glow energy plc. -...

GLOW ENERGY PLC.

Date : 11 November 2015

Results for 9M/2015

Disclaimer

The views expressed here may contain information derived from publicly available sources that

have not been independently verified. No representation or warranty is made as to the accuracy,

completeness or reliability of the information. Any forward looking information contained in this

presentation has been prepared based on number of assumptions which may be incorrect and/or

not properly represent actual situation incurring in the future. The actual information contained in

this presentation is for the purpose of illustration and presentation only. Should there be any

discrepancies with audited/reviewed financial statements, annual report, and other official filings to

SEC, the information presented in such documents should be relied upon as official information.

This presentation should not be relied upon as a recommendation or forecast by Glow Group.

This presentation shall not be construed as either an offer to sell or a solicitation of an offer to buy

or sell shares in any jurisdiction.

GLOW GROUP – Results of 9M/2015 – 11/11/2015 2

HEADLINE

COMMENTS


GLOW GROUP – Results of 9M/2015 – 11/11/2015

Headline Comments

• NNP 3Q/15 reported at 2.9 billion THB, up 17.2% YoY.

• Excellent availability of all the main units.

• NNP 9M/15 reported at 7.9 billion THB, up 3.4% YoY.

• Excluding Other Income items (Doosan Settlement, CFB3 Insurance): 7.3 billion THB, down 4.5% YoY.

• Main YTD trends remain valid:

• Cogen: robust volumes and spreads (3 Stg reduction in Ft in September; Tariff rebase in

November).

• Gheco-One: inspection and corresponding impact on availability payments, energy margin and

maintenance costs.

• GIPP: APR step-down and lower dispatch (but also lower depreciation).

• HHPC: lower dispatch.

• THB weakening.

• Favorable impact, mostly from higher availability payments (USD linkage: 50% for Gheco-One with

“deadband”; 90% for GIPP; 85% for HHPC; 50/80% for SPP).

• Core NNP metric disregards unrealized forex gains and losses.

4


RESULTS

OVERVIEW

5


• Financial Lease

• From 1Q/2014, Thai GAAP has started adopting a new accounting standard with respect to Financial Lease. In our view, the

changes resulting from the adoption of this new accounting standard do not affect cash flows and are therefore not directly

operations-related. We therefore show results excluding the impact of Financial Lease, except when mentioned.

• Normalized Net Profit

• Glow’s management focuses on core profitability. Therefore, we consider Normalized Net Profit (NNP) as our key profitability

metric. NNP is defined as Net Profit, excluding (i) Net Unrealized FX Gains/Losses, (ii) Deferred Tax Income/Expense, and

(iii) the impact of the Financial Lease treatment. NNP is also the metric we focus on in considering our dividend payments.

• Unrealized FX Gains and Losses.

o Glow IPP, GHECO-One and HHPC have outstanding loans in USD which will be repaid with USD linked cash flows.

o Under Thai GAAP the outstanding USD loan is converted at year-end to THB at the then current exchange rate. Any

difference in the outstanding loan amount in THB resulting from a change in exchange rate compared to last year

leads to an Unrealized FX Gain (THB appreciation) or Loss (THB depreciation).

o Since the USD loans in Glow IPP, GHECO-One and HHPC are served by USD linked cash flows, these Unrealized

FX Gains/Losses should, in Glow’s view, be ignored from an economic point of view.

• Deferred Taxes

o From 1Q/2013, Thai GAAP has started adopting Deferred Tax accounting practices. In our view, Deferred Tax

Income/Expense is an accounting item resulting from differences in accounting and tax book values, and is therefore

not directly operations-related.

