News Column

Bangchak to issue up to B8bn bonds

February 27, 2014

By Nanchanok Wongsamuth, Bangkok Post, Thailand

Feb. 27--The state majority-owned Bangchak Petroleum Plc (BCP) will issue 5-8 billion baht worth of debentures in the second quarter of the year to finance its investments.

President Vichien Usanachote said the SET-listed company is seeking new investments together with local and international partners in solar farms, ethanol and upstream businesses in minerals and oil.

Among those is a 30-50-megawatt solar farm project in Japan.

The deal will be finalised this year and contribute to the Bangchak's revenue next year.

"A suitable location is needed in Japan, because they have a lower intensity of sunlight than in Thailand, but with a higher adder," said Mr Vichien.

Bangchak will issue 5-8 billion baht of debentures in the next three months to fund the new projects, in which the investments could go up to 10 billion baht for the next two or three years.

This year, Bangchak will spend more than 12 billion baht including 4 billion baht in petroleum business and 3.4 billion in the third phase of its solar farm business with a capacity of 48 MW, all of which are to start up in the third quarter.

Another 7 billion baht will be allocated to efficiency, energy and environment improvement programmes.

About 1.2 billion baht will be used to set up another 70 stations, bringing the total to 1,130 nationwide. Around 100 stations will be rebranded.

Last year, Bangchak's revenue totalled 186.5 billion baht, up 13% from 2012, with net profit surging 9% to 4.65 billion baht.

The company's marketing business grew by 10% through sales of 86,200 barrels per day, while Thailand's oil demand increased 4%. It has 14.8% market share in retail oil business, up from 13.8% in 2012.

That ranked third after PTT (38.2%) and Esso (15.1%).

"We hope to be the second largest oil retailer this year," said Mr Vichien.

It plans to increase the number of Big C mini stores from 62 last year to 150 this year, while Inthanin coffee stores will be increased from 296 to 400 this year.

Production this year will average 90,000-94,000 bpd, down from last year's 99,300 as refineries will be shut down for maintenance for 46 days. The refining margin this year will be US$7 per barrel.

The International Energy Agency's forecasts global oil demand this year at 92.6 million bpd, with Asia accounting for 680 million. In 2013, the demand was 91.29 million bpd.

Dubai crude prices are forecast at $100-105 per barrel, compared with last year's average average of $105.45 on economic recovery in the US and Europe, increased production of shale gas from the US and softening conflicts in the Middle East.

BCP targets earnings before interest, taxes, depreciation and amortisation of 25 billion baht by 2020, or one-and-a-half times higher than this year.

"To achieve that, the projects must have an investment return of no less than 15%," said Mr Vichien.

BCP will seek board approval in April to pay a dividend of 1.35 baht per share this year.

Shares of BCP closed yesterday on the SET unchanged at at 28.50 baht in trade worth 42.5 million baht.


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Source: Bangkok Post (Thailand)

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