Management Discussion and Analysis
For the Financial Result of Quarter 2 Year 2019
Ended June 30, 2019
Note: This Management Discussion and Analysis (MD&A) was made to disclose information and the vision of the management in order to assist investors to better understand the company's financial status and operation. It also supports the "Good Corporate Governance Project" of the Securities and Exchange Commission (SEC).
An English version of the MD&A has been prepared from the Thai version. In the event of a conflict or a difference in interpretation between the two languages, the Thai version shall prevail.
The objective of this MD&A is to present the information and the explanation of financial status and operating results as of the date hereof. However, the information provided in this MD&A may vary if any factors or situation are changed in the future; the investors are, therefore, required to have their own discretion regarding the usage of this information for any purpose. For further detail, please contact Investor Relations Division of the Electricity Generating Public Company Limited at Tel: 662-998-5150-3 or Email: ir@egco.com
Management Discussion and Analysis
1. Significant events in the second Quarter of 2019
- The progress in construction projects
- Xayaburi Project, a project of the Xayaburi Power Company Limited, (EGCO holds a 12.50% ownership interest.), is a hydro power plant project, Run-of-River. The project is located in the Laos People's Democratic Republic (Laos PDR). The project has entered into the PPA with EGAT with the contracted capacity of 1,220 MW and Electricite Du Laos (EDL) with the contracted capacity of 60 MW for 29 years. The construction of the project has progressed 99.40% (The construction plan was 99.12%). The commercial operation date is scheduled in the fourth quarter of 2019.
- SBPL Project, a project of San Buenaventura Power Ltd., Co., (EGCO holds a 49% ownership interest.), is a 500 MW supercritical coal-fired power plant, in Mauban, Quezon province of Republic of the Philippines. 455 MW of the plant's capacity and energy are contracted to the Manila Electric Company (MERALCO) pursuant to a 20 years power supply agreement which is extendable for up to an additional 5 years. The construction of the project has progressed 99.79% (The construction plan was 99.72%). The commercial operation date is scheduled in the fourth quarter of 2019.
- NT1PC Project, a project of Nam Theun 1 Power Company Limited (EGCO holds a 25% ownership interest.), is a hydro power plant project. The project is located on Nam Kading River in Bolikhamxay, Lao PDR. The project has entered into the PPA with EGAT with the contracted capacity of 514 MW and EDL with the contracted capacity of 130 MW for 27 years. The construction of the project has progressed 53.55% (The construction plan was 55.21%). The commercial operation date is scheduled in the second quarter of 2022.
- Other significant event
- On June 21, 2019, The Board of Directors of Electricity Generating Public Company Limited (EGCO) approved the investment in Gangdong Fuel Cell Project (Gangdong), located in Gangdong-gu, Seoul, South Korea with the capacity of 19.80 MW. Gangdong will sell electricity to Korea Electric Power Corporation (KEPCO), the sole off-taker of wholesale power generation in South Korea, through the Korea Power Exchange, sell thermal energy, and receive renewable credits in the form of renewable energy
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certificates (REC) with respect to its electricity generation output. Gangdong will construct and operate by Paju Energy Services Co., Ltd. (Paju ES), a company in which EGCO Group owns a 49% equity interest. Paju ES owns and operates Paju Power Plant which is a combined cycle gas-fired power plant. The investment objectives for the Gangdong are to fulfil a portion of the Renewable Portfolio Standard (RPS) obligations of Paju ES on a long-term basis and to generate incremental economic earnings to Paju ES. A fuel cell is an electrochemical device that combines hydrogen from natural gas and oxygen to produce electricity and heat. Fuel cells operate without combustion and it is considered as an option for a reliable source of power. Gangdong construction works are scheduled to commence in August 2019. The commercial operation date is scheduled in the fourth quarter of 2020.
