Manila Electric Co. · PSE:MER

Manila Electric — 9M 2018 Earnings Presentation

43 slides from Manila Electric's earnings presentation, Oct 29, 2018

  1. Slide 1: Financial and Operating Results

    FINANCIAL AND OPERATING RESULTS

  2. Slide 2: Financial Highlights 9M 2018

  3. Slide 3: Electricity Revenues

    227,411 227,411 214,389 214,389 Distribution revenues 46,209 Electricity Revenues = 221,266 44,682 Q3 76,867 73,357 Electricity Revenues = 208,848 Q2 79,737 Generation & other pass- 74,456 through charges 175,057 164,166 Q1 70,807 66,576 Non-electricity revenues 6,145 5,541 9M 2018 9M 2017 9M 2018 9

  4. Slide 4: Costs and Expenses; Capital Expenditures

    5,473 7,582 19,444 3% 4% Costs and Expenses 9% 174,461 84% Purchased Power Operating Expenses Depreciation & Amortization Other Expenses 10,111 Capital Expenditures 8,076 9M 2018 9M 2017

  5. Slide 5: EBITDA and Income

    11.7% 12.3% 11.7% 12.3%  Margins  7.3% 7.2% 8.0% 7.4% 26,565 26,268 26,565 26,268 Q3 8,980 9,053 8,980 9,053 18,212 16,686 15,370 15,928 6,239 Q2 8,897 8,897 Q3 5,835 5,427 9,293 9,293 5,252 Q2 5,934 6,661 5,520 5,684 Q1 8,688 7,922 8,688 7,922 Q1 4,917 4,598 5,312 4,817 9M 2018 9M 2017 9M 2018 9M

  6. Slide 6: Earnings Per Share

    16.16 14.80 14.13 13.64 Earnings Per Share Core Earnings Per share 9M 2018 9M 2017

  7. Slide 7: Total Debt

    TOTAL DEBT (in Million PhP) 40,029 40,150 (in Million PhP, Except Ratios) 9M 2018 9M 2017 24,764 24,836 Cash 48,122 46,699 15,265 15,314 Gross Debt 40,029 40,150 Net Debt (8,093) (6,549) 9M 2018 9M 2017 Current Portion Non-current Portion Gross Debt/EBITDA 1.13 1.15 LONG-TERM DEBT REPAYMENT SCHEDULE

  8. Slide 8: Operations Report

    OPERATIONS REPORT Performance ended September 2018

  9. Slide 9: Operating Highlights

    Operating Highlights Energy Customer Peak Net System Sales Count Demand Input (NSI) 4.8%* 4.7%* 6.1%* 4.1%* 32,921 GWh 6.54 million 7,399 MW 34,815 GWh Ave. Retail S-Factor Rates & GSL** 12.5%* Sustained Service Business P8.92/kWh Improvement Updates *vs. same period, previous year **For GSL, RY

  10. Slide 10: Details

    Details

  11. Slide 11: Energy Sales: 9 Months 2018

    Energy Sales: 9 Months 2018  Up 4.8% vs. 2017 (+1,520 GWh) Share /  for 9M 2018: 3.0% RESIDENTIAL 4.5% 30.7% 10,111 GWh 4.8% 32,921 •Dampened organic growth due to weather COMMERCIAL Total sales volume disturbances (Q3), outages, economics 39.3% 4.3% 31,401 for Flat Streetlights account for 0.3%

  12. Slide 12: Energy Sales: 9 Months 2018

    Energy Sales: 9 Months 2018 12 ORGANIC 10,107 GWh NEW/ RAMP-UP 13 ORGANIC 108 NEW (70 GWh) 296 GWh 9,811 GWh RAMP-UP 283 (213 GWh) NEW accounts RAMP-UP from YTD: 191,643 2017 energized Real Feel Temp lower by 0.05 ºC while Ave. accounts: 274,705 Temp lower by 0.39 ºC due to impact of SOUTH: 29 GWh T