General Comments

6


9M/2015 Headline P&L

9M/2015 Act 9M/2015 Act without lease

with lease without lease vs with lease

Revenue 50,691 51,509 818

Gross Margin 18,766 19,584 818

Depreciation 3,233 3,484 251

EBIT 11,882 12,449 567

Exchange Gain(Loss) (1,327) (1,327) 0

- Realised exchange gain / loss 47 47 0

- Unrealised exchange gain / loss (1,374) (1,374) 0

Profit Before Tax 8,291 8,858 567

Corporate Income Tax 903 903 0

Deferred Tax (3) 105 108

Net Profit 6,461 6,897 436

7


9M/2015 P&L Comparison (without lease) Difference

2015 Act 2015 Act

2014 Act 2015 Act vs 2014 Act vs 2014 Act (%)

Revenue 56,515 51,509 (5,006) -8.9%

Gross Margin 19,450 19,584 134 0.7%

EBITDA 16,265 15,933 (332) -2.0%

EBIT 12,467 12,449 (18) -0.1%

Exchange Gain(Loss) 252 (1,327) (1,579) (626.6%)

- Realised exchange gain / loss 60 47 (13) -21.7%

- Unrealised exchange gain / loss 192 (1,374) (1,566) -815.6%

Profit Before Tax 10,207 8,858 (1,349) -13.2%

Corporate Income Tax 886 903 17 1.9%

Deferred Tax 70 105 35 50.0%)

Net Profit 7,762 6,897 (865) -11.1%

Normalized Net Profit 7,650 7,934 284 3.7%

8


Quarterly P&L Comparison (without lease) Comparison Comparison

3Q/2015 vs. 3Q/2015 vs.

3Q/2014 2Q/2015 3Q/2015 3Q/2014 2Q/2015

Revenue 18,010 17,398 17,855 (155) 457

Gross Margin 6,366 6,783 6,544 178 (239)

EBITDA 5,216 5,535 5,446 230 (89)

EBIT 3,928 4,345 4,339 411 (6)

Exchange Gain(Loss) 45 (425) (1,011) (1,056) (586)

- Realised exchange gain / loss 11 79 37 26 (42)

- Unrealised exchange gain / loss 34 (504) (1,048) (1,082) (544)

Profit Before Tax 3,149 3,162 2,599 (550) (563)

Corporate Income Tax 240 234 241 1 7

Deferred Tax 17 38 42 25 4

Net Profit 2,457 2,462 2,116 (341) (346)

Normalized Net Profit 2,442 2,787 2,861 419 74

9


SELECTED

KEY DRIVERS

10

4111

3642

YTD Sep/2014 YTD Sep/2015


IPP Availability and Dispatch IPP Business

GHECO-One Dispatch (GWh)

HHPC Dispatch (GWh)

3359

2348


463

334


GIPP Dispatch (GWh)

-30.1%

963 (+21.0%)

510 (-47.1%)

839 (+64.6%)

796 1,000 (+19.2%)

458

126 212

272

426

265

83 75

351 316 241 282

415

279 306

0

200

400

600

Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15

492 471 448 475 473 450

43

371

490 431 396

474 490 484 461

0

100

200

300

400

500

600


1,398 (-0.9%)

904 (-35.4%)

1,301 (+44.0%)

1,411 1,435 (+10.3%)

146 (+22.9%)

98 (-33.1%)

189 (+93.5%)

119 48 (-74.6%)

65

26 28

68

43 35

10

26

61 70 67

52

17 17 14

0

20

40

60

80


29 days outage YTD-Sep 2015 (29 days unplanned outage), 1 day outage in the quarter.

EGAT requested reserved shutdown from time-to-time during 2015 (Unit1: 64 days and

Unit2: 67 days).

Major planned maintenance during Jan-Feb/2015.

49 days outage YTD-Sep 2015 (37 days planned maintenance , 12 days unplanned outage),

1 day outage in the quarter.

Planned maintenance during 13/Jan-05/Feb/2015.

38 days outage YTD-Sep 2015 (24 days planned maintenance, 14 days unplanned

outage), 10 days outage in the quarter.

