOs an emergent market at 5- SEIPI maintains 4 to 5
Slide 16: Sales & Customer Drivers: FY2017
Sales & Customer Drivers: FY2017 STRONG EARLY ELECTRICITY -PROSPECTING- DEMAND -PLANNING- EXPANDING CUSTOMER EARLY PROJECT BASE -PROCESSING- -DESIGN- -FACILITATION- -ENERGIZATION- ROBUST CONSUMER SPENDING 42,102 GWh AVAILABILITY CUSTOMER POSITIVE 4.9% PROGRAMS ECONOMIC CONDITIONS EXCELLENT OPERATIN
Slide 17: Energy Sales: FY2017 & Month-on-Month
Energy Sales: FY2017 & Month-on-Month 2017 monthly sales in excess of 3,000 GWh; first-time 3,835 3,741 3,714 3,698 3,637 3,567 3,609 3,608 3,598 3,437 3,488 3,512 3,473 3,495 3,401 3,361 3,416 3,168 3,262 3,110 3,143 3,025 3,039 2,908 6.9% 0.8% 0.5% 1.5% 3.7% 5.5% 6.1% 6.5% 6.9% 7.3% 5.3% 7.1%
Slide 18: Customer Count: FY2017
Customer Count: FY2017 Up 4.8% vs. 2016 (+288,284 customers) Share / for FY2017: CAGR10Y: 3.5% RESIDENTIAL CAGR5Y: 4.0% 5.0% 2.7% 4.8% 91.9% 5,812,069 4.4% customers 3.8% 6.33 COMMERCIAL Count of Flat 3.9% 6.04 Million Streetlight 7.9% 5.78 account for 0.1%, 499,567 customers 5.57 4,728 cust
Slide 19: Customer Satisfaction Index (CSI): 2017FY
Customer Satisfaction Index (CSI): 2017FY An all-time high! Customers were once again front and center 2000 2000 01 02 03 04 05 06 07 08 09 2010 2010 11 12 13 14 15 16 2017 2017 8.39 Lowest rate in 5 years 8.29 +1 sig point higher 8.18 fewer power interruption, Lower inflation, KLoad launch than l
Slide 20: Peak Demand: FY2017
Peak Demand: FY2017 Stronger demand in 2017 MERALCO PEAK DEMAND LUZON PEAK DEMAND CAGR10Y: 3.9% CAGR10Y: 4.2% CAGR5Y: 4.4% 3.3% CAGR5Y: 5.2% 3.4% 6,973 * 10,054 ** 8.9% 7.1% 6,748 9,726 2.4% 2.9% 5.0% 8,928 3.3% 6,298 8,717 6,121 8,305 5,928 in MW *June 14, 2017 in MW **May 9, 2017 2013 20
Slide 21: Clark Electric (CEDC): FY2017
Clark Electric (CEDC): FY2017 ENERGY SALES, in GWh CUSTOMER COUNT 559.2 574.3 2.7% 2,146 1,987 8.0% 2016 2017 CEDC’s top 5 sales contributors (kWh) for December 2017 include Advent Energy (SSPC), SN Aboitiz Power (Taiyo Nippon Sanso Clark Inc.), Advent Energy (Yokohama Tire Phils.), 2016 2017 Phin
Slide 22: Energy Sources: FY2017
Energy Sources: FY2017 Contracted supply contracts (PSAs and IPPs) delivered 63.1% of total volume in 2017 (6.2% vs. 2016) Contestable volume increased to 24.1% (+5.6% vs. 2016) 42,866.1 44,638.9 100%GWh 100%GWh 4.1% (NSI Equivalent) (NSI Equivalent) 18.5% RES 24.1% 7,909.3 10,743.5 1.8% 752.
Slide 23: Power Fuel Mix: FY2017
Power Fuel Mix: FY2017 Details Natural Gas provided 37.5% of fuel sources while Coal 34.1% with balance, multi-fuel Reduced coal supply by 3.5% (-911 GWh) 42,866.1 44,638.9 100.0%GWh 100.0%GWh (NSI Equivalent) (NSI Equivalent) 4.1% 20.2% 8,649.8 MULTI-FUEL* 26.8% 11,984.5 37.6% 16,123.5 COAL 34
Slide 24: Average Retail Rates: FY2017
Average Retail Rates: FY2017 7.1% higher than 2016 average rates (+P0.53/kWh); Generation Charge, FIT-Allowance and Taxes drove increase For 2017, Generation Charge, largest component in customer’s bill, 54.8%; Meralco 17.7%; NGCP 9.7% 100% P8.03/kWh 100% P7.50/kWh 7.1% TAXES, UNIV CHARGE 0.95
Slide 25: Business Updates & Other Events of Interest
Details Business Updates & Other Events of Interest
Slide 26: Business Updates: Strengthening the Core Business
Business Updates: Strengthening the Core Business (via Completed CapEx Proj. for Enhanced Capacity & Power Quality) Increased power transformer capacity by 512 MVA and circuit length by 66 km 5 Substation Projects Uprating of San Miguel (from 1-20MVA to 1-33 MVA, May 9) Development of Lucena (
Slide 27: PPP Projects Overview Map (as of December 2017)
PPP Projects Overview Map (as of December 2017) 3 5 1 7 2 2017 . Count of Count of as of November as of December PROJECTS Completed Projects Projects Affected Completed % Comp. Affected Completed % Comp. PPP PROJECT 1 LRT2 East Extension 9 5 140 119 85% 140 121 86% 2 Skyway Stage 3 117 81 1241 872 7
Slide 28: DPWH Relocation Projects
DPWH Relocation Projects 2017 Distribution Poles - Sectors STL Total MERALCO Franchise Month North Central South Sub-Total Poles Bulacan Pampanga January - 6 16 22 - 22 February 30 - 24 54 4 58 Gen. Luna Ave. San Mateo March 125 4 4 133 - 133 Rizal April 2 45 66 113 32 145 Manila Bay Metro Manila Ma
Slide 29: Embedded RE Plants in Meralco Franchise
Embedded RE Plants in Meralco Franchise 134 MW Total RE Capacity Embedded RE Capacity: For Export: 113.09 MW (10 EGs) Biomass/Biogas Plants (2 EGs, 9.71 MW) Own-use : 13.45 MW (33 EGs) 1. Pangea Green Energy Philippines, Inc - 34.5 kV, 1.516 MW NM Capacity: 2. Montalban Methane Power Corp – 34.5 kV,
Slide 30: Potential Embedded RE Plants
