GPSC confident on 2016 performance with continuous growth, more income of power business with no impact from oil price
GPSC reveals that the power industry will continue to grow, thanks to supportive measures from the government and the business link with the Asean Economic Community (AEC) economy. GPSC is confident that its performance will reach the target as some projects are ready to COD (commercial operation date) and it is immune from the fluctuating in oil prices and vulnerable global economy because the company is equipped with the long term contract with the clients to manage future risk.
Dr. Toemchai Bunnag, President of Global Power Synergy Public Company Limited or GPSC, said that regarding the business operation in 2016, the company is still confident that it would be able to maintain the steady growth, in spite of the overall economic situation and the fluctuating in oil prices. The power industry is set to enjoy positive trend this year. In addition, the industry has the long term contract of 15-20 years with its clients. Therefore, GPSC is confident that its operation will achieve the target as planned.
“This year will be another year that the power industry will continue to expand, thanks to the government measures especially its alternative energy policy, including solar power, biomass and the waste that the government has planned to invite the private sector to submit the power selling agreement. This is the mega trend that draws strong interest from investors. Moreover, as Thailand has become a member of AEC, the power industry will further connect with the region and grow in line with the regional growth” said Dr. Toemchai.
At any rate, fluctuating in oil price situation from the past year until now has not affected the company’s ability to generate income and maintain the profit margin because the power and stream selling is based on Cost Plus Basis and minimum Take or Pay contract. Therefore, the performance should proceed as planned, as well as the company’s domestic and overseas expansion in power and steam business. The positive performance reflects in the operating result in the first nine months of 2015 during which the net profit rose by 33 % compared to the same period in 2014, reflecting the stable rise of the company. He is confident that the operating result in 2015 will meet the original target.
Dr. Toemchai said that as for the growth in 2016, the company continues to grow from 2015. GSPC’s projects are proceeding as planned, including 125 MW NNEG Power Project (Nava Nakorn Electricity Generating Company Limited) which will start COD (commercial operation date) this year with existing clients and the full income realization of IRPC Clean Power Phase 1 after the project starts commercial operation last November.
Moreover, the company has planned to grow with PTT Group, either investment in domestic or abroad as of an electricity and utility producer flagship of PTT Group. This is one of GPSC’s strong point in term of growth along with PTT Group.
The company has also placed high importance on long term project with the good return according to the five-year plan. GPSC will be able to increase the production capacity to be 2,850 megawatts, 10 % of which comes from alternative energy, 30 % of the overseas investment of the above-mentioned capacity. Equipped with financial and budget of around Bt18 billion, the company will mobilize fund from IPO worth around Bt10 billion and the low-cost loan of Bt8 billion. In the future, the company has planned to expand the capacity beyond the original target. GPSC is confident that it will be able to secure the low-cost loan because the company currently has strong financial support with low debt to capital ratio and financial competence to boost the confidence of the lenders.