EGCO Group Fully Moves Forward, Allocating over 150-billion-baht budget within 5 years
Ready to Expand Renewable Energy Portfolio in Respond to Global Trend
Increases Power Generating Capacity up to 1,000 MW within 2021
Electricity Generating Public Company Limited or EGCO Group is moving forward to the fully-integrated energy businesses expansion, strengthening its power business, expanding renewable energy portfolio and Smart Energy Solution in responding to the global energy trends, and also extending to the fuel and infrastructure businesses. The Company has set aside over 150-billion-baht investment budget within five years to drive the businesses with the 4I strategy in order to create sustainable growth and long-term value for stakeholders. The preparation would enable it cope with any changes with a robust business ecosystem.
Mr. Thepparat Theppitak, President of EGCO Group, said, “In the overall of 2020, the electricity industry, both at home and abroad, faced many challenges such as the COVID-19 pandemic as well as rapidly-changing business environment as a result of technology disruption. In the midst of these challenges, EGCO Group is able to adapt quickly and keep doing business in the New Normal situation. We are able to manage existing assets efficiently and expand our investments into the new areas as well as in other energy-related industry continuously. For example, the commercial operation of Gangdong power plant in South Korea, the new investment in the USA and being Thailand’s first electricity generating company to be selected as a member of DSJI in the Emerging Markets Index in Electric Utilities category.”
For the future business direction, EGCO Group has adjusted its business strategies and directions in respond to the energy transition by putting emphasis on expanding business operations both in terms of production and providing fully-integrated energy services. This includes electricity business, which is its core business, and also seeks investment opportunities in fuel and infrastructure businesses as well as Smart Energy Solution. This will be implemented through the 4I strategies which include: “Invest” in assets with sustainable growth that can generate good returns in the long term, “Improve” and manage existing assets to excellence, “Innovate” by driving businesses with innovation to create sustainable growth; and “Increase” competitiveness in finance.
EGCO Group is still seeking new investment opportunities, especially in the renewable energy and Smart Energy Solution as to be in line with the worldwide trends of promoting clean and renewable energy. It plans to invest in new projects in form of mergers or acquisitions (M&A) in the targeted countries which we already have investment footprint such as Vietnam, Philippines, South Korea, Taiwan and the United States.
“Recently, EGCO Group has successfully invested in the Linden Cogen power plant with the installed capacity of 972MW, situated in Linden, New Jersey, USA. The transaction will be completed in the Q2 of 2021 and revenue will be recognized as soon as the deal is closed successfully. The Linden Cogen power plant is a quality asset located in a strategic point, adjacent to the natural gas supply which is benefit for the low cost of fuel supply. It sells the energy, capacity and ancillary services in New Jersey and New York; two of the most congested and capacity constrained power markets in the US. The facility also enjoys long-term process steam and electricity sales contracts with large investment grade industrial off-takers. The investment is an important step for EGCO Group to enter the US market which lay out the foundation towards future investment opportunities in renewable energy business,” said Mr. Thepparat.
Meanwhile, as a comprehensive energy service provider, EGCO Group has also made further investment in the energy-related businesses including the fuel and infrastructure businesses as well as Smart Energy Solution business by seeking investment opportunities with business partners, both at home and abroad. At present, the Company has projects that are under construction and development such as extension of oil pipeline to the Northeastern region, which is scheduled to commence operation in the Q4 of 2021; EGCO Rayong Industrial Estate development project based on Smart and Green Industrial Estate concept. It has signed the contract with the Industrial Estate Authority of Thailand in January 2021 and is scheduled to be officially open in 2022. It is also applying for a LNG Shipper license to supply and wholesale natural gas of 200,000 tonnes per year for fueling its own power plants and is now awaiting the results from the Energy Regulatory Commission. The Solar Solution Provider project to provide fully-integrated premium solar cell products and systems, targeting at industrial and commercial buildings customers. A joint venture project between EGAT Group through EGAT Innovation Holding to do electricity innovation and the New S Curve businesses.
“Based on such business directions, EGCO Group has allocated an investment budget over 150 billion baht within five-year period for the projects which are under construction and development, as well as new investment projects which are under negotiation. In the short term period within 2021, it is expected to increase power generating capacity up to 1,000 MW in its portfolio from Linden Cogen in the United States and other projects which are under negotiations. It will help create sustainable growth to the Company, and long-term value for stakeholders," said Mr. Thepparat.
The year 2020: Recording 8,738-million-baht operating profit with the full year dividend payment of 6.50 baht per share
In 2020, EGCO Group recorded its operating profit (excluding the effects of foreign exchange rate, deferred income tax, impairment, financial instruments and lease income) of 8,738 million baht, down 1,630 million baht or 16% compared to 2019. The major factors derived from a decrease in the operating results of the large power plants, including Paju power plant, BLCP power plant, Quezon power plant, Nam Theun 2 Power Plant and Chaiyaphum Wind Farm.
In addition, the Board of Directors’ meeting dated 25 February 2021 resolved to propose the 2021 Annual General Meeting of the Shareholders to make a dividend payment of 3.50 baht per share from the performance in the latter half of 2020. With inclusion of the dividend of 3 baht per share already paid from the performance in the first six months of 2020, the dividend payment for the accounting period starting from 1 January to 31 December 2020 will amount to 6.50 baht per share. The Annual General Meeting of the Shareholders for 2021 is scheduled on 19 April 2021. The dividend payment is set to be made on 27 April 2021.
The year 2021 is expected to have better operating profits than the previous year from the revenue recognition of new projects
“For 2021, it is expected that the COVID-19 pandemic will be better off which is a positive factor for EGCO Group’s businesses. Furthermore, it is expected that the Company’s operating profits will be increased from the previous year due to revenue recognition from the operations of the Linden Cogen power plant in the USA, the Yunlin Offshore Wind Farm in Taiwan which has gradually transmitted electricity to the grid in the Q2 of 2021 onwards, as well as the extension the oil pipeline to the Northeastern region which is expected to commence operations in the Q4 of 2021," Mr. Thepparat concluded.