Closing a Historic Deal and Ushering a New Chapter, Bangchak Group Achieves Record-High Performance
Bangchak Corporation Public Company Limited, one of our Premium Members ,announced its performance for the first nine months of 2023, recording a total revenue of THB 242,931 million and EBITDA of THB 31,433 million. The third quarter of 2023 recorded revenue of THB 94,528 million, representing a 39% increase from the previous quarter, and a 26% increase year on year. This increase was driven by oil-related businesses due to price increases, while the natural resources business experienced higher sales volume, and power business recognised increased production from power plants. Moreover, the performance of Esso (Thailand) has been consolidated since 1 September 2023, and additional profits were recorded from the acquisition of Esso (Thailand) shares.
Chaiwat Kovavisarach, Group Chief Executive Officer and President, Bangchak Corporation Public Company Limited, revealed that in the first nine months of the year 2023, Bangchak recorded a total revenue of THB 242,931 million and EBITDA of THB 31,433 million, despite pressures from decreased Operating GRM during the first half of the year from falling oil prices. However, other investments and expansions in various potential businesses, such as natural resources business, power business, and the incorporation of Esso (Thailand) Public Company Limited as a Bangchak subsidiary, and the consolidation of performance. This has resulted that in the first nine months of 2023, the company recorded a net profit attributable to owners of the parent of THB 14,210 million, representing earnings per share of THB 10.09.
The third quarter of 2023 recorded the highest performance in the company’s 39-year history since its establishment at THB 11,011 million, translating to a profit per share of THB 7.91. The revenue for this quarter amounted to THB 94,528 million, with an EBITDA of THB 13,813 million, reflecting an increase of over 100% from the previous quarter and a 20% increase from the same period in the previous year. Several factors contributed to this outstanding performance include: 1) The oil-related business benefited from rising crude oil and product prices, resulting in a THB 3,598-million Inventory Gain. 2) Increased sales volumes in the natural resources business. 3) The power business recognised increased power generation from hydroelectric power plants in Laos PDR throughout the quarter and acknowledged the rise in electricity production from natural gas power plants in the United States, with the addition of two projects. 4) The financials also incorporated the performance of Esso (Thailand) at a 76.34% ownership stake in the consolidated financial statement since 1 September 2023, along with the recognition of extraordinary gains from the renegotiation of purchase prices based on fair value assessments of Power Purchase Agreements (PPA) totaling THB 7,389 million.”
Q3/2023 Performances by Business Group are as follows.
The Refinery and Oil Trading Business Group recorded an EBITDA of THB 6,306 million, improving more than 100% from the previous quarter, and 53% year on year. Operating GRM significantly increased to USD 14.67 per barrel, which is higher than the GRM in Singapore at USD 9.60 per barrel. The Refinery Business Group maintained production levels averaging 116.4 thousand barrels per day (KBD), or a 97% utilisation rate.
The Marketing Business Group recorded an EBITDA of THB 1,312 million, improving by more than 100% on the previous quarter and year on year. Sales volume was recorded at 1,571 million liters, representing a 13% increase year-on-year, driven by sales growth, service station network expansion, and marketing campaigns, along with the continuous recovery of the aviation fuel market and the tourism sector.
ESSO (Thailand) Business Group recorded an EBITDA of THB 1,281 million. Esso (Thailand)’s performance in the third quarter was consolidated with Bangchak Corporation since 1 September 2023. In September 2023, Bangchak Sriracha Refinery underwent a planned turnaround maintenance and to install and connect equipment for the product quality improvement project according to Euro 5 standard for a 25-day period.
The Power Business Group recorded an EBITDA of THB 1,330 million, improving 35% on the previous quarter and 10% year-on-year. This is the best EBITDA of the three previous quarters. The hydropower projects in Lao PDR have resumed operations throughout the entire quarter, and the group recognised the share of profits from investments in joint ventures (operating from 2 new natural gas power plants in the United States), as well as Thai wind projects that recorded seasonal sales increase.
The Bio-Based Products Business Group recorded an EBITDA of THB 169 million, improving 22% on the previous quarter, and more than 100% year-on-year. The ethanol production and distribution business recorded higher profits due to the increased sales volume in line with the sales management plan aimed at maximising the company’s benefits.
The Natural Resources Business Group recorded an EBITDA of THB 4,873 million, improving 32% on the previous quarter. OKEA’s sales volume increased 17% on the previous quarter attributed to increased sales volume from the Brage and Nova units (in the second quarter of 2023, there were no sales from these two units). Moreover, the average price of crude oil and liquefied natural gas increased in line with the global market. OKEA received approval from the Norwegian government to expand its investment in the Statfjord field and is expected to be completed by 30 November 2023.
Chaiwat concluded by stating, “The results of the third quarter clearly reflect our ability to conduct business, which stems from the strong foundation we have built in developing Bangchak’s capabilities. This marks the beginning of a new chapter in the company’s business history, with a stronger foothold that will enable Bangchak to seek and seise new business opportunities for even greater success. We remain steadfast in our commitment to responsible business practices and focus on the steady and sustainable growth of our business, while maintaining a balance in the Energy Trilemma.”
Moreover, in September, Bangchak approved interim dividend payments for 2023 to shareholders at a rate of THB 0.50 per share. This reflects Bangchak’s commitment to continuously increasing shareholder value.
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