Egco eyes steady profit increase as foreign investments rise
Electricity Generating (Egco) projects its net profit will rise steadily in the coming years to Bt10 billion in 2019, from more than Bt7 billion expected for this year.
President Sahust Pratuknukul said the country’s second-largest independent power producer foresaw a good opportunity to further expand its investment in Asean and Asia-Pacific countries, especially in the Philippines and Indonesia where it had earlier this year spent more than Bt21 billion to acquire stakes in power plants.
In July, Egco Group completed the acquisition of a 40.95-per-cent indirect interest in Masinloc Power Partners, which owns a 630-megawatt power plant on Luzon Island in the Philippines, from AES Phil Investment.
The company also bought 20-per-cent indirect ownership interest in Star Energy Geothermal, which owns a 227MW power station in Indonesia.
“In the Philippines, there is a power-pool market, under which if a company sees an opportunity it can go ahead to expand soon after [establishing a plant], unlike in Thailand [where the electricity market is restricted through government auctions],” he said.
For Star Energy Geothermal in Indonesia, the existing power-purchase agreement allows the plant to expand up to 400MW capacity, but the company will have to consider the financial and technical aspects before deciding to go ahead, he added.
Sahust said the listed Thai company had not set a target of how many megawatts it would expand by, and would instead focus on steadily increasing its profits.
It is currently negotiating to acquire a solar-power project in Thailand and a power project overseas.
Overseas power plants are expected to contribute 40 per cent of Egco’s net earnings in 2019, when they are projected to top Bt10 billion, after it commences the Xayaburi hydro power plant in Laos that year.
They account for 22 per cent of net profit at present, said the company chief.
For domestic business, Egco will adjust its strategic business plan to comply with the new Power Development Plan being drafted by the government, which is expected to tilt more toward coal-fired power plants and renewable-power projects.
“For coal-fired power, we will prepare the site for BLCP’s second-phase expansion. For renewable projects, which usually require a lot of land, we don’t have land and therefore we might have to partner with people who have won the bidding for the projects,” he said.
Egco reported a net profit of Bt7.168 billion for the first nine months of the year, up 7 per cent from the same period a year ago.
The company runs 22 power plants in Thailand and abroad with a total contracted equity capacity of 4,805MW.
