17 February 2022
Bangchak Reports 2021 Performance with EBITDA of over 25,000 Million Baht Record-Breaking High Resulted from Upstream Investments in Norway (OKEA) along with Business Process Redesign (BPR) and Cost Saving Program Contributing over 1,600 Million Baht
Bangchak Group 2021 performance recorded revenue from sales and rendering of service in the amount of THB 199,417 million, EBITDA of THB 25,818 million, net profit attributable to owners of the parent at THB 7,624 million or equivalent to THB 5.25 earnings per share, representing a record high, benefitting from upstream business investments such as in natural resources in Norway (OKEA), as well as Business Process Redesign (BPR) to enhance internal procedures and reduce costs, which began in 2010, boosting Bangchak EBITDA by more than THB 1,600 million. In 2021, it accelerated investments in green innovation for continued growth toward a sustainable organization, leading the world to the Net Zero goal with the Group targeting Carbon Neutrality by 2030 and Net Zero GHG Emissions by 2050.
Chaiwat Kovavisarach, President and Group Chief Executive Officer, Bangchak Group, revealed that that the performance in 2021, amid the COVID-19 pandemic, exacerbated and prolonged throughout the year, Bangchak and its subsidiaries was able to generate a record-breaking performance, with revenue from sales and rendering of services in the amount of THB 199,417 million, increasing 46% from 2020, equivalent to an EBITDA of THB 25,818 million, increasing by 529% from 2020, net profit attributable to owners of the parent at THB 7,624, increasing by THB 14,591 million from 2020, or equivalent to THB 5.25 earnings per share; a record-high.
Revenue from sales and rending of services in Q4/2021 recorded THB 66,762 million, increasing by 40%, relative to the previous quarter, following progress of dissemination of COVID-19 vaccines globally resulting in economic recovery, oil demand growth, and the easing of the pandemic in many countries.
The annual performance of each business group are follow:
Refinery and Oil Trading Business Group Performance increased THB 11,532 million from 2020, mainly from an inventory gain of THB 5,966 million, while conversely 2020 recorded an inventory loss. Operating GRM rose to USD 4.52/BBL in 2021, slightly increasing from USD 1.31/BBL. Furthermore, the refinery continued to increase its production capacity due to address the expansion of Unconverted Oil exports, helping to support GRM and mitigate the impact of falling domestic oil demand.
Despite of the annual turnaround maintenance in first quarter, the average daily production capacity was 99,000 BBL, or 83% of the total refinery capacity, and UCO production doubled relative to the year before.
Marketing Business Group Performance increased by 20% from 2020, mainly from Inventory Gains in 2021 from the increase in oil prices, while total sales volume declined by 6% compared to the previous year, however, it was able to retain it second place market share (16.2%) by sales volume through service stations, according to data from the Department of Energy Business, with 1,277 service stations at the end of 2021.
Green Power Business Group Performance grew by 15% from 2020, mainly attributable to increased total electricity sales from clean energy power plants domestically and abroad, such as 4 new solar power plants in Thailand, and Nam San B Hydro Power Plant in PDR Lao, which recognized full-year performances, and share of profits from Geothermal Power Pant business in Indonesia totaling THB 577 million, an increasing of THB 344 million, following increased power tariff rates, and lower financial costs.
Bio-Based Product Business Group Recognized gains from fair value adjustment 2021 investments, resulted in comparable performance to the previous year despite the impact of decreased biodiesel sales volume due to COVID-19, the lower B100 blending mandate to control domestic diesel prices, and decreased ethanol demand.
Natural Resources Business Group Performance in 2021 recorded EBITDA increase by THB 9,254 million compared to 2020, mainly attributable to the group’s 2021 change of OKEA investment status recording from an associated company to subsidiary, changing from share of profit (loss) to a consolidated method starting from 1 July 2021, and in Q3/2021 recorded gain from sales of investment in BCPE (net of exchange rate) of THB 120 million. As a result, the Natural Resources Business Group realized significant EBITDA increase, mainly attributable to the rise in average price of oil and natural gas, especially natural gas, which increased 464% from 2020. Following high European winter demand, the easing of lockdown measures, and European low gas reserves resulted in OKEA record-high revenue from the sales of oil and gas. OKEA contributed 16% to the Group’s revenue increase. Moreover, OKEA EBITDA constituted 30% of the group’s overall EBITDA.
As for Q4/2022 profits, the easing COVID situation has prompted recovery of economic activity and domestic travel, resulting in the Group recording and EBITDA of THB 9,281 million, increasing 23% to the previous quarter, net profit attributable to owners of the parent at THB 1,756 million, decreasing 4% to the previous quarter, equivalent to THB 1.20 earnings per share. The recovery of previously declining oil demand, resulted in the retail sales in December 2021 to achieve a record new high of 432 million liters per month, the first time retail sales volume exceeded refinery capacity. Furthermore, the Marketing Business Group continued to promote lubricant sales, increasing its domestic market share to 9.9% from 9.4% in the previous year. Inthanin Coffee business also recorded a new high for cups sold in December.
Chaiwat Kovavisarach stated that in addition to conducive market factors that support revenue growth from sales and rendering of services, the ability to adapt and accelerate managerial efficiency are critical to reducing costs and increasing profits for Bangchak Group. For example, Business Process Redesign (BPR) to improve procedural efficiency and reduce costs, which include ongoing and new initiatives that boost the Group’s EBITDA by more than THB 1,600 million in 2021. This includes promoting UCO product sales to compensate for the sudden halt of Jet Fuel sales, reflecting the adaptability in time of crisis, ready for impending energy transition.
Bangchak’s 2022 business direction is determined to proceed with business expansion emphasizing investment in green innovation to reduce greenhouse gas emissions to achieve the goal of carbon neutrality by 2030 and Net Zero GHG Emissions by 2050. This year, Bangchak received the S&P Global Sustainability Award 2022 – Silver Class, ranked Top 3 globally, from the assessment by S&P Global, the assessor of the Dow Jones Sustainability Indices (DJSI), reaffirming the commitment to sustainable innovative business in harmony with the environment and society, which includes the green business of companies in the Group such as BCPG and BBGI. BBGI has a strategy to spearhead into the high-value bio-based products, preparing to raise funds in the Stock Exchange of Thailand by issuing an initial public offering on 17 March 2022.
Moreover, on 17 February 2021, the Board of Directors approved the payment of dividends in the second half of 2021 in the amount of THB 1.00 per share, when combined with the interim dividend of the first half at the rate of THB 1.00 per share, for a full year 2021 dividend at the rate of THB 2.00 per share, equivalent to THB 2,715 million. The Record Date for confirming shareholders who are entitled to receive this dividend will be 3 March 2022, and the dividend will be paid on 22 April 2022.