Bangkok Aviation Fuel Services Plc (BAFS), Thailand's top aviation refuelling service provider, is focusing its attention on diversified business projects like oil pipelines and renewable energy plants after its core business of aviation refuelling took a devastating hit from air travel restrictions imposed to prevent coronavirus spread.
It hopes the new business segments will contribute to half its revenue in the next five years, up from 21% as of the end of last year.
BAFS announced on Thursday that it expects its fuel sales volume to decrease 58% this year to 2.58 billion litres because of global restrictions on aviation travel.
ML Nathasit Diskul, vice-president and acting director for business development and marketing at BAFS, said air traffic will likely not return to normal in the next few months, with people still hesitant to fly even as restrictions are eased.
"It may take 1-3 years to return to normal life," he said.
BAFS said first-quarter revenue this year dropped 15.4% to 867 million baht from 1.02 billion baht in the same period last year.
Net profit in the first quarter fell 58% year-on-year to 153 million baht from 368 million baht. Sales volume dropped 17.3% year-on-year to 1.33 billion litres from 1.61 billion litres.
ML Nathasit said the company has 1.39 billion baht in cash on hand to continue operations, but it has requested additional capital from creditors in case the situation worsens.
He said the company has been planning for potential disruption in the sector over the past 4-5 years, so it diversified into related services.
"It may take a few years before we will see the benefits from these new diversified business projects, so we will have to wait," ML Nathasit said.
The new projects include extension of a pipeline from Pichit to Lampang that will begin operating early next year.
The first phase extended from Ayutthaya to Phichit and began operations in June of last year.
A subsidiary, Fuel Pipeline Transportation Co, is the developer and operator of the pipelines.
Another wholly owned unit, BAFS Clean Co, is planning to invest in renewable energy projects locally and overseas.
BAFS Clean will provide services relating to management, technology, financial management and other supporting services in connection with renewable energy and environmental businesses.
One deal that the company is almost ready to officially announce is an asset acquisition of a renewable energy power plant with a capacity of 20 megawatts already in operation.
BAFS will announce the results of the acquisition by the end of this year.
Another subsidiary, BAFS Intech Co, designs, produces, assembles and refuels aviation vehicles. The company already has purchase orders from Laos and Myanmar.