Gulf Energy Development Public Company Limited (GULF) has reported a core profit of 925 million baht in the first quarter of 2020, increased 37.9% QoQ and 8% YoY. The increase was mainly due to the Availability Payment of its two IPP(3,200MW), coupled with its SPPs being able to feed more electricity to the industrial estate.
GULF also booked lower cost in neutral gas from THB 282/mmbtu in the first quarter of 2019 to THB 267/mmbtu in the first quarter of 2020./, while the Ft remained the same.
More importantly, the company had fully recognized earnings from all 12 SPPs in this quarter, compared to a recognition of 10 SPPs in 1Q19. GULF also fully recognized income from two solar power plants in Vietnam, along with another biomass power plant, which COD on March 1, 2020. GULF had a total of 2,726 equity MW for the already commenced power plants, compared to a total of 2,477 equity MW in 1Q19.
In 2027, once all the current developing projects are fully in operation, GULF will record a total equity MW of 7,781.
Map Ta Phut Industrial Port Development Phase 3 is under EPC negotiation and expected to start construction in Q3’20, with land reclamation work scheduled to be completed in 2023. Laem Chabang Port Development Phase 3 is under PPP contract negotiation with thePort Authority of Thailand. Meanwhile, M6 & M81 Intercity Motorways is under preparation for PPP contract signing which is expected to be signed in early June 2020.
Regarding the COVID-19 outbreak, Electricity sales volume is expected to have no significant impact, as 89% of GULF’s total power production capacity is sold under power purchase agreements with Electricity Generating Authority of Thailand (EGAT), which has a contractual minimum offtake amount for SPPs and Available Payment for IPPs that can maintain its availability to dispatch electricity. Moreover, GULF’s industrial users are from diverse sectors and there was a continuous expansion of the customer base as well.
Progress of projects under construction in Thailand is still advancing as planned. Nonetheless, Mekong Wind Power Project in Vietnam Phase 1’s construction work is delayed from the effect of COVID-19 outbreak, resulting in a postponement of its scheduled commercial operation date to be in May 2021. However, for other phases of the Mekong Wind Power Project, GULF is trying to accelerate their development in order to commence the operation in 2021 according to plan.
In addition, GULF reported a net loss of 413 million baht in the first quarter of 2020, mainly due to the Thai Financial Reporting Standards (TFRS) 9 Financial Instruments and TFRS 16 Leases, which does not related to GULF’s statement of cash flows from its higher production capacity.