With nearly 200 billion baht revenue, Bangchak net profit soars

Bangchak Group recorded 199.417 billion baht revenue from sales and services in 2021, backed by a big jump in revenue in the fourth quarter.

Earnings before Interest, tax, depreciation and amortisation (EBITDA) amounted to 25.818 billion baht, with net profit attributable to owners of the parent company at 7.624 billion baht, or 5.25 baht earnings per share, representing a record high.

The group benefited from upstream business investments such as in natural resources in Norway (OKEA), and Business Process Redesign (BPR) to enhance internal procedures and reduce costs, which began in 2010, boosting Bangchak’s EBITDA by more than 1.6 billion baht.

Revenue from sales and services in the fourth quarter of 2021 recorded 66.792 billion baht, increasing by 40 per cent from the previous quarter. The progress in dissemination of Covid-19 vaccines globally resulted in economic recovery, growth in oil demand, and easing of the pandemic in many countries.

The annual performance of each business group was as follows:

Refinery and Oil Trading business earnings increased by 11.532 billion over 2020, mainly from an inventory gain of 5.966 billion baht. Operating gross refining margin (GRM) rose to US$4.52 per barrel in 2021.

Furthermore, the refinery continued to increase its production capacity due to the expansion of Unconverted Oil exports helping to support GRM and mitigate the impact of falling domestic oil demand.

The average daily production capacity was 99,000 barrels or 83 per cent of the total refinery capacity, and used cooking oil production doubled from the year before.

The Marketing Business Group’s performance improved by 20 per cent over 2020, mainly from inventory gains in 2021 from the increase in oil prices, while total sales volume declined by 6 per cent compared to 2020. However, it was able to retain second place in market share through sales volume at service stations.

Green Power Business Group’s performance grew by 15 per cent over 2020, mainly attributable to increased total electricity sales from clean energy power plants at home and abroad.

Bio-Based Product Business Group recognised gains from fair value adjustment of 2021 investments, resulting in performance comparable with 2020, despite the impact of decreased biodiesel sales volume due to Covid-19, the lower B100 blending mandate to control domestic diesel prices, and decreased ethanol demand.

Natural Resources Business Group saw EBITDA in 2021 increase by 9.254 billion baht over 2020, mainly attributable to the change in 2021 of OKEA’s investment status from an associate company to a subsidiary, changing the accounting from share of profit (loss) to a consolidated method starting July 1, 2021.

In the third quarter, it recorded a gain from sale of investment in BCPE (net of exchange rate) of 120 million baht. As a result, the Natural Resources Business Group realised a significant EBITDA increase, mainly attributable to the rise in the average price of oil and natural gas, especially natural gas, which increased 464 per cent from 2020.

Following high European winter demand, the easing of lockdown measures, and low European gas reserves, OKEA achieved record-high revenue from the sales of oil and gas. OKEA contributed 16 per cent to the Group’s revenue increase. Moreover, OKEA's EBITDA constituted 30 per cent of the group’s overall EBITDA.

As for the fourth quarter, the easing Covid-19 situation has resulted in recovery of economic activity and domestic travel. The Group recorded an EBITDA of 9.281 billion baht, increasing 23 per cent over the previous quarter, with net profit attributable to owners of the parent at 1.756 billion baht, decreasing 4 per cent over the previous quarter, equivalent to 1.20 baht earnings per share.

The recovery of previously declining oil demand resulted in retail sales in December 2021 achieving a record high of 432 million litres per month, the first time that retail sales volume exceeded refinery capacity.

Furthermore, the Marketing Business Group continued to promote lubricant sales, increasing its domestic market share to 9.9 per cent, while the Inthanin Coffee business also recorded a new high for cups sold in December.

President and CEO Chaiwat Kovavisarach stated that in addition to conducive market factors that support revenue growth, the ability to adapt and accelerate managerial efficiency is critical to reducing costs and increasing profits.

The business direction in 2022 is to proceed with business expansion, emphasising investment in green innovation to reduce greenhouse gas (GHG) emissions, to achieve the goal of carbon neutrality by 2030 and net zero GHG emissions by 2050.

This year, Bangchak has been included in the “Silver Class” of the Sustainability Yearbook 2022, ranked top 3 globally, from the assessment by S&P Global, reaffirming the commitment to a sustainable innovative business in harmony with the environment and society.

BBGI Pcl has a strategy to spearhead high-value bio-based products, preparing to raise funds in the Stock Exchange of Thailand by issuing an initial public offering on March 17.

The board of directors approved the payment of dividends in the second half of 2021 on Thursday at one baht per share, following up on the interim dividend of one baht per share in the first half. Full year dividend for 2021 totalled 2 baht per share, amounting to 2.715 billion baht.

The date for confirming shareholders who are entitled to receive this dividend will be March 3, and the dividend will be paid on April 22.