2. Business overview
EGCO Group have invested in the Power Producer (PP), Independent Power Producer
(IPP), Small Power Producer (SPP), Very Small Power Producer (VSPP), Coal Mining, Operating and Maintenance (O&M), Management and Administrative Services (Management Services). Details of each plant are as follows:
- Subsidiaries which can be categorized into 2 businesses: 1. Power Generation
1.1 Local power generation | |
Khanom Electricity Generating Co., Ltd. (KEGCO) | IPP |
EGCO Cogeneration Co., Ltd. (EGCO Cogen) | SPP |
Roi-Et Green Co., Ltd. (RG) | SPP |
Banpong Utilities Co., Ltd. (BPU) | SPP |
Klongluang Utilities Co., Ltd. (KLU) | SPP |
Chaiyaphum Wind Farm Co., Ltd. (CWF) | SPP |
SPP Two Co., Ltd. (SPP 2) | VSPP |
SPP Three Co., Ltd. (SPP 3) | VSPP |
SPP Four Co., Ltd. (SPP 4) | VSPP |
SPP Five Co., Ltd. (SPP 5) | VSPP |
Yanhee EGCO Holding Co., Ltd. (Yanhee EGCO) | Holding Co. |
∙ Solarco Company Limited (Solarco) | VSPP |
Theppana Wind Farm Co., Ltd. (TWF) | VSPP |
EGCO Plus Co., Ltd. (EGCO Plus) | Holding Co. |
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1.2 Overseas Power Generation
Quezon Power (Philippines) Limited Co. (Quezon)
Boco Rock Wind Farm Pty Ltd. (BRWF)
2. Other businesses
2.1 Local Other Businesses
EGCO Engineering and Service Co., Ltd. (ESCO)
2.2 Overseas Other Businesses
Pearl Energy Philippines Operating Inc. (PEPOI)
Quezon Management Service Inc. (QMS)
-
Associated in overseas power generation business Star Energy Geothermal Pte. Ltd. (SEG)
Star Energy Geothermal (Salak - Darajat) B.V. (SEGSD) - Joint Ventures which can be categorized into 2 businesses: 1. Power Generation
1.1 Local power generation
Gulf Electric Public Company Limited (GEC)
- Gulf Cogeneration Co., Ltd. (GCC)
- Nong Khae Cogeneration Co., Ltd. (NKCC)
- Samutprakarn Cogeneration Co., Ltd. (SCC)
- Gulf Yala Green Co., Ltd. (GYG)
-
Gulf Power Generation Co., Ltd (GPG) BLCP Power Limited (BLCP)
Natural Energy Development Co., Ltd. (NED) G-Power Source Co., Ltd. (GPS)
1.2 Overseas power generation
PP
PP
O&M
O&M
Management
Services
PP
PP
Holding Co.
SPP
SPP
SPP
SPP
IPP
IPP
SPP & VSPP VSPP
Nam Theun 2 | Power Co., Ltd. (NTPC) | PP |
San Buenaventura Power Ltd. Co. (SBPL) | PP | |
Nam Theun 1 | Power Co., Ltd. (NT1PC) | PP |
Paju Energy Services Co.,Ltd. (Paju ES) | PP |
2. Others businesses
- Overseas Other Business
PT Manambang Muara Enim Co., Ltd. (MME) | Coal Mining |
E&E Engineering and Service Company Limited (E&E) | O&M |
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(4) Other long-term investment
Xayaburi Power Company Limited (XPCL)
As of June 30, 2019, EGCO Group's portfolio consists of 27 operating power plants, with a total contracted capacity of 5,147 MW equity and 3 construction projects, with a total contracted capacity of 544 MW equity.
3. Report and Analysis of the Operating Results
EGCO would like to present analysis of the operation result as follows:
Summary of operating results for Q2/2019, Ended of June 30, 2019 | Unit : Million Baht | ||||||||||||||
Power Generation | Others | Total | Change | ||||||||||||
Increase (Decrease) | |||||||||||||||
Quarter 2 | Quarter 2 | Quarter 2 | Quarter 2 | ||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | Amount | % | ||||||||
Total Revenues | 11,017 | 8,929 | 158 | 142 | 11,175 | 9,071 | 2,104 | 23% | |||||||
Total Expenses | (10,050) | (8,254) | (174) | (148) | (10,224) | (8,402) | 1,822 | 22% | |||||||
Share of Profit (Loss) | 1,652 | 1,800 | (9) | 19 | 1,643 | 1,819 | (176) | (10%) | |||||||
Profit (Loss) before the effects of | |||||||||||||||
foreign exchange, deferred income tax | 2,619 | 2,475 | (25) | 13 | 2,594 | 2,488 | 106 | 4% | |||||||
and lease income | |||||||||||||||
Deferred income (expense) tax | 163 | (197) | 6 | - | 169 | (197) | 366 | 186% | |||||||
Profit (Loss) before the effects of | 2,782 | 2,278 | (19) | 13 | 2,763 | 2,291 | 472 | 21% | |||||||
foreign exchange and lease income | |||||||||||||||
Profit (Loss) from foreign exchange | 1,194 | (5,316) | 1 | - | 1,195 | 5,316 | 6,511 | 122% | |||||||
Net profit (Loss) before the impact of | 3,976 | (3,038) | (18) | 13 | 3,958 | (3,025) | 6,983 | 231% | |||||||
lease income | |||||||||||||||
Impact of lease income | (10) | 661 | - | - | (10) | 661 | (671) | (102%) | |||||||
Net Profit (Loss) | 3,966 | (2,377) | (18) | 13 | 3,948 | (2,364) | 6,312 | 267% | |||||||
For focusing on the operating performance, the impact of lease income were excluded from the analysis of the operation result.
The operating profit of EGCO Group before the effects of foreign exchange, deferred income tax and lease income for Q2/2019 were Baht 2,594 million, increasing by Baht 106 million comparing to Q2/2018, which came from an increase in power generation business of Baht 144 million and a decrease in other business of Baht 38 million. See more details in 3.1 and 3.2 as follows;
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EGCO - Electricity Generating pcl published this content on 13 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 August 2019 11:41:10 UTC