Thailand’s Gunkul Engineering Plc expects 2020 revenue to grow by 25%

Construction News Vietnam
Sopacha Dhumrongpiyawut, Gunkul’s chief executive

Thailand’s Gunkul Engineering Plc expects 2020 revenue to grow by 25%

11 February 2020

Gunkul Engineering Plc expects 2020 revenue to grow by 25%, thanks to new turnkey projects and recurring income from power projects.

Chief executive Sopacha Dhumrongpiyawut said 2020 should mark a fifth year in a row of growth, driven by turnkey projects, development projects and asset acquisitions.

Gunkul is a manufacturer and supplier of electrical equipment; a provider of engineering, procurement and construction (EPC); and a developer of renewable power projects.

“We earn revenue from both recurring and new projects,” Ms Sopacha said.

Turnkey contracts account for 35-40% of total revenue, while recurring projects contribute 60-65%.

Ms Sopacha said recurring projects include takeovers of two solar power projects in Vietnam in deals worth 1.87 billion baht.

The two projects have a combined power generation of 60 megawatts and began operations last May. They are Tri Viet 1 and Bach Khoa A Chau 1 in Tay Ninh province in the south.

Both projects produce and distribute electricity to state-run Vietnam Electricity with a purchase rate of feed-in tariff at US$0.0935 per kilowatt-hour for 20 years.

She said Gunkul purchased all shares from Singapore-based An Yang Pte and Yun Yang Pte. Gunkul invested through its subsidiary Bright Green Power Co.

“These deals are expected to help expansion of Gunkul’s operations in Southeast Asia, while Gunkul can recognise income and returns from two power plants immediately,” Ms Sopacha said. “Gunkul has a policy to become a leader in the power market, promoting renewable power plants both domestically and abroad.”

The company predicts that renewable power projects will have high growth and low risk from operations. They could also create a stable source of income for Gunkul in the long run.

In January, Gunkul acquired additional shared ownership from Super Energy Corporation Plc to be the sole owner of a 29-megawatt solar farm in Thailand.

The deal was worth 780 million baht, made through Gunkul’s subsidiary Infinite Alternative Energy Co. The project is in operation.

In addition, Gunkul is developing a 30MW solar farm with Kenyir Solar Park Sdn Bhd.

The project is worth 1.35 billion baht, scheduled to operate next month. It will connect to the state grid of Tenaga Nasional Berhad in Malaysia.

For the turnkey projects, Gunkul has construction projects worth roughly 8 billion baht, expected to generate revenue during 2020-22 under EPC contracts from companies and state utilities.

“Gunkul is looking for potential EPC contracts from three state utilities, planning to allocate a combined budget of 593 billion baht to improve the power distribution over 10 years,” Ms Sopacha said.

Gunkul expects to secure 2019 revenue of 7.7 billion baht.