BGRIM posts 54% core profit growth in Q1 amid hostile environment
Strong financial foundation with 21 billion cash on hand to weather crisis
B.Grimm Power Plc (BGRIM) recorded a 54% growth in normalized net profit for the first quarter of this year on a 9.4% revenue increase.
The SET-listed private power producer booked core profit from operations, excluding extra items, in the January-March period at 1,158 million baht, with 682 million baht attribute to major shareholders, up 54% from the previous year as revenue grew to 11,223 million baht.
BGRIM CEO Preeyanart Soontornwata says the result demonstrates the company's robustness especially at the time of economic downturn which is aggravated by the Covid-19 pandemic.
Fueling BGRIM's first-quarter performance was mainly due to the 944 MW incremental production capacity rendered over the past one-year circle by four projects which were brought on stream and the acquisition of two co-generation ventures namely the SPP1 in 2019 and the 123-MW Ang Thong Power Plant in March this year.
BGRIM's power sales in the first quarter remained strong, thanks to the diverse industry clientele with rising energy demand from the packaging group (up 15.1%), electronics sector (up 13.2%), household electrical appliances (up 8%), tire (up 3.2%).
There were also new industrial customers which signed up for 26 MW in the past 12 months.
Meanwhile, the margin of EBITDA (income before interest and taxes and depreciation and amortization) rose to the highest level of 29.2% in the first quarter due to the improvement of the gas turbine power generator and the realisation of BGRIM's solar energy ventures in Vietnam which offered the highest EBITDA yield.
Net profit was at 159 million baht, 81 million baht of which was attributable to major shareholders – mainly from unrealised loss primarily from the foreign exchange which was a non-cash item amounted to 886 million baht, calculated from US dollar debt and the depreciation of Thai baht against US dollar.
In the wake of the Covic-19 pandemic, BGRIM currently has over 21 billion baht in cash which allows it to deal with the effect from the protracted Covic-19 crisis. At the same time, the company has also received additional working capital facilities of four billion baht to a total nine billion baht from financial institutions to enhance liquidity.
BGRIM is ready to stand by its stakeholders to overcome this crisis together.
The company has set up a team to closely monitor and respond to government policies related to the crisis.
BGRIM has provided medical and social assistance, worth not less than 50 million baht, as well as putting in place various measures to take care of the safety of employees while maintaining the company's service quality without any layoffs.
Most of BGRIM's revenue comes from long-term power purchase agreements with government agencies which are not directly affected by the Covic-19 situation.
There are still new customers coming in for the rest of the year, totaling 30 MW in power purchase.
In addition, the on-going proactive cost control is expected to save 34 million baht from the extension of the lifespan of some components. Furthermore, improving gas turbines' efficiency of various projects in 2019 and 2020 is expected to cut natural gas cost by not less than 50 million baht per year.
Meanwhile, the company has conducted a thorough cash flow assessment based on various assumptions that offers a strong sense of confidence, having no impacts on the repayment and investment plans.
At the same time, there are still projects under construction such as the 39-MW Ray Power's solar project in Cambodia, the 13-MW Lakchai floating solar farm and the Bowin Wind Farm 1 and 2 Projects which are slated to start commercial operation between the fourth quarter of 2020 and first quarter of 2021.
The company focuses on carefully analyse investments and risk management to ensure the company will grow steadily and sustainably in accordance with the commitment to put in place a total of 5,000 MW capacity from both operating and under-development projects in 2022.