Energy Absolute PCL (SET: EA), one of Thailand’s leading renewable energy businesses, yesterday (7 January 2025) won near-unanimous shareholder support to raise around Bht 7,400 million from a Rights Offering to existing shareholders that it hopes to use to solidify its recovery after five months of intensive restructuring within the group.
EA’s group operations span the production of fuel from renewable sources such as biofuel, the generation of electricity from renewable sources such as wind farms and solar farms, the supply of products and systems to store and distribute electricity, such as industrial batteries and electric vehicle charging stations, and the assembly of electric commercial vehicles such as trucks, buses, and river ferries.
Mr. Chatrapon Sripratum, Chief Executive Officer, Energy Absolute PCL, said, “We are pleased to have stabilised the business by taking some tough decisions and returned to a strong positive cashflow as well as sustained our profitability by focusing on our profitable businesses, and restructuring the money-losing operations.”
He said, “We have profitable businesses in the production of biofuels, electricity generation from wind and solar energy, as well as the operation of Thailand’s only electric vehicle charging business that has a positive cashflow. Together, these businesses contribute sixty percent of EA revenues and almost all of our profits. We got into these businesses before almost anyone else in Thailand and that visionary initiative is paying off handsomely with solid revenue streams and industry leading profit margins.
“However, the successes of these businesses were being offset by our electric commercial vehicle manufacturing operation and our battery manufacturing operation which were losing money and draining our cash, largely, as a result of changes in the global environment that affected the dynamics of the businesses. So, as a part of our re-structuring, we paused the vehicle assembly business, and we scaled down the battery business, and these two decisive actions have successfully halted the drain on our cash.”
Mr. Sripratum added, “We see huge growth and profit potential for EA in both the commercial electric vehicle business and the battery business. But to capture the opportunities we must change our business model. First, we must form a close partnership with a giant global player in these sectors that can help us be more competitive and also enable us to penetrate markets beyond Thailand. And second, we must commit less of our capital to such fast-change sectors that offer very limited time to recoup investments. We have already made good progress in driving this strategy which will also make us more agile and more resilient in the face of future global changes.”
- Sripratum reported that EA is currently establishing a joint venture with one of China’s largest special vehicle manufacturers to produce as well as export electric special vehicles. The joint venture partner, Chengli Special Automobile Co., Ltd., produces over 30,000 units of special vehicles and exports to more than 30 countries. In a memorandum of understanding that was signed with EA in December 2024, it was agreed that the vehicles will be assembled in EA’s existing 65,000 square-metres (80 rai) vehicle assembly plant located in Chachoengsao province. The plant, initially, will have a maximum annual capacity of between 3,000 to 9,000 units, depending on the complexity of the special vehicles being produced. Production is planned to start in April 2025. Typical electric vehicles to be assembled include ambulances, garbage trucks, and telescopic boom lifts, which will be the first time such electric vehicles are assembled in Thailand on an industrial scale. This collaboration is expected to generate in excess of Bht 3,000 million in annual revenues in the first full year of operations in 2026.
- EA also reported signing a memorandum of understanding to establish a joint venture with one of China’s leading battery manufacturers which has important customers based in the United States of America and in the European market. The partnership is to produce lithium-ion batteries and will be the first large facility in Thailand to manufacture lithium-ion batteries. The batteries are primarily for use in home energy storage systems addressing both demand in Thailand as well as major overseas markets. The production will be at EA’s current 80,000 square-metres (91 rai) battery production site in Chachoengsao province and will involve scaling up from the current two-gigawatt production capacity to four gigawatts. The joint venture agreement is expected to be signed in February 2025 and work on site preparation commence in 2025.
Mr. Sripratum added, “We are delighted with the overwhelming support given to our plan which won approval from 99.9% of the shareholder votes cast at yesterday’s extraordinary general meeting, and I thank shareholders for their confidence in the strategic direction we are taking.”
“The additional capital will further strengthen EA’s financial position and assist us in capturing the exciting opportunities ahead as we move into the next phase of our recovery,” he said.
Mr. Vasu Klomkliang, Chief Financial Officer, Energy Absolute PCL, said, “The fresh funding from the Rights Offering that was approved by shareholders on 7th January is primarily intended for retiring loans from banks and redeeming maturing debentures. We hope to reduce our debt from Bht 58,664 million to Bht 52,004 million. This will not only create savings in annual interest payments of around Bht 300 million but will also improve our debt-to-equity ratio and benefit us in terms of financial stability and creditworthiness, as well as help us generate further savings through more favourable terms on our outstanding loans.”
The subscription period for the Rights Offering is 17 to 23 January 2025.
According to EA’s latest disclosures, its cashflow for the first nine months of 2024 is at a strong positive Bht 5,610 million, improving from a negative Bht 1,726 million for the same period last year, and at almost three times greater than where it stood in the previous year. Net profit for the first nine months of 2024 stood at Bht 1,852 million, and EBITDA at Bht 6,183 million on revenues Bht 14,397 million.
