Glow Energy Plc. Results of H August 2012 August Glow

Transcription

1 Glow Energy Plc. Results of H August 2012 Glow 1

2 Disclaimer The views expressed here may contain information derived from publicly available sources thatt have not been independently d verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information contained in this presentation has been prepared based on number of assumptions which may be incorrect and/or not properly represent actual situation incurring in the future. The actual information contained in this presentation is for the purpose of illustration and presentation only. Should there be any discrepanciesi with audited/reviewed d/ i d financiali statements, t t annual report, and other official filings to SEC, the information presented in such documents should be relied upon as official information. This presentation should not be relied upon as a recommendation or forecast by Glow Group. This presentation shall not be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. Glow 2

3 Glow s Business Overview Glow 3

4 Key P&L performance indicator for Glow is Normalized Net Profit (NNP) Glow IPP, GHECO-One and HHPC have outstanding loan in USD which will be repaid by USD linked and USD operating cash flows Under Thai GAAP the outstanding USD loan is converted at year-end to THB at the then current exchange rate. Any difference in THB outstanding loan amount due to using a different exchange rate compared to last year leads to an unrealized FX gain (THB appreciation) or loss (THB depreciation). Since the USD loans in Glow IPP, GHECO-One and HHPC are served by USD linked cash flows the unrealized FX gains / losses should, in Glow s view, be ignored from an economic point of view. Glow s management has focused on core operational profit. Therefore, we consider NNP, net profit ignoring net unrealized FX gains / losses, as basis for dividend payment consideration. Glow 4

5 H Key Factors affecting results Cogen Business: Industrial customer sales volume continued to increase while industrial customer electricity sales margin is still squeezed Industrial demand increased, despite BSTE explosion in May. 74 MW sales to EGAT, non-firm during March-May May and firm from June 2012 IC electricity sales margin is still squeezed from rising gas price, despite 30 Satang increase of Ft in June. Better optimization of Cogeneration fleet dispatching more from Phase 5 and CFB units, thanks to improved volume. IPP Business: GIPP: performed scheduled major maintenance for around 1.5 months per unit in Q GHECO-One: One: recorded EGAT penalty, despite no further booking of DLD compensation in Q HHPC: returned to normal operation with production in H of 292 GWh, compared to approximately 90 GWh for the whole Glow 5

6 Financial Key Summary YoY Glow Group (MTHB) H H H vs H % Revenue (1) 18,644 25,476 6, % Gross Profit 5,945 7,636 1, % EBITDA 4,724 5, % Profit Before Tax 2,233 2, % Tax (250) -47.9% Net Profit 1,838 2, % Normalised Net Profit 2,076 2, % Key positive driver for H1-2012, comparing YoY, is increasing IC sales volume, despite squeezed operating gas margin for most of H Interest and depreciation of Phase 5 realized in P&L after start COD in Oct.2011 Tax decreased due to lower tax rate, lower profit of Glow IPP, and higher interest expenses. HHPC returning back to normal operations provide substantial variance YoY from operating loss in Glow Note: 1) Revenue from ordinary business excluding exchange gain / interest incomes / investment incomes. 6

7 Financial Key Summary - QoQ Glow Group (MTHB) Q Q Q vs Q % Revenue (1) 12,058 13,418 1, % Gross Profit 3,953 3,683 (271) -6.8% EBITDA 3,214 2,238 (976) -30.4% Profit Before Tax 2, (2,036) -88.2% Tax 319 (48) (367) % Net Profit 1, (1,002) -64.7% Normalised Net Profit 1, (272) -22.9% Key negative factor for Q2-2012, QoQ, is lack of contribution from GHECO-One DLD claim from Doosan recorded as revenue in Q EGAT penalty recorded as expense in Q Gas operating margin continued to be squeezed, as a result of gradually rising gas price, despite relief lif due to 0.30 THB/kWh Ft adjustment t in Jun. Operationally, Cogen Business, Glow IPP, and HHPC have all contributed better results in Q versus Q Glow Note: 1) Revenue from ordinary business excluding exchange gain / interest incomes / investment incomes. 7

