Thailand’s B.Grimm Power posts 25% rise in Q1 normalised profit

Construction News
Dr Harald Link, Chairman and President of BGRIM

Thailand’s B.Grimm Power posts 25% rise in Q1 normalised profit

On course to secure 1,000 MW this year

B.Grimm Power Public Company Limited (BGRIM), Thailand’s leading industrial power producer, achieved a 654.3% growth in net profit attributable to the parent company in the first quarter of this year compared to the previous quarter, rising to 611 million baht.

In terms of normalised net profit, excluding unrealised foreign exchange gain (loss), the profit rose by 25.2% over the preceding quarter to 646 million baht while slipping 5.3% from the same period of 2020.

Dr Harald Link, Chairman and President of BGRIM, noted that the company’s industrial power producer (SPP) operations grew robustly, with a good profit in the January-March period.

The sound SPP performance has softened interest payment burdens incurred following the end of credit terms related to the engineering, equipment procurement and construction (EPC) contract involving BGRIM’s solar projects in Vietnam.

There was also a temporary drop in solar power sales in Vietnam, largely due to the Covid-19 impact.

Meanwhile, the margin of earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to a record 31.5% as a result of expanding power sales to industrial clients which raised their purchase volumes from BGRIM by 6.5% over the preceding quarter, or 5.5% more than the same period a year earlier, setting a new record of 814 gigawatt-hours.

This was due to the system tie-in of new customers under the 10.3-megawatt power purchase agreements as well as growth of all major industrial clientele, especially those in the automotive parts, industrial gas and home appliances sectors.

It is estimated that electricity purchase volumes by industrial customers will grow by 10-15% this year.

Production efficiency has increased following improvements made to gas turbines in the ABPR 1 and ABPR2 projects during June-October 2020 last year. The price of natural gas fell by 17.4% over the same period last year, also contributing to lower production costs.

BGRIM’s renewable energy business realised full quarterly revenue from solar power projects in Cambodia which started commercial operation in December 2020. However, revenues from BGRIM’s solar farms in Vietnam declined temporarily because of a drop in electricity purchase volumes caused by transmission line problems and lower power demand resulting from the coronavirus outbreak.

However, these problems were resolved and the purchase volumes swung back strongly during March and April this year.

BGRIM has proactively laid down contingency plans to deal with various crisis scenarios and the coronavirus pandemic.

BGRIM’s financial position is firm, with more than 21 billion baht cash on hand and a solid cash flow driven by 48 operating power plants along with support from financial institutions that enable the company to proceed with its projects as planned.

Dr Link said this year BGRIM is also beefing up cooperation with various companies and organisations to expand business opportunities.

In April 2021, BGRIM signed a memorandum of understanding with the Metropolitan Electricity Authority (MEA) to jointly pursue opportunities in the fields of renewable energy, energy management systems and other related ventures such as Energy Storage System (ESS), Energy Trading System, Smart Grid and Electricity Distribution System.

Construction of several BGRIM power projects are well underway this year, including Bo Thong Wind Farm 1 & 2, with an installed capacity of 16 MW, located in Mukdahan Province.

The Bo Thong scheme is so far 94% complete and due to begin commercial operations in the first half of 2021.

To date, BGRIM has a total of 48 projects in operation, with the goal of achieving a combined production capacity from green field projects and acquisitions of at least 1,000 MW within this year.

The company remains committed to the target of securing overall power supply contracts of up to 7,200 MW by 2025.