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MAY 2014 INVESTOR PRESENTATION – Energy Development Corp.

Energy Development Corp. · May 1, 2014 · 62 slides

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Slides

  1. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 1
    EDC COMPANY PRESENTATION MAY 2014
  2. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 2
    TABLE OF CONTENTS Page 1 Key Investment Highlights 4 20 2 Review of FY 2013 Financial Results 21 26 3 Growth Projects 27 39 4 Return to Service of Leyte Power Plants 40 45 5 Summary 46 47 APPENDICES Page i Review of…
  3. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 3
    KEY INVESTMENT HIGHLIGHTS 4
  4. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 4
    Key Investment Highlights 1 I II III IV V Favorable Strong Credit & Domaine Contract-based Track Record Industry Investment Expertise Cash Flows of Growth Dynamics Profile 2nd largest vertically Energy sales largely 88% increase in…
  5. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 5
    2ND LARGEST VERTICALLY INTEGRATED GEOTHERMAL COMPANY GLOBALLY Domaine Expertise I STEAM PLANT COMPANY COUNTRY CAPACITY CAPACITY (in MW) (in MW) 1 Calpine USA 1,310 1,310 2 EDC Philippines 1,130 1,130 3 Comision Federal de…
  6. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 6
    TECHNOLOGY & GEOGRAPHICALLY DIVERSE Domaine Expertise I 1,208 MW 1 150.0MW Burgos 1,129MW Geothermal 1 (Under development) 79MW Hydro Power 1 1 120.0MW Pantabangan 12.0MW Masiway % share 1 110.0MW Bacman I 7% of Installed…
  7. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 7
    GENERATES CASHFLOWS AT BOTH PARENT AND SUBSIDIARY LEVELS Contract-based Cash Flows II Revenues (2) as of Mar. 2014 FGHPC 848 IFC GIC Public 12% Lopez Group EDC E: 43.32 % V: 61.88 % Parent (3) E: 1.69 % V: 1.12 % E: 4.99 % V: 3.33…
  8. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 8
    POSSESSES STABLE AND PREDICTABLE CASH FLOWS Contract-based Cash Flows II Percentage of Consolidated USD Revenues (2) Linkage Cashflow National 45% Electricity 73% Power Electricity Corporation Power Purchase Agreements…
  9. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 9
    LIMITED EXPOSURE TO VOLATILE SPOT MARKET Contract-based Cash Flows II LONG-TERM CONTRACTUAL AGREEMENTS TERM STRUCTURE OF CONTRACTS(1) 2031 CONCESSION In PHP Millions Geothermal Renewable Energy Service Contract 2031 year…
  10. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 10
    SIGNIFICANT PORTFOLIO EXPANSION SINCE PRIVATIZATION Track Record of Growth III 1976 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 STEAMFIELD OPERATOR STEAMFIELD AND POWER PLANT OPERATOR Limited to steam field operations (+) 125.0 MW…
  11. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 11
    MAINTAINS A TRACK RECORD OF OPERATIONAL EXCELLENCE Track Record of Growth III 1Q 2013 1Q 2014 Availability Factor (1) 99% 99% 99% 99% 98% 99% 96% 98% 94% 100% 90% 100% 81% 72% 80% 72% 80% 60% 60% (%) 36% 40% 40% 20% 20%…
  12. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 12
    RE ACT OF 2008 PROVIDES SUPPORT TO PHILIPPINE RENEWABLE ENERGY SECTOR Favorable Industry Dynamics IV PREVIOUS NOW o Income Tax Holiday (ITH) o Income Tax Holiday (ITH) o 7-year ITH from start of commercial PRINCIPAL TAX o 6…
  13. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 13
    STRONG PHILIPPINE POWER DEMAND AND TIGHTENING RESERVE MARGINS WILL LEAD TO Favorable Industry Dynamics IV SIGNIFICANT NEW CAPACITY REQUIREMENTS Philippine Power Supply And Demand Profile Luzon Visayas Mindanao 4.5% Average Demand…
  14. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 14
    LED BY AN EXPERIENCED BOARD OF DIRECTORS AND MANAGEMENT TEAM THAT IS COMMITTED TO BEST Favorable Industry Dynamics IV IN CLASS CORPORATE GOVERNANCE PRACTICES TECHNICAL EXPERTISE (1) BOARD OF DIRECTORS Technical Others (2) Services Key…
  15. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 15