8 Cogen Business - YoY Cogen Business (1) IPP Business (2) Glow Group Bt mn change % % % Gross Operating Revenue (3) 12,996 18,401 5, ,726 7, ,644 25, Fuel Costs (Gas, Coal, Diesel, Biomass) 8,462 13,274 4, ,135 4, ,597 17, Other Variable Costs(Water/Chemicals) Gross Profit 4,446 4, ,576 2, ,945 7, Maintenance & Other Operating Costs 1,032 1, ,221 2, EBITDA 3,414 3, ,345 1, ,724 5, Depreciation & Amortization 938 1, ,525 2, Net Financial Cost (4) Taxes Minority Interest of Net Profit 127 (216) Minority Interest of Unrealised FX Gain/Loss (96) (9) Normalised Net Profit 1,674 1, ,076 2, COGEN BUSINESS Industrial customer electricity sales volume increased by 11% while steam sale volume increased by 30%, while 74 MW new SPP sales started from March on non-firm basis and June for firm sales under PPA. Industrial sales volume increase mainly driven from new sales to GE Phase 5 customers and Glow SPP11 contribution, despite loss of demand from BST group (10 MW and 125 ton/h) due to BSTE explosion in May. Continuing rise in fuel cost is main factor causing squeeze electricity sale margin, while, on the other hand, increase steam margin in THB/ton terms. Ft increased by 0.30 THB/KWh from June Glow Note: 1) Cogen business includes operation of GE, SPP1, SPP2, SPP3, and SPP11 2) IPP business consists of Glow IPP, GHECO-One and HHPC 3) Excluding exchange gain / interest incomes / Investment Income 4) Net of interest incomes, interest expenses and financial related costs 8

9 IPP Business - YoY Cogen Business (1) IPP Business (2) Glow Group Bt mn change % % % Gross Operating Revenue (3) 12,996 18,401 5, ,726 7, ,644 25, Fuel Costs (Gas, Coal, Diesel, Biomass) 8,462 13,274 4, ,135 4, ,597 17, Other Variable Costs(Water/Chemicals) Gross Profit 4,446 4, ,576 2, ,945 7, Maintenance & Other Operating Costs 1,032 1, ,221 2, EBITDA 3,414 3, ,345 1, ,724 5, Depreciation & Amortization 938 1, ,525 2, Net Financial Cost (4) Taxes Minority Interest of Net Profit 127 (216) Minority Interest of Unrealised FX Gain/Loss (96) (9) Normalised Net Profit 1,674 1, ,076 2, IPP BUSINESS Glow IPP performed scheduled major maintenance resulting in lower EBITDA of approximately 360 MTHB for the period. However, we expect to utilize all contracted available hours and normal operation results for full year, provided no significant forced outage for the rest of the year. HHPC returned to normal operation resulting in higher EBITDA contribution of approximately 143 MTHB for the period. GHECO-One recorded 2 months revenue on DLD compensation from contractor in 1Q-12 for 1,046 MTHB and recorded expense on LD compensation to EGAT in 2Q-12 for 618 MTHB. Glow Note: 1) Cogen business includes operation of GE, SPP1, SPP2, SPP3, and SPP11 2) IPP business consists of Glow IPP, GHECO-One and HHPC 3) Excluding exchange gain / interest incomes/ Investment Income 4) Net of interest incomes interest expenses and financial related costs 9

10 Summary of Economic Indicators H H % MW Contracted (EGAT + ICs) MW 2,049 (1) 2, TPH Contracted t th tph 965 (1) , EGAT IPP business GWh 2,625 2,379 (2) -9.3 EGAT SPP business GWh 1,766 2, Industrial Customer GWh electricity sold GWh 2,071 2, Industrial Customer kton steam sold kton 2,838 3, Average PEA Price THB/kWh Average Gas Cost - Cogen business THB/mmBTU Average Gas Cost - IPP business THB/mmBTU Coal Price FOB (3) USD/Ton JPU Freight Price USD/Ton actual Availability - Cogen Business % 95.7% 95.7% Availability - IPP Business % 95.1% 73.5% Unplanned Outage Factor - Cogen business % 1.6% 1.7% Unplanned Outage Factor - IPP business % 3.0% 1.3% Glow IPP Heatrate BTU/kWhe 6,914 6, Allocated Cogen Heatrate (Coal Units) BTU/kWhe 10,683 10, Allocated Cogen Heatrate (Gas Units) BTU/kWhe 8,765 8,002 (4) -8.7 GSPP11 Heatrate BTU/kWhe - 8,458 N/A Exchange Rate THB/USD Glow Note: 1) Increase from new contracted capacity to EGAT 164 MW and ICs 87 MW and 75 tph. 2) Includes HHPC Electricity Sales of 49 GWh in H and 292 GWh in H ) Price excludes biomass which currently is used up to 5% of coal volume. 4) Includes GE Phase 5 Heat rate. 10

