Gulf Energy Development Public Company Limited · Total 262.1 35.0 161.3 22.7 As of the end of the 3-month period ending March 31, 2019, the Company has a total of ten SPP projects

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Gulf Energy Development Public Company Limited

Management Discussion and Analysis of the Company’s Performance

For the First Quarter Ended March 31, 2019

The Management Discussion and Analysis of the Company’s Performance (the “MD&A”) is intended to present and analyze the Company’s results of operations and financial position at the end of the accounting period. Such

information may change in the future. The MD&A is primarily prepared in Thai. In cases where the content in the translation contains any conflict or is interpreted differently from the Thai version, the Thai version shall prevail.

For questions or queries, please contact our Investor Relations Department: Tel: +66 (0) 2080-4488 or Email: [email protected]

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Gulf Energy Development Public Company Limited Management Discussion and Analysis of the Company’s Performance for the First Quarter Ended March 31, 2019

1

Definition

Company Gulf Energy Development Public Company Limited

Group The Company, its subsidiaries, its associates and its joint ventures

EGAT The Electricity Generating Authority of Thailand

EPC Engineering, procurement and construction

GBL Gulf BL Co., Ltd., a power project operator under the subsidiary of GMP

GBP Gulf BP Co., Ltd., a power project operator under the subsidiary of GMP

GJP Gulf JP Company Limited, an associate in which the Company has a 40.0% equity

interest

GMP Gulf MP Company Limited, a subsidiary in which the Company has a 70.0% equity

interest

GNC Gulf NC Co., Ltd., a power project operator under the subsidiary GMP

GNS Gulf JP NS Co., Ltd., a power project operator under the associate GJP

GPD Gulf PD Co., Ltd., a power project operator under the subsidiary of IPD

GSRC Gulf SRC Co., Ltd., a power project operator under the subsidiary of IPD

GTS1 Gulf TS1 Co., Ltd., a power project operator under the subsidiary GMP




Gulf WHA MT Gulf WHA MT Natural Gas Distribution Company Limited, a joint venture in which the

Company has a 35.0% equity interest

GUT Gulf JP UT Co., Ltd., a power project operator under the associate GJP

GVTP Gulf VTP Co., Ltd., a power project operator under the subsidiary GMP

HITEC Thai Industrial Estate Corp., Ltd.

IPD Independent Power Development Company Limited, a subsidiary in which the Company

has a 70.0% equity interest

IPP Independent Power Producer in which capacity sold to EGAT is more than 90 megawatts

Mitsui Mitsui & Co., Ltd.

PEA The Provincial Electricity Authority

SPP Small Power Producer in which capacity sold to EGAT is more than 10 megawatts but

not more than 90 megawatts

TFRIC 4 Revenue recognition standard applied for the IPPs to record revenue from availability

payment as income from financial lease

WHA WHA Energy Co., Ltd.

YoY Comparison of performance between this accounting period and the previous year

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1. Executive Summary

1.1 Key events in Q1’19

Two SPP projects out of twelve SPP projects under GMP began commercial operations

In Q1’19, two SPP projects under GMP, with a total installed power generation capacity of 262.1

megawatts and total installed steam generation capacity of 35.0 tons per hour, began commercial

operation as scheduled. Each project has signed a 25-year PPA with EGAT to supply 90.0 megawatts of

electricity and has entered into long-term agreements to supply the remaining electricity and steam to

industrial users, per the details below.

Power project

Industrial estate/

Industrial park

Province

Installed capacity

Equity stake

Equity installed capacity Commercial

operation date Power Steam Power Steam

(Megawatts) (Tons/hour) (Megawatts) (Tons/hour)

GNLL2

WHA Industrial Zone, Rayong

Rayong 126.9 10.0 52.5% 66.6 5.2 Jan. 1, 2019

GNPM

WHA Industrial Zone, Saraburi

Saraburi 135.2 25.0 70.0% 94.7 17.5 Mar. 1, 2019

Total 262.1 35.0 161.3 22.7

As of the end of the 3-month period ending March 31, 2019, the Company has a total of ten SPP projects

under the GMP group in operation with an equity installed power generation capacity of 731.9 megawatts

and an equity installed steam generation capacity of 115.4 tons per hour.

