Thailand: Ratch upbeat on profit view

Thailand: Ratch upbeat on profit view

SET-listed Ratchaburi Electricity Generating Holding Plc (Ratch), Thailand's
largest private power producer by capacity, is optimistic about its profit
this year, even without introducing any new projects in the second half, as
the Hongsa coal-fired power plant in Laos is now in full operation.

President and chief executive Kijja Sripatthangkura said the Hongsa project
is using 80% of capacity this year with its three units running at full
capacity. The plant started up in 2015 but ran only one unit.

Power generators at the 1,878-megawatt Hongsa plant also increased their
efficiency, which should help this year's net profit double to 6 billion
baht, Mr Kijja said.

Hongsa, which is 40% owned by Ratch, phased in operations of each generator
from 2015 to March 2016. Another 40% is owned by Banpu Power Plc, while 20%
is owned by Lao Holding State Enterprise.

Mr Kijja said Ratch still has several projects expected to continue their
development over the next three years. The projects include two renewable
power plants in Australia; the Xe-Pian and Xe-Namnoy hydroelectric projects
in Laos, with a combined power-generating capacity of 410MW; the
Fangchenggang nuclear power project Phase 2 in China, with 2,360MW capacity;
and the Berkprai Cogeneration Power Plant in Thailand, with 100MW capacity.

The 42.5MW Collinsville solar power project and the 180MW Mount Emerald wind
farm, both in Australia, are due to start commercial operations in March and
September 2018, respectively. The other projects are to start operation
during 2019-21.

The company recently signed a joint venture for a 49% stake in Indonesia's
gas-fired Riau project with PT Medco Power Indonesia. Total capacity is
estimated at 275MW, and the investment budget is worth US$300 million.
Commercial operation is due to start in 2021.

Mr Kijja said Ratch is planning to diversify into related power businesses,
expanding overseas because of limited opportunities at home. The latest
diversification is investment in power storage in Thailand and tap water in
Laos after shelling out for bids to construct the Yellow Line and Pink Line
for Bangkok's mass transit system.

Mr Kijja said competition in the domestic power-generating sector has
intensified, leading the company to seek more opportunities in the overseas
market.

Ratch has set aside 10 billion baht for capital expenditure this year, with
5.6 billion for power plant projects and 4.4 billion for mergers and
acquisitions in Asean.

Mr Kijja said revenue from overseas markets will make up 50% of the total
this year, up from 20% last year.

In the first quarter of 2017, the company posted total revenue of 10.6
billion baht, down 26% year-on-year, while net profit rose 8% to 1.4 billion
baht.

RATCH shares closed yesterday on the Stock Exchange of Thailand at 49.75
baht, down 50 satang, in trade worth 64.3 million baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1248746/ratch-upbeat-on-profit-view

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com