SUPER: Cost Swallows Profit

It was previously expected that Super Energy Corporation Public Company Limited (SUPER) would show an outstanding performance in 3Q20 as the company has already disposed of its asset to Super Energy Power Plant Infrastructure Fund (SUPEREIF), minimizing liabilities amounted to 4,000 million baht. 

 

However, when the operating results came out, SUPER’s net profit for the third quarter dropped dramatically by 57.91% to stand at 488 million baht from a profit of 1,160 million baht a year ago.

 

Despite the fact that total revenue grew by 10.69% to 1,651 million when compared to a year earlier of 1,491 million baht. This mainly came from a revenue from sales of 1,605 million baht or increased by 10.13% and a revenue from service of 45 million baht or increased by 34.52%.

 

The key factor of declining in profit was due to the investment in international power plants, particularly in Vietnam, pressuring SUPER to ask for loans again and it came along with an increase in financial cost.  

 

As a result, cost of the sale of goods surged 4.99% to 812 million baht and cost of the sale of the rendering of services jumped 151.75% to 36 million baht. Selling expenses soared 101.38% to 1.16 million baht, administrative expenses rose 14.02% to 142 million baht and finance costs increased 10.64% to 420 million baht.

 

Meanwhile, share of profit from investments in associates fell by 41.77% to 17 million baht from 30 million baht a year ago, mainly due to an asset disposal of 2 solar power plant projects totaling 118 megawatts to SUPEREIF, lessening a revenue recognition from 100% to 20% in line with shareholding proportion. 

 

SUPER recently decided to dispose of investment in Super Wind Energy Cong Ly 1 Joint Stock Company (SWEC1) in Vietnam, gaining a money amount of 272 million baht to add more liquidity to the company.

 

The debt-to-equity (D/E) ratio of SUPER as of the end of September 2020 jumped to 2.47x.  

 

The numerous liabilities pressured SUPER’s share price to underperform despite having positive factors from the COD of 3 solar power plant projects in Vietnam with a total installed capacity of 550 megawatts in 4Q20.

 

SUPER also has other positive factors as the 171-MW and 250-MW wind farms in Vietnam are ready to commence the COD within 2021.

 

But it seems like the share price hasn’t responded as it should, causing SUPER’s price to fall below its IPO price of 1 baht per share up to now.