Bangkok--14 Nov--Glow Energy
Glow Energy posted year to date consolidated revenues of THB 25,681 million, Earnings Before Interest Taxes Depreciation and Amortisation (“EBITDA”) of THB 6,017 million, and Normalised Net Profit (“NNP”, net profit before unrealised foreign exchange gains and losses) of THB 3,266 million, for the first nine months of 2008.
Mr. Esa Heiskanen, the newly appointed CEO of Glow Group explained: “To counter the adverse macro-economics circumstances, we implemented several cost savings initiatives which has allowed to limit the reduction of normalized net profit to only 1.36%.
Furthermore, the Ft increased by 14.85 satang in October, which will start to alleviate the impact of the temporary margin reduction (estimated at about THB 400 million for the year to date) resulting from higher fuel costs and the lower than expected Ft. In addition, the weakening Thai Baht during the last few months helped reduce the year-on-year strengthening of the currency to just 5%, thereby limiting the negative earnings impact of the currency appreciation to only about THB 170 million. It is likely that the Company will be able to target full-year normalized net earnings broadly in line with 2007.”
Mr. Heiskanen continued to add: “Cogeneration sales continued to improve with 4.7% increase in electricity sales and 0.8% in steam sales. Significant progress is being made in the signing up of new sales contracts for the new 115 MW and the 382 MWe cogeneration expansions.
Glow today has already secured commitments for the entire 115 MW expansion, which will start operating at the end of 2009. It has also secured for most of the 382 MWe expansion, which will start operating by September 2011. Furthermore, the Company has just received the shareholders’ approval to acquire a 67.25% stake in the 150 MW Houay Ho hydro power plant in Laos. The actual acquisition will take place beginning 2009, and will give Glow a platform for future business development in cross border hydro projects.”
New IPP debt financing has been secured
On 9 October 2008, just one month after the PPA signing, GHECO-One, a joint venture of Glow Group and Hemaraj, successfully closed a 20.5 years project financing of USD 460 million and THB 9,960 million for its 660 MW IPP Power Project with seven international banks and two local banks for up to approximately 65% of the total project costs. The largest part of the 35% of the project costs, in which Glow holds 65% share (or about THB 9,000 million), will only need to be funded in 2011.
The GHECO-One project is scheduled for commercial operation in November 2011 and will sell all its capacity to EGAT under a 25-year Power Purchase Agreement (PPA). It is the only new IPP project that has already signed both the PPA and been granted the Environmental Impact Assessment (EIA) approval, and secured project financing.
Khun Suthiwong Kongsiri, Glow’s CFO explained “There is no need for Glow to increase its registered capital to fund the expansions in Thailand. With our current A credit rating and our financial discipline in maintaining long-term debt to equity ratio at around 1 times, we will have ample capacity based upon the strength of our balance sheet to fund these expansions without reducing the level of dividend payout. It should be noted that such dividend payout level corresponds to a dividend yield in excess of 8% at the current share price”.
Mr. Esa Heiskanen, concluded that “Glow has had a very reliable track record for delivering on its commitments. On the investment side, we have successfully signed the PPA for the new IPP project and secured the necessary project financing. We also launched a new major cogeneration expansion, for which most of the off-take has already been secured, and we have initiated a foothold in Laos. On the operations side, we were able to execute all the necessary action plans to improve stop the results from deteriorating. From 2010 onwards, we can expect to see increasing profitability as our on going expansions begins commercial operation. By 2011, our capacity will have increased by more than 50% and Glow will be a much different company, both in terms of size and in terms of total earnings”.
About Glow Energy
Glow Energy is a member of the Glow Group who is a major energy player in Thailand. Glow Group combined installed capacities include 1,708 MW of electricity and 967 tons per hour of steam.
Glow Group generate and supply electricity to EGAT Public Company Limited (EGAT) under Thailand's SPP (Small Power Producer) and IPP (Independent Power Producer) programs, as well as electricity, steam, industrial water and services to large industrial customers principally located in the Map Ta Phut area and nearby.
GDF SUEZ Energy International is Glow Energy’s major shareholder and is a division of the GDF SUEZ Group, one of the largest international industrial and services groups in the world.
For more information about GDF SUEZ or GDF SUEZ Energy International, please visit the companies’ websites at www.gdfsuezenergyint.com and www.suezenergyint.com. For more information about the Glow Group please go to www.glow.co.th
For further details please contact
Natthapatt Tanboon-ek
Glow Energy Plc.
Tel. 02-670-1500-1
Email [email protected]