    EDC HAS VARIOUS CORPORATE SOCIAL RESPONSIBILITY PARTNERSHIPS AND PROGRAMS Favorable Industry Dynamics IV OUR SOCIAL AND ENVIRONMENTAL COMMITMENTS CSR INVESTMENTS FOR 2012 Others We believe that education is the most dependable way…
  16. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 16
    DELIBERATELY MANAGING FINANCIAL RISKS Strong Credit & Investment Profile V DEBT MATURITY PROFILE1 LOANS BY STRUCTURE2 Sculpted to support EDCs growth trajectory Predominantly fixed debt matches nature of energy projects 350 300…
  17. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 17
    DELIVERING SUPERIOR FINANCIAL AND OPERATING RESULTS TO STAKEHOLDERS Strong Credit & Investment Profile V CONSOLIDATED REVENUES EBITDA MARGIN 17,330 17,491 100% 28,369 18,000 36,000 15,641 15,316 24,551 25,656 30,000 24,153 15,000…
  18. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 18
    MAINTAINING A ROBUST CREDIT PROFILE (1) Strong Credit & Investment Profile V NET DEBT TO MARKET CAPITALIZATION NET DEBT TO EQUITY Deteriorated with drop in price per share Allows for additional fund raising Dec-10 0.32x Dec-10 1.09x…
  19. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 19
    DIVIDEND POLICY IS TO DECLARE 30% OF PRIOR YEARS RNI Strong Credit & Investment Profile V Dividends on Common Shares PHP Million 3,500 3,000 3,000 2,500 2,000 2,175 2,250 1,875 1,863 1,875 1,875 1,500 1,485 1,500 1,500…
  20. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 20
    REVIEW OF 1Q 2014 FINANCIAL RESULTS 21
  21. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 21
    SIGNIFICANT EVENTS THAT AFFECTED 1Q 2014 FINANCIAL RESULTS Review of 1Q 2014 Financial Results 2 Bacman Units 1 &3 start generating revenues (P453 million) UL & Unified Leyte and Tongonan revenues decline (P203 million)…
  22. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 22
    CONSOLIDATED REVENUES INCREASED BY PHP0.2 B WITH BACMAN UNITS 1 & 3 DECLARING Review of 1Q 2014 Financial Results 2 COMMERCIAL OPERATIONS 1Q 2013 REVENUES (P millions) In PHP Billions Pantabangan Bacman -Masiway 83* 984 7.4 7.3…
  23. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 23
    CONSOLIDATED RECURRING NET INCOME DOWN BY PHP0.5 B DUE TO HIGHER OPERATING EXPENSES Review of 1Q 2014 Financial Results 2 In PHP Billions 3.2 3.1 0.2 0.1 (0.4) (0.2) (0.2) 2.8 ( 0.2) 2.6 2.4 2.9 2.2 2.4 2.2 RNI, Mar. 2013…
  24. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 24
    CASH GENERATED FROM OPERATIONS AND PESO BOND ISSUANCE SERVICED DEBT AND FUNDED CAPEX Review of 1Q 2014 Financial Results 2 In PHP Billions 17.9 1.9 ( 0.6) (0.3) 17.3 17.0 (2.8) 14.2 16.0 14.2 Cash Balance, Cash generated…
  25. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 25
    CURRENT RATIO IMPROVED WHILE BOTH NET-DEBT- TO EQUITY AND NET-DEBT-TO-EBITDA WEAKENED Review of 1Q 2014 Financial Results 2 Current Ratio Net Debt-to-Equity Net Debt-to-EBITDA* Mar. 2014 2.41 Mar. 2014 1.21 Mar. 2014 2.91…
  26. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 26
    GROWTH PROJECTS 27
  27. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 27
    EDCS GROWTH AGENDA Growth Projects 3 1 ACQUIRE 2 DEVELOP 305 MW Palinpinon- 25 MW Nasulo to be Tongonan in 2009 commissioned in 2H14 130 MW Bacman in Win key Install 261MW of 5 MW NNGP Plant 2010 development is on-going…
  28. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 28
    NNGP TO NASULO (N2N) RELOCATION PROJECT Growth Projects 3 Electricity Generation 1200 1000 800 600 400 200 0 1-May 2-May 3-May 4-May 5-May 6-May 7-May 8-May 9-May 10-May 11-May 12-May 13-May…
  29. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 29
    BACMAN BUSINESS RECOVERY PLAN Growth Projects 3 SULZER repair Bacman Units 1 &2 Commercial Operation Date: Unit 1 (January 28, 2014) Unit 2 (2Q 14) Cost: Unit 1 (US 1.8 million) Unit 2 (US 1.8 million) INTERIM FIX PERMANENT…
  30. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 30
    150 MW BURGOS WIND PROJECT Growth Projects 3 MAR 4Q 1Q 2013 2014 2015 Signed deal with Vestas of COD COD Denmark STAGE 1 STAGE 2 87 MW 63 MW Project Components: 50 units Vestas V90 3MW WTG (VESTAS) Substation for 150 MW…
