GPSC's net profit grows 20% in Q2/2020 with positive factors of low fuel prices and higher electricity-steam consumption
GPSC’s net profit rises in Q2/2020 despite the COVID-19 crisis. The Q2 net profit rises up to 20% from Q1/2020, resulting in a 72% increase in its net profit for the first half of 2020 year on year. The strength of the company reflects an excellent performance of Glow in the first half of 2020 as well as other positive factors, including lower gas prices, full production capacity of power plants in the group and expected higher utilization rate of power and steam from most of the plants after relieving the lockdown restriction.
Mr. Chawalit Tippawanich, President and Chief Executive Officer of Global Power Synergy Public Company Limited or GPSC, the innovative power flagship of PTT Group, announced the revenue of 18,138 million baht in Q2/2020, 1% down from Q1/2020, but 20% increase in profit, which is 1,896 million baht. Compared to the same period of last year, the company’s net profit exclusive of adjusted net income is 2,264 million baht, up by 57%, leading to the company’s gaining revenues of 36,446 million baht for the first half of 2020 (Jan-Jun 2020), up by 25%, with a net profit exclusive of adjusted net income of 4,212 million baht, a 77% increase compared to the first half of 2019.
The increase in the company’s profit for the first half of this year was attributed to Glow Energy Public Company Limited (GLOW)’s revenue recognition in the first half of 2020 while only 3 months of GLOW’s revenue was recognized in Q1/2019. Meanwhile, an increase in an initial profit from Sriracha Power Plant was also recognized as the availability payment went up as a result of revenue restructuring from a financial lease. Additionally, Q2/2020 was supported by the drop of natural gas prices in line with lower global oil prices. In addition, Glow IPP3 has received 223 million baht for land grab and forced eviction for the construction of 500-kV high voltage power network of the Electricity Generating Authority of Thailand (EGAT).
“The company’s performance reflects our strength from the synergy between GPSC and GLOW, which is starting to generate profits, and less impact on power and steam consumption of our industrial customers during the COVID-19 outbreak,” said Mr. Chawalit.
The financial performance of Q2/2020 compared to Q1/2020 with a higher profit was attributed to both companies’ power plants, including the Independent Power Producers (IPP), which have an initial profit growth from the availability payment, and the increased revenue of Houay Ho Power Plant in Lao PDR.
The initial profit from Small Power Producers (SPP) went up from Q1/2020 due to a rising consumption of electricity and steam by the industrial customers while the initial profit from Very Small Power Producers (VSPP) rose due to the increased sales revenue of Global Renewable Power Company Limited (GRP) and Ichinoseki Solar Power 1 GK Company (ISP-1), and the increased revenue from the Engineering, Procurement and Construction (EPC) services provided by Combined Heat and Power Producing Company Limited (CHPP).
Mr. Chawalit also mentioned about the development of energy innovation saying that the company’s Board of Directors has approved a 230-million-baht investment in an energy storage system (ESS) technology research and development center to test the safety of energy storage systems in order to build user confidence in the Energy Storage System (ESS). The battery plant is under construction and will begin its commercial operation later this year.