CK strengthens business growth through merger, ready to take on more government projects
Mr. Plew Trivisvavet, Chief Executive Officer, CH. Karnchang Public Company Limited (CK) revealed the company’s fiscal 2014 performance with earnings of Bt 32,858 million and operating profit of Bt 2,296 million with backlog of over Bt 93,583 million. The strong performance was due to the growth of revenue and profit from contraction works with gross profit of 9.26% from work-in-hand gained through efficient engineering and financial management, as well as prudent project selection; and the earnings and profit from the investment in the company’s subsidiaries e.g., Bangkok Expressway Plc (BECL), TTW and CK Power, all generated a stable strong dividend and profit. The outstanding operating results also reflect the company’s stable growth and management strategy in both its construction business and investment in infrastructure projects. CK agreed to pay an annual dividend of Bt 0.55 per share for 2014 performance.
CK’s major investment restructuring plans in 2015 are the merger between Bangkok Expressway Plc (BECL) and Bangkok Metro Plc (BMCL) and the selling of CK’s stocks to Xayaburi Power Co., Ltd. (XPCL) to CK Power Plc (CKP) which are essential in strengthening the company’s leadership position and capability.The shareholders’ meeting of BECL and BMCL on 2 April 2015 approved the BECL-BMCL merger plan. The BECL-BMCL merger gives optimal benefits to the two companies as the newly formed company will be a comprehensive expressway and mass transit service provider with enhanced capacity, financial position, operating efficiency and competitive edge, and can better compete and seize investment opportunities, domestically and overseas. The new company is also expected to generate excellent investment yields, both short-term and long-term. CK will hold 30% stake in the new company and fully supported the merger for the strengthened capacity of the two companies.
The CKP shareholders’ meeting already approved the purchase of XPCL shares from CK, which is in line with CK’s intention to position CKP as key investor in electricity generation and distribution businesses and in accordance with CKP’s future investment plan. As currently the construction of Xayaburi project phase 1 is completed, the construction risk in critical parts like diversion facility is now overcome and the engineering risk is now under control. It is also the right time for CKP to purchase XPCL shares from CK in order to generate good investment yield for CKP shareholders. CKP agreed to purchase 30% stake in XPCL from CK, equal to 805,830,000 shares worth totally Bt 4,344 million, which is an appropriate price and benefits both companies.
As for the investment and business direction in 2015, CK and its subsidiaries have deployed all resources, work force, finance as well as partnerships required in investing in new projects both domestically and overseas. The company will gear full steam ahead in bidding for new infrastructure projects including the MRT Orange Line and Pink Line, dual-track railways and motorways, with confidence to acquire 20 – 25% share of these projects. CK is also ready to invest in infrastructure project as Public-Private Partnership (PPP) through its subsidiaries including BECL, BMCL, TTW and CKP in expressway, mass transit line, power plant and water treatment plant projects. In 2015, the concession of operation of the MRT Blue Line Extension will be finalized and CK along with BMCL will employ their best efforts to expedite its operation. As for the investment in overseas, two key markets are Myanmar and Laos where infrastructure development is seeing a high growth rate. TTW is currently conducting a feasibility study and a clear direction will be seen later this year.
CK recently signed new agreement for the construction of medical center and utilities for Mae Fah Luang University worth Bt 1,477 million on 21 April 2015.