BGRIM supports govt’s temporary cut in power tariff See only 0.17% impact on revenue confronting with earning boost from gas price declining

BGRIM supports govt’s temporary cut in power tariffSee only 0.17% impact on revenue confronting with earning boost from gas price declining

B.Grimm Power Plc (BGRIM), one of Thailand’s leading power producers, welcomes the Cabinet's resolution to reduce electricity charges as part of the economic stimulus package, though it has a minimal effect on its revenue while receiving the positive effect from natural gas price declining, the major cost, to significantly enhance 2020’s earning.

The March 10 resolution calls for freezing the Ft, the fuel adjustment fee in May at the current rate of -11.6 satang per unit (kWh), and trimming the power charges for all types of users in April-June 2020 by 3%.

BGRIM President Preeyanart Soontornwata said the resolution will only affect the company's annual revenue by merely 0.17% as the bulk of its income remains solid.

She said: "BGRIM is pleased to be part of a mission to help entrepreneurs to mitigate the effects of the economic difficulties and drought by temporarily reducing charges of our power supplies to industrial customers by similar rate with this measure for three months beginning in April."

The majority of revenue would not be effected from this as up to 77% of BGRIM's total revenue comes from power sales to the Electricity Generating Authority of Thailand (EGAT), renewable energy power projects and overseas ventures, while incomes deriving from industrial clients account only 23%, Mrs Preeyanart explained.

The financial impact from the tariff cut is temporarily and fairly small in amount, she stressed.

The company is committed to continuously expanding its business and strengthening industrial clientele which is adding up to 31 MW in new power sales in the first nine months of this year.

BGRIM's power sales to industrial customers in the first two months of this year rose 1% from the same period last year due to increased demand from packaging, air conditioning industry and others.

Meanwhile, the declining price of natural gas, which accounts for more than 70% of BGRIM's total costs, provides a significant opportunity for the company to cut costs and enhancing bottom line this year.

The average natural gas price in January-February 2020 was down by 9% compared to the same period last year.

The drop in gas price will have a positive effect on the company's profit. The 9% drop in gas price could imply the 15% additional earnings compared to the net earnings attributable to major shareholders in 2019 which amounted to 2,331 million baht, Mrs Preeyanart noted.

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