RATCH Group Public Company Limited
Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Abbreviation
The Company | RATCH Group Public Company Limited |
The Group | RATCH Group Public Company Limited and its subsidiaries |
PEA | Provincial Electricity Authority |
EGAT | Electricity Generating Authority of Thailand |
COD | Commercial Operation Date |
EBITDA | Earnings before Interest, Tax, Depreciation and Amortization |
FX | Foreign Exchange Rate |
IPP | Independent Power Producer |
PPA | Power Purchase Agreement |
SPP | Small Power Producer |
Projects/Companies | |
CS | Coc San Hydroelectric Power Plant, operated by Lao Cai Renewable Energy Stock Company, a wholly-owned indirect |
subsidiary | |
LG | Lincoln Gap 1&2 Wind Farm Project, operated by Lincoln Gap Wind Farm Pty Ltd., a wholly-owned indirect subsidiary |
(currently owned by RASA) | |
HKH | Hin Kong Power Holding Company Limited, a joint venture in proportion of 51% |
HKP | Hin Kong Combined-Cycle Power Plants, operated by Hin Kong Power Company Limited, a direct joint venture in |
proportion of 51% | |
HPC | Hongsa Thermal Power Plants, operated by Hongsa Power Company Limited, an indirect joint venture in proportion of 40% |
NN2 | Nam Ngum 2 Hydroelectric Power Plant, operated by SouthEast Asia Energy Limited, a direct joint venture in proportion of |
33.33% | |
PNPC | Xe-PianXe-Namnoy Hydroelectric Power Plant, operated by Xe-PianXe-Namnoy Power Company Limited, a direct joint |
venture in proportion of 25% | |
RAC | RATCH-Australia Corporation Pty Ltd, a wholly-owned indirect subsidiary |
RASA | RATCH-Australia South Australia (Holdings) Pty Ltd., an indirect subsidiary wholly-owned by RAC |
RCO | RATCH Cogeneration Power Plant, operated by RATCH Cogeneration Company Limited, a wholly-owned subsidiary |
R E N | REN Korat Energy Cogeneration Power Plant, operated by REN Korat Energy Company Limited, a direct joint venture in |
proportion of 40% | |
RER | RATCH Energy Rayong Power Plant, operated by RATCH Energy Rayong Company Limited |
RG | Ratchaburi Power Plants, operated by Ratchaburi Electricity Generating Company Limited, a wholly-owned subsidiary |
RHIS | RH International (Singapore) Corporation Pte Ltd, a wholly-owned indirect subsidiary |
SCG | Ratch Pathana Energy Public Company Limited (previous name : "Sahacogen (Chonburi) Public Company Limited"), a |
subsidiary in proportion of 51.67% | |
SP | Snapper Point Gas-Fired Power Plant, operated by Port Adelaide Energy Pty Ltd., a wholly-owned indirect subsidiary |
(currently owned by RASA) | |
1
Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Executive Summary
Industry and Economic Situation
The Bank of Thailand has reported that, the Thai economy slowed down in March 2024 as domestic demands and tourism sector softened after a period of robust expansion and the benefits from the Easy E-Receipt campaign dissipated. Despite the slowdown, the economy showed signs of improvement in the 1st quarter of 2024, compared to the previous quarter. However, the overall growth remained lower on a YoY basis. The tourism sector continued to drive economic activity in the service sector, leading to higher employment. Private investment also increased, particularly in new industries and services while exports and manufacturing production remained stagnant.
The Ministry of Finance projects economic growth of 2.4% in 2024, up from the 1.9% growth in the previous year, this growth is supported by the continued expansion of the tourism sector and the supporting role of fiscal policy for the remaining of the year. Domestically, economic stability is expected to be robust, with an inflation rate forecasted at 0.6% per year, due to the downward adjustment in prices of certain food items. Additionally, the decline in prices of goods in the energy category is attributed to the government's initiatives to alleviate the cost of living.
On April 10, 2024, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 2.50%, as it had done in its two previous meetings since November last year. The current policy rate still aligns with the economic and inflation trends, and is conducive to safeguarding long-term financial and economic stability.
The PRISM Experts reports that global oil prices have remained within the range of 75-90 USD per barrel since the beginning of 2024. This is driven by geopolitical factors. OPEC plus will potentially increase its production after the 2nd quarter of 2024 to alleviate the high oil prices. Additionally, the OPEC plus still have a spare capacity of approximately 5 million barrels per day. Nevertheless, vigilant monitoring of the global economic recovery and adjustments in interest rates by central banks worldwide is imperative, as these factors will impact oil price fluctuations.