11 Revenue : Volumes EGAT SPP Business (GWh) IC Power (GWh) 4,000 4,000 3,000 2,000 1, % 2,487 3,000 2, % 2,071 2,298 1,000 1,000 0 H H H H ,000 3,000 2,000 1,000 0 EGAT IPP Business (GWh) 2,625 2, % 2,379 2,087 H H (1) 49 GWh from HHPC (2) 292 GWh from HHPC IC Steam (kton) 5,000 4,000 2, % 3,000 2,000 1, ,686 H H Note: 1) GIPP EGAT Sales lower vs. 2011, due to scheduled major maintenance. 2) HHPC includes sales EDL Glow 11

12 Operating margin Average Gas Price - Cogen (Bt/mmBTU) Average IC Selling Price (Bt/kWh) % % H H H H Average Gas Price IPP (Bt/mmBTU) (1) % 296 H H % 20% 10% 0% Gas Price Change vs IC Tariff Change Gas IC Gas IC 28.0% 10.2% 8.7% 0.6% FY-10 vs FY-11 H1-11 vs H1-12 Note : 1) IPP gas price is on pass-through basis. % Gas Price Change % IC Price Change Glow 12

13 Industrial customers demand dropped in Q2 due to BSTE explosion in May % ICs Steam Load Factor (%) 75% ICs Power Load Factor (%) 50% Q1/2006 Q2/2006 Q3/2006 Q4/2006 Q1/2007 Q2/2007 Q3/2007 Q4/2007 Q1/2008 Q2/2008 Q3/2008 Q4/2009 Q1/2009 Q2/2009 Q3/2009 Q4/2009 Q1/2010 Q2/2010 Q3/2010 Q4/2010 Q1/2011 Q2/2011 Q3/2011 Q4/2011 Q1/2012 Q2/2012 Actual consumption of our industrial customers, mostly in Petrochemical business, are typically high and consistent. Even though supply contracts to industrial customers have Minimum Take Obligation, fluctuation between MTO level and actual affects our performance. We recently experienced substantial steam load factor dropped in 2Q-12 as a result of BSTE explosion incident in early May-12. Glow 13

14 Gas and coal margin is squeezed to the max but will ease after Ft is adjusted 0.34 THB/kWh EGAT s fuel subsidization Average = 0.60 THB/kWh Average = 1.70 THB/kWh EGAT s fuel subsidization 1.61 THB/kWh Glow Operating margin for both gas and coal are reduced d due to: Gas and coal price continued to increase. PEA price is not adjusted enough to reflect increased fuel price. Ft for period of Jun Aug is adjusted by THB/kWh, resulting in improved gas operating margin but not yet back to normal level. However, coal operating margin is back to close to normal level as our coal price for the year is already hedged. Note: 1) PEA Price = Base Tariff assumed at 1.8 THB/kWh + actual FT until Jun 2011 and at 2.8 THB/kWh + actual FT since Jul ) Gas Cost = Blended SPP gas costs in THB/mmBTU x Constant Gas-fired heatrate of 8,800 * BTU/kWh / 10^6 (*8,600 BTU/kWh since Nov 2011 from efficiency of Phase 5) 3) Coal Cost = Average FOB Coal Cost in THB/mmBTU x Constant Coal-fired heatrate of 10,300 BTU/kWh / 10^6 14

15 Coal & Freight H H H vs H % COAL mmbtu/ton JPU TON JPU 487, ,957 31, % AVERAGE JPU&ABARE COAL INDEX USD/TON JPU % AVERAGE COAL PRICE AT FOB USD/TON JPU % FREIGHT PRICE USD/TON actual (2.1) -17.1% TOTAL COAL PRICE (CIF) USD/TON JPU % TOTAL COAL PRICE (CIF) THB/mmBTU % Higher coal cost in 1Q 2012 due to higher coal index. For 2012, Glow has locked open position at 114 USD/Ton JPU (FOB), compared to average FOB price of 97.2 USD/Ton JPU in 2011 and we are in the process to lock-in coal cost for 2013 open position. Note: Average JPU&ABARE Coal Price Index - Apr 2009 Mar 2010 : USD/Ton JPU. - Apr 2010 Dec 2010 : USD/Ton JPU (Coal Price Index is adjusted and retroactive to April 2010) Glow - Jan 2011 Mar 2011 : USD/Ton JPU. - Apr 2011 Mar 2012 : USD/Ton JPU. - Apr 2012 Mar 2013 : USD/Ton JPU. 15

