Gulf Energy Development Plc. (GULF) reported the financial results for Q3/23 with a total revenue of THB
30,674 million, a 26% increase from THB 24,275 million in Q3/22 and a core profit of THB 4,203 million,
a 94% increase from THB 2,167 million in the same period of last year.
The growth was primarily driven by the improved performance of the gas-fired power generation
business, as Gulf Pluak Daeng (GPD), a power project under IPD Group, commenced commercial operation
of its first unit with an installed capacity of 662.5 MW on 31 March 2023. Additionally, the 12 SPPs
under GMP Group and 7 SPPs under GJP Group had higher gross profit margins from electricity sales to
industrial users as a result of the lower average gas cost which fell from 579.13 THB/MMBtu in Q3/22
to 363.24 THB/MMBtu in Q3/23, while the average Ft rate increased from 0.48 THB/kWh in Q3/22 to 0.68
THB/kWh in Q3/23. Another attribution is the IPP power projects, including GNS, GUT and GSRC, which
recorded higher electricity sales volume to the Electricity Generating Authority of Thailand (EGAT).
The GNS and GUT power projects under GJP Group recorded a higher average load factor which increased
from 8% in Q3/22 to 21% in Q3/23, while the average load factor of GSRC power project under IPD
Group increased from 21% in Q3/22 to 79% in Q3/23. Additionally, overseas power projects also
reported better operating results. The DIPWP power project in Oman has seen an increase in its
commercial operation capacity, expanding from 52 MW in Q3/22 to 326 MW since the beginning of 2023,
resulting in GULF realizing a share of core profit of THB 174 million in Q3/23, an increase of 306%
YoY. GULF also recognized a share of core profit from the Jackson Generation power project in the
United States of THB 150 million in Q3/23 following the investment in the project in February
2023.
For the renewable energy business, GULF recognized a share of core profit from 3 wind power projects
under Gulf Gunkul Corporation totaling THB 235 million, a 205% YoY increase, due to higher average wind
speed from 4.8 m/s in Q3/22 to 5.5 m/s in Q3/23. Nonetheless, these aforementioned positive factors were
partially offset by a lower share of profit from the Borkum Riffgrund 2 (BKR2) offshore wind project in
Germany following the shareholding reduction from 50.00% to 24.99% as GULF divested 25.01% stake to the
Keppel Group in December 2022.
In Q3/23, GULF recognized a share of core profit from PTTNGD of THB 259 million, a recovery from a loss
of THB 221 million in 3Q22, due to higher gross profit margin per unit from the higher fuel oil price
and lower natural gas cost in this quarter, as the revenue for this project is linked to fuel oil price
while cost is dependent on natural gas price. In addition, GULF recognized a share of core profit of THB
65 million in this quarter from Thai Tank Terminal, a public terminal management project for handling
liquid products, following the investment in the project in December 2022. GULF also realized a share of
core profit from the investment in INTUCH of THB 1,527 million in Q3/23, a 37% YoY increase, from the
stronger performance of AIS and a gain on the disposal of all investment of 33.33% in Rabbit-Line Pay
Company Limited.
EBITDA for Q3/23 was THB 9,364 million, a 41% increase from THB
6,660 million in Q3/22. Net profit attributable to the parent company, which takes into account the
impact of the FX rate, was THB 3,360 million, an increase of 209% from THB 1,087 million in Q3/22 as a
result of the Thai Baht’s depreciation against the US dollar from 35.75 THB/USD at the end of Q2/23 to
36.72 THB/USD at the end of Q3/23. Nonetheless, the recording of such transaction is an accounting
transaction that does not have an impact on GULF’s cash flow and performance.
As of 30 September 2023, GULF reported total assets of THB 476,710
million, total liabilities of THB 332,454 million and shareholders’ equity of THB 144,256 million, with
a net interest-bearing debt to equity ratio of 1.70 times, decreased from 1.76 times as of 30 June 2023,
due to an increase in shareholders' equity.
Ms. Yupapin Wangviwat, Deputy Chief Executive Officer and Chief
Financial Officer, GULF, stated, “Q4/23 performance is still in line with the target, despite
the
government’s measure to reduce electricity tariff to 3.99 THB/kWh for the months of September to
December 2023. Even with the electricity tariff at this level, GULF's SPPs are still able to generate
higher profit than last year due to the lower average gas cost and higher average Ft in 2023 compared to
2022. Moreover, industrial customers account for only 8% of the total electricity sold. As such, GULF is
not impacted by the aforementioned measure. Furthermore, the projects that are scheduled to commence
commercial operation at the end of 2023 are still on track. The second unit of GPD with an installed
capacity of 662.5 MW has already commenced commercial operation on 1 October 2023. In addition, GULF1’s
solar rooftop projects are expected to gradually commence commercial operation to a total of 150-180 MW
by the end of this year. Additionally, the BKR2 wind project in Germany will reach its peak season in
the fourth quarter and the upward trend of the Henry Hub natural gas price will drive profit from the
Jackson Generation project, a gas-fired power project in the United States. For the digital asset
exchange business in Thailand under Gulf Binance, the project is set to start operations in November
2023. As such, these factors will drive GULF to achieve its 2023 earnings target.
GULF is aware of the importance of reducing greenhouse gas
emissions, and have therefore set a target to increase the renewable energy proportion in our portfolio
by no less than 40% by 2035. In October 2023, GULF entered into 25-year Power Purchase Agreements with
the Electricity Generating Authority of Thailand (EGAT) for the development of a total of 12 solar farms
and solar farms with battery energy storage systems (BESS) projects. The total contracted capacity of
these projects is 649 MW, with a scheduled commercial operation date between 2024 and 2025. In addition,
GULF also entered into 20-year Power Purchase Agreements with the Provincial Electricity Authority (PEA)
for the development of 2 industrial waste-to-energy projects with a total contracted capacity of 16 MW
and a scheduled commercial operation date in 2026. GULF expects to gradually sign the Power Purchase
Agreements for the renewable energy projects for which the Group has been selected as the project
operator through the bidding process by the Energy Regulatory Commission (ERC) for over 700 MW by the
end of this year.
In addition, GULF is currently developing 3 hydroelectric power
projects in the Lao People's Democratic Republic (Lao PDR), including the Luang Prabang, Pak Lay and Pak
Beng projects, with a total installed capacity of 3,142 MW and scheduled commercial operation dates in
2030, 2032, and 2033, respectively. All 3 projects will produce electricity for EGAT for a period of 29
– 35 years. GULF believes that the company’s sustainable operations and compliance with international
standards will enable it to achieve its decarbonization targets in the long term.”
