Bangchak eyes 20% surge in gross earnings 

The key drivers will continue to be the listed company’s three main businesses: oil refining, oil marketing, and renewable power business run by its newly listed subsidiary, BCPG. 
Furthermore, Bangchak is looking to enter bio-products business this year, which could generate growth of 30-40 per cent, president and chief executive Chaiwat Kovavisarach said yesterday.
He attributed the company’s disappointing fourth-quarter results to a decline in the marketing margin of its oil retailing business in October, when a period of national mourning began following the passing of His Majesty King Bhumibol Adulyadej.
Moreover, in December Bangchak refrained from increasing its pump prices as a New Year’s gift to motorists.
“The refinery ran above the goal set for it, and [oil] retailing, by sales volume, met the target. In terms of performance, we were on target. And those [squeezes on marketing margin] were one-time events,” he explained.
Refinery business is expected to grow in both volume and value terms by more than 10 per cent this year, as the company has no scheduled shutdown and expects its gross refinery margin to improve from US$5.99 (Bt210) a barrel last year to $6-$7 this year, Chaiwat said.
Oil retailing business is expected to increase in volume by more than 10 per cent, partly due to the plan to open 100 new petrol stations during the course of the year. 
BCPG, meanwhile, is targeted to grow its ebitda by more than 20 per cent, he added.
“It could also grow from an acquisition that will expand its capacity from more than 200 megawatts to between 400MW and 500MW,” Bangchak’s chief said.
BCPG president Bundit Sapianchai elaborated that his firm was negotiating to acquire a 30-per-cent interest in a power business with about 200MW capacity in a “nearby” country. It is also in the final negotiation stage over an agreement to purchase 40 per cent of a 50MW wind-power project in the Philippines, with the deal expected to be signed in the next month. 
BCPG has an investment budget of Bt16 billion for the year, Bundit said.
Bangchak, meanwhile, has earmarked Bt18.5 billion for capital expenditure (capex) this year, comprising Bt5 billion for maintenance; another Bt5 billion for “growth capex”, about Bt3 billion of which is for petrol-station network expansion; Bt3 billion for a bio-products joint-venture project; Bt4 billion for its resources business, mainly for its lithium-mining joint venture in the US; Bt1 billion for Bangchak Retail, which plans to open 55 Spar stores this year; and Bt500 million for innovations and other projects.
Bangchak, which is establishing the Bangchak Initiative Innovation Centre at its Bangkok refinery, has earmarked $10 million to invest in start-ups every year, Chaiwat said.
“This year is the first time that Bangchak’s management has a target to generate revenue from high value-added products accounting for 0.5 per cent of ebitda,” he added.
Bangchak shares dipped 3.57 per cent to close at Bt33.75 on Monday after it reported a net profit of Bt1.13 billion for the October-December period, 42 per cent off analysts’ consensus target. 
Though disappointing, the figure represents a turnaround from the loss of Bt112 million that it booked in the same quarter a year earlier.