On March 27, 2024, the Energy Regulatory Commission (ERC) approved to maintain fuel tariff (Ft), applicable between May and August 2024 at 0.3972 THB per unit which keeps the price of electricity at an average of 4.1805 THB per unit.
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Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Total Revenues and EBITDA
- Total Revenues
- EBITDA
In the 1st quarter 2024, the total revenues were THB 10,997 million. By excluding the Energy Payment (pass- through), the total revenue increased by 6.2% QoQ while decreased by 14.9% YoY. The EBITDA were THB 3,332 million, increased by 11.3% QoQ while decreased by 10.0% YoY. The main reasons were as follows:
- The total revenues and EBITDA increased QoQ mainly as RG had more availability and electricity generating together with the increase in gas price. Moreover, Ft, as approved by the Energy Regulatory Commission (ERC), is at 0.3972 THB per unit for the period January - April 2024 , which has increased from 0 .2048 THB per unit during September - December 2023. As a result, the revenue from sales and EBITDA of SPPs such as RCO, SCG, and RER increased. In addition, the Company recognized an increase in share profit from PNPC from managing the amount of water flowing into the reservoir in the second half of 2023.
- The total revenues and EBITDA decreased YoY as the share profit of HPC decreased mainly due to planned maintenance which has conducted since the end of 2023 to maintain the efficient operation and profit contribution.
3
Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Profit to Owner of the Company
In the 1st quarter 2024, by excluding the effect of FX, the operating result was THB 1,416 million, increased by 235.5% QoQ while decreased by 12.9% YoY. The main reasons are in line with the total revenue and the EBITDA as previously mentioned.
4
Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
1. Significant Events of the 1st Quarter of 2024
Significant Events of the 1st Quarter of 2024 are as follows
1.1 Commercial Operation of Hin Kong Combined-CyclePower Plant Block 1, Ratchaburi Province and LNG import to support electricity production
On March 1, 2024, Hin Kong Combined-Cycle Power Plant Block 1 with contracted capacity of 700 megawatts, located in Hin Kong Subdistrict, Muang District, Ratchaburi Province, has officially commenced commercial operation. Hin Kong Combined-Cycle Power Plant Block 1 and Block 2 with total contracted capacity of 1,400 megawatts were operated by HKP and had PPA with EGAT for 25 years. Hin Kong Combined-Cycle Power Plant Block 2 is expected to commence commercial operation in 2025.
Granted an LNG shipper license in the amount of 1.4 million tons per annum, HKH has successfully imported the first LNG shipment of approximately 62,000 tons on February 28, 2024, in preparation for the commercial operation of Hin Kong Combined-Cycle Power Plant Block 1. This marks HKH as the first private company in Thailand to initiate LNG imports. In addition, the import of such LNG is a vertical integration between the power generation and the gas business, and in line with the Energy Policy and Planning Office's policy to minimize risks in gas procurement and increase energy security for the country as well. In 2024, HKH plans to import a total of approximately 0.64 million tons.
1.2 Signing of Power Purchase Agreement for Wind Farms in the Commonwealth of Australia
On March 28, 2024, RAC has entered into Power Purchase Agreement with ZEN Energy Retail Pty Ltd., an electricity retailer in the Commonwealth of Australia, to sell 20.6% of the electricity generated by the 226.80-megawatt Collector Wind Farm in the New South Wales, and 100% of the electricity generated by the 33- megawatt Starfish Hill Wind Farm in South Australia. Such sale of electricity will begin from April 1, 2024 onwards for the total contract period of 10 years.
Before entering into this Power Purchase Agreement, Collector Wind Farm sold its generated electricity to Iberdrola Australia Energy Markets Pty Ltd. (formerly known as Infigen Energy Markets Pty Ltd.) and ALDI Foods Pty Ltd. at the proportion of 60% and 19.4% respectively, while Starfish Hill Wind Farm sold 100% of its generated electricity to National Electricity Market of the Commonwealth of Australia. After the transaction is complete, the proportion of electricity sold according to Power Purchase Agreements for both wind farms will be 100%.
