S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L In transition Higher Peaks NEW HORIZONS Earnings Call on EDC s YTD September Financial and Operating Results November 15,
EDC CONSOLIDATED REVENUES CONSOLIDATED REVENUES IN YTD SEPTEMBER IMPROVED BY PHP 3.8 BILLION DUE MAINLY TO INCREASED CONTRIBUTION FROM SUBSIDIARIES In Php Billions 20.7 2.5 22.5 1.8 (0.3) (0.2 ) (0.1 ) 22.2 22.1 22.0 18.2 22.0 Revenues, FG Hydro GCGI No. Negros Mindanao Leyte Revenues, Note: Bacman s Php1.9 billion trading revenues were offset against the cost of replacement power. 2
EDC CONSOLIDATED RNI AS A RESULT, CONSOLIDATED RECURRING NET INCOME LIKEWISE IMPROVED BY PHP 3.8 BILLION In Php Billions 8.2 6.4 1.8 * (0.2) 8.0 (0.2 ) ** 7.8 ( 1.5 ) *** 0.9 6.3 1.5 7.8 6.3 4.0 RNI, FG Hydro GCGI Mindanao BGI's net loss RNI, NCI RNI Attributable to EDC Note: * GCGI increase in RNI excluding inter-company charges ** excludes own generation offset against Property, Plant & Equipment *** NCI = minority interest & earn out payment made to First Gen Corporation 3
EDC CONSOLIDATED REVENUES AND RNI FOR 3 RD QUARTER INCREASED BY 5% AND 21%, RESPECTIVELY, AS COMPARED TO 2 ND QUARTER Revenues Recurring Net Income 3Q 2Q 1Q 7,512 7,183 7,254 + 4.6% - 1.0% 3Q 2Q 1Q 2,729 2,250 2,792 + 21.3% - 19.4% FG Hydro 1,211 3Q REVENUES (Php Millions) Drilling Services 162 FG Hydro 1,148 2Q REVENUES (Php Millions) Drilling Services 178 FG Hydro 1,411 1Q REVENUES (Php Millions) Drilling Services 168 Palinpinon 1,820 Leyte 2,835 Palinpinon 1,847 Leyte 2,827 Palinpinon 1,717 Leyte 2,758 Tongonan I 1,037 Mindanao 447 Tongonan I 690 Mindanao 493 Tongonan I 649 Mindanao 552 Note: Bacman s Php1.9 billion trading revenues were offset against the cost of replacement power. 4
UNIFIED LEYTE REVENUES AND NET INCOME FROM UNIFIED LEYTE DECREASED SLIGHTLY Revenues 125 Net Income 90 Ave. Tariff (Php/KWh) 8,422-1.5% 2,972-2.9% Php1 Million 2.98 + 0.0% 2.99 8,547 3,062 Sales Volume (GWh) Drivers Lower tariff (1) Lower volume (124) (125) Drivers Lower revenues (125) Higher operating expenses (300) Others (mainly forex gain) 335 (90) Php124 Million 2,821 2,863-1.5% 5
MINDANAO I & II REVENUES AND NET INCOME FROM MINDANAO I & II DECREASED DUE TO LOWER SALES VOLUME Revenues 110 Net Income 111 Ave. Tariff (Php/KWh) 1,492 240 Php3 Million 2.800 + 0.2% 1,602-6.9% 351-31.6% 2.796 Drivers Higher tariff 3 Lower volume (158) Q1 adjustment for prior year s shortfall generation (none in ) 45 Drivers Lower revenues (110) Others (1) (111) Sales Volume (GWh) Php158 Million 533 589-9.6% (110) 6
GCGI (TONGONAN & PALINPINON) GCGI s INTEGRATED NET INCOME INCREASED BY PHP 2.2 BILLION OR 123% DUE TO HIGHER REVENUES Revenues Net Income Revenues WESM 712 9% 1,812 2,208 Contracted 7,047 91% 5,948 7,759 + 30.5 1,802 4,010 + 122.5% Ave. Tariff (Php/KWh) Php1,003 Million 4.89 + 14.8% 4.26 Drivers Higher tariff 1,003 Higher volume 809 1,812 Drivers Higher revenues 1,812 Lower operating expenses 76 Absence of financing charges in 349 Other income mainly on forex 181 Higher income tax (210) 2,208 Sales Volume (GWh) Php809 Million 1,587 1,397 + 13.6% 7
