Banpu takes 'strategic approach' for long-term profit

"We at Banpu have always taken a long-term view of our investment horizon," chief executive officer Somruedee Chaimongkol said. "We have sought synergies in all new portfolio acquisitions.

"When we acquired Centennial Coal in Australia, we were determined to improve its productivity, optimise the operation, and synergise for flexibility. Many of the initiatives taken since those days have led to key achievements today. We have improved the average selling price, and achieved record annual productivity while the costs of production, sales, and distribution have reduced remarkably."

During the first three months of 2015, Banpu’s revenue from coal sales was at US$631 million (Bt21.3 billion), representing 92 per cent of total sales revenue. The remaining 8 per cent of sales revenue, amounting to $58 million, was generated from sales of power, steam, and others.

Gross profit

Gross profit was reported at $245 million, 15 per cent lower than in the same period last year.

Banpu’s gross profit margin was at 36 per cent in the first quarter of 2015, derived from 36 per cent in the coal business and 42 per cent in the power business. The gross profit margin of the power business improved from 33 per cent in the first quarter of 2014 as the lower coal price was favourable for coal-fired power plants.

"Banpu’s power business is growing as planned, with all projects progressing according to schedule," Somruedee said. "The Hongsa Power Plant will commence commercial operations in June. Over the past quarter, our high-performance power plants in China brought in a profit of $14 million.

"We also expect that in another two years, or from 2017 onwards, our power business in Thailand, China, and Laos should have a combined electricity-generating capacity of 2,750 equity-megawatts, which will bring in a consistent stream of income."