IEC chairman forecasts big profit rise this year
BHUSANA Premanode, chairman and president of International Engineering, has no plan to return to the telecom business and will focus on growing his company through renewable energy and waste plastic pellets.
The company yesterday also announced a plan to start paying a dividend for the first time in more than a decade, ahead of a Bt497-million rights offering set from February 1-5. Its board of directors will meet on February 26 to declare the dividend payout policy and approve the firm’s business plan.
IEC’s stock price shot up 50 per cent to close at 3 satang during trading on the Stock Exchange of Thailand yesterday, passing its rights-offering price of 2.2 satang.
Bhusana said IEC’s forecast was for the group’s profit to rise from a two-digit figure to Bt210 million this year, Bt273 million in 2017, Bt323.5 million in 2018, Bt418.4 million in 2019 and Bt533.8 million in 2020.
The major contributors to this huge earnings-growth projection will be MSW (municipal solid waste) power projects and waste-plastic-pellet projects.
“Biomass projects will not generate a big profit, while we will not expand our solar-power business,” he said.The forecast is “conservative” because it does not include potential income from its planned Bt4-billion “integrated gas hub”, a complex of sugar-cane molasses, biogas, ethanol and compressed bio-methane gas (CBG) factories. It is courting PTT, Bangchak and other investors to join the project. Renewable energy, comprising MSW, solar and biomass power plants, is expected to contribute 91 per cent of IEC’s revenue in 2015, with the balance made up by the information and communica
tions technology business.
Renewable energy is estimated to fall to 46 per cent of revenue this year, as the waste-plastic-pellet plant in Rayong will start up and contribute 47 per cent, while the ICT (information and communications technology) business will slide further to 7 per cent.
IEC’s bottom line is expected to improve this year since it will realise full-year earnings from all of its power plants, while the waste-plastic-pellet plant alone is expected to generate a net profit of Bt195 million.
Yunnan Water Investment, a Hong Kong-listed company with two Chinese state enterprises among its major shareholders, has agreed to invest with IEC in all municipal-waste projects. This would help relieve the firm’s investment burden.
Bhusana said he might succeed Komol Jungrungreangkit as the second-largest shareholder of IEC after the rights offering, since he was ready to buy more shares than the 8:1 allowed by the subscription ratio, if some shareholders do not exercise their rights.
IEC missed its 2015 financial target because it incurred a loss of Bt148 million from conducting “machine re-engineering” at its GIDEC and Sa Kaew MSW power plants.
However, the GIDEC plant now can run at 80 per cent of capacity and the Sa Kaew plant at full capacity.
Other causes include the delay of the construction of its waste-plastic-pellet plant in Rayong due to complaints from local communities, machinery and liquidity problems, and the delay in securing the power purchase agreement for its Kampaeng Phet biogas plant.
IEC reported consolidated net profit of Bt41.3 million for the first nine months of last year, up slightly from Bt39.74 million booked during the same period of 2014. Net profit per share, however, slid from 0.03 satang to 0.02 satang during the period, because of a capital increase.