-11.4%

-27.7%

11

81.59%

94.45%

95.15%

94.45%

YTD-Sep 15 w/ PlannedMaintenance

YTD-Sep 14 w/ PlannedMaintenance

YTD-Sep 15 w/o PlannedMaintenance

YTD-Sep 14 w/o PlannedMaintenance

GIPP Availability

94.74%

97.53%

YTD-Sep 15

YTD-Sep 14

GHECO-One Availability

2206 2190


-0.7%


2107

2236


Cogen Main Assets Generation Volumes Cogen Business

CFB 1-3 Dispatch (GWhe)

+6.1%

Phase5 Dispatch (GWhe)

813 (+12.0%)

732 (-10.0%)

682 (-6.9%)

726 777 (+13.9%)

241 258 227

273 266 275 232

210

291 268

221 193

236 269 272

0

50

100

150

200

250

300

350


CFB1 - 42 days outage YTD-Sep 2015 (33 days planned maintenance, 9 days unplanned outage), 17 days outage in the quarter.

CFB2 - 11 days outage YTD-Sep 2015 (11 days unplanned outage), 3 days outage in the quarter.

CFB3 - 69 days outage YTD-Sep 2015 (37 days planned maintenance, 32 days unplanned outage), 4 days outage in the quarter.

704 (-12.7%)

700 (-0.06%)

757 (+8.1%)

806 778 (+2.8%)

264 275 267 263

215 226 279

223 199

231 263 263 263 263 252

0

50

100

150

200

250

300


1) Average steam conversion - Gas is 3.95 ton/MWheq and Average steam conversion – Coal is 2.90 ton/MWheq

Higher Phase 5 YTD utilization, due to production shift from coal to gas.

10 days outage YTD-Sep 2015 (8 days planned maintenance, 2 days unplanned outage), 1 day outage in the quarter.

12

5600 5556


3881 3832



Industrial Customer Volumes Cogen Business

IC Power Sales (GWh)

IC Steam Sales (ktons)

1,219 (-8.5%)

1,247 (+2.3%)

1,257 (+0.8%)

1,332 1,327 (+5.6%)

434 451 447 444 372

403 437

390 420

379 446 432 444 448 435

0

100

200

300

400

500


1,785 (-8.4%)

1,756 (-1.6%)

1,870 (+6.5%)

1,948 1,929 (+3.1%)

654 664 630 630 539

616 630 559 568 577

651 642 631 651 647

0

100

200

300

400

500

600

700


Volumes in line YoY, especially if corrected for the one-off higher demand (throughout 2014) of a large customer.

Lower April volumes reflect scheduled maintenance for another large customer.

Generally high utilization factors for MTP customers, reflecting favorable petrochemical market conditions.

Demand in Pluak Daeng also strong (up 6% YoY).

-1.3%

-0.8%

13

Maintenance (and tie-in) activities for 2 large customers at the start of the year.

Strong demand since Q2 (up 3% YoY).

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2.3

2.5

1.50

2.00

2.50

3.00

3.50

4.00

4.50


Normalized Spread Trends Cogen Business

1) PEA Price = Base Tariff at 2.8 THB/kWh + actual FT 2) Gas Cost = Blended Cogen gas price in THB/mmBTU x normalized gas-fired

heat-rate at 8,600* BTU/kWh / 10^6 3) Coal Cost = Average FOB coal price in THB/mmBTU x normalized coal-fired

heat-rate at 10,300 BTU/kWh / 10^6

Note :

2.36 THB/kWh

0.53 THB/kWh

14

Avg. PEA Price Gas Cost

Coal Cost

Spread Average High Low

Gas 0.54 0.79 0.13

Coal 1.84 2.54 0.94

Mar07 – Sep15


YoY Prices/Spreads Comparison Cogen Business


332

316

Average Gas Price (THB/mmBTU)

-4.8%


82.26

68.51

Average Coal Price (USD/ton JPU)


3.43 3.32

Average PEA Price (THB/kWh)

-16.7%


0.57 0.60

Average Gas Spread (THB/kWh)


2.38 2.41

Average Coal Spread (THB/kWh)

