Manila Electric Co. · PSE:MER
Manila Electric — FY2020 Earnings Presentation
38 slides from Manila Electric's earnings presentation, Mar 1, 2021
Slide 1: Financial and Operating Results
YEAR ENDED DECEMBER 31, 2020 FINANCIAL AND OPERATING RESULTS March 1, 2021
Slide 2: Financial Highlights
YE 2020 FINANCIAL HIGHLIGHTS
Slide 3: Financial Summary 2020 vs. 2019
FINANCIAL SUMMARY 2020 vs. 2019 Amounts in million Pesos COSTS & EXPENSES, NET INCOME & CASH & REVENUES CAPITAL EBITDA BORROWINGS EXPENDITURES 2019 2020 2019 2020 2019 2020 2019 2020 Core Net Income Gross Revenues Purchased Power Cost Cash and Cash Investments 23,832 21,711 318,315 275,304 241,032 2
Slide 4: Revenues 2020
REVENUES 2020 Amounts in million Pesos, except percentages Revenue by Component Revenue by Quarter 318,315 318,315 14% 275,304 14% 275,304 65,891 77,189 60,551 61,096 76,173 71,954 267,946 244,207 Electricity 89,575 207,395 Revenues 72,225 75,378 70,029 8,217 7,358 2019 2020 2019 2020 Non-electricit
Slide 5: Costs and Expenses 2020
COSTS AND EXPENSES 2020 Amounts in million Pesos, except percentages Costs and Expenses Breakdown Capital Expenditures Breakdown 287,076 254,313 25,812 20,833 20,233 14% (10%) 8,555 (6%) 15,526 (3%) 11,052 11% (53%) 3% 204,420 (80%) 5,663 (27%) 4,118 (20%) 2019 2020 Operating Depreciation Other Purc
Slide 6: EBITDA and Net Income 2020
EBITDA AND NET INCOME 2020 Amounts in million Pesos, except percentages Core and Reported EBITDA by quarter Core and Reported Net Income by quarter Margin 12% 13% 13% 11% 7% 8% 7% 6% 40,977 38,026 35,287 11,215 8,264 29,847 Q4 10,955 7% 27% 23,832 23,285 9,883 9,883 10,149 21,711 Q3 8,964 5,379 4,96
Slide 7: Credit and Debt Profile 2020
CREDIT AND DEBT PROFILE 2020 Amounts in million Pesos, except percentages Consolidated Debt 2019 2020 41,253 40,144 12,745 3% 14,809 Cash & Cash Investments 106,123 96,718 Gross Debt 41,253 40,144 28,508 25,335 Net Debt 2,991 (10,768) 2019 2020 Current Non-current Gross Debt to EBITDA 1.01 1.34 Long
Slide 8: Core Earnings and Dividends 2020
CORE EARNINGS AND DIVIDENDS 2020 Amounts in Pesos per share, except percentages Cash Dividends and Core Earnings Dividends Declared and Dividend Yield 18.00 6.00% 16.00 21.145 16.058 19.262 14.00 15.092 5.50% 12.00 5.287 10.00 5.17% 2.889 5.07% 5.00% 8.00 7.824 5.108 4.935 6.00 4.50% 4.00 5.464 4.69
Slide 9: Operational Results
YE 2020 OPERATIONAL RESULTS
Slide 10: Performance Highlights 2020 vs. 2019
PERFORMANCE HIGHLIGHTS 2020 VS. 2019 BUSINESS DRIVERS SERVICE PERFORMANCE ELECTRICITY RATE CONSOLIDATED ENERGY SALES SYSTEM LOSS AVE. RETAIL RATE 43,572 GWh 6.08% 7.96 PhP/kWh ▼7% ▲0.54 %PT, 12-MMA ▼10% CONSOLIDATED CUSTOMER COUNT SYSTEM AVE. INTERRUPTION 7.132 M FREQUENCY INDEX ▲4% 1.501 times ▼15%
Slide 11: 2020 Consolidated Energy Sales (in GWh)
2020 CONSOLIDATED ENERGY SALES (in GWh) Sales volume decline driven largely by impact of community quarantine to Commercial and Industrial Segments 46,871 ▼7% 43,572 2019 vs 2020 44,313 Sales Mix 42,102 13,659 29% 40,142 12,176 28% Industrial ▼ 1%pts. ▼ 11% 18,483 39% 14,766 34% Commercial ▼ 5%pts.