The TTCIZ-01 Solar Power Project in Vietnam began commercial operation

On March 6, 2019, TTC Green Energy Investment Joint Stock Company, a joint venture in which the

Company indirectly holds 49.0% shares through Gulf International Holding Pte. Ltd (“GIH”) and which

operates the TTCIZ-01 Solar Power Project (“TTCIZ-01”), began supplying power to Vietnam Electricity

(“EVN”). The TTCIZ-01 project, located in Tay Ninh province, Vietnam, with an installed power generation

capacity of 68.8 megawatts, has a project cost of approximately USD 65 million and has a 20-year PPA

with EVN.

Increase in the proportion of shares in the TTCIZ-02 Solar Power Project in Vietnam

On December 21, 2018, GIH entered into a share purchase agreement and a shareholders’ agreement

with Thanh Thanh Cong Industrial Zone Joint Stock Company (“TTCIZ”) to increase the proportion of

shares held in TTC Energy Development Joint Stock Company, the operator of the TTCIZ-02 Solar Power

Project (“TTCIZ-02”) in Vietnam, from 49.0% to 90.0%. Share transfer to GIH was completed on February

1, 2019.

The TTCIZ-02 project, located in Tay Ninh proince, Vietnam, with an installed power generation capacity

of 50.0 megawatts, has a project cost of approximately USD 50 million and has a 20-year PPA with EVN.

The issuances and offerings of debentures not exceeding 10,000 million baht

With reference to the Extraordinary General Meeting of Shareholders dated November 27, 2018 in which

a resolution was passed to approve the issuances and offerings of debentures not exceeding 10,000

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million baht to fund normal operations which includes repurchasing the existing debenture and financing

the Group’s working capital, the Company appointed Bangkok Bank Public Company Limited,

Kasikornbank Public Company Limited and Siam Commercial Bank Public Company Limited as Joint

Lead Underwriters and Standard Chartered Bank (Thai) Public Company Limited as Co-underwriter. The

Company was assigned the company rating “A“ and the debentures were assigned the rating “A-“ by TRIS

Rating Company Limited. The Company offered the aforementioned debentures, valued 7,500 million

baht, to institutional investors and high net worth investors on January 23-24, 2019 and successfully

allocated the debentures on January 25, 2019. A considerable number of institutional and high net worth

investors expressed interest in the debentures and indicated their intention to subscribe in the offerings,

resulting in approximately 4 times oversubscription of the debentures. The debentures were allotted in a

series of four tranches with 3, 5, 7 and 10 years terms with an average interest rate of 3.3% per annum

and an average terms of 5.7 years.

The issuances and offerings of debentures not exceeding 20,000 million baht

With reference to the agenda proposed to the Annual General Meeting of Shareholders to approve the

issuances and offerings of debentures not exceeding 20,000 million baht to fund normal operations which

includes repurchasing the existing debenture and financing the Group’s working capital, on April 24, 2019,

the Annual General Meeting of Shareholders a resolution was passed to approve the issuances and

offerings of debentures not exceeding 20,000 million baht as proposed.

Annual dividend payment for 2018 of 1.20 baht per share

The Annual General Meeting of Shareholders dated April 24, 2019 passed a resolution for the dividend

payment in respect of the results of operation of the Company for the year ended December 31, 2018 at

1.20 baht per share out of the net profit and retained earnings for the total amount of 2,559,960,000 baht

or equivalent to 78.9% of the net profit based on the separate financial statements of the Company. The

dividend shall be paid to entitled shareholders whose names appear on the name list of shareholders as

of the Record Date of May 3, 2019, and the dividend shall be paid on May 21, 2019.

