Thailand’s Gulf Energy Development records B1.4bn profit in second quarter 2021

Construction News
Gulf commenced commercial operation of the first unit of the GSRC power project on March 31 of this year.

Thailand’s Gulf Energy Development records B1.4bn profit in second quarter 2021

Gulf Energy Development Plc reported core profit of 1.4 billion baht in the second quarter of the year, an increase of 42% year-on-year or 412 million baht.

According to Yupapin Wangviwat, chief financial officer of Gulf, the increase was mainly from the profit of Gulf SRC power project’s (GSRC) first unit following the commercial operation on March 31, with an installed power generation capacity of 662.5 megawatts and an average load factor of 88% this quarter.

“The rise in core profit also comes from the higher volume of electricity sales of 12 small power producer plants [SPPs] under GMP group and seven SPPs under GJP group to industrial customers from all industries, especially from the automotive, electronic components and steel industries,” she said.

In the second quarter, the average load factor of industrial customers for the 12 SPPs was 63%, increasing from 51% last year, while the seven SPPs had an average load factor of 66%, rising from 57% last year, she said.

Additionally, the volume of electricity sold to the Electricity Generating Authority of Thailand from the two independent power producers (IPPs) under GJP group rose by 148% year-on-year, resulting in more plant efficiency.

Gulf also recorded a share of profit from PTT NGD of 63 million baht from the company’s investment of 42% equity stake.

Compared to the previous quarter, core profit decreased by 989 million baht or 41.4% due to the absence of dividend income from InTouch Holdings Plc this quarter, as well as from Borkum Riffgrund 2 (BKR2) offshore wind power plant project’s lower volume of electricity sales due to seasonality, since the second and third quarters are low season while the first and fourth quarters are peak season for offshore wind power projects in Germany.

Total revenue for the second quarter was recorded at 11.8 billion baht, an increase of 2.71 billion baht or 29.6% year-on-year.

Ms Yupapin said the rise in revenue is mainly due to revenue from GSRC Unit 1’s commercial operation in the first quarter. The revenue was recognised from BKR2 offshore wind power project, which was recognised for the first time in the fourth quarter of last year, and from the higher electricity and steam sales to industrial customers of the GMP group.

Meanwhile, electricity sales from GTN1 and GTN2 solar power projects in Vietnam saw a slight drop due to the temporary curtailment from the Covid-19 pandemic, affecting electricity demand.

The Ebitda margin was 35.6%, an increase from 31.9% year-on-year. This was mainly due to a decline in natural gas costs by 8.7% year-on-year, despite the drop in average Ft rate.

Ms Yupapin also said global energy trends have shifted from fossil fuels to clean energy, with a goal to reduce greenhouse gas emissions and achieve net zero carbon by 2050 under the Paris agreement.

Gulf strictly adheres to a “No coal policy” and has set a target to increase the proportion of installed power generation capacity from renewable energy to more than 30% of the company’s total gross installed power capacity by 2030.

Gulf has invested in renewable projects in Europe and Asia, including Thailand.

On Aug 13, the board of directors approved the restructuring of the group’s business by changing the company name of Gulf Energy International Company Limited, a subsidiary in which the company holds 100% equity stake and operates as a holding company, to Gulf Renewable Energy Co.

It will also transfer all of the company’s operating subsidiaries related to renewable energy such as BKR2, solar power projects and an offshore wind project in Vietnam, solar rooftop projects and biomass power project in Thailand and other projects, to be managed by Gulf Renewable Energy.

Gulf Renewable Energy will also be the investment arm for the company’s renewable energy business expansion in the future.

The restructuring has no impact on the company’s effective shareholding ratio in the subsidiaries and is not classified as a transaction under the notification of the capital market supervisory board No. Tor Chor 20/2551.