Gulf Energy Development Public Company Limited (SET: GULF) reported the financial results for Q2/24 with a total revenue of THB 32,617 million, a 3% decrease from Q2/23 due to the lower average electricity selling price resulting from lower natural gas cost and Ft. However, core profit increased by 34% to THB 4,779 million, compared to THB 3,556 million in the same quarter of the previous year.
The growth was primarily driven by the improved performance of the power generation business. Gulf Pluak Daeng (GPD), an IPP power project under the IPD group with a total installed capacity of 2,650 megawatts, commenced commercial operation of unit 3 in March 2024. As a result, in Q2/24, GULF realized the full quarter contribution of GPD units 1-3, with a combined installed capacity of 1,987.5 megawatts, which had gradually commenced commercial operations since 2023. Furthermore, Hin Kong Power (HKP), an IPP power project with a total installed capacity of 1,540 megawatts, commenced commercial operation of unit 1 (installed capacity of 770 megawatts) in March 2024. Therefore, GULF also recognized the full quarter contribution of HKP unit 1 in this quarter.
Moreover, GULF recognized a share of core profit from GJP group of THB 643 million in Q2/24, which represents an 11% YoY increase. This increase was due to higher electricity sales volume to Electricity Generating Authority of Thailand (EGAT) from the 7 SPPs, with the average load factor increasing from 67% in Q2/23 to 80% in Q2/24. Furthermore, the 3 SPPs under GJP group underwent plant maintenance shutdowns (B-inspection) during Q2/23.
For the renewable energy business, GULF recognized a share of core profit from wind projects under Gulf Gunkul Corporation of THB 182 million in Q2/24, an increase of 23% YoY from THB 148 million, due to higher average wind speeds that rose from 5.2 m/s in Q2/23 to 5.5 m/s in Q2/24. Meanwhile, Gulf Chana Green (GCG) biomass power project reported a core profit increase from THB 37 million in Q2/23 to THB 51 million in Q2/24, representing a 40% increase. This growth was attributed to a higher electricity sales volume to EGAT and lower average wood cost, which decreased from 833 THB/ton in Q2/23 to 680 THB/ton in Q2/24, despite a decline in the average wholesale Ft rate.
However, Gulf Sriracha (GSRC), an IPP power project under IPD group, reported lower profit in Q2/24 compared to the same period last year. This decline was due to a decrease in the volume of electricity sold to EGAT, with the average load factor decreasing from 92% in Q2/23 to 84% in this quarter, as the GSRC underwent a planned maintenance shutdown (CI-inspection) in June 2024. Additionally, 12 SPPs under GMP group also saw a decline in profit compared to the same period last year, primarily due to a decrease in electricity sales volume to both EGAT and industrial users. This decline is attributed to planned major maintenance shutdowns (C-inspection) for 2 SPPs under GMP group in Q2/24.
For the gas business, GULF realized a share of core profit from PTT NGD of THB 382 million in Q2/24, a 256% increase from THB 107 million in Q2/23, primarily driven by a significant decrease in the average natural gas cost, which fell from 412.5 THB/MMBtu in Q2/23 to 341.5 THB/MMBtu in Q2/24, while the average fuel oil price increased from 70.0 USD/barrel in Q2/23 to 81.6 USD/barrel in Q2/24, as the majority of the project’s revenue is linked to fuel oil price while cost is dependent on natural gas price.
In Q2/24, GULF recognized a share of core profit from the investment in INTUCH of THB 1,621 million, an increase of THB 269 million or 20% YoY from THB 1,352 million in Q2/23, primarily due to the improved performance of AIS from increased ARPU, along with lower operating costs resulting from effective cost management.
EBITDA for Q2/24 was THB 10,244 million, an increase of 19% compared to THB 8,620 million in Q2/23, while the net profit attributable to the parent company, which accounts for the impact of the FX rate and derivative instruments, was THB 4,741 million, a 64% increase from THB 2,885 million in Q2/23. In Q2/24, GULF recorded unrealized losses from exchange rates from the Thai baht’s depreciation against the US dollar, which fell from 36.63 THB/USD at the end of Q1/24 to 37.01 THB/USD at the end of Q2/24. Nonetheless, the recording of such transaction is an accounting transaction that does not have an impact on GULF’s cash flow and performance.