1.2 Progress of projects under construction and development

• As of March 31, 2019, two gas-fired SPP power projects

under GMP currently under construction, namely GNVR1 and

GNVR2, have progressed slightly faster than scheduled, with

progress at 98.8% - 99.6%. On May 1, 2019, GNRV1, with an

installed power generation capacity of 128.2 megawatts and

an installed steam generation capacity of 10.0 tons per hour,

began commercial operation as scheduled.

• The GCG biomass SPP, located in Chana district, Songkhla province with an installed power generation capacity of 25.0 megawatts, began construction as scheduled, with progress at approximately 50.0% at the end of March 2019. The project is expected to begin commercial operation in March 2020 as scheduled.

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• Progress on the construction of the NGD4 natural gas distribution project, to supply natural gas to industrial users in the WHA Eastern Seaboard Industrial Estate 4, reached approximately 90.0% as of March 31, 2019. The project is expected to begin commercial operation in June 2019.

• TTCIZ-02 Solar Power Project in Vietnam, with an installed power generation capacity of up to 50.0 megawatts, began commercial operation on April 19, 2019, earlier than the expected COD in May 2019.

• The Wind Power Project with an installed power generation capacity of up to 310 megawatts, located in Vietnam, is divided into three construction phases with scheduled commercial operation dates (“SCOD”) as follows: • Phase 1, up to 30 megawatts approx. SCOD in 2021

• Phase 2, up to 49 megawatts approx. SCOD in 2021

• Phase 3, up to 231 megawatts approx. SCOD between 2022-2023

The project is in the process of selecting contractors and applying for various permits, with construction expected to begin in Q3 of 2019.

• The 2,650-megawatt gas-fired IPP power project, GSRC, began construction on December 3, 2018, with progress at 25.6% as of the end of March 2019. The project has a scheduled commercial operation date between 2021 and 2022.

• The gas-fired Duqm Independent Power and Water Project (DIPWP), located in Oman with an installed power generation capacity of 326 megawatts, began construction in August 2018 with progress at approximately 15.9% as of the end of March 2019.

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1.3 Summary of performance for Q1’19

Key financial information Q1’18 Q4’18 Q1’19 Change

Mil Baht Mil Baht Mil Baht % YoY % QoQ

Revenue from sales and management fee 3,435.6 5,267.7 6,554.0 90.8% 24.4%

Share of profit from an associate and joint ventures 1,300.0 436.9 895.1 -31.1% 104.9%

Profit for the period 2,165.5 936.3 1,820.6 -15.9% 94.4%

Profit attributable to owners of the parent 1,707.7 553.3 1,292.7 -24.3% 133.6%

Less: gain (loss) on exchange rate 951.8 31.6 436.0 -54.2% 1,279.7%

Profit attributable to owners of the parent before gain (loss) on exchange rate

755.9 521.7 856.7 13.3% 64.2%

Share of profit (loss) from an associate – GJP exclude gain (loss) on exchange rate

694.8 452.4 654.9 -5.7% 44.8%

Basic earnings per share (baht) 0.80 0.26 0.61 -23.8% 135.2%

• Revenue from sales and services in Q1’19 totalled 6,554 million baht, a significant increase of

24.4% QoQ and 90.8% YoY, as a result of sequential commercial operation of power projects under

GMP, with two additional SPP projects, namely GNLL2 and GNPM (projects number 9 and 10 of 12),

with a total installed power generation capacity of 262.1 megawatts, beginning commercial operation

in the first quarter of 2019. In addition, projects which began commercial operation between 2016 and

2017 were able to sell more electricity to industrial users.