Potential Embedded RE Plants 1,222 MW Potential Capacity Philippine Spring Water Resources, Inc. Guiguino, Bulacan – Solar (1.08 MW) Powersource First Bulacan Solar Inc. (PFBSI) Ecopark Energy of Valenzuela San Miguel, Bulacan – Solar (64.7 MW) Valenzuela City – Solar (2-8 MW and 4.7 MW) ATN Philipp
Slide 31: Significant Events/ Customer Initiatives & Programs
Business Updates: Significant Events/ Customer Initiatives & Programs Meralco Donates to Rehabilitation of Marawi Meralco and Bacman Geothermal Inc. sign DWSA* • Jan. 9, 2018: Ceremonial Signing for Distribution Wheeling Services Agreement • BGI is the 23rd Retail Electricity Supplier within Meralco
Slide 32: CXE: Customer Experience Engine
CXE We took another major step in transforming the customer experience… In 2017, CXE went live with CRM, OSA, Internal Knowledge Base, and Document Management System and started with the beta testing of the Customer Portal. SIMPLE FAST CONVENIENT TRANSACTIO DAYS TO HEALTHY FRONTLINE NS ENERGIZE
Slide 33: CXE 2018 Releases
CXE 2017 was only the beginning, as we embark on major releases that customers will experience in 2018… In 2018, CXE will go live with Online Billing & Payments and Notifications, Mobile App, Concerns Management, Kiosk App, New Call Center System, and Outage Reporting & Notifications. Jan ‘17 Feb Ma
Slide 34: Prepaid Electricity Customer Activations
In 2017, we activated additional 48,735 PRES customers, cumulative of 89,717. Prepaid Electricity predominantly attracted residential customers, as well as real estate developers 2017 activations: an all-time high; We sustained information drives to residential customers through a We worked with rea
Slide 35: Communicating Monthly Electricity Rates
Communicating the monthly electricity rates remain to be a priority and we utilized several channels to ensure we reach as many household decision makers as possible …making sure we end with good news and tips to help our customers manage energy consumption.
Slide 36: Corporate Partner Engagement
We engaged our Corporate Partners with relevant solutions via: 37 Power Up Forums and Workshops 12 Strategy Planning with Customers …and the resulting partnership stories were published across several touchpoints, with special focus on our Luminaries. We utilize broadsheets, e-DMs, the website and M
Slide 37: Energizing Partnership Programs with LGUs
NOTES: 90 LGUs since 2014. Total of 5 strat since 2016. We sustained our Energizing Partnership and 4 Strategic Planning Sessions Programs, with 51 LGUs in 2017 51 LGUs …and implemented 9 Power-Up Forums with a total of 621 attendees With 97% satisfaction rating Explored 1st microbiz PUF highlightin
Slide 38: DOE Forum on Smart Grid Roadmap
DOE Forum to revive Smart Grid TWG creation and development of National SG Roadmap and Implementation Policies (1H 2018) DOE Meralco Powerlab & SCADA Forum for Smart Grid Policy and Roadmap Tour (Nov 27-29)
Slide 39: Meralco 2017 International Awards
MERALCO 2017 INTERNATIONAL AWARDS el ae FORUM sian NR > (Pass NY 2 Sess Ww 0 \ Mans > = S = a: & ate sap
Slide 40: 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 26 February 2018
Slide 41: 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 country’s first super-critical coal-fired power project is now on its 27th month and is expected to be completed for COD in mid-2019. SWFGD Aeration, Intake Structure, W
Slide 42: Atimonan One Energy, Inc. (A1E)
Atimonan One Energy, Inc. (A1E) 2x600 MW Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon The PSA with Meralco submitted to ERC in April 2016. Public hearings, Technical Working Group (TWG) review and assessment of the PSA and the tariff, and other regulatory processes “Done”. ERC ap
Slide 43: Atimonan One Energy, Inc. (A1E)
Atimonan One Energy, Inc. (A1E) 2x600 MW Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon MGen intends to establish a Joint Venture with the Electricity Supply Board of Ireland (ESBI), a leading third party service provider in O&M services worldwide, that will allow for a transfer of
Slide 44: Redondo Peninsula Energy, Inc. (RP Energy)
Redondo Peninsula Energy, Inc. (RP Energy) Phased 2x300 MW CFB Coal-Fired Power Plant in Subic, Zambales 225-MW Power Supply Agreement (PSA) with Meralco for Phase 1 submitted to ERC for approval in April 2016. Public hearings, Technical Working Group (TWG) review and assessment of the PSA and the
Slide 45: Disclaimer
This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on February 26, 2018. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same mater
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