Global Power Synergy looks to another year of growth

The company is confident its operations this year will meet the targets it has set.

Several projects in-hand will soon begin operations commercially and are not expected to be adversely affected by the fall in oil prices or the sluggish global economy, as basic infrastructure projects are shielded by contracts of 15-20 years, Toemchai Bunnag, president of Global Power Synergy, said yesterday.

Last year’s volatile oil prices did not affect the company’s business operations, in terms of both revenue and profit margin, because the sale of electricity and steam was based on the ‘cost-plus’ basis in the form of ‘minimum take, or pay’, whereby the fuel cost is shifted on to clients, he explained.

The company therefore receives guaranteed minimum revenue from its customers as per the contracted supply quantity.

Global Power Synergy’s first-nine-month operating results for last year showed a 33-per-cent net profit, year on year, reflecting continuing growth and stability of the company’s business.

Toemchai is confident the full-year results for 2015 will be in accordance with the company’s targets.

As for this year, he expects continuing business growth from several core projects which the company is developing and/or constructing, such as the 125-megawatt Navanakorn (NNEG) electricity-generation plant, which will begin selling electricity commercially to contracted clients this year.

Meanwhile, there will be full revenue recognition of the IRPC Clean Power Phase-1 project, following the launch of commercial operations last November.

In addition, the company plans to negotiate investment in both domestic and foreign power-plant projects with PTT, as it is a major power supplier for the infrastructure needs of the PTT group of companies, the president said.

This is one of the business strengths of Global Power Synergy, as it can grow along with PTT and its subsidiaries, he added.

In any case, Global Power Synergy focuses on long-term project development which provides good investment returns, according to its plans for the next five years.

In the future, the company expects to raise production capacity to 2,850MW, which will allow it to invest 10 per cent in alternative energy – solar, biomass and recycled garbage, for example – with another 30 per cent being invested abroad.

Bt18 billion will be allocated for investment, of which Bt10 billion will be raised via an initial public offering and the remainder from borrowings.

Global Power Synergy also has plans to increase production capacity beyond its near-term targets, as the company is confident it can secure sources of low-cost funding, especially with its sound financial position and low debt-to-equity ratio.

The company’s debt-repayment ability should make lenders feel secure in extending loans to the business, Toemchai explained.