16 HHPC has returned to normal operation in Target Water level at H is at the normal operation level : Rainfall at year-end 2011 is fairly high (2,295 mm) Production volume of 292 GWh in H1-2012, comparing to approximately 90 GWh for the whole 2011 We plan to produce 442 GWh in Glow Note : 1) HHPC 1Q 2012 EBITDA and NNP was 169 MTHB and 75 MTHB respectively. 16

17 Summary of Results EBITDA Consolidated EBITDA Analysis (+727mn / +15.4%) 8,000 6,000 4,000 2, , (300) DLD EGAT Penalty 5,451 H Cogen Glow IPP GHECO-One HHPC H Cogen business EBITDA IPP business EBITDA 5,000 4,000 3,000 2,000 1, , mn 3, % H H ,000 3,000 2,000 1, , mn 38.7% 1,866 H H Note : 1) All Figures in THB Millions. Glow 17

18 Key Drivers EBITDA 5,000 Cogen business EBITDA Analysis (+172 mn / +5.0%) 4,000 3, (52) (137) ,586 3,000 2,000 1,000 Volume (+276) Capacity (+172) Margin (-178) Oh Others (58) (-58) Routine AB-Inspection LTSA Admin Expenses (-69) Right of Use (-50) Insurance (-18) Cogen PD H GM Impact Cogen Maintenance Other Operation Other H IPP business EBITDA Analysis (+521 mn / +38.7%) 3,000 2,000 1, ,345 FX Volume Planned Outage (248) (43) DLD EGAT Penalty H GM Impact GIPP GM Impact HHPC EBITDA Impact GHECO-One 1,866 Others H Note : 1) All Figures in THB Millions. Glow 18

19 Key Drivers Normalized Net Profit Cogen business NNP IPP business NNP 2,000 1,500 1, , mn -20.0% 1,340 H H ,500 1, mn % 890 H H ,000 3,000 2,000 1, ,076 Consolidated NNP (+24mn / +1.2%) +727 (503) +250 (215) +21 (256) 2,100 Phase 5 TNP H EBITDA Impact Depreciation Income Tax Interest Financial Expenses Minority Interest H Note : (1) All Figures in THB Million.. Glow 19

20 Financial Status Glow 20

21 Summary Cash Flow Statement 30-Jun-12 KTHB vs 2011 Net profit 2,232,826 2,583, ,721 Depreciation 1,505,025 1,979, ,271 Amortization 55,821 66,420 10,599 Exchange loss (gain) 351,394 42,783 (308,611) Other non-cash items (359,908) (1,683,545) (1,323,637) Change in net working capital (3,506,846) (1,693,615) 1,813,231 Net cash from operating 278,312 1,294,886 1,016,574 Of the THB 7,839 mn (1) ending cash balance of 30 Jun 12 THB 4,409 mn is in Cogen Business THB 3,430 mn is in IPP Business (2) Purchase of PP&E (2,912,146) 146) (2,462,895) 449,251 Other cash from investing (31,524) 2,491,368 2,522,892 Net cash from investing (2,943,670) 28,473 2,972,143 Total debt repayment (415,961) (607,640) (191,679) Total debt issuance 2,342,000 3,671,900 1,329,900 Change in financial lease (21,111) (9,461) 11,650 Dividends paid (1,127,968) (1,426,027) (298,059) Net cash from financing 776,960 1,628, ,812 FX loss (gain) of cash and cash equiv 1,014 (2,043) (3,057) Net change in cash (1,887,384) 2,950,088 4,837,472 Beginning balance 8,704,437 4,888,576 (3,815,861) Ending balance 6,817,053 7,838,664 1,021,611 Glow Note: (1) Ending Balance 7,839 Bt mn excludes temporary investments of 1,305 Bt mn (Cogen 1,173 Btmn + IPP Business 132 Btmn) 21 (2) IPP Business consists of Glow IPP, GHECO-One, and Houay Ho Power.