+1.3%

+5.2%

-3.2%

15


VARIANCE

ANALYSIS

16


3Q/2015 vs. 2Q/2015

NNP 2Q/2015 Act Cogen Business GIPP GHECO-1 HHPC NNP 3Q/2015 Act

2,787 197 25 (68) (80) 2,861

NNP 4Q/2014Act

NNP 1Q/2015Act

NNP 2Q/2015Act

BI Payment NNP 2Q/2015Act

(Exc. One-timeitem)

Gross Profit MaintenanceCosts

Other OperatingCosts

Depreciation FinanceExpenses

Income Tax MinorityInterest(MI)

NNP 3Q/2015Act

2,018 2,286

2,787 2,734 (173) 53 83 32 (20) 2,861

EBITDA Impact -24 MTHB

Below EBITDA +95 MTHB

(53) 96

55

17

NNP 9M/2014Act

Gross Profit MaintenanceCosts

Other OperatingCosts

Depreciation AssetReplacements

FinanceExpenses

Income Tax MinorityInterest(MI)

NNP 2015 Act(Exc. One-time

item)

BI Payment LD's Payment NNP 9M/2015Act


9M/2015 vs. 9M/2014

NNP 9M/2014 Act Cogen Business GIPP GHECO-1 HHPC NNP 9M/2015 Act

7,650 515 (48) (67) (116) 7,934

7,650

EBITDA Impact -1,380 MTHB

Below EBITDA +754 MTHB

(913)

18 287 27 249

191 7,934

(485)

380 254 7,300

18

275


FINANCIAL

STATUS

19

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

23 17 18 13

7 7 8

8

9 10 10 11 10

66

60 57 63

37 33 30 36 35

29 24 29 25

88


Debt Maturity Profile

4,000

5,500

1,000

1,500

4,600

4,000 3,400

5,555

4,000

Glow Cogen Repayment Profile (MTHB)

5,500 5,600

4,000

3,400

5,555

Bond Bank Loan

GHECO-One

HHPC

Glow IPP

Consolidated Glow Group Gross Debt

Jun-15 Sep-15

23,139 24,380

29,232 28,791

USD loans (excluding tranches swapped into THB), as of Sep 2015

• GIPP: 58 MUSD

• GHECO-One: 341 MUSD

• HHPC: 77 MUSD

Total gross consolidated debt was

• 53,171 MTHB in Sep 2015 versus

• 52,371 MTHB in Jun 2015

Cogen Business

IPP Business

52,371 53,171

2014 Outstanding

Bank Loan

- 19,055 MTHB

Bond

- 10,500 MTHB

2014 Outstanding

GIPP

- 79 MUSD

GHECO-One

- 612 MUSD

HHPC

- 81 MUSD

20

4,000

2015 2016 2017 2018 2019 2020 2021 2025

5,500

(New)


Key Financial Ratios

1H-2015

9M-2015

D/E Ratio

Conso: Gross D/E (Net D/E) 1.11 (0.99) 1.12 (0.96)

Cogen: Gross D/E (Net D/E) 0.62 (0.60) 0.61 (0.59)

Debt to EBITDA (Conso)

Gross Debt to EBITDA (Net Debt to EBITDA) 2.58 (2.31) 2.59 (2.23)

Note: 1.) Trailing 12 months

2.) Gross D/E = Total Outstanding Debt / Total Equity

Net D/E = (Total Outstanding Debt – Cash) / Total Equity

Gross Debt to EBITDA = Total Outstanding Debt / EBITDA

Net Debt to EBITDA = (Total Outstanding Debt – Cash) / EBITDA

ROCE = (EBIT-Tax)/(Total Equity + L-T Debt)

Profitability Ratio

EBITDA Margin 31.16% 30.93%

Normalized Net Profit Margin 15.07% 15.40%

ROCE(1) 13.16% 12.39%

ROE(1) 19.01% 18.11%

21


Dividends Policy and History

• Our policy is (in simplified terms) to pay “a normal dividend of not less than 50% of NNP”.