Slide 12: 2020 Monthly Energy Sales (in GWh)
2020 MONTHLY ENERGY SALES (in GWh) Residential accounted for largest share due to work-from-home arrangements and online learning; Industrial recovered and grew in latter part of 2020 3,953 4,007 2019 2020 Average Mix 3,802 3,743 3,625 3,719 3,673 3,661 3,629 3,451 3,330 1,003 1,159 1,191 1,049 1,10
Slide 13: 2020 DU Energy Sales Profile and Drivers
2020 DU ENERGY SALES PROFILE AND DRIVERS RESIDENTIAL COMMERCIAL INDUSTRIAL 2,000 2,000 2,000 2019 1,500 1,500 1,500 2020 2020 2020 2019 1,000 1,000 1,000 2019 ▲ 13% 500 ▼20% 500 ▼11% 500 0 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Slide 14: 2020 Consolidated Customer Count (in M)
2020 CONSOLIDATED CUSTOMER COUNT (in M) Increasing customer count driven by service applications and energization returning to pre-ECQ levels 7.132 6.883 0.108 ▲3.6% Industrial 0.011 0.541 8% 0.528 Commercial 6.575 92% Residential 6.339 Customer count of Parent is 99.9%, CEDC is 0.1% Flat streetligh
Slide 15: 2020 Energization
2020 ENERGIZATION Steady recovery in energization of PCA and OSA PROJECT-COVERED APPLICATIONS (PCA) ORDINARY SERVICE APPLICATIONS (OSA) • 2020 PCA (4,393) down 22% vs. 2019 (5,635) highly affected by • 2020 OSA (167,259) down 13% vs. 2019 (192,867) due to postponement of construction by large develo
Slide 16: 2020 Consolidated Net System Input (in GWh)
2020 CONSOLIDATED NET SYSTEM INPUT (in GWh) Lower vs. 2019 due to impact of community quarantine and lower temperatures 49,251 ▼7% 46,734 45,919 44,639 42,866 Parent is 99%, down by 7% vs. 2019 CEDC is 1%, down by 16% vs. 2019 2016 2017 2018 2019 2020 16
Slide 17: 2020 Consolidated NSI Breakdown (in GWh)
2020 CONSOLIDATED NSI BREAKDOWN (in GWh) 45,919 GWh NET SYSTEM INPUT IPPs/Old PSAs Natural Gas 24,545 17,713 53% 39% POWER SOURCES FUEL MIX Coal 28,206 15,930 35% New PSAs 45,919 45,919 9,556 21,374 21% Other RES Multi-fuel 6,795 11,818 12,276 12,101 15% 26% WESM Special Contracts 4,543 Solar Liquid
Slide 18: 2020 Peak Demand (in MW)
2020 PEAK DEMAND (in MW) Meralco and Luzon peaks lower vs. 2019 driven by COVID-19 and cooler weather 11,344 11,103 ▼2% 7,740 ▼2% 7,614 MERALCO LUZON 18 2019 Jun 4 2020 Mar 10 2019 Jun 21 2020 Mar 9
Slide 19: 2020 System Loss Performance
2020 SYSTEM LOSS PERFORMANCE (in %, 12-MMA) Higher by 0.54% points vs. 2019 due to effect of unbilled sales (58.5 GWh) as of December and due to shift in sales mix towards higher loss-to-serve Residential segment SYSTEM LOSS CAP 7% 6.44 6.19 6.18 6.08 5.96 5.97 5.85 5.72 5.74 5.61 5.65 5.60 2019 5.5
Slide 20: 2020 S-Factor Performance (Network)
2020 S-FACTOR PERFORMANCE (NETWORK) Continued to achieve rewards levels* across all performance indicators SAIFI SAIDI CAIDI Forced and Pre-arranged Forced and Pre-arranged Forced and Pre-arranged times in minutes in minutes 1.769 ▲2% 188.362 ▼15% 108.618 ▼13% 106.479 1.501 163.003 2019 2020 2019 20
Slide 21: 2020 S-Factor Performance (Customer)
2020 S-FACTOR PERFORMANCE (CUSTOMER) Continued to achieve rewards levels* on Average Time to Process Applications and Average Time to Connect AVERAGE TIME TO AVERAGE TIME TO CALL CENTER PROCESS APPLICATIONS CONNECT PERFORMANCE in days in days in seconds ▲39% ▲10% 3.88 59 1.83 2.78 1.66 4 2019 2020 2
Slide 22: RY2021 Guaranteed Service Levels (GSL)
RY2021 GUARANTEED SERVICE LEVELS (GSL) Continued to deliver well within performance ceilings* GSL 1 GSL 2 GSL 3 GSL 4 Customers experiencing Customers experiencing a number Restoration of supply to a Connection not provided on the cumulative duration of sustained of sustained interruptions customer
Slide 23: 2020 Networks Capex (in PhP, B)
2020 NETWORKS CAPEX (in PhP, B) 129% of full year CapEx utilized with resumption of projects post-ECQ PhP 12.03B 129% UTILIZATION 2.88 New Connections 3.49 PhP 9.34B* CAPEX BUDGET 2.39 Asset Renewals 3.70 2.27 Load Growth 3.28 0.75 Non-Network 0.52 0.55 Electrification *Recasted budget 0.68 0.45 Bui
Slide 24: Networks Project Updates
