glow energy plc. results for 12m/2014 - listed...
TRANSCRIPT
Glow Energy Plc. Results for 12M/2014
Place: Empire Tower 31st Floor
Date: 24 February 2015
GLOW GROUP – Results of 2014 – 24/02/2015
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.
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GLOW GROUP – Results of 2014 – 24/02/2015 3
Headline Comments
GLOW GROUP – Results of 2014 – 24/02/2015
Headline Comments
4
4Q/2014
NNP, at 2,018 MTHB, is in line with our expectations; down 17% on 3Q/2014.
IPP Business
Seasonality of APR.
GHECO1 and GIPP have reached full CAH.
Cogen Business
Fairly stable price and spread environment (fall in oil prices not yet reflected in gas
prices and Ft).
Lower IC volumes (power – 8.5%; steam – 8.3% QoQ), mostly as a result of
customer maintenance activities.
12M/2014
NNP, at 9,668 MTHB, is up 20% on 2013.
Earnings growth mostly driven by IPP business:
Higher availability and dispatch of GHECO1 (95.2% versus 71.7%).
Higher Dispatch of HHPC (609 GWh versus 325 GWh).
Gross Profit from the Cogen Business is also up:
Higher IC volumes (power +8.1%; steam +3.7%).
Higher spreads (Ft increase to 0.69 THB/kWh in May; lower average IC coal
prices).
But: somewhat lower load Factors of CFB units.
GLOW GROUP – Results of 2014 – 24/02/2015 5
Results Overview
GLOW GROUP – Results of 2014 – 24/02/2015 6
General Comments
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.
Glow IPP, GHECO-One and HHPC have outstanding loans in USD which will be repaid with USD linked cash flows.
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).
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.
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.
GLOW GROUP – Results of 2014 – 24/02/2015
2014 Headline P&L
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Difference
2014 Act 2014 Act without lease
with lease without lease vs with lease (%)
Revenue 73,266 74,212 947 1.3%
Gross Margin 24,532 25,479 947 3.9%
EBITDA 19,952 20,898 947 4.7%
Depreciation 4,720 5,057 337
EBIT 15,232 15,841 609 4.0%
Exchange Gain(Loss) (62) (62) (0)
- Realised exchange gain / loss 1 1 0
- Unrealised exchange gain / loss (63) (63) 0
Profit Before Tax 11,841 12,450 609 5.1%
Corporate Income Tax 1,117 1,117 0
Deferred Tax (111) 76 188
Net Profit 9,139 9,540 401 4.4%
GLOW GROUP – Results of 2014 – 24/02/2015 8
Comparison YoY
Difference
2014 Act 2014 Act
2013 Act 2014 Act vs 2013 Act vs 2013 Act (%)
Revenue 69,699 74,212 4,514 6.5%
Gross Margin 22,097 25,479 3,382 15.3%
EBITDA 18,256 20,898 2,642 14.5%
EBIT 13,238 15,841 2,603 19.7%
Exchange Gain(Loss) (1,003) (62) 941
- Realised exchange gain / loss 29 1 (28)
- Unrealised exchange gain / loss (1,032) (63) 969
Profit Before Tax 8,918 12,450 3,532 39.6%
Corporate Income Tax 887 1,117 229
Deferred Tax 144 76 (68)
Net Profit 7,214 9,540 2,325 32.2%
NNP 8,056 9,668 1,612 20.0%
GLOW GROUP – Results of 2014 – 24/02/2015 9
Selected Key Drivers
GLOW GROUP – Results of 2014 – 24/02/2015
GIPP Dispatch (GWh)
GHECO1 Dispatch (GWh)
HHPC Dispatch (GWh)
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GIPP Availability*
GHECO1 reached fully CAH on
31/Dec/2014 at 9.00 p.m.
GIPP reached fully CAH on
19/Dec/2014.
5,100.8
4,316.3
YTD Dec/2013 YTD Dec/2014
4,120.3
5,462.5
YTD Dec/2013 YTD Dec/2014
324.9
608.9
YTD Dec/2013 YTD Dec/2014
96.78% 97.91%
YTD Dec/2013 YTD Dec/2014
71.69%
95.20%
YTD Dec/2013 YTD Dec/2014
GHECO-1 AVAILABILITY (%)
416465 453
310
438479 467 484 475 492 471 448
475 473 450
311
442
315
412 414463
359
467 445 458
123
212272
426
265
0 0 0 0
43
74 72 77 7765
26 28
6843 35
1,289
(+20.7%)
1,271
(-1.4%)
793
(-37.6%)
117 226
(+93.2%)
119
(-47.4%)
146
(+22.7%)
1,068
1,227
(-8.0%)
1,426
(+16.2%) 1,411
(-1.1%)
1,398
(-0.9%)
1,334
-
Transmission line outage in 4Q/2013
Maintenance in Aug/2014
EGAT has requested reserve shutdown from time-to-time since 3Q/2014
Major DCS upgrade and EGAT COC testing in Jan/2014
IPP Availability and Dispatch
+32.6%
+87.4%
-15.4%
963
(+21.4%)
GHECO1 Availability*
*Including de-rating.