• Share of profit from the associate GJP before gain (loss) on exchange rate in Q1’19 totalled

654.9 million baht, an increase of 44.8% QoQ and a decrease of 5.7% YoY. QoQ profit increased

from fewer number of plants which had scheduled maintenance in Q1’19 (only 2 SPPs under GJP,

namely GNLL and GNK2) compared to Q4’18 in which four plants had scheduled maintenance (2

IPPs: GUT and GNS, and 2 SPPs: GNLL and GCRN). In addition, profit from the group of seven SPPs

(7 SPPs) increased QoQ in Q1’19 as a result of an increase in the Ft of 4.3 satang. Compared to the

same quarter in 2018, share of profit decreased by 5.7% which resulted from the lowered availability

payment rate (APR) of GNS (IPP) in accordance with its PPA with EGAT. In addition, although the 7

SPPs were able to sell 5.2% more electricity (YoY) to industrial users, allowing the power projects to

operate at even higher efficiency with lower rates of fuel consumption, the profit from the 7 SPPs

decreased slightly due to the impact of the increase in the average price of natural gas, from 237.29

baht/MMBTU in Q1’18 to 282.02 baht/MMBTU in Q1’19, or equivalent to 18.8% YoY, while Ft rates

increased by a mere 4.3 satang.

In addition to share of profit from GJP, Q1’19 is the first quarter that the Company started to recognize

share of profit from power projects in Vietnam, which is mainly from the TTCIZ-01 Solar Power Project.

The Company holds 49.0% in this project, which commenced commercial operation on March 6, 2019

and recorded 7.2 million baht in share of profit in Q1’19.

• Core profit in Q1’19 totalled 856.7 million baht, an increase of 64.2% QoQ and 13.3% YoY as

a result of significant improvement in the performance of the GMP group. In the first quarter of 2019,

GMP group recognized revenue from ten SPP projects which had begun commercial operation,

compared to revenue recognized from only eight projects in Q4’18 and six projects in Q1’18.

Furthermore, profit margins of the GMP group in Q1’19 were higher than the previous quarter and

the same quarter of the previous year as projects under the group were able to sell significantly

greater amounts of electricity and steam to industrial users, allowing plants to operate at higher

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efficiency with subsequent lower heat rates. In addition, share of profit from GJP increased 44.8%

QoQ and decreased 5.7% YoY as detailed above.

• Net profit attributable to the owners of the parent totalled 1,292.7 million baht, an increase of

133.6% QoQ and a decrease of 24.3% YoY, primarily due to the recognition of unrealized gain (loss)

on exchange rate resulting from the translation of USD-denominated loans to Thai Baht using the

exchange rate at the end of the period compared to that of the previous period. The Group recognized

unrealized profit of 436.0 million baht in Q1’19, compared to 31.6 million baht in Q4’18 and 951.8 million

baht in Q1’18, resulting from the fluctuation of the appreciation of Thai baht against USD in each quarter

(exchange rates at the end of Q1’19, Q4’18 and Q1’18 were 31.98, 32.61 and 31.41 baht/USD,

respectively).

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2. Analysis of the Group’s Results of Operations for the First Quarter of 2019

2.1 Revenue structure

Revenue structure Q1’18 Q4’18 Q1’19 Change


Revenue from sales 3,360.6 5,192.7 6,476.6 92.7% 24.7%

Revenue from electricity sold to EGAT and PEA 2,515.2 3,899.1 4,969.2 97.6% 27.4%

Revenue from electricity sold to industrial users 757.8 1,128.7 1,345.9 77.6% 19.2%

Revenue from steam sold to industrial users 87.6 165.0 161.5 84.3% -2.1%

Revenue from management fee 75.0 75.0 77.5 3.3% 3.3%

Share of profit from an associate and joint ventures 1,300.0 436.9 895.1 -31.1% 104.9%

Dividend income - 3.3 - N.A. N.A.

Interest income 42.0 46.3 44.9 6.8% -3.1%

Other income 6.2 1.3 2.1 -66.8% 54.0%

Total revenues 4,783.8 5,755.5 7,496.1 56.7% 30.2%

2.1.1 Revenue from sales

Revenue from sales in Q1’19 was 6,476.6 million baht, an increase of 1,283.9 million baht or 24.7%

QoQ from commencement of commercial operation of GNLL2 and GNPM in January 2019 and March

2019, respectively, in addition to the greater amount of electricity and steam sold.

