BANPU is planning to invest 45,000 million baht over the next five years (2021-2025) to expand all of its energy sector operations, excepting coal business, with the aim of reaching EBITDA for clean energy of 50% by 2025.
Mrs. Somruedee Chaimongkol, Chief Executive Officer of Banpu Public Company Limited (BANPU), said that the company has set aside approximately 45,000 million baht for a five-year investment plan (2021-2025), of which 8,500 million baht will come from the September 2021 offering of newly issued ordinary shares and 8,500 million baht will come from the issuance and allocation of BANPU-W4 warrants in 2022.
Under the Greener & Smarter strategy, the company is consistently accelerating the Banpu Transformation plan. BANPU has been undergoing the business transformation for more than two years and has continuously achieved the goals of successfully expanding the clean energy business portfolio while also generating prompt cash flow.
So the company believes that the earnings before interest, tax, depreciation and amortization (EBITDA) will exceed 50% in the clean energy sector compared to 43% in the first half of 2021.
BANPU has no additional investment plans in the coal business. Instead, the company will focus on improving and developing the current investment, utilizing green technology to maximize coal extraction efficiency and minimize environmental effect. BANPU believes that demand for coal will remain constant till 2040.
The first half of 2021 saw all three of BANPU’s core businesses perform well and create cash flow with an EBITDA of USD 582 million, or approximately 17,948 million baht. Energy Resources and mining combined generated an EBITDA of USD 331 million, or nearly 10,228 million baht. While prices are expected to increase in 3Q21 due to tight demand and supply.
For the natural gas business in the US, EBITDA was 178 million US dollars, or approximately 5,463 million baht, in the first half of the year. Meanwhile, gas prices are expected to increase to $4/cubic foot in the second half of the year, up from an average of $2.76/cubic foot in the first half, owing to the increasing demand trend while supply remains stable.
For the energy generation business, it can continue to earn a profit continuously, particularly from the HPC power plant in Lao PDR, which can create and sell electricity with a greater availability or EAF value. The BLCP power plant in Rayong province has been shut down for maintenance.
For the renewable energy business, EBITDA was 77 million US dollars or approximately 2,370 million baht in the first half of the year, as solar power plants in China earned more profit due to favorable weather conditions that result in increased light intensity and a higher rate of power generation capacity (Capacity Factor).
In addition, there has been a growth in energy generation and Capacity Factor in Japan’s solar power plant business. The Vinh Chau wind energy project Phase 1 in Vietnam has reported a 68% construction progress and is projected to begin commercial operation in 4Q21, a delay from the original 3Q21 schedule.