BGI (BACMAN) BACMAN S OPERATION HAS REMAINED CASH ACCRETIVE DESPITE DELAYS ENCOUNTERED IN COMMISSIONING ALL UNITS In Php Millions In GWh Bacman Geothermal Inc. Jan. Supply Source Jan. 2,822 2,302 Replacement Power 1,771 Own Generation 111 19% FG Hydro/3rd Party Contracts 117 20% 1,051 634 ** WESM 360 61% 520 * Own Generation 417 417 Gross Cash Generated Cost from WESM Cost from FG Hydro/3rd Party Net Cash Generated Total cash generated from BGI s operations is Php 417.0 M * Php520.4 million in testing and commissioning revenues generated by Bacman Unit 2 are netted off from PPE as required by Philippine Accounting Standards (PAS) 16. ** Includes Php 377 million electricity sales sourced from FG Hydro 8
FG HYDRO (PANTABANGAN-MASIWAY) FG HYDRO S NET INCOME HAS SIGNIFICANTLY INCREASED DUE TO REVENUES FROM ANCILLARY SERVICES Revenues * Net Income YTD Revenues (Php Millions) WESM 675 18% 2,464 Ancillary Services, 380 Ancillary Services, 1,862 1,306 3,770 + 188.8% Drivers Ancillary services 1,482 Bilateral Contracts 427 WESM 555 2,464 * Includes electricity sales to BGI customer amounting to Php377 million. 2,318 456 2,774 + 508.3% Drivers Higher revenues 2,464 Higher operating expenses (146) 2,318 Net income attributable to: Non-controlling interest ** 1,460 EDC 1,314 2,774 ** Includes estimated earn-out amounting to Php584 million. Contracted 1,233 33% Ave. Tariff (Php/KWh) Sales Volume (GWh) BCQs 270.1 BCQs 183.8 Ancillary 1,862 49% 5.37 + 26.8% 4.24 WESM 34.6 WESM 84.8 +62.5% 9
EDC CONSOLIDATED CASH FLOW CASH GENERATED FROM IMPROVED PERFORMANCE WERE USED TO SERVICE DEBT, INVEST IN CAPEX, AND PAY OUT DIVIDENDS TO SHAREHOLDERS In Php Billions 24.9 (3.6 ) 12.4 21.3 (6.7 ) 14.6 (1.9 ) * (1.3 ) ** 11.4 12.5 11.4 Cash Balance, Dec Cash generated from operations Debt Servicing PPE Acquisition and Explo & Other Investments Cash Dividend Cash Balance, Note:* to EDC Shareholders ** to First Gen Corporation 10
YTD FINANCIALS DEBT RATIOS ALSO GENERALLY IMPROVED AS A RESULT OF HIGHER NET INCOME Current Ratio Net Debt-to-Equity Net Debt-to-EBITDA 2.11 1.12 2.30 2.65 1.37 3.16 Current ratio went down due to increase in current liabilities on account of BGI s net payables on replacement power and the accrual of special cash dividend to EDC s common shareholders. Net debt-to-equity improved mainly due to higher net income for the current period. Net debt-to-ebitda improved mainly due to higher EBITDA brought about by higher revenues. 11
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 EDC CONSOLIDATED DEBT PROFILE EDC s CONTINUES TO MANAGE ITS FINANCIAL RISK PROFILE Debt Maturity (1) Loans by Structure (3) 350 300 250 200 150 100 50 - Floating 10% Fixed 90% USD Debt PHP Debt 6.0 yrs Average Loan Life (Years) 7.3% Average Interest Cost Loans by Currency (3) Creditor / Type Currency Outstanding Amount (mm) Repayment Original Tenor (Yrs) Maturity Club Loan USD 175.0 Amortizing 6.0 2017 Reg S Bonds USD 300.0 Bullet 10.0 2021 IFC Loan 1 PHP 3,758.1 Amortizing 15.0 2023 IFC Loan 2 PHP 3,262.5 Amortizing 15.0 2025 PHP FXCN PHP 7,000.0 Amortizing 10.0 2022 PHP Debt 63% USD Debt 37% USD-Linked Revenues 39% PHP Bonds PHP 12,000.0 Bullet 5.5 7.0 2015-16 Local Banks (2) PHP 4,450.0 Amortizing 10.0 2020 (1) In USD Millions as of September 30, (3) USD65MM converted to fixed PHP via Cross Currency Swap (2) Borrower is FG Hydro 12
UPDATE TO GROWTH PROJECTS 13