Compared to Q1’18, revenue from sales increased by 3,116.0 million baht or 92.7% YoY from the

revenue recognition of ten SPPs under the GMP group which gradually commenced commercial

operation between 2017 and Q1’19 as opposed to revenue recognition of only six SPPs in Q1’18.

Furthermore, the volume of electricity and steam sold also increased.

Volume of electricity and steam sold by SPPs under GMP

Q1’18 Q4’18 Q1’19 Change

% YoY % QoQ

Ten SPPs

Volume of electricity sold to EGAT (gigawatt-hour) 865.2 1,189.5 1,518.7 75.5% 27.7%

Volume of electricity sold to industrial users

(gigawatt-hour) 241.8 349.9 419.3 73.4% 19.8%

Volume of steam sold (tons per hour) 47.6 74.3 80.8 69.9% 8.8%

2.1.2 Revenue from management fee

Revenue from management fee is revenue received from the Company providing management

services to its associate GJP. In Q1’19, the Company had a revenue from management fee of 77.5

million baht, an increase of 2.5 million baht or 3. 3% both QoQ and YoY as stipulated in the service

agreement.

2.1.3 Other income

Other income in Q1’19 was 2.1 million baht, a decrease of 0.7 million baht or 54.0% QoQ. Compared

to Q1’18, other income decreased by 4.1 million baht or 66.8% YoY as the Group recognized a gain

on disposal of available-for-sale investments in Q1’18.

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2.2 Cost and expense structure

Cost of sales structure Q1’18 Q4’18 Q1’19 Change


Cost of sales (2,484.3) (3,797.6) (4,957.6) 99.6% 30.5%

Fuel cost (1,981.9) (3,260.0) (4,126.8) 108.2% 26.6%

Operations and Maintenance (94.5) 92.1 (143.2) 51.6% N.A.

Depreciation (288.4) (408.5) (487.2) 69.0% 19.3%

Other costs (119.6) (221.3) (200.3) 67.5% -9.5%

Cost of service (45.7) (33.8) (33.0) -27.7% -2.3%

Total cost of sales and service (2,530.0) (3,831.3) (4,990.6) 97.3% 30.3%

Selling and administrative expenses (230.2) (458.1) (366.1) 59.0% -20.1%

Total operating costs and administrative expenses

(2,760.2) (4,289.4) (5,356.7) 94.1% 24.9%

2.2.1 Cost of sales

Cost of sales in Q1’19 was 4,957.6 million baht, an increase of 1,160.0 million baht or 30.5% QoQ

as overall the Company had an increase in volume of electricity and steam sold by power projects

under the GMP group in Q1’19 as well as the realization of cost of sales from GNLL2 and GNPM

which commenced commercial operation in January 2019 and March 2019, respectively. The

average natural gas price also increased slightly from 279.0 baht/MMBTU in Q4’18 to 282.02

baht/MMBTU in Q1’19. Operations and maintenance costs in Q1’19 stood at 143.2 million baht while

in Q4’18, cost was recorded at (92.1) million baht. This was due to an adjustment of maintenance

costs under the Long-Term Service Agreement (LTSA) for the power projects under GMP in Q4’18,

resulting in a reversal of the long-term maintenance cost overbooked in the past in this quarter.

Compared to Q1’18, cost of sales in Q1’19 increased by 2,473.2 million baht or 99.6% YoY as the

Company had an increase in volume of electricity and steam sold by ten power projects under the

GMP group which commenced commercial operation as opposed to only six power projects in Q1’18.

Furthermore, the average natural gas price increased significantly from 237.29 baht/MMBTU in

Q1’18 to 282.20 baht/MMBTU in Q1’19 or equivalent to 18.8% YoY, which impacted cost of sales

despite higher operation efficiency with lower fuel consumption rates by the power projects under

GMP.

