CK Power reports 2014 strong growth of 116%, paving way for first dividend in April 2015 and new project investment
Dr. Supamas Trivisvavet, Managing Director, CK Power Plc. (CKP) said that the company reported a strong growth in 2014 with total revenue of Bt 7,027 million, up 25% YOY, and net profit of Bt 472 million, up 116% YOY. The company also considered paying its first dividend in April 2015 and gears towards investing in the Xayaburi Hydroelectric Power Plant project, which will strengthen CKP’s vision to be the leading power player of the ASEAN.
The key factor that contributed to the high growth in 2014, especially the 116% growth in net profit, is the revenue recognition from power and steam sales by the Bangpa-In Cogeneration Power Plant – Phase 1 (BIC1) for the full year, compared to half-year BIC1 revenue recognition in 2013. Moreover, all power plants showed excellent performance through operational efficiency, effective administrative and financial cost management. Although the Nam Ngum 2 Hydroelectric Power Plant (NN2) in Lao PDR generated a slightly lower-than-expected power due to delayed rainy season in 2014, the mechanism in the Power Purchase Agreement of NN2 allowed for the use of energy reserve accounts, cumulated from the previous year when water was abundant and extra energy was produced. The revenue of NN2 in 2014 was therefore, not substantially affected. In addition, as CKP began to receive dividend incomes from invested projects, the company would seek shareholder approval in the Annual General Shareholder Meeting on 9 April 2015 on paying the first dividend of Bt 0.10 per share for its 2014 performance.
In 2015, CKP will continue to grow its business with focus on improving the efficiency of its power plants and cost control measures. The new project which is under development phase - the Bangpa-In Cogeneration Power Plant - Phase 2 (BIC 2) with installed capacity of 120 MW, is under construction and expected to be completed and start commercial operation in 2017, and will contribute approximately Bt 3 billion of revenue annually. Moreover, CKP is considering the investment in Xayaburi Hydroelectric Power Plant (XPCL) project with installed capacity of 1,285 MW, of which the construction is now 40% completed.
The company plans to purchase 30% stake in XPCL from CH. Karnchang Public Company Limited (CK). Dr. Supamas said that this is the right time to buy XPCL since the construction of the Phase 1 is completed and the engineering risk in the construction of Phase 2 is under control. Buying XPCL now will allow CKP to get good price, resulting in good rate of returns that is in line with CKP’s investment policy. The deal will also increase CKP’s total power production capacity by nearly three folds - from 755 MW to 2,160 MW, giving substantial value to the company and strengthening its vision to be the leading power player in Thailand and the ASEAN.