  13. Slide 13: Energy Sales: 9 Months 2018

    Energy Sales: 9 Months 2018 13 4.4% 12,752 6.7% 9,353 COMMERCIAL GWh INDUSTRIAL GWh REAL ESTATE (17.2%) SEMICON (7.6%)  Office Space Demand: BGC has highest take up (33%) while Makati has Trumps’ tariffs & trade tensions with China push electronic lowest (8%) of all MM districts. Expected YE 1.15M

  14. Slide 14: Customer Count: 9 Months 2018

    Customer Count: 9 Months 2018  Up 4.7% vs. 2017 (+290,748 customers) Share /  for 9M 2018: 6.542 4.8% 2.8% 4.7% RESIDENTIAL 92.0% 4.6% 6.252 6,017,096 customers COMMERCIAL Total customer count 7.8% 5.978 for Flat Streetlights 510,075 account for 0.1%, customers in Mn 4,800 INDUSTRIAL* customers

  15. Slide 15: Ave. Temperature: 9 Months 2018

    Ave. Temperature(°C): 9 Months 2018  Ave. Temp for September 2018/YTD lower vs. 2017 30.3 30.5 30.1 29.7 29.3 29.9 29.5 28.7 28.9 28.8 28.4 28.4 28.3 28.8 28.6 27.9 28.5 27.7 27.1 27.6 28.2 28.1 27.2 26.7 27.9 28.2 27.8 27.6 27.6 26.6 27.0 2016 2017 2018 26.2 26.2 Ave Temp (Sept. YTD) 28.7°C 28.4°C

  16. Slide 16: Clark Electric (CEDC): 9 Months 2018

    Clark Electric (CEDC): 9 Months 2018 ENERGY SALES, GWH ENERGY SALES, in GWh CUSTOMER COUNT 8.2% PSPC 68.6 GWh PSPC 1 6.4% 426.7 391.6 2,222 358.1 2,089 2,088 (w/o (w/o PSPC) 9.4% PSPC) 6.4% 2017 2018 2017 2018 CEDC’s top 5 sales contributors for Sept 2018 include Advent Energy (Yokohama Tire Phi

  17. Slide 17: NSI and Peak Demand: 9 Months 2018

    NSI*: 9 Months 2018 Peak Demand: 9 Mos. 2018  Up 4.1% (+1,361.1 GWh)  Meralco Peak Demand of 7,399 MW , 6.1% up Meralco YTD, MW: 6,973 MW 4.1% 34,815.2 GWh 2017 Peak* 7,399 33,454.1 6,973 6.1% *Jun 14, 2017 2017 2018 2017 2018 (June 14) (May 23) Luzon YTD Peak Demand, MW: 10,054 MW 2017 Peak** 1

  18. Slide 18: Energy Sources and Fuel Mix: 9 Months 2018

    Energy Sources: 9 Mos. 2018 Fuel Mix: 9 Mos. 2018 SOURCE 9M 2018 Liquid Fuel, 0.2%* GWh Share Coal PSAs-Total 10,614.6 30.5% 30.4% PSA IPP SEM-Calaca 1,264.0 3.6% 28.4% Natural Gas 30.5% MPPC-Masinloc 999.8 2.9% 38.7% Multi-fuel TLI-Pagbilao 1,190.7 3.4% WESM 30.7% SMEC-Sual + CEDC 1,891.9 5.4% 12.3

  19. Slide 19: Average Retail Rates: 9 Months 2018

    Average Retail Rates: 9 Months 2018 (Reflects Generator Wheeling adjustments)  12.5% higher than 2017 average rates (+99¢/kWh); mainly due to Generation, Taxes, SL and FIT-All charges • Distribution Charge biggest reduction for the period; • Generation Charge is largest component in customer’s bill

  20. Slide 20: System Loss Performance: September 2018, 12-MMA

    System Loss Performance: September 2018, 12-MMA  12-MMA ending Sept. 2018 at 5.67%  Improved by 6.3% vs. Sept. 2017’s 6.05%  Lower by 1.83% pts. vs. newly-set SL cap of 7.50% 8.50% (System Loss Cap, January May 2018) 7.50%* Oct 2016 - Sept 2017 Oct 2017 - Sept 2018 1.83% 6.44 6.06 6.11 6.05 5.99