2.2.2 Cost of service

Cost of service is a cost incurred from the Company providing management services to its associate

GJP. In Q1’19, cost of service was 33.0 million baht, a decrease of 0.8 million baht or 2.3% QoQ and

compared to Q1’18, cost of service decreased by 12.6 million baht or 27.7% YoY. The decrease was

caused by the Company’s ability to allocate personnel providing management services to GJP more

efficiently, resulting in the aforementioned lower cost.

2.2.3 Administrative expenses

In Q1’19, administrative expenses were 366.1 million baht, a decrease from 458.1 million baht in

Q4’18, or 20.1% QoQ as a result of the decreased activity of power projects in operation during the

year. The decrease was also a result of less advertising and marketing expenses in Q4’18.

On the contrary, compared to Q1’18, administrative expenses increased by 135.9 million baht or

59.0% YoY mainly from the increased activity of power projects in operation and under construction

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during the year in addition to expenses to support CSR activities and advertising and marketing

expenses, which are non-recurring.

2.3 Finance costs

Finance costs in Q1’19 were 634.3 million baht, an increase of 56.9 million baht or 9.9% QoQ, mainly

attributable to an increase in interest expense from the recognition of interest expenses after commencing

commercial operation of the SPPs under GMP from eight SPPs in Q4’18 to ten SPPs in Q1’19, as well

as from the interest expenses from the Company’s debentures which were issued and offered on January

26, 2019.

In comparison to Q1’18, finance costs increased by 164.0 million baht or 34.9% YoY from an increase in

interest expense from the recognition of interest expenses after commencing commercial operation of the

SPPs under GMP from six SPPs in Q1’18 to ten SPPs in Q1’19 in addition to the gradual increase in loan

drawdowns of the 12 SPPs.

Finance costs Q1’18 Q4’18 Q1’19 Change


Interest expense (402.3) (508.6) (572.9) 42.4% 12.6%

Guarantee fee (33.4) (22.6) (15.2) -54.5% -32.7%

Commitment fee (10.4) (28.4) (24.2) 132.3% -14.7%

Others (24.2) (17.8) (22.0) -9.0% 23.9%

Total finance costs (470.3) (577.4) (634.3) 34.9% 9.9%

2.4 Net profit and net profit before gain on exchange rate (Core profit)

Profit for the period Q1’18 Q4’18 Q1’19 Change


Gross profit 905.6 1,436.4 1,563.5 72.7% 8.8%

Gross profit from sales 876.2 1,395.2 1,519.0 73.4% 8.9%

Gross profit from services 29.3 41.2 44.4 51.5% 7.9%

Profit for the period 2,165.5 936.3 1,820.6 -15.9% 94.4%

Profit attributable to owners of the parent 1,707.7 553.3 1,292.7 -24.3% 133.6%

Less: gain on exchange rate from subsidiaries 346.7 33.6 196.4 -43.4% 484.5%

Less: gain on exchange rate from share of profit from the associate GJP

605.1 (2.0) 239.6 -60.4% N.A.

Profit attributable to owners of the parent before gain on exchange rate (Core profit)

755.9 521.7 856.7 -91.1% -91.1%

Gross profit margin (Sales) 26.1% 26.9% 23.5% -2.6% -3.4%

Gross profit margin (Services) 39.1% 54.9% 57.4% 18.3% 2.4%

2.4.1 Profit attributable to owners of the parent and Core Profit

Please see more details in 1.3

2.4.2 Gross profit

Gross profit in Q1’19 was 1,563.5 million baht, an increase of 127.1 million baht or 8.8% QoQ, and

an increase of 657.9 million baht or 72.7% YoY, respectively. The increase was caused primarily by

an increase of gross profit from the electricity and steam sales business of 123.9 million baht for

Q4’18 and an increase of 642.8 million baht from the same quarter in 2018. Nonetheless, gross profit

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margin from sales in Q1’19 was 23.5%, a decrease from 26.9% in Q4’18 and a decrease from 26.1%

in Q1’18 due to the impact from the higher average price of natural gas while Ft rates increased by

only 4.3 satang.