As of June 30, 2024, GULF reported total assets of THB 481,852 million, total liabilities of THB 337,974 million and shareholders’ equity of THB 143,877 million, with a net interest-bearing debt to equity ratio of 1.85 times, increased from 1.70 times as of March 31, 2024, due to an increase in long-term debt resulting from the bond issuance in April 2024, together with the loan drawdowns from financial institutions used as working capital.
Ms. Yupapin Wangviwat, Deputy Chief Executive Officer and Chief Financial Officer, GULF, stated, “GULF maintains its 2024 total revenue growth projection of approximately 25-30%, with projects proceeding as planned. In the second half of 2024, the GPD power project unit 4 (662.5 megawatts) is scheduled to commence commercial operations on October 1, 2024. Meanwhile, the 5 domestic solar farms and solar farms with battery energy storage systems projects, with a total installed capacity of 532 megawatts, are set to begin commercial operations in December 2024.
In addition, GULF1’s solar rooftop projects are expected to sign contracts for at least 270 megawatts and achieve at least 180 megawatts of operational capacity by the end of this year. GULF1 has a target to expand its solar energy business to over 1,000 megawatts by 2030. For the gas business, HKH, a joint venture in which the Company holds a 49% equity stake, has imported a total of 5 cargos totaling 400,000 tonnes of LNG since the beginning of the year to support electricity production for HKP project unit 1, with plans to import an addition of approximately 200,000 tonnes of LNG during the remainder of this year. As such, these factors will drive GULF to achieve its 2024 revenue target.”
Ms. Yupapin added, “The Company’s other projects in the pipeline are also on track. The land reclamation for the Map Ta Phut industrial port development phase 3 project is expected to be completed by the end of 2024, with the construction of the LNG terminal set to begin in mid-2025. Meanwhile, the Laem Chabang port development phase 3 project is scheduled to receive land delivery from the Port Authority to begin construction of the port in late-2025. Lastly, the intercity motorway project M81 (Bang Yai–Kanchanaburi) is scheduled to commence operation in 2025, while M6 (Bang Pa-In–Nakhon Ratchasima) is scheduled to commence operation in 2026.
For the digital business, the GSA DC (data center) is currently under construction. The first phase, with a capacity of 25 megawatts, is scheduled to open for operation in April 2025. The Company intends to increase the data center’s capacity by an additional 25 megawatts in the second phase within the same area, resulting in a total capacity of 50 megawatts. GSA DC will prioritize the use of clean energy and has been designed to meet the growing demand for GPU processing in cloud computing. Currently, many organizations are driving toward digital transformation by leveraging big data, IoT, and AI, with AI workloads requiring GPU for data processing, which requires substantial energy consumption and the use of liquid cooling systems for effective heat removal. The main customers for GSA DC will be hyperscalers, enterprises and government agencies.
For the cloud business, the Company has collaborated with Google to provide the Google Distributed Cloud air-gapped service, which is planned to open for service in mid-2025. Target customers include organizations that need to store and process sensitive or confidential data. Google Cloud users can also choose to store their data at the Company’s GSA DC data center. Additionally, the Company aims to expand its business to deliver additional services within the Google Cloud ecosystem, including AI and cybersecurity solutions, in the future.
The amalgamation between GULF and INTUCH is currently under implementation. The establishment of the new company (NewCo) is expected to be completed in Q2/2025.”
GULF is dedicated to conducting business that drives the country’s economy while promoting sustainable social development and improving the quality of life for the Thai people. The Company engages with communities across 40 provinces in Thailand through various initiatives. One such initiative is the Green Energy Green Network for THAIs, a clean energy project developed in collaboration with AIS. This project aims to install solar panels and communication systems from mobile phone base stations in remote areas lacking electrical utilities and telecommunications infrastructure, targeting 30 areas over the next 5 years. The goal is to reduce inequality, enhance the quality of life, and foster sustainable economic growth within the community.
