Mr. Prakobkiat Ninnad, President of Bangkok Aviation Fuel Services PCL (BAFS), disclosed the company's business operations for 2021, noting the continued and unprecedented uncertainty due to COVID-19 in the country and around the world which is having a huge impact on global businesses, especially the tourism and aviation industries. Nevertheless, BAFS believes in Thailand's resilience in aviation and tourism over the long-term. As a result, the company unveiled its strategic plan for 2021-2024 which aims to support the group's sustainable growth. By 2024, the company expects to achieve 43% of its income from its core business of aviation refueling with the remaining 57% from its non-core business diversifying its risk distribution.
BAFS will continue to maintain the strength and potential of its core businesses while expanding its related businesses and investing in new businesses to meet the needs of the new normal. This will encompass digital transformations and disruptions to strengthen the different business segments, while maintaining a solid foundation and ensuring continued and sustainable growth as planned to achieve the group's objectives. For 2021, BAFS outlined its business plan which cover:
1) Core Businesses - Sustain the strength of core businesses through integrated service offerings. This will be achieved by expanding the aviation refueling business to airports in provinces with strong potential either operated by BAFS or through joint ventures. In addition, Thai Aviation Refueling Company Limited (TARCO), a hydrant pipeline network provider at Suvarnabhumi Airport, is implementing the Aviation Fuel Hydrant Network Project at Suvarnabhumi Airport - Phase II as part of the second phase of the Suvarnabhumi Airport Development Project which includes building another 28 parking bays. Meanwhile, the underground hydrant pipeline system was completed in June 2019 and testing of the complete system using aviation fuel commenced in January 2021 while service readiness tests for Airports of Thailand PCL and other operational system tests should be completed by April 2022.
2) Related Businesses - The company plans to expand the scope of its business operations to fulfill a wider range of customer requirements in aviation refueling services. BAFS Innovation Development Company Limited (BID) will take the lead in providing information technology and software services that contribute to innovations and a digital solutions business. BID will develop service platforms related to aviation and airport businesses using advanced technologies including blockchain and AI. This includes the development of a robotic prototype for aviation refueling installed on refueling vehicles. In addition, BAFS INTECH Company Limited is producing and distributing aviation refueling vehicles and equipment to support aircraft in Lao PDR and Myanmar, collaborating with leading European companies to develop an electric vehicle (EV) and acting as a distributor for additional accessories such as industrial valves which are critical to the petroleum industry.
3) New Businesses - BAFS' business plan outlines new ways to generate revenue providing a more balanced income structure. To achieve this, BAFS Clean Energy Corporation Company Limited is planning to invest in renewable energy and recycling businesses. The company's acquisition of seven solar power plants with a total production capacity of 36.4 megawatts worth approximately 1,704.67 million baht will contribute to the group's income in 2021. Additional acquisitions of solar power plants overseas are planned in the future.
In 2020, the group (BAFS and its subsidiaries) delivered total revenue of 1,882.5 million baht, a decrease of 2,035.8 million baht or 52% from 2019. This was due to the sizeable decrease in the amount of aviation fuel serviced by the group at Suvarnabhumi and Don Mueang Airports and the amount of fuel carried through the pipeline transportation service, all of which were affected by the sluggish economy, a significant decline in air transport, and the decline in ground fuel consumption as a result of COVID-19. Consequently, the company adopted strict measures to manage expenses and set servicing costs at 1,528.6 million baht, a decrease of 300.6 million baht or 16.4% from 2019, and administrative expenses of 588.9 million baht, a decrease of 112.5 million baht or 16% from 2019. This resulted in a loss of 374.3 million baht, a decrease of 1,314.2 million baht or 139.8%, leading to a deficit for the group. Nevertheless, the cost-savings measures including voluntary pay cuts by executives, allowed BAFS to deliver a net profit of 25.9 million baht.
"We are cautiously optimistic entering 2021 having solidified our business development plans along with our commitment to sustainably provide energy business services focused on quality, safety and the environment. Our performance, as always, incorporates good governance, effective risk management across the supply chain along with improved management know-how geared to continued innovations in our businesses. We will reinforce our growth potential and look after our stakeholders throughout the value chain using our proprietary expertise and exceptional business capabilities in the energy business. BAFS remains committed to delivering business growth through a sustainable approach focused on quality," concluded Mr. Prakobkiat.
Source: ABM Connect