22 Notable cash movements in 2012 and Financing activities Debt Repayments GE scheduled repayment THB 3,000 mn in Dec-12 GIPP scheduled repayment USD 11.7 mn in Dec-12 HHPC scheduled repayment THB 30.4 mn & USD 1.7 mn in Dec-12 Gheco-One scheduled d repayment THB mn & USD 16.2 mn in Oct-12 Capex for projects under construction GHECO-One Equity Contribution : THB 3,180 (1) mn in 2012 Glow SPP12 (2) : THB 1,299 mn in 2012 Glow 22 Note : 1) Only Glow portion in GHECO-One (Glow 2) SPP12 is formerly known as TNP2.

23 Key Financial Indicators : Outstanding Debts H Glow Cogen Repayment Profile (MTHB) MTHB 85,000 Consolidated Glow Group 5,506 5,600 75,000 65,000 65,903 76,357 67,214 57,279 55,000 (2) Gross Debts (1) Net Debts 45,000 Q Q Total Gross consolidated d Debt was 76,357 MTHB in Q versus 65,903 MTHB in Q Note : 1) Gross Debt cash temporary investment 2) Included Loan from related party IPP Business Repayment Profile (MUSD) Glow * HHPC and GHECO-One Loan consists of USD tranche and THB tranche 30 Baht/USD) 23

24 Key Financial Indicators Q Q DSCR Glow IPP (incl. cash) 2.40 (4.34) 2.62 (4.65) DSCR Glow Cogen (incl. cash) 1.64 (2.61) 1.90 (3.17) D/E Ratio Glow Conso: Gross D/E (Net D/E) 1.95 (1.69) 2.21 (1.94) Glow Cogen: Gross D/E (Net D/E) 1.04 (0.91) 1.26 (1.10) Interest Coverage Ratio Glow Cogen Glow s long term target is to maintain the following DSCR excluding cash on hand of not less than 1.6x D/E of not more than 1.0x but allowing for temporary hike if due to consolidation effect during construction ICR of not less than 5.0x Note : Glow IPP - DSCR = (Glow IPP EBITDA) / (Principal + Interest + Financial Charge) Glow Cogen - DSCR = (Glow Cogen EBITDA + Dividend from IPP business) / (Principal + Interest + Financial Charge) Gross D/E = Total Outstanding Debts / Total Equities Glow Net D/E Glow Cogen - ICR = (Total Outstanding Debts cash) / Total Equities = (Glow Cogen EBITDA + Dividend from IPP business) / (Interest) 24

25 Debt repayment capacity is sufficient to support committed investments ,000 5,000 4,000 3, ,000 1, ,000 6,000 5,500 5,506 5,600 2,000 3,000 2,500 1,100 3,400 3,500 5,555 4, Existing Future Funds We recently secured 2,500 MTHB funding for 2012 with average tenor of approximately 5 years at attractive rate. Glow 25

26 Current Updates Glow 26

27 Summary of expansion projects GHECO-One SPP11 & 13 (1) 100% HHPC 108% Houay Ho; Hydro IPP 152 MW Glow 67.25% 114% CFB3; 115 MWeq coal-fired cogen 121% 140% Phase 5; 382 MWeq gas-fired cogen 174% 180% GHECO-One; 660 MW Coal-fired IPP Glow SPP11 & 13; Solar AIE SPP12; 143 MW gas-fired cogen 1.55 MW 110 MW gasfired solar farm cogen Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Solar AIE Capacity as of Q : 1,996 MWeq Q : 3,530 MWeq (increase of around 80% ) CFB3 Phase 5 SPP12 (2) Glow Note: (1) SPP11 & SPP 13 are formerly known as TNP1 and RNP respectively. (2) SPP12 is formerly known as TNP2.

28 Current Update on GHECO-One GHECO-One achieved Commercial Operation on Jul 26, GHECO-One had forced outage from Jul 27 and expected to resume operation in middle of August, due to boiler tube leakages. Impact: For Profit and Loss statement perspective, we expected to continue capitalizing cost incurred until unit becomes available. However, there might be financial impact if Contracted Available Hours (CAH) in 2012 could not be fully utilized, which will result in loss of AP. As a result of delay of COD, Glow Energy may be looking at raising additional THB1.5 bln for equity injection into GHECO-One. Glow 28

29 Thank you Glow 29

30 Q&A Glow 30