BGRIM defies Covid-19 impact with 21% profit leap in 2020

BGRIM defies Covid-19 impact with 21% profit leap in 2020

Pursuing strategic partnerships in all businesses to drive future growth

B.Grimm Power PCL (BGRIM), Thailand’s leading industrial power producer, posted a 21% increase in net operating profit in 2020 despite the adverse impact of the Covid-19 pandemic on the global economy.

Dr Harald Link, Chairman and President of BGRIM, said the 2,617 million baht in earnings attributable to its parent company was largely due to the increase in generating capacity and power sales to industries in Thailand. BGRIM last year added 162 MW in capacity which ramped up its output by 6% to 14,451 gigawatt-hours.

Power demand of BGRIM's industrial clientele in the kingdom rebounded strongly between September 2020 and January 2021 over the same period of the previous year, he pointed out. The company has seen the continued broadening of its customer base with new industrial clients with a total requirement of 15 MW being connected to BGRIM's supply system in 2020. This year, BGRIM expects more than 40 MW in additional industrial demand to come about to further consolidate the company's customer base.

Dr Link noted that the recognition of full-year performance of large-scale solar power farms in Vietnam and the decline in natural gas prices contributed to BGRIM's robust results in 2020. Last year saw the price of natural gas, the primary fuel of BGRIM's power plants, dropped by 10.4% year-on-year to 244 baht per million BTU (British Thermal Unit). PTT Plc, Thailand's major supplier of natural gas, expects natural gas price to come to an average of 225 baht/per million BTU in 2021.

Dr Link said that in addition to the goal of expanding power purchase agreements (PPA) capacity to 7,200 MW by 2025 from 3,058 MW currently, BGRIM has advanced its achievements under the philosophy of “Doing Business with Compassion.” The philosophy, fondly practised for over 143 years by B. Grimm Group which BGRIM belongs to, has emphasised cooperation with partners in all business groups. Such a spirit extends to the collaboration with companies under the group which have engaged in various businesses, ranging from healthcare to real estate and digital industries. The cooperation has been forged with partners both at home and abroad.

Evidencing the direction is an array of partnership accords struck over the past six months. These include: Univentures Public Company Limited (UV), a partnership which engages in real estate investment and development business with various products and services, and; an alliance with the Provincial Electricity Authority (PEA) and its subsidiary PEA ENCOM International (PEA ENCOM) to pursue business opportunities for independent power supply (IPS) projects, micro grid systems, and smart micro grid system, among others.

On 15 December 2020, BGRIM made history by starting up its large-scale solar farm in Cambodia on schedule despite the impact of a Covid-19 outbreak and major flooding there. This is the first Thai power plant project to operate under the Power Purchase Agreement (PPA) entered with the Electricite Du Cambodge (EDC) for a period of 20 years and is guaranteed by the Government of Cambodia.

Dr Link said the conclusion of the syndicated green loan for the Phu Yen TTP solar farm project in Vietnam is another proud achievement of BGRIM last year. This represents the first green credit in Thailand and the CLMV region (Cambodia, Laos, Myanmar and Vietnam) certified by the Climate Bonds Initiative, part of an independent global environmental movement.

BGRIM has been recognised for its sustainable development, with five awards from four organisations being received in December last year to underscore the company's dedication. These include:

* An “excellent” (5-star) rating from the corporate good governance survey of listed companies conducted by the Thai Institute of Directors Association.

* Being ranked in the Thaipat Institute's ESG100 List for the third consecutive year in 2020, plus winning the Sustainability Disclosure Award 2020.

* Being selected for the Sustainable Stock List (THSI) by the Stock Exchange of Thailand for the third consecutive year.

* Being scored 100 out of 100 by the Thai Investors Association for the quality of holding its annual general meeting of shareholders in 2020.

BGRIM's power projects under development have progressed with the Bo Thong Wind Farms 1 & 2, with a combined installed capacity of 16 MW in Mukdahan province being 80.8% completed and on schedule for starting commercial operation in the first half of 2021. Meanwhile, construction work on BGRIM's nine SPPs have recorded 9% to 32% in progress, with some of them set to begin commercial runs in the second half of 2022

BGRIM is to pay a dividend of 0.30 baht per share for the second half of last year, after offering an interim dividend of 0.15 baht per share, thus maintaining a full-year dividend payout at 45% of net operating profit. The closing date for dividend eligibility (XD) is 10 March 2021, for the dividend payment to be made on 11 May 2021.

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