B.Grimm Power Public Company Limited (SET: BGRIM)’s first-quarter revenue edged up 41%, thanks to robust electricity sale volumes from both existing clients and new clients, higher tariffs and growth from renewable energy facilities in Thailand and Lao PDR.
However, the net profit attributable to the parent firm in January-March declined by 96.2% from the same period last year to 23 million baht.
The lower profit was largely due to the decline in the performance of the industrial power plants being weighed down by the sharp rise in natural gas prices amid the Russia-Ukraine conflict, while the adjustment of the selling power price was gradual, Dr Harald Link, Chairman and President of BGRIM, explained.
As a result, the margin from the electricity to the company’s industrial customers dropped.
Nevertheless, BGRIM had continued to manage costs by means of preparing the importation of liquefied natural gas (LNG) under long-term contracts starting from 2023 and concluding the Terminal Usage Agreement with PTT LNG.
The company’s cost control has been in force, with power sales to industrial clients being expanded and growths from almost all major customers being expected.
BGRIM’s overall electricity sale volumes to industrial customers are projected to increase by 10-15% this year.
It is noteworthy that the firm’s five SPP Replacement power stations will be up and running in the second half of this year.
These modern plants, being built to replace older ones, will be more fuel efficient and capable of reducing gas consumption by about 15%.
The improvements of the BPWHA and ABP4 plants are underway with the introduction of Digital Twins technology from Siemens to optimise plant maintenance.
In response to rising fuel prices, the Energy Regulatory Commission (ERC) has raised electricity charges under the fuel adjustment clause known as Ft, starting from 16.17 satang per kilowatt-hour (kWh) in January and on to 23.38 satang/kWh in May. Further adjustment is expected in September.
The 88-megawatt solar farm in Malaysia, a joint venture between BGRIM and reNIKOLA group in Malaysia, is due to come on line within this year.
These factors will contribute positively to BGRIM’s the performance for the rest of the year.
Financially, the firm is well prepared to deal with various situation scenarios including the coronavirus pandemic effects.
BGRIM’s financial position is solid with more than 26 billion baht in cash on hand.
In addition, there are stable cash flows from 53 power plant projects that are already in operation.
The approval from the recent shareholders’ meeting to extend the debenture limit to not more than 100 billion baht in 2022-2026 period as well as support from many financial institutions are helping BGRIM’s financial management to support business growth and capturing investment opportunities.
Dr Link said that this year the company has also extended cooperation with leading partners in the pursuit of business opportunities.
In March this year, BGRIM signed a memorandum of cooperation with True Group in the development of digital innovations for the energy business.
The cooperation encompasses Digital Infrastructure System Development by Smart Energy; 5G Technology Innovation Project Development; Effective Use of Energy and Basic Infrastructure Development; and the Development of New Economic Ecosystem and the Promotion of Startup Businesses in Thailand.
There are several projects under construction for BGRIM this year.
Among them is the 18-MW U-Tapao Solar Power Plant Phase 1 in Rayong with works are completed by 65% and is due to start commercial by this year-end.
The BGPAT2 & BGPAT3 power projects, each with an installed capacity of 140 MW, are on track for operational start-up next year.
BGRIM currently has 53 projects in operation and the firm is targeting an aggregate installed capacity from new projects, both from green-field and acquisition at home and abroad, of not less than 1 Giga-watts this year.
The company maintains the target of having 7,200 MW of power sales contracts by 2025, rising to 10,000 MW by 2030.