WHAUP Expects Business Recovery in the Second Half of this Year Ready to Move Forward with Utilities and Power Businesses

Bangkok – WHA Utilities and Power Public Company Limited (WHAUP) announces its first half 2020 performance with revenue and normalized share of profits at Baht 1,282 Million and net profit of Baht 361 Million, while normalized net income is at Baht 397 Million. Key factors of the declining performance are the lower share of profits from the power business according to the power purchase agreements, planned maintenance, the impact from droughts and the COVID-19 pandemic. CEO Dr. Niphon Bundechanan is confident in the business recovery, once the drought situations improve, encouraging operators to resume normal operations. This will enable the company to achieve its target for utilities and power consumption.

For its second quarter 2020 performance, ending 30 June 2020, WHA Utilities and Power Public Company Limited (WHAUP) reported that the company generated revenue and normalized share of profits at Baht 620 Million, decreasing 44% year-on-year, while its normalized net income, which is an index to reflect its major performance, stood at Baht 177 Million, decreasing 74% year-on-year. The declining performance was impacted by the lower share of profits from investment in associated and joint ventures, especially Gheco-One Power Plant, which shown the decline based on its power purchase agreement and also the situation of droughts continued from the first quarter.

For the first half of 2020, the company posted revenue and normalized share of profits of Baht 1,282 Million, decreasing 28% year-on-year, and its normalized net income was Baht 397 Million, decreasing 59% year-on-year.

Dr. Niphon Bundechanan, Chief Executive Officer of WHA Utilities and Power Plc (WHAUP), said, “The Independent Power Producers (IPP) business was affected by declining share of profits (accounting perspective) from Gheco-One Power Plant, as a result of many factors, including the reduction of availability payment in the power purchase agreement, Thai Baht appreciation resulting in lower availability payment, the downward trend of coal prices, and the start of 10% corporate income tax payment since late last year. However, due to continued solid operating performance of the power plant and the decrease of principal and interest obligation, the company can consecutively earn high dividend from Gheco-One as expected. Meanwhile, the share of profits from Small Power Producers (SPP) business in the second quarter was on par with the previous quarter. The total power dispatch in the second quarter had improved from the first quarter by 2%. However three out of eight power plants were under planned maintenance during the first half. This made the share of profits from the SPP group, including maintenance expenses in the first half, decrease by 13% year-on-year. In addition, WHAUP still realized the additional revenue and share of profits from Chonburi Clean Energy (waste-to-energy power plant), which began commercial operation since late last year, and the solar rooftop projects. In the first half, the capacity of the solar rooftop projects rose up to 18 MW from 6 MW as of end 2019 and target to reach 39 MW by the end of 2020. As a result, the total operating capacity will reach 592 equity MW by the end of 2020.

The WHAUP CEO noted, “For the utilities business in the second quarter of 2020, the company continued to be impacted by drought situation. The industrial sector responded to the government measures, which sought collaboration to reduce water consumption continuously. This resulted in a 9% drop in the company’s domestic sale volume in the first half of this year.

When considering factors such as 1) improvement of the drought situation, as the water level at three main reservoirs that supply the EEC area increased in July from its lowest level in May; 2) the trend for more factories to resume their normal operations; and 3) the launch of customers’ new projects, which were delayed in the first half due to the drought crises, the company expects that water sales will increase in the second half.

Furthermore, the company’s expansion project for reclaimed water in the first half, which already began commercial operation, currently serves 15% of water demand. This will enable the company to generate more revenue as reclaimed water is premium grade water, partly reducing dependency and costs of raw water”.

Dr. Niphon concluded that with the drought situation resolved and the gradual recovery of industrial sector as well as the relaunch of new projects that have been delayed by customers , the company forecasts that its performance will boost up in the second half to reflect these positive factors.

Mr. Nattaphatt Tanboon-ek, Chief Financial Officer of WHAUP, added, “Even though the financial market was affected by the COVID-19 crisis in the first half of this year, the company’s cashflow and financial management were not impacted. In February, the company issued debentures with maturity of 2 years and 10 months, and 10 years for a total of Baht 3 Billion. For the redemption of debentures, which will mature in August, the company will use source of fund from financial institutions for Baht 4 Billion with a payment term of 2-3 years. This will maintain the company’s financial costs at an appropriate level and ensure financial readiness to expand business as planned to achieve the target”.