Message from the President
“A Heartfelt Thank You to All Shareholders”
In 2017, B.Grimm Power Public Company Limited began a new chapter with the successful initial public offering (IPO) of our shares on July 19, 2017. We received an overwhelming response from both domestic and international institutional and retail investors. The institutional investors include the Asian Development Bank, a leading international financial institution, Muang Thai Life Assurance Public Company Limited and Thai Life Insurance Public Company Limited, all of whom are our cornerstone investors, and their trust in B.Grimm Power has undoubtedly helped to strengthen investors’ confidence in the company.
The proceeds from the IPO are being utilised as follows to further our success as promised to our shareholders.
First, we have improved our net debt-to-equity ratio. The IPO proceeds have been used to repay bank loans and shareholder loans. As a result, our net debt-to-equity ratio at the end of 2017 was reduced to only 1.4 times, which is a suitable baseline for our future growth and further development of new and existing power plant projects as planned. Furthermore, the lower net debt-to-equity ratio would result in a better credit rating for the company, and we intend to undergo a credit assessment in 2018 in preparation for other capital market fund raising options that will enable us to manage our funding costs more effectively.
Second, we have invested in power plant projects as planned. B.Grimm Power is a proficient developer and operator of power plants, with a dedicated team of highly experienced and skilled professionals working with transparency and integrity. In the past 6 years, we have successfully developed 25 power plants, all of which were completed according to the scheduled commercial operation date (COD) specified by the power purchase agreement, and within the budgetary framework agreed with the lending banks. In 2017, we allocated a portion of the IPO proceeds to the development of the Xenamnoy 2 and Xekatam 1 project, our first hydro power plant in the Lao People’s Democratic Republic. The power plant has an installed capacity of 20 MW, and has been in commercial operation since August 2017. In addition, we are constructing three combined cycle cogeneration power plants in Amata City Industrial Estate, Rayong, with an aggregate installed capacity of 399 MW. The construction of each project is progressing as planned, and the power plants will begin commercial operation in February, June and October 2018, respectively.
Third, we plan to pursue sustainable growth. With an aim to grow sustainably, we have opted for a qualitative approach to select new investment projects by assessing the return on capital based on the associated risks and the complexity of each project. The IPO proceeds will serve as an important capital resource for our future investments. In 2017, B.Grimm Power has been working on the following new power plant projects:
- Preparation for the development of three SPP replacement power plant projects, namely ABP1, ABP2 and BPLC1, which are considered qualified power plants under the draft of the Energy Regulatory Commission (“ERC”)’s =regulations on the purchase of power from Small Power Producers under firm contracts (cogeneration system) with PPAs expiring in 2019 - 2025. The new power plants will be developed to replace existing plants with expiring PPAs.
- Seven PV solar farm projects for government agencies and agricultural cooperatives with a total capacity of 30.83 MW, comprising five projects with an aggregate capacity of 23.58 MW under joint investment with the War Veterans Organization (“WVO”), and two projects with a total capacity of 7.25 MW for agricultural cooperatives.
- An industrial waste to energy power plant project with a capacity of 4.8 MW is being developed by Progress Interchem (Thailand) Company Limited, a company which is 48% owned by B.Grimm Power Public Company Limited. These projects are only a part of our endeavours that underline our strong commitment to pursue “quality growth” for the optimum benefit to our shareholders who have trusted and invested with us.
Awards and Recognition
With the overwhelming interest from local and international investors, the appropriate IPO share allotment, and the price stability of our shares following the SET-listing, B.Grimm Power is very proud to have received four prestigious awards from internationally renowned financial magazines: 1) The Best IPO in Thailand 2017 awarded by The Asset, 2) The Best IPO Deal in Southeast Asia 2017 awarded by Alpha South East Asia, 3) Best Energy Solutions Provider awarded by International Finance, and 4) Deal of the Year awarded by Thai Bond Market Association. We would like to take this opportunity to sincerely thank our shareholders, and would like to dedicate this success to you in recognition that these achievements have been made possible with your kind support.
In addition to the projects under construction and development as mentioned above, we have achieved strong performance on account of our 30 power plants that are in commercial operation, with a total installed capacity of 1,646 MW. In 2017, B.Grimm Power’s revenue from sales and services totalled Baht 31,482 million, representing a 13.5% growth and the highest total revenue recorded since the company’s inception. The growth is mainly attributable to the full-year commercial operation of the ABP5 and BPWHA1 combined cycle cogeneration power plants, which have been in commercial operation since 2016; the higher electricity prices which increased in tandem with the government’s Ft rates; and the higher electricity consumption from our industrial customers. Besides the significant growth in revenue, we also achieved impressive operating profits, with an EBITDA of Baht 8,725 million, or an EBITDA margin of 28%, which is a reflection of the effectiveness of our power plant operations and operating cost control. Our normalised net profit stood at Baht 2,918 million, representing a net profit margin of 9.3%, which is higher than that of last year, particularly following the change in our debt-to-equity ratio in the second half of the year.
The above-mentioned achievements are only the first step of success for B.Grimm Power Public Company Limited. The management and all employees are strongly determined and committed to continue to take the company forward to become a leading world-class power company. On behalf of all executives and employees, I would like to express our deepest gratitude to all of our shareholders, and I very much hope for your continued trust and support in B.Grimm Power Public Company Limited and our aspiration to “empower the world compassionately”.