Gulf Energy Development Plc. (GULF) reported the financial results for Q3/22 with total revenues of THB 24,275 million, representing an increase of 76% year-on-year (YoY). The growth was driven mostly by the revenue recognition of Gulf SRC's (GSRC) units 2-3 with a total installed power generation capacity of 1,325 MW, which began commercial operation in Q4/21 and Q1/22, respectively. Another factor is the increased revenue from the Borkum Riffgrund 2 offshore wind power project (BKR2) in Germany as a result of the average electricity prices, which almost doubled from EUR184/MWh to EUR328/MWh. Additionally, GULF recorded higher revenue from the 19 gas-fired SPPs due to higher electricity selling prices in tandem with the rise in natural gas prices.
In Q3/22, gross profit from sales was THB 4,466 million, an increase of 55% YoY or THB 1,584 million. However, gross profit margin decreased to 20.6%, down from 24.6% in Q3/21 due to the rise in average natural gas costs by 116% YoY, from 268.61 THB/MMBTU in Q3/21 to 579.13 THB/MMBTU this quarter, while the average Ft rate increased by 0.6298 THB/kWh (from -0.1532 THB/kWh to 0.4766 THB/kWh). In addition, the SPPs under GMP Group, which include GBP, GNPM, and GNRV2 power plants, as well as an IPP under GJP Group, the GUT power plant, had a major maintenance shutdown (B Inspection) during Q3/22.
GULF recorded a core profit of THB 2,167 million in this quarter, a decrease of THB 126 million or 6% YoY, primarily due to the aforementioned spike in natural gas prices, along with the decrease in share of profit from INTUCH of THB 556 million (in Q3/21, GULF recognized dividend income from INTUCH of THB 1,667 million, while in Q3/22, the company changed its accounting method for INTUCH to share of profit, which was recorded at THB 1,111 million). In addition, PTT NGD posted a loss of THB 221 million in this quarter due to lower fuel oil prices and higher gas prices (PTT NGD's revenue structure is linked to fuel oil prices while costs are linked to gas prices). Nevertheless, GSRC recorded higher profit from the commercial operation of units 2-3 and BKR2 had improved performance this quarter, which resulted in the overall profit to weaken just slightly.
Net profit attributable to the parent company, which takes into account the impact of the FX rate, was THB 1,087 million, a decrease of 32% YoY from THB 1,588 million in Q3/22 as a result of the Thai Baht depreciation against the US Dollar by 7.3%, from 35.46 THB/USD in Q2/22 to 38.07 THB/USD in Q3/22, while the Thai Baht depreciated by only 5.8% against the US Dollar in Q3/21 compared to Q2/21. Nonetheless, the recording of such transaction is an accounting transaction, which does not impact the cash flow and performance of the company.
As of September 30, 2022, GULF had a net interest-bearing debt to equity ratio of 1.96 times, a slight increase from 1.89 times at the end of June 2022. This was mainly due to the THB 35,000 million in debentures that GULF issued in August 2022 for business expansion and partial loan repayment.
Ms. Yupapin Wangviwat, Chief Financial Officer, GULF, stated, "This year's performance is still in line with the target, despite the steep rise in natural gas prices. GULF received minimal impact as industrial customers account for only 13-14% of GULF Group's overall electricity sales volume. Moreover, GULF invests in various types of businesses, both domestically and internationally, such as the renewable energy business overseas, including the BKR2 wind power project in Germany and solar farm projects in Vietnam, the gas-fired power generation business overseas, such as the Jackson Generation power project in the United States, as well as the investment in INTUCH Group. This is to diversify revenue streams, which results in stable earnings in the long term for GULF."
In Q4/22, earnings will grow from GSRC unit 4 (662.5 MW), which began commercial operation on October 1, 2022, and the BKR2 wind power project, which will reach its peak season in the fourth quarter. GULF will also record a full-quarter share of profit from the 3 wind power projects under Gulf Gunkul Corporation. For 2023 results, earnings are anticipated to increase significantly from the commercial operation of the Gulf Pluak Daeng (GPD) project, which is an IPP power plant with a total installed power generation capacity of 2,650 MW, where two units, totaling 1,325 MW, are scheduled to commence commercial operation. GULF also expects to record profit from the 1,200-MW gas-fired Jackson Generation power project in the United States from Q1/23 onwards.
Source: Gulf Energy Development
