GPSC’s 2Q Profit Beats Expectation, Booking ฿1.9Bn as SPPs Revenue Buoy Operations

Global Power Synergy Public Company Limited (GPSC) has reported its 2Q20 consolidated financial statement through the Stock Exchange of Thailand as follows;

GPSC reported a net profit of 1,895 million baht in 2Q20, increased 75.37% compared to a net profit of 1,081 million baht in 2Q19 and increased 20% from a net profit of 1,580 million baht in 1Q20.

 

Gross profit of Independent Power Producer (IPP) decreased by THB 677 million, mainly due to lower Availability Payment of GHECO One according to the payment structure of the PPA with EGAT. Gross profit of Houay Ho Power Plant (HHPC) also decreased as a result of lower water level in the reservoir than that in Q2/2019. Gross profit of Sriracha Power Plant increased as a portion of the Availability Payment (AP) that is linked to USD increased due to THB depreciation. Additionally, revenue from finance lease agreement also increased as a result of financial lease accounting (TFRIC 4) adjustment.

Gross profit of Small Power Producer (SPP) increased by THB 278 million corresponding to lower natural gas and coal price and higher electricity and steam demands of industrial customers of Rayong Central Utility Plant (CUP) despite lower electricity and steam demands of industrial customers of GLOW SPP.

Gross profit of Very Small Power Producer (VSPP) and others increased by THB 115 million mainly from recognition of gross profit from Global Renewable Power Co., Ltd. (GRP) after the acquisition completion on 26 March 2020 and from increased gross profit of Combined Heat and Power Producing Company Limited (CHPP) from Engineering, Procurement and Construction service (EPC) in Q2/2020.

 

Other income increased from land eviction fee amounting THB 223 million in Q2/2020 which is paid by EGAT as compensation for electric power transmission rights of way.

 

Other expenses decreased by THB 340 million mainly from ( i ) lower finance costs of THB 624 million or 39% from Q2/2019 due to partial repayment of bridge loan using proceeds from the Right Offering (RO) completed in Q4/2019 and (ii) lower selling and administrative expenses by THB 170 million or 28% due to provision of employee’s severance pay corresponding to revision of the Labour Protection Act of GLOW and unwinding costs of FX forward contracts of GLOW in Q2/2019.

 

Synergy from Acquisition of GLOW

In the year 2020 the Company expects to be able to recognize synergy value from the merger of approximately THB 400 500 million mainly from the management of power plants, power and steam network integration and management of Long Term Service Agreements ( to achieve highest efficiency and reduce operating costs In addition, the Company is also focusing on i improvement of procurement process via active and inventory cost control in order to achieve economies or scales and ( other cost management such as financing costs, insurance costs, working capital management, and organizational cost control The Company has evaluated preliminary which is expected to gradually increase from 2019 to 2024 and reach the synergy value of approximately THB 1 600 million in 2024.

In the first 6 months of year 2020 the Company recognized synergy value from the above activities of approximately THB 292 million and completed steam network integration connecting steam transmission network of GLOW SPP facilities to Rayong Central Utility Plant 3 (CUP 3 The connected network can support steam transmission of approximately 10 30 ton/hour and enhance flexibility and efficiency of steam supply system.