• Additionally, since our IPO (2005) we have grown our (normal) dividend by at least 5% per year.

• 2013 and 2014 dividend growth reflects strong increase in profitability following the completion of our 2008/2012 expansion

program (80% increase in installed capacity).

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0.600 0.600 0.600 0.700 0.735 0.772 0.810 0.851 1.100

1.388 1.500

0.975 1.054 1.136 1.123

1.179 1.238

1.300

1.904

2.205

0.750

Special

Annual

Interim

Dividend Split (THB/share)

2.250

1.575 1.654

1.736 1.823

1.914 2.010

2.110

2.755

3.305

+5% +5% +5% +5%

+5% +5%

+31%

+20%

38% 36% 35% 38% 38% 38% 38% 31% 33%

22

+5% +5% +5% +5% +5% +13% +26%

+5%


General Updates • Gheco-One’s ongoing dispute with the Revenue Department

• Dispute is with respect to tax on unrealized foreign exchange gains (derived from translation of USD

debt) during the construction period.

• Gheco-One has paid the disputed tax amounts, and has subsequently filed for return of such payments.

• The Central Tax Court has ruled in favor of Gheco-One in October 2015 with respect to our claim for the

tax year 2010 (466 MTHB).

• It is expected that the Revenue Department will appeal, and that the case will go to the Supreme Court.

• Bond issuance

• Glow Energy has successfully issued (in September) a 10-year bullet bond, in an amount of 4 billion

THB, with a coupon of 3.95%.

• Proceeds have been used to roll-over maturing debt.

• Base Tariff (PEA tariff) adjustment/Rebase

• See next slide

• SPP Scheme

• Limited updates from the previous briefings.

• Ongoing discussions with respect to:

• Extensions of PPA’s (only for contracts expiring in 2017/2018, including Glow Phase 2, currently

2*90 MW).

• Replacement PPA’s.

23


New Electricity Tariff

• The Base Tariff has been rebased effective November 2015.

o The “starting point” was the Tariff and Ft for the period May-August 2015.

The Base Tariff was revised downwards slightly (by 1 Stg).

The Ft (for that reference period) was “embedded”.

o As the Ft was reduced by 3 Stg for the period September-December 2015 (i.e. after the reference period for the

rebase), the Ft for November becomes negative.

• The change in total Tariff (i.e. Base Tariff + Ft) between October and November is marginal (-1 Stg).

*Note: Indications for illustration only, for the 115kv TOU Tariff, assuming a given load profile.

2.7837 2.7837 3.2693

0.4961 0.4638

-0.323 -1

1

3

5

7

9

11

May - Aug 2015 Sep - Oct 2015 Nov - Dec 2015

THB/kWh

Ft

Base*

Total = 3.2798 Total = 3.2475

Total = 3.2370 -0.0323 -0.0105

New Tariff

• Suthiwong Kongsiri (CFO since 2005) will move to the US to be the

CFO of GDFSuez Energy North America.

• Pajongwit Pongsivapai (Volk) will take over as CFO effective January

2016.

• Volk has been within Glow Group for almost 20 years:

• He was COO in the past period 2008-2013.

• He is currently (since 2014) EVP in charge of Business Development.

• Educations and certifications:

• Master Degree of Sciences in Chemical Engineering, Oregon State University,

USA

• Bachelor Degree of Chemical Engineering, Chulalongkorn University, Thailand

• General Management course, European Center for Executive Development,

INSEAD Fontainebleau, France

• Finance for Executives Program, The University of Chicago, USA

• Leadership Development Program organized by IMD (Switzerland) and Thai

Listed Companies Association (Thailand)

• Advanced Certificate Course in Politics and Governance in Democratic Systems

for Executives, The College of Politics and Governance, King Prajadhipok’s

Institute, Thailand

• Certificate of Executive Development Program (EDP), Thai Institute of Director

Association (IOD), Thailand


CFO Succession

25


THANK YOU

26

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