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CK Power targets higher revenue

Feb 18. 2015
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CK POWER targets robust growth this year by focusing on improving the efficiency of its power plants and cost-control measures. The company reported a strong performance in 2014, posting a total revenue of Bt7.02 billion, up 25 per cent year on year, and
The company has considered paying its first dividend in April, 2015, as well as investing in the Xayaburi Hydroelectric Power Plant project towards its vision of becoming a leading player in the Asean power industry, managing director Supamas Trivisvavet said.
She said a new project, the Bangpa-In Cogeneration Power Plant – Phase 2 (BIC 2) with a capacity of 120MW, is currently under construction and expected to be completed and start commercial operation in 2017. It will contribute approximately Bt3 billion of revenue annually. Moreover, CKP is considering an investment in the Xayaburi Hydroelectric Power Plant (XPCL) project with an installed capacity of 1,285MW, of which construction is now 40 per cent completed. The company plans to purchase a 30 per cent holding in XPCL from CH Karnchang (CK). 
Supamas said this was the right time to invest in XPCL since the construction of Phase 1 had been completed and the engineering risk in the construction of Phase 2 was under control. 
Buying XPCL now will allow CKP a good price and a high rate of returns, in line with the company’s investment policy. The deal will also increase CKP’s total power production capacity by nearly three folds – from 755MW to 2,160MW, giving substantial value to the company and further strengthen its goal of being a leading power player both in Thailand and the Asean market. 
Meanwhile, the key factor contributing to CKP’s high growth in 2014, especially the 116 per cent surge in full-year net profit, was the revenue recognition from power and steam sales from the Bangpa-In Cogeneration Power Plant – Phase 1 (BIC1). 
Moreover, all other power plants showed excellent performance through operational efficiency, effective administrative and financial cost management. 
Although the Nam Ngum 2 Hydroelectric Power Plant (NN2) in Laos generated lower supply than expected last year due to the delayed rainy season, the mechanism in the Power Purchase Agreement of NN2 allowed for the use of energy reserve accounts, cumulated from the previous year when water was abundant and extra energy was produced. 
The revenue of NN2 in 2014 was therefore, not substantially affected. In addition, as CKP began to receive dividend incomes from invested projects, the company would seek shareholder approval in the annual general shareholder meeting on April 9, 2015, on paying the first dividend of Bt 0.10 per share for its 2014 performance.

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