Glow IPP Business
GLOW GROUP – Results of 2014 – 24/02/2015
232
175
222259
235
97
205
267237
264 275 267 263
215 226
11
CFB1 ~27 days planned outage & 6 days unplanned outage
CFB2 ~23 days planned outage & ~ 23 days unplanned outage
670
(-17.3%)
810
(+20.9%)
726
(-10.4%)
813
(+12.0%) 810
Cogen Main Assets Generation Volumes
CFB3 ~ 12 days planned outages & ~ 21 days unplanned outage;
load-gear problem in the period Jan/2014 to Jul/2014 has restricted
output (BI claim expected to be concluded in 2015)
3,239.1
3,019.5
YTD Dec/2013 YTD Dec/2014
287
262 261
233
159
278 276 269 265
241258
227
273 266 275
1) Average steam conversion - Gas is 3.95 ton/MWheq and Average steam conversion – Coal is 2.90 ton/MWheq
591
(-6.0%)
709
(+20.0%)
806
(+13.7%)
704
(-12.7%)
629
2,703.7
2,811.9
YTD Dec/2013 YTD Dec/2014
Higher Phase5 dispatch as a result of a production shift from coal to
gas.
Planned outage 52 days & unplanned outage 9 days
Major maintenance in Mar/April 2014
+4.0%
-6.8%
CFB 1-3 Dispatch (GWhe)
Phase5 Dispatch (GWhe)
Glow Cogen Business
GLOW GROUP – Results of 2014 – 24/02/2015
422
354 389
450
379
436 444 437 403
434 451 447 444
372 403
603 554 578
616 587 637 616 594 604
654 664 630 630
539 616
1,265
(+7.1%)
1,284
(+1.5%)
1,332
(+3.7%)
1,219
(-8.5%)
Industrial Customer Volumes
12
IC Steam Sales (ktons)
IC Power Sales (GWh) Lower QoQ volumes mostly driven by shutdowns of production facilities for
maintenance by 2 major customers.
Lower QoQ volumes mostly driven by shutdowns of production facilities for maintenance by 2 major customers.
1,840
(+6.1%)
1,814
(-1.4%)
1,948
(+7.4%)
1,785
(-8.3%)
1,181
1,735
7,118.9 7,384.8
YTD Dec/2013 YTD Dec/2014
4,718.95,099.1
YTD Dec/2013 YTD Dec/2014
+8.1%
+3.7%
Glow Cogen Business
GLOW GROUP – Results of 2014 – 24/02/2015
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb
-14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Sep
-14
Oct
-14
Nov
-14
Dec
-14
Avg. PEA Price Gas Cost Coal Cost
Normalized Spread Trends
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Glow Cogen Business
2.46 THB/kWh
0.65 THB/kWh
Note: 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
GLOW GROUP – Results of 2014 – 24/02/2015
3.29
3.44
2013 2014
Average PEA Price (THB/kWh)
98.47
81.09
2013 2014
Average Coal Price (USD/ton JPU)
2.10
2.41
2013 2014
Average Coal Spread (THB/kWh)
0.51
0.60
2013 2014
Average Gas Spread (THB/kWh)
YoY Prices/Spreads Comparison
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+4.6%
+16.9% +14.9%
-17.7% +2.4%
Glow Cogen Business
323
331
2013 2014
Average Gas Price (THB/mmBTU)
GLOW GROUP – Results of 2014 – 24/02/2015 15
Variance Analysis
GLOW GROUP – Results of 2014 – 24/02/2015
2,090 2,076
3,133
2,442
(337) (73)(174) 30 7 9 115 2,018
NNP 4Q/2013Act
NNP 1Q/2014Act
NNP 2Q/2014Act
NNP 3Q/2014Act
Gross Profit MaintenanceCosts
OtherOperating
Costs
Depreciation& Asset
replacements
FinanceExpenses
Income Tax MinorityInterest(MI)
NNP 4Q/2014Act
172172
EBITDA Impact-584 MTHB
Below EBITDA+45 MTHB
4Q/2014 vs. 3Q/2014 (Quarter Only)
16
2,442 (227)
(21) (202) 26 2,018
NNP 3Q/2014 Act Cogen Business GIPP GHECO-1 HHPC NNP 4Q/2014 Act
172172
1 2
1) Including one-off insurance proceeds for GHECO-One in an amount of THB 297 million (before tax).
2) NNP for 3Q/2014 , adjusted for seasonal ity (i.e. using APR for Q4/2014)), would have been 2,320 MTHB.