  31. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 31
    LOCAL GEOTHERMAL PROJECTS WILL BE THE MAIN SOURCE OF GROWTH IN THE MEDIUM TERM Growth Projects 3 1 1 2 2 Beyond PROJECT CAPACITY 2014 2015 2016 2017 2018 1 Nasulo 20 MW X 1 2 No. Negros 6 MW X 2 1 Bacman 3 30+ MW X FRONTIER…
  32. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 32
    OVERSEAS EXPANSION - INDONESIA Growth Projects 3 EDC has a Representative Office in Jakarta and incorporated two local entities in Indonesia to facilitate the identification and exploration of new geothermal projects Expansion of the…
  33. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 33
    LATIN AMERICA WILL BE A DRIVER OF LONG-TERM GROWTH FOR EDC Growth Projects 3 Large portfolio of early-stage assets Development team with significant experience in both geothermal and Latin America Long-term commitment to bring…
  34. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 34
    CHILE AND PERU PROVIDE THE RECIPE FOR SUCCESSFUL GEOTHERMAL DEVELOPMENT Growth Projects 3 Promising Estimates 1700 MW Estimates 3,000 MW Geothermal Potential Growing Power Peak demand of 10 GW growing Peak demand of 6 GW growing at…
  35. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 35
    EDC SEIZED THE OPPORTUNITY AND NOW HOLDS STAKES IN UP TO 13 CONCESSIONS AND 39 Growth Projects 3 APPLICATIONS Granted Sites Applications Company (Entry into LatAm) Peru Chile Peru Chile Alterra Power Corp 2 2 16 0 (2008) Hot…
  36. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 36
    EDC HAS BUILT AN EXPERIENCED AND COMPETENT LEADERSHIP TEAM SUPPORTED BY STRONG LOCAL Growth Projects 3 ORGANIZATIONS Andrew Whittome Manuel Ogena A. Arman V. Lapus Chief Drilling Advisor Senior Vice President Managing…
  37. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 37
    EDCS EXPERIENCE AND INTERNAL PROCESSES ALLOW US TO CAREFULLY SCREEN ASSETS AND DEVELOP ONLY Growth Projects 3 THOSE WITH THE HIGHEST CHANCES OF SUCCESS 100% 500 Activity Peru (surface exploration) Desktop survey 80% Mariposa 400…
  38. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 38
    WE ARE NOW EXECUTING AN EXPLORATION DRILLING PROGRAM IN MARIPOSA, ONE OF THE Growth Projects 3 MOST ADVANCED GEOTHERMAL PROJECTS IN CHILE GEOTHERMAL RESERVOIR AND MAP OF THE REGION CIVIL WORKS DRILLING TARGETS Santiago Drilling…
  39. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 39
    RETURN TO SERVICE OF LEYTE POWER PLANTS 40
  40. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 40
    RESTORATION OF TONGONAN UNIT 3 Return to Service of Leyte Power Plants 4 DAMAGED COOLING TOWER NOVEMBER 10, 2013 We are extremely impressed by the caliber of the management at EDC and with the plan that has been developed for the…
  41. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 41
    POWER PLANT RESTORATION WAS DIVIDED BASED ON AVAILABILITY AND SOURCE OF MATERIALS Return to Service of Leyte Power Plants 4 Phase 1 Phase 2 With readily available parts/materials With parts/materials from local and foreign suppliers…
  42. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 42
    EXPEDITED DELIVERY OF OFF-THE-SHELF COOLING TOWER PARTS Return to Service of Leyte Power Plants 4 DEC 6, 18 & 25, 2013 - ARRIVAL OF CHARTERED 747 FREIGHTERS IN CEBU Expedited delivery of off-the-shelf cooling tower parts from…
  43. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 43
    COOLING TOWER CONFIGURATION Return to Service of Leyte Power Plants 4 1 CELL FAN STACK MALITBOG POWER PLANT Per Cooling Tower, per Unit Total No. of 28 DIAMETER DESIGN Blades per Fan Total Fan Stacks Units Fan Stack…
  44. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 44
    EFFECTS OF TYPHOON YOLANDA IN LEYTE Return to Service of Leyte Power Plants 4 Visual inspection of the main power plants constituting the 650 MW revealed the following: Cooling towers of the Malitbog (232MW), Tongonan (112.5MW) &…