  21. Slide 21: S-Factor & GSL Performance

    S-Factor & GSL Performance: 9 Mos. 2018 & RY2018 (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

  22. Slide 22: Business Updates & Other Events of Interest

    Details Business Updates & Other Events of Interest

  23. Slide 23: Strengthening the Core Business: CapEx Projects

    Business Updates: Strengthening the Core Business: CapEx Projects Replacement of Power Transf. at North Port Substation Replacement of Power Transf. 6 at Balintawak Substation Date Commissioned: July 24, 2018 Date Commissioned: August 31, 2018 A new 83 MVA power transformer was commissioned to New 8

  24. Slide 24: Strengthening the Core Business: CapEx Projects

    Business Updates: Strengthening the Core Business: CapEx Projects Interconnection of Steel Asia to MERALCO’s 115 kV System Date Commissioned: July 27, 2018 Location: Bahay-Pare, Meycauayan, Bulacan The project transfers the electric service of Steel Asia Manufacturing Corp. (SAMC) from 34.5 kV to 11

  25. Slide 25: Impact of Typhoon Ompong (Mangkhut)

    Business Updates: Impact of Typhoon “Ompong” (Mangkhut)  September 14-15, 2018  Sept. 12 (5PM) TY OMPONG entered the PAR at 3:00 PM and threatened Northern Luzon with max sustained winds of up to 205 kph and gustiness of up to 255 kph.  Sept. 14 (8 AM) TY OMPONG Increased its threat over Luzon as

  26. Slide 26: Impact on Reliability and Energy Sales

    Business Updates: Impact of Typhoon “Ompong” (Mangkhut)  Impact on Reliability and Energy Sales  220 circuits or 31% of Meralco’s 707 Operational Circuit were Circuit-Segment Tripping * affected  25.2 Gwh – Estimated NSI Reduction 220  3.18 million customers or 49% – affected by momentary and Un

  27. Slide 27: Estimated CAPEX Cost for Damaged Facilities

    Business Updates: Impact of Typhoon “Ompong” (Mangkhut)  Estimated CAPEX Cost for Damaged Facilities [OPEX Cost not yet Included) Replacement Cost for Damaged Facilities Bgy. Batong Malake, Los Banos, Laguna (Los Bgy. Sala, Cabuyao, Laguna (Balibagockt. 43XV) Banos ckt. 35WT) Coastal Area, Paombong

  28. Slide 28: Meralco helps restore power in Cagayan

    Business Updates: Meralco helps restore power in Cagayan  Meralco sent a 66-crew on Sept. 25, 2018 to Cagayan to help restore power due to damages caused by Typhoon Mangkhut

  29. Slide 29: Key Statistics (Call Center)

    Business Updates: Impact of Typhoon “Ompong” (Mangkhut)  Key Statistics (Call Center) SMS: 21,665 (30%) incoming transactions Complaints were during the BCM FB: 12,304 (17%) created from Sep 15-16; 67,029 activation; most of which or a total of 29,303* or 43% from phone calls Twitter: 3,154 (4%) 10

  30. Slide 30: Reaching customers through media

    Business Updates: Impact of Typhoon “Ompong” (Mangkhut)  Reaching to the customers through media BEFORE TYPHOON DURING TYPHOON Be Prepared Posts Posted Tue, 9/11 Posted on Thu, 9/15 Reach: 271K Reach: 114K “Circuit Breaker”: If water enters “Tree Trimming”: PM us on FB your home, turn off the Circu

  31. Slide 31: Significant Events/ Customer Initiatives & Programs

    Business Updates: Significant Events/ Customer Initiatives & Programs RATES INFO CAMPAIGN MERALCO ONLINE Rates decreased by P0.1458 *residential customer consuming 200kWh / mo Meralco Mobile 6th on iOS top Meralco Mobile 2nd trending Safety Tip (TV and Radio): Re-air typhoon safety tip in anticipa

