Mr. Somkiat Masunthasuwun, Chief Executive Officer of WHA Utilities and Power Plc (WHAUP), reveals that the company is driving its organization to become the leading service provider of "Smart Utilities and Green Power", in line with its strategy to seek opportunities for extended investments in utilities and power businesses. The company will rely on the development of technology-driven solutions for utilities business and renewable energy, in line with WHA Group's policy and goal to become a technology company.
WHAUP also aims to build added value and long-term growth, with an expected normalized total revenue and share of profit of THB 6 billion in 2026. It will maintain earnings before interest, taxes, depreciation, and amortization (EBITDA) over 50%, driven by the growth of water and power businesses along with the expansion of its customer base in Thailand and Vietnam. Moreover, the development of high value products such as demineralized water and new products and services will be carried on to serve customer demand and become a one-stop-service provider.
WHAUP plans to provide more Green Power services with additional investments for the installation of Solar Rooftops, which has grown rapidly over the past 2-3 years and received a warm customer response. This includes the biggest solar rooftop installation in ASEAN, for Prinx Chengshan Tire (Thailand) Co., with a generating capacity of 19.44 MW.
This strengthens the company's confidence in providing services to bigger projects in the future, particularly those overseas. Currently, the company is studying M&A possibilities for solar and wind power, as well as green field projects by implementing a successful business model in Thailand to enhance investments.
Mr. Akarin Prathuangsit, Chief Operating Officer of WHAUP, noted that the project development and implementation will be initiated through new technologies to meet customer demand for the full range of utilities and power businesses.
Utilities Business - This year, the company sets its target on water sales and management for a total of 153 million cubic meters, a 13% increase from last year, on the back of existing and new customer growth together with the expansion of customers outside WHA industrial estates. Apart from conventional water sales, either raw or industrial, WHAUP also concentrates on selling value-added products such as demineralized water and premium clarified water, which are produced during the wastewater treatment process to help protect the environment and serve customers' needs. With a capacity of 1.4 million cubic meters/year, the Premium Clarified Water plant will start its commercial delivery service in Q3/2022 to supply small power plants under Gulf Energy Development Plc (GULF).
Last year, outside WHA industrial estates, WHAUP signed a collaboration agreement for a joint venture to produce and distribute value-added water products to factories in Asia Industrial Estate. In the first phase, the joint venture will produce 1 million cubic meters of value-added water, expected to start commercial operations in Q4/2022. Apart from investments to increase water sales, WHAUP has also invested in alternative water sources, including the expansion of water reservoirs to reduce the purchase of raw water from main suppliers, and help lower costs. It targets to increase the capacity of alternative water sources by at least 11 million cubic meters/year.
In Vietnam, the company will expand utilities investments in WHA Industrial Zone 1 - Nghe An Phase 2, which started construction in Q1/2022. The development of Phase 1 has been fully completed and is ready to serve growing demand from customers in the industrial zone, similar to the tap water projects of SDWTP and Cua Lo, which will have additional investments to expand the network of tap water to serve more customers.
Energy Business - In 2022, WHAUP plans to increase total outstanding electricity sales contracts to 150 MW, of which 115 MW in combined capacity will start commercial operations (COD) this year, and the remaining in the next years.
In the area of innovation and technology, WHAUP will continue preparing for the future of solar energy business through the development of several technologies such as Smart Energy platform for solar energy trading among customers within WHA industrial estates. A Peer-to-Peer Energy Trading platform, called "RENEX, was developed in cooperation with PTT Public Company Limited and Sertis Company Limited, using Blockchain technology to enhance transaction security and facilitate energy trading among entrepreneurs in industrial estates. The project received cooperation from the Provincial Electricity Authority and is part of the Energy Regulatory Commission's Energy Innovation Experiment Project, or ERC Sandbox. It is in the final preparation stage to do trial commercial trading services. Commercial trading is expected to officially kick off in Q3/2022. Once the power trading system is completed, it will boost WHAUP's renewable energy portfolio to grow exponentially. Presently, there are 23 operators participating as Clean Energy Traders in this pilot project.
The company has also introduced the Battery Energy Storage System (BESS) to be used together with the solar energy power production, and proposed as another service to customers. It is also conducting the study of the Smart Microgrid system to enhance the utilities system within WHA industrial estates to extend the renewable energy business portfolio and create a new business model for the company. This will be an important factor for WHAUP to use clean energy at higher efficiency while building confidence for the future of power-generating systems.
Mr. Prapon Chinudomsub, Chief Financial Officer of WHAUP, stated that the company has set aside a five-year investment budget (2022-2026) of THB 10 billion baht, including around THB 1 billion each for investments in 2022 for water and power businesses. The funds will come from loans from financial institutions and the issuance of debentures.
On June 1, 2022, the company successfully issued debentures worth THB 2.8 billion, receiving an overwhelming response from investors despite volatile interest rate trends. As part of debentures, a green bond worth 1.8 billion was issued for the first time by WHAUP, reflecting the company's determination to respect environmental concerns and build sustainable development. WHAUP debentures received a credit rating of "A-/stable" by Tris Rating.
Currently, the company's net interest-bearing debt to shareholder equity ratio stands at 0.9 times, relatively low compared to the creditors' ceiling at 2.5 times. This demonstrates the company's strong financial status and its potential ability to secure more loans for new investment opportunities, including green field development, mergers & acquisitions (M&A), joint ventures and additional investments inside and outside WHA industrial estates for both utilities and power businesses. This will eventually complement and strengthen WHAUP businesses, build growth confidence in Thailand and overseas, and develop innovative solutions for renewable energy and utilities for sustainable growth in the long term.
Source: Media Planner Consultant