Gulf core profit gains 36% in Q1

Gulf core profit gains 36% in Q1

Firm posts 125% increase in revenue

SET-listed Gulf Energy Development recorded a core profit of 3.25 billion baht in the first quarter of 2022, a rise of 36% from the previous year.

The company's total first-quarter revenue tallied 22.4 billion baht, an increase of 125% year-on-year.

According to the firm, the growth came from the first and second units of its subsidiary Gulf SRC Co (GSRC), together with higher profit from the Borkum Riffgrund 2 (BKR2) offshore wind power project in Germany -- despite the German government's curtailment -- as well as profit from shares of InTouch Holdings Plc worth 1.1 billion baht.

However, while the gross profit from sales in the first quarter was 4.45 billion baht, up 51% year-on-year, the gross profit margin actually declined from 33.1% in the first quarter of 2021 to 22.1% in this year's first quarter, reported Gulf.

The decline resulted from the increased gross profit contribution from independent power producer projects, which have a lower gross profit margin than that of the BKR2 wind farm.

The impact of a 101% spike in year-on-year natural gas costs was limited because Gulf sells 87% of its electricity to state-run Electricity Generating Authority of Thailand (Egat), meaning the majority of the rising cost was absorbed by Egat.

Yupapin Wangviwat, chief financial officer at Gulf, said the company's business direction in 2022 will continue to focus on decarbonisation and digitalisation.

"For decarbonisation, the company emphasises investments in renewable energy projects in Thailand and overseas, including wind power projects, solar power projects and hydropower projects," Ms Yupapin said.

"Two hydropower projects, the Pak Lay and Pak Beng projects in Laos, entered into tariff memorandums of understanding with Egat in January and April this year, respectively, and plan to sign a power purchase agreement with Egat in the second quarter of 2022."

Regarding digitalisation, Gulf along with Advanced Info Service (AIS) and Singtel signed a joint development agreement in early 2022 to establish a data centre business in Thailand, which is currently in the process of site selection.

Construction is expected to begin later this year, she said.

Last month, Gulf Innova entered into a shareholders' agreement with Binance to jointly develop a digital asset exchange business in Thailand, which is currently applying for licences from the relevant agencies, said Ms Yupapin.

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