NETWORKS PROJECT UPDATES UPRATING OF PORTION OF AMADEO-GATEWAY-FCIE 115 KV LINE • 4.7 km portion was uprated from 1-795 MCM to 2-795 MCM ACSR and energized on December 14, 2020 • Provides N-1 contingency during outage of Amadeo-Tagaytay West 115 kV line • Strengthens 115 kV sub-transmission system i
Slide 25: Networks Project Updates
NETWORKS PROJECT UPDATES EXPANSION OF TAYABAS 230 KV- 115 KV DELIVERY POINT SUBSTATION (2ND BANK) • Increased capacity with new 300 MVA transformer bank, commissioned on December 29, 2020 • Provides more stable and reliable system in South Sector • Addresses critical loading of existing 100 MVA tran
Slide 26: Networks Project Updates
NETWORKS PROJECT UPDATES ENERGIZATION OF SKYWAY STAGE 3 • Completed 8 project-covered application (PCA) work orders, and energized Skyway’s new streetlights and toll plazas on December 26, 2020 (a day ahead of its initial opening), despite request made only on December 22. - December 23: Meralco and
Slide 27: Networks Project Updates
NETWORKS PROJECT UPDATES MERALCO ELECTRIFICATION PROGRAM PROJECTS (PRIORITY 2 AND 3)* MEP Priority 2 & 3 Over-all Completion Status per Province as of December 31, 2020 Energized Bulacan 110 sites (80%) 55% 536 P2 and P3 Sites Cavite 59 sites (48%) Php 1.1 Billion Laguna 42 sites (48%) project cost
Slide 28: 2020 Average Retail Rate
2020 AVERAGE RETAIL RATE PhP 0.91 reduction vs. 2019 8.87 • 16.1% decrease in Generation charge with implementation of new PSAs and PhP/kWh invocation of Force Majeure claims during community quarantine. Lower WESM 2019 7.96 and fuel prices, and Peso appreciation also contributed to decrease. • 6.2%
Slide 29: ERC Update: Distribution Rate True-Up
1 ERC UPDATE: DISTRIBUTION RATE TRUE-UP (ERC CASE NO. 2020-043 RC) • December 23, 2020 : MERALCO filed Application to refund PhP 13.8B for True-Up covering period from July 2015 to November 2020 • February 16, 2021 : Initial Hearing (Determination of Compliance with Jurisdictional Requirements and E
Slide 30: DOE Update: Competitive Selection Process (CSP)
2 DOE UPDATE: COMPETITIVE SELECTION PROCESS (CSP) • February 19, 2021 : Opening of Envelope 3 (Bid Prices) - DOE observers were in attendance, led by Usec. Emmanuel Juaneza and Dir. Mario Marasigan - Levelized Cost of Electricity (LCOE) Reserve Price, inclusive of Line Rental, VAT and AS Cost Recove
Slide 31: 2019 Meralco Sustainability Report Recognized with Gold Rank
2019 MERALCO SUSTAINABILITY REPORT INTERNATIONALLY RECOGNIZED WI TH GOLD RANK BY ASIA SUSTAINABILITY REPORTING RATING (ASRRAT) FORUM 2020 First maiden SR to be recognized by ASRRAT Asia Sustainability Reporting Rating (ASRRAT) - Ratings system initiated by National Center for Sustainability Reportin
Slide 32: Power Generation
YE 2020 POWER GENERATION OPERATIONAL HIGHLIGHTS
Slide 33: San Buenaventura Power Limited Co. (SBPL)
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. ▪ Joint venture of MGen with New Growth, B.V., a wholly owned sub
Slide 34: Atimonan One Energy, Inc. (A1E)
Atimonan One Energy, Inc. (A1E) 2x600 MW (net) Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon Total Project Cost: <PhP160 Billion (<USD 3.0 Billion) ▪ A1E is one of the shortlisted bidders in Meralco’s Competitive Selection Process for its 2024/2025 requirements. However, it is not o
Slide 35: MGEN Renewable Energy, Inc. (MGreen)
MGEN Renewable Energy, Inc. (MGreen) ▪ MGreen was established to serve as MGen’s subsidiary for its renewable energy investments. ▪ MGreen targets around 1,000 MW to 2,000 MW of renewable energy projects over the next 5-7 years. ▪ The focus is on the development of a portfolio of utility scale solar
Slide 36: PowerSource First Bulacan Solar, Inc. (PFBSI)
PowerSource First Bulacan Solar, Inc. (PFBSI) 50MWac/80.9MWdc Solar Power Plant in San Miguel, Bulacan Total Project Cost: PhP4.25 Billion ▪ MGen’s first solar investment covering a total land area of 72 hectares ▪ In January, MGreen increased its shareholding in PFBSI to 60% following the buyout of
Slide 37: Substation and Main Control Building
Substation and Main Control Building 37
Slide 38: Cautionary Statement
CAUTIONARY STATEMENT 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 th
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