GLOW GROUP – Results of 2014 – 24/02/2015
8,056 131 39 1,133
309 9,668
NNP 2013 Act Cogen Business GIPP GHECO-1 HHPC NNP 2014 Act
2014 YTD vs. 2013
17
8,056 3,382
(561) (178) (39) (12) (229) (749)9,668
NNP 2013 Act Gross Profit Maintenancecosts
Other Operatingcosts
Depreciation &Asset
replacements
Finance Expenses Income Tax Minority Interest(MI)
NNP 2014 Act
EBITDA Impact+2,643 MTHB
Below EBITDA-280 MTHB
GLOW GROUP – Results of 2014 – 24/02/2015 18
Financing Structure
GLOW GROUP – Results of 2014 – 24/02/2015
Debt Maturity Profile
19
27,548 24,491
36,294 30,506
63,842
54,998
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2013 2014
Consolidated Glow Group Gross Debts
Cogen Business IPP Business (1)
23 17 18 13
7 7 8
8
9 10 10 11 10
67
61 58 65
38 34 30 37 36
30 25 29 26
90
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
GHECO-One(2)
HHPC(3)
Glow IPP
Glow Cogen Repayment Profile (MTHB)
Total Gross consolidated Debt was 54,998 MTHB in 2014 versus 63,842 MTHB in 2013
USD loan (excluded tranches swapped into THB), as of Dec 2014 GIPP: 71 MUSD GHECO-One: 367 MUSD HHPC: 23 MUSD
Note: 1) Value of debts for IPP Business consists of 19,507 MTHB for GHECO-One, 2,342 MTHB for Glow IPP, and 2,641 MTHB for HHPC
2) GHECO-One Loan consists of USD tranche and THB tranche (converted @ 30 Baht/USD)
3) HHPC outstanding debt as of 1 February 2015 is 81 MUSD after refinancing in January 2015
4,000
5,500
1,000
1,500
4,600
4,000 3,400
5,555
5,500 5,500 5,600
4,000
3,400
5,555
2015 2016 2017 2018 2019 2020 2021
Bank loan Bond
GLOW GROUP – Results of 2014 – 24/02/2015
Gearing Indicators
20
Note: 1) Gross D/E = Total Outstanding Debts / Total Equities
Net D/E = (Total Outstanding Debts – cash) / Total Equities
Gross Debt to EBITDA = Total Outstanding Debts / EBITDA
Net Debt to EBITDA = (Total Outstanding Debts – cash) / EBITDA
2013 2014
D/E Ratio
Conso: Gross D/E (Net D/E) 1.57 (1.43) 1.20 (1.08)
Cogen: Gross D/E (Net D/E) 0.89 (0.85) 0.67 (0.65)
Debt to EBITDA (Conso)
Gross Debt to EBITDA (Net Debt to EBITDA) 3.50 (3.18) 2.63 (2.35)
Gross D/E is projected to fall below 1 towards end 2015.
GLOW GROUP – Results of 2014 – 24/02/2015
Dividends Policy and History
21
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% increased in installed capacity).
0.600 0.600 0.600 0.700 0.735 0.772 0.810 0.851 1.100
1.500
0.975 1.054 1.136 1.123 1.179 1.238 1.300
1.904
2.205
0.750
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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
38% 36% 35% 38% 38% 38% 38% 31% 33%
+5% +5% +5%
+5% +5% +5%
+31%
[3.305]
+20%
GLOW GROUP – Results of 2014 – 24/02/2015 22
Selected Updates
GLOW GROUP – Results of 2014 – 24/02/2015
Sensitivity to Oil Price Movements
23
Oil Price Gas Price
IC Power Tariff
IC Steam Tariff
• Wellhead price adjustment
interval
• LNG (high correlation with
oil price) vs. PNG (partial
indexation to oil price only)
• Gas-based capacity represents +/- 2/3 of the Thai system
• Ft adjustment (every 4 months) reflect changes in
(prospective) gas prices
• Gas price-linked (energy) tariff
EGAT Sales IC Sales:
Gas-Power
IC Sales:
Gas-Steam
IC Sales:
Coal-Power
IC Sales:
Coal-Steam
Limited Impact Positive Impact Negative Impact Negative Impact Negative Impact
• Pass through of gas
price changes under
the PPA’s
• Partial pass through of
gas price changes into
the Tariff
• Pass through of gas
price changes into the
tariff, but margin is also
implicitly linked to gas
prices
• Tariff decreases; fuel
cost does not; margin
therefore decreases
• Tariff decreases; fuel
cost does not; margin
therefore decreases
+/- 2/3 of
Total Sales +/- 1/3 of Total
Sales
+/- 80% of
IC Capacity +/- 20% of
IC Capacity
GLOW GROUP – Results of 2014 – 24/02/2015
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb
-14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Sep
-14
Oct
-14
Nov
-14
Dec
-14
Jan-
15
Feb
-15
Mar
-15
Apr
-15
May
-15
Jun-
15
Jul-1
5
Aug
-15
Sep
-15
Oct
-15
Nov
-15
Dec
-15
Avg. PEA Price Gas Cost Coal Cost
24
The trends in the graph above are shown for illustration only, using simplified assumptions:
Oil price stable at 50 USD/bbl.
(Single) FOB coal price stable at 65 USD/ton JPU.
Glow Cogen Business
2.46 THB/kWh
0.65 THB/kWh
2015F*
Normalized Spread Outlook
GLOW GROUP – Results of 2014 – 24/02/2015
Thank You!
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