  45. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 45
    SUMMARY 46
  46. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 46
    MOVING FORWARD, WE OUTLINE THESE OBJECTIVES FOR 2014 AND BEYOND Summary 5 Priorities 2014+ Objectives Term out forthcoming bullet maturities Balance Sheet Lower further interest costs and continually manage currency Management…
  47. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 47
    END OF PRESENTATION www.energy.com.ph 48
  48. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 48
    APPENDICES 49
  49. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 49
    REVIEW OF FINANCIAL HIGHLIGHTS BY ASSET 50
  50. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 50
    FG HYDROS REVENUE AND NET INCOME DECREASED DUE TO LOWER REVENUES BROUGHT BY Review of Financial Highlights by Asset i ADJUSTMENT IN 2013 WESM PRICES 1Q 2014 Revenues Revenues (Php Millions) Net Income (PHP Million) (PHP Million)…
  51. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 51
    GCGIs INTEGRATED REVENUE AND NET INCOME DECREASED DUE TO LOWER SALES VOLUME FROM Review of Financial Highlights by Asset i TONGONAN AND HIGHER OPEX 1Q 2014 Revenues Revenues (Php Million) Net Income (PHP Million) WESM (PHP Million)…
  52. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 52
    HIGHER REVENUES RESULTED TO LOWER NET LOSS FOR BACMAN Review of Financial Highlights by Asset i 1Q 2014 Revenues Revenues (Php Million) Net Loss (PHP Million) (PHP Million) 370 78 + 445.8% WESM Contracted 336 117 74% 26% -…
  53. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 53
    REVENUES AND NET INCOME FROM MINDANAO I & II INCREASED DUE TO HIGHER TARIFF AND THE Review of Financial Highlights by Asset i ABSENCE OF SHORTFALL ADJUSTMENT IN 2014 Revenues Net Income (PHP Million) (PHP Million) 91 131 100%…
  54. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 54
    REVENUES AND NET INCOME FROM UNIFIED LEYTE DECREASES AS SALES VOLUME DROPPED DUE TO Review of Financial Highlights by Asset i TYPHOON YOLANDA AND FOREX LOSS Revenues Net Income (PHP Million) (PHP Million) 85 272 - 3.1% 100%…
  55. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 55
    STAGES OF GEOTHERMAL EXPLORATION 56
  56. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 56
    VOLCANOES, HOT SPRINGS, FUMAROLES AND SOLFATARAS INDICATE THE PRESENCE OF Stages of Geothermal Development ii GEOTHERMAL RESOURCES Surface Thermal Manifestations Temperature/Chemical Measurements 57
  57. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 57
    GEOSCIENTIFIC SURFACE STUDIES DELIMIT THE GEOTHERMAL PROSPECT AND IDENTIFY TARGETS Stages of Geothermal Development ii FOR EXPLORATION DRILLING Deep Well Drilling Geophysical Surveys 58
  58. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 58
    DISCHARGE TESTING OF WELLS CONFIRM THE CHEMISTRY OF THE RESERVOIR FLUIDS AND THE Stages of Geothermal Development ii PRODUCTIVITY OF THE WELLS Well Discharge Testing 59
  59. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 59
    OUR IN-HOUSE EXPERTISE SPANS THE ENTIRE GEOTHERMAL VALUE CHAIN: FROM EXPLORATION Stages of Geothermal Development ii TO POWER PLANT OPERATIONS VERTICAL INTEGRATION OF GEOTHERMAL SERVICES Geothermal Exploration and Development…
  60. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 60
    WESM 61
  61. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 61
    FROM THE SPIKE IN ELECTRICITY PRICES IN 1Q 2010, WESM PRICES HAVE SINCE THEN MODERATED WESM iii WESM WEEKLY AVERAGE PRICES (JANUARY 1, 2009 TO DECEMBER 31, 2011) High WESM prices due to tight supply caused by: (1) Malampaya…
  62. MAY 2014 INVESTOR PRESENTATION – Energy Development Corp. – slide 62
    PRICES PEAKED IN MAY 2011, WHEN DEMAND INCREASED DUE TO HIGH TEMPERATURES, AND IN WESM iii OCTOBER 2011, JUNE 2012 AND NOVEMBER 2013 GIVEN TIGHT SUPPLY IN THE MARKET 20.00 2011 2014 Luzon and Visayas Monthly Ave Prices (ex-Ante)…

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