Mr. Thanawat Trivisvavet, Managing Director, CK Power Public Company Limited or CKPower (SET: CKP), one of the region’s largest producers of renewables-based electricity with the lowest carbon footprint, shared that the company faced a downturn in its operating results for Q2/2023 and H1/2023. The primary reason was the profound influence of the El Niño phenomenon in the first half of 2023. This climatic event introduced significant volatility, resulting in widespread drought globally, notably in Southeast Asia. Such conditions notably affected CKPower’s assets, causing a noticeable decline in water levels in the reservoir of the Nam Ngum 2 Hydroelectric Power Plant (NN2). Similarly, the water inflow volume through the Xayaburi Hydroelectric Power Plant (XPCL) also saw a comparative dip from the previous year’s numbers. In response to these challenges, CKPower is adopting a prudent approach when declaring availability and is sharpening its focus on expense management. Encouragingly, the company anticipates a bounce back in its Q3/2023 operating results, with the improvement expected to stem from the rainy season factor.
CKPower recorded a total revenue of Baht 2,566 million for Q2/2023, a Baht 93 million or 3.5% decrease against Baht 2,659 million of the previous year, and a six-month revenue of Baht 5,251 million, a Baht 49 million or 0.9% year-over-year surge, primarily due to an increase in project management income and other related incomes, while the net profit attributable to shareholders in Q2/2023 and H1/2023 fell compared to the previous year.
In addition, CKPower posted Baht 1.8 million in Q2/2023profit, a 99.8% year-over-year drop compared to the Baht 864 million of 2022, and recognized a total loss of Baht 103 million in the first six months of the year, a year-over-year decline compared to the net profit of Baht 903 million in the previous year, chiefly attributable to a reduced share of profit from its investment in XPCL resulting from a shrink in the volume of electricity sold in accordance with the lower water volume as well as to a swell in financial expenses, influenced by the global trend of interest rates. NN2 noted a decline in electricity sales and a rise in expenses, which resulted from a major overhaul as part of its routine maintenance plan. The Bangkhenchai Solar Power Plant (BKC) experienced a revenue drop as its adder period had come to an end. Despite these challenges, CKPower maintains a strong financial standing, boasting a commendable interest-bearing debt to equity ratio of 0.62.
“This year, El Niño has ushered in another intense dry season. Nevertheless, we’re confident in our ability to adeptly navigate these challenging circumstances, having laid out systematic plans and preparations for drought conditions. We are also expecting increase water volume from the coming rainy season in addition to acutely monitoring the interest rate policy of both the U.S. and Thailand, as they play a pivotal role in influencing CKP’s operating results.
At the end of Q2/2023, 83% of CKP’s long-term liabilities on the consolidated financial statements were debentures with fixed interest rates and an average financial cost of 3.50%. Similarly, XPCL, an associate of CKPower, has implemented a policy to prevent interest rate risks through interest rate swaps and an issuance of debentures to adeptly manage its long-term liabilities. This ensures maintaining an optimal balance between fixed and floating interest rates.”
Mr. Thanawat elaborated on CKPower’s environmental commitment for 2023, stating that the company has set an objective to cap its Scope 1 and Scope 2 GHG emissions at 723,674 tCO2e. By June 30, 2023, the company’s emissions stood at 354,851 tCO2e, indicating they are on track and below the projected target for the year’s halfway point. Moving into the latter half of the year, CKPower remains unwavering in its dedication to keep emissions at or well beneath this limit. This will be achieved through projects to reduce energy consumption and increase internal resource efficiency. Further bolstering its environmental pledge, CKPower will transition to electric vehicles, replacing its current fleet, and aims to amplify its internal renewable-based electricity use from 88% to an ambitious 92% within the year.