Bacman Power Plant Rehabilitation WE EXPECT BACMAN TO COMMISSION THIS DECEMBER Unit 1 55 MW 125 Investment Cost (in US$ Million) Unit 2 55 MW Testing & Reliability Runs Unit 2 55 MW 100 100.25 Unit 3 20 MW 75 72.00 Testing & Reliability Runs Commercial operations 55 MW Unit 2 had operated reliably, at an availability factor ~ 90%, and generated 104,163 MWh valued at Php 520 million. Both generators are now on site. Re-blading of Units 1 and 2 is ongoing. Total of 110 MW. Repair/testing works for 20 MW Unit 3 is on-going; unit s commissioning is expected to start towards end-. 50 25 0 Acquisition 28.25 Rehab Final cost outlook of the rehabilitation and upgrade works is expected to increase to US$72 million, or by US$6 million over the latest estimate. At US$ 0.77million per MW, the Bacman Project is still a good value proposition. 14
NNGP TO NASULO (N2N) PROJECT TARGET COMMERCIAL OPERATION DATE FOR THE NASULO GEOTHERMAL PROJECT IS 2014 Nasulo (+ existing Nasuji site) has combined available steam of 40MW+ NNGP to Nasulo (N2N) relocation project is to be implemented in 2 phases : Phase 1 civil works includes powerhouse Phase 2 of the project will involve relocation of the electro-mechanical equipment Phase 1 has been awarded to First Balfour whereas bidding process for Phase 2 is still on-going. A full year s operation of the 20-25 MW Nasulo will add ~ P 0.9 billion and P 0.5 billion in revenues and net income, respectively. 15
Burgos Wind Project NEGOTIATIONS WITH PROSPECTIVE EPC CONTRACTORS AND FOR FINANCING ARE ON-GOING TO ACHIEVE A 2015 PROJECT COMMISSIONING PROJECT DETAILS Estimated Capacity 86 MW The Wind Farm is located in the Municipality of Burgos, Ilocos Norte 618 Hectares 618 Hectares Location Project Cost Municipality of Burgos, Ilocos Norte US$ 323M Target COD 2015 Term 25 Years Project Capacity 2013 2014 2015 Burgos 86 MW * ERC has approved Php 8.53 per kwh Feed-in-Tariff for wind energy projects, albeit, FiT mechanism is still expected to be released by end 4Q. ORIGINAL REVISED Investments in non-traditional RE (wind, run-off river hydro, solar) have slowed down with the delayed implementation of the Feed-in Tariff. 16
GROWTH STRATEGY EDC IS ACTIVELY PURSUING GROWTH OPPORTUNITIES IN MARKETS WITH ATTRACTIVE RESOURCES AND STABLE BUSINESS FRIENDLY REGIMES CHILE PERU INDONESIA Awarded Newen, Batea and San Rafael geothermal concessions through direct application 1Q On-going resource assessment is being done for San Rafael & Batea. Hiring of technical and administrative team for Chilean office established local office Entered into an agreement with Alterra Power Corp. for exploration field works and due diligence at one geothermal concession project Entered into JV with Hot Rock Limited (HRL) to co-develop the Chocopata and Quellaapacheta geothermal authorizations Conducted reconnaissance survey on Chocopata and Quellaapacheta geothermal authorizations Commenced the incorporation process for the Quellaapacheta Project Company Entered into an agreement with Alterra Power Corp. for exploration field works and due diligence at five geothermal authorizations Established local office Recently incorporated two companies for application of Preliminary Survey rights Applied for Preliminary Survey rights covering pre-identified sites 17
QUESTION & ANSWER www.energy.com.ph 18