5
Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Progress of Projects under Construction (as of March 31, 2024)
Hin Kong Power Plant (HKP) Block 2
Type of Power Plant | IPP | |||
Type of Fuel | Natural Gas | |||
Install Capacity (MW) | 770 | |||
Location | Ratchaburi Province | |||
Ownership | 51% | |||
PPA | 25 Years with EGAT | |||
COD | Year 2025 | |||
Progress | 99.00% | |||
R E N Korat Energy Power Plant (R E N) | ||||
Type of Power Plant | Cogeneration IPS Power Plant | |||
Type of Fuel | Natural Gas | |||
Install Capacity (MW) | 31.2 | |||
Location | Nakhon Ratchasima Province | |||
Ownership | 40% | |||
Customers | Industrial Promotion Zone, | |||
Nakhon Ratchasima Province | ||||
COD | Year 2024 | |||
Progress | 98.77% |
The Expansion of NNEG Phase 3
Type of Power Plant | SPP Cogeneration | |
Type of Fuel | Natural Gas | |
Install Capacity (MW) | 30 | |
Location | Pathumthani Province | |
Ownership | 40% | |
Customers | Industrial Users | |
COD | Year 2024 | |
Progress | 30.01% |
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Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
Calabanga Power Plant
Type of Power Plant | Solar Power Plant |
Install Capacity (MW) | 74.1 |
Location | Luzon Island, Philippines |
Ownership | 49% |
COD | Year 2024 |
Progress | 90.91% |
Song Giang 1 Power Plant
Type of Power Plant | Hydroelectric Power Plant |
Install Capacity (MW) | 12 |
Location | Khanh Hoa Province, Vietnam |
Ownership | 46.22% |
COD | Year 2024 |
Progress | 42.59% |
Wood Pellet Production and Sale Project
Type | Wood Pellet Production and Sale |
Capacity | 60,000 Tons per Year |
Location | Champasak Province, Lao PDR |
Ownership | 25% |
Contract Term | 15 Years |
COD | Year 2024 |
Progress | 94.32% |
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Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
MRT Pink Line Extension Project | ||
Technology | Monorail | |
Route | Sirat - Muang Thong Thani | |
Ownership | 10% | |
Contract Term | 30 Years | |
COD | Year 2024 | |
Progress | Civil Works = 54.44% | |
Railway System = 32.97% |
Intercity Motorway Bang Pa-In - Nakhon Ratchasima (M6)
Type | Designing, Construction, Civil Works |
Maintenance and Installation of Toll- | |
Collection System | |
Route | Bang Pa-In - Nakhon Ratchasima |
Ownership | 10% |
Contract Term | Phase 1: Designing and |
Construction - 3 Years | |
Phase 2: Maintenance - 30 Years | |
COD | Year 2025 |
Progress | 37.66% |
Intercity Motorway Bang Yai - Kanchanaburi (M81)
Type | Designing, Construction, Civil Works |
Maintenance and Installation of Toll- | |
Collection System | |
Route | Bang Yai - Kanchanaburi |
Ownership | 10% |
Contract Term | Phase 1: Designing and Construction |
- 3 Years | |
Phase 2: Maintenance - 30 Years | |
COD | Year 2025 |
Progress | 46.18% |
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Management Discussion and Analysis
For the 1st Quarter Ended March 31, 2024
2. Operation Performance according to Consolidated Financial Statement
Analysis of Revenues
Unit : Million THB | |||||
Q1/2023 | Q4/2023 | Q1/2024 | Increase(Decrease)% | ||
QoQ | YoY | ||||
Revenue from sales and rendering of services | |||||
14,493 | 7,492 | 8,888 | 18.6% | -38.7% | |
RG | 9,689 | 3,747 | 4,784 | 27.7% | -50.6% |
RAC | 1,005 | 1,038 | 1,572 | 51.4% | 56.4% |
LG*, SP*, CS | 935 | 481 | 46 | -90.4% | -95.1% |
RCO | 868 | 666 | 717 | 7.7% | -17.4% |
SCG | 1,426 | 1,100 | 1,118 | 1.6% | -21.6% |
RER | 540 | 483 | 574 | 19.0% | 6.3% |
Others | 29 | (22) | 77 | 454.4% | 163.0% |
Revenue from leases contracts | 627 | 592 | 567 | -4.2% | -9.6% |
Share of profit of associates and joint ventures | 1,358 | 584 | 946 | 62.1% | -30.3% |
IPPs | 1,109 | 428 | 602 | 40.6% | -45.7% |
SPPs | 93 | 83 | 106 | 26.8% | 14.1% |
Hydro Power Plants | (1) | 100 | 245 | 145.8% | n.a. |
Renewable Power Plants | 103 | (35) | 28 | 180.4% | -72.8% |
Infrastructure and Others | 54 | 7 | (35) | -574.9% | -164.9% |
Other incomes | 527 | 1,200 | 596 | -50.4% | 13.0% |
Management service income | 65 | 119 | 75 | -37.3% | 15.2% |
Interest income | 407 | 518 | 434 | -16.3% | 6.6% |
Other income | 55 | 562 | 87 | (0.85) | 58.4% |
Total revenues | 17,005 | 9,868 | 10,997 | 11.4% | -35.3% |
Note: * On December 19, 2023, LG and SP were restructured to be under RASA, a subsidiary of RAC.
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Ratchaburi Electricity Generating Holding pcl published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 12:30:02 UTC.