  32. Slide 32: Meralco Online

    Meralco Online Commercial Launch: Sep. 12, 2018 Key Features: • View and Pay Bills • Report an Outage • Perform After-Sales Requests • Inquire and Give Feedback • Apply for Electric Service* + Appliance Calculator & Orange Tag + Business Center Locator + Bright Ideas * exclusive for desktop/browser

  33. Slide 33: Meralco Online bill sample

    JUAN DELA CRUZ 123 ROSARIO, PASIG MERALCO METRO MANILA A cn aden ELECTRIC BILL ‘Account Summary for Account Number 098765443244 F 0 a panne risen | ar DELACRUET — Tan OTe TA 2018 Bua eeaa we Wag DIE

  34. Slide 34: For Our Corporate Customers

    34 FOR OUR CORPORATE CUSTOMERS 33 locators of E&A, Consumer Products, F&B ATTENDEES 5 Sep Laguna Industrial Park • Meralco Online registrations for IK Plastic and Printwell Packaging • LIIP – 1mbps direct internet access l RADIUS l approx. PhP 9.5k per month • Sci Automation Inc. – 15mbps direct int

  35. Slide 35: Meralco Online (Beta) for Business

    35 FOR OUR CORPORATE CUSTOMERS Meralco Online (Beta) for Business Companies covered: Pocket Forum Megaworld, Global-Estate Resorts, Inc. Suntrust Alliance Properties, Empire East Global Inc Land, First Oceanic ATTENDEES 27 Sep Property Management e-DM reminder to submit documents for pre-enrollment

  36. Slide 36: For Our Biz Customers

    36 FOR OUR BIZ CUSTOMERS Objective: open doors to unengaged customers by introducing Biz Partners Group and subsidiaries Potential revenue from PUFs • power factor correction • data connectivity • solar installations Manila / Laguna ZONE Pasay ZONE 26 Sep 12 Sep Seda Hotel Sofitel Hotel Nuvali 130 l

  37. Slide 37: For Our LGU Partners

    37 FOR OUR LGU PARTNERS ENERGIZING PARTNERSHIP PROGRAMS : STRATEGIC PLANNING 5 Sep Cabuyao City Government Seda Hotel, Nuvali ATTENDEES 85 attendees from the LGU 30 from Meralco Partnership highlights: • 19 identified projects – 52% growth in power requirements in the next 5 years • Negotiations wit

  38. Slide 38: For Our Residential Service Providers

    38 FOR OUR RESIDENTIAL SERVICE PROVIDERS electrical experts Certified by Meralco • 100 entities (companies and independent electricians) • 44.3%* of OSA are energized by CBM experts *as of July 2018 CONTRACTORS ATTENDED 26 Sep MPH Business Etiquette and Image Enhancement 26 Sep Meralco Balintawak BC

  39. Slide 39: 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 29 October 2018

  40. Slide 40: San Buenaventura Power Limited Co. (SBPL)

    San Buenaventura Power Limited Co. (SBPL) 455MW (net) Supercritical Coal-Fired Power Plant in Mauban, Quezon  BOI registered pioneer supercritical pulverized coal power plant  35th month of construction; COD: Q3 2019  93.69% EPC Overall Work Progress as of September 2018 Boiler Building and Coal

  41. Slide 41: Atimonan One Energy, Inc. (A1E)

    Atimonan One Energy, Inc. (A1E) 2x600 MW (Net) Ultra Supercritical Coal-Fired Power Plant in Atimonan, Quezon  Committed Project with DOE, with Certificate of Energy Project of National Significance granted on September 11, 2018  Registered as Preferred Pioneer Enterprise by the Board of Investmen

  42. Slide 42: Renewable Investments

    Renewable Investments Solar  MGen is focused on development of a portfolio of utility scale solar generation projects to supply the Luzon grid, and the customers of Meralco, with low cost electricity.  MGen believes solar generation will form an important part of the energy mix going forward, and

  43. Slide 43: Disclaimer

    This presentation is prepared for the participants of the MERALCO Investors and Analysts Briefing & Teleconference held on October 29, 2018. This presentation has consequential limitations and is not a comprehensive discussion about Manila Electric Company and Subsidiaries (MERALCO). The same materi

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