BGRIM Sets for Strong Q1 Results amid Robust Revenue from Malacha HPP

B.Grimm Power Public Company Limited (SET: BGRIM) is expected to report a net profit of THB 730 million for 1Q25, representing a 93% year-on-year increase, though a 7% decline from the previous quarter, according to analysts at Krungsri Securities.

Excluding the foreign exchange (FX) gain of approximately THB 105 million, normalized profit is estimated at THB 625 million —up 27% YoY and surging 91% QoQ.

The primary drivers behind the anticipated improvement in quarterly profit include an improved gross margin compared to 1Q24, reflecting a 2% decrease in gas costs (from THB 340 per million BTU in 1Q24 to THB 334 per million BTU).

Furthermore, share of profit in core operations from BGRIM’s solar power plant in Malaysia and wind power plant in South Korea shifted from losses to gains, buoyed by seasonal factors and a swing in FX gains from a loss of THB 70 million in 1Q24 to a gain of THB 100 million.

Looking ahead, 2Q25 net profit is likely to increase both YoY and QoQ, driven by the full-quarter recognition of revenue from the Malacha hydropower project in the US (a 30 MW plant acquired at the end of 2Q24). Additionally, the onset of Thailand’s peak season is expected to support earnings compared to 4Q24.

Krungsri Securities expects BGRIM’s 1Q25 earnings to be announced on May 14.

KGI Securities (Thailand) expects BGRIM to report 1Q25 net profit of THB 630 million, up 66% YoY but down 20% QoQ, with core profit estimated at THB 730 million—an increase of 48% YoY and 123% QoQ.

The jump in core profit is underpinned by stronger share of profit and full-quarter recognition from the Malacha hydropower project. Tax expenses are expected to nearly double YoY, after the expiration of BOI tax benefits for four SPP (Small Power Producer) plants in April 2024.

Meanwhile, SG&A costs declined significantly compared to 4Q24, while Malacha entered its high season. SPP power plant margins improved on lower gas prices (THB 334 per million BTU).

Electricity sales to the Electricity Generating Authority of Thailand (EGAT) dipped 2% due to maintenance shutdowns at some projects, while Industrial User (IU) power sales fell 7% YoY following a slowdown in the automotive segment. However, IU sales rose 2% from 4Q24, with a new capacity addition of 7 MW.

Given these improvements, KGI upgraded BGRIM recommendation from “Hold” to “Buy”, maintaining a target price at THB 13.10. The upward revision in profit forecasts is balanced by applying a larger discount (now 60% from 50%) to the value of BGRIM’s South Korean projects due to potential delays.

Nonetheless, the analysts’ outlook has turned increasingly positive given falling energy prices and a stronger baht, which could mean SPP plant earnings could outperform expectations.

Siriwong Borvornboonrutai, Chief Executive of Finance and Accounting at BGRIM, previously projected a 10-15% growth in total revenue for 2024, compared to last year’s sales and service income of THB 55.853 billion —driven chiefly by new projects, particularly solar farms and wind farms in South Korea.

Key projects include the 20 MW KOPOS onshore wind farm and the 365 MW Nakwol offshore wind project, both scheduled to commence commercial operation (COD) within the year.

BGRIM has set a 2024 capex budget of THB 10-12 billion to fund committed projects, including wind power ventures in Korea and the Philippines, as well as potential M&A transactions. The company anticipates closing at least 1-2 M&A deals within this year.