Gross profit from services increased by 3.3 million baht or 7.9% QoQ and by 15.1 million baht or

51.1% YoY as the Company was able to manage cost of services more efficiently, resulting in higher

gross profit margin from services in Q1’19 which stood at 57.4%, an increase from 54.9% in Q4’18

and from 39.1% in Q1’18.

2.4.3 Share of profit from an associate and joint ventures

Share of profit from an associate and joint ventures Q1’18 Q4’18 Q1’19 Change


Share of profit from the associate GJP 1,300.0 450.4 894.5 -31.2% 98.6%

Share of profit from the joint venture Gulf WHA MT (0.0) (0.3) (1.4) N.A. 393.1%

Share of profit from the joint venture for projects in Vietnam - 1.3 7.2 N.A. 451.9%

Share of profit from the joint venture for a project in Oman - (14.6) (5.2) N.A. -64.0%

Total share of profit from an associate and joint

ventures 1,300.0 436.9 895.1 -31.1% 104.9%

Less: gain on exchange rate from share of profit from the

associate GJP 605.1 (2.0) 239.6 -60.4% N.A.

Share of profit from an associate and joint ventures

before gain on exchange rate 694.8 452.4 654.9 -5.7% 44.8%

The Group recorded a share of profit from an associate and joint ventures in Q1’19 of 895.1 million

baht, an increase of 458.2 million baht or 104.9% QoQ and a decrease of 404.9 million baht or 31.1%

YoY, respectively. The majority of the share of profit was from the contribution from GJP, of which,

before effects from exchange rate, the Group’s share of profit in Q1’19 was 654.9 million baht, an

increase of 202.5 million baht or 44.8% QoQ and a decrease of 39.9 million baht or 5.7% YoY,

respectively (please see more details in 1.3).

From the table showing GJP’s volume of electricity, steam and chilled water sold, it appears that in

Q1’19, the IPPs had an increase in volume of electricity sold to EGAT of 15.3% QoQ and a decrease

of 5.3% YoY while the SPPs had a slight decrease in volume of electricity sold to EGAT compared

to Q4’18 and in the same quarter of 2018. Its electricity sales to industrial users increased by a mere

0.6% QoQ and increased by 5.2% YoY. Nonetheless, the volume of chilled water sold to industrial

users increased by 15.9% QoQ and decreased by 2.6% YoY industrial users used less chilled water.

The following table shows volume of electricity, steam and chilled water sold by power projects under GJP

Q1’18 Q4’18 Q1’19 Change

% YoY % QoQ

IPPs

Volume of electricity sold (gigawatt-hour) 1,936.2 1,591.0 1,833.8 -5.3% 15.3%

7 SPPs

Volume of electricity sold to EGAT (gigawatt-hour) 1,117.2 1,104.5 1,099.5 -1.6% -0.4%

Volume of electricity sold to industrial users

(gigawatt-hour) 274.1 286.6 288.4 5.2% 0.6%

Volume of steam sold (tons per hour) 31.0 30.6 31.1 0.3% 1.6%

Volume of chilled water (refrigeration tons per hour) 3,549.1 2,982.7 3,458.4 -2.6% 15.9%

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In addition to share of profit from GJP, Q1’19 is the first quarter that the Company started to recognize

share of profit from power projects in Vietnam, which is mainly from the TTCIZ-01 Solar Power

Project. The Company holds 49.0% in this project, which commenced commercial operation on

March 6, 2019 and recorded 7.2 million baht in share of profit in Q1’19.

2.4.4 Gain from exchange rate

Gain (loss) on exchange rate primarily results from loans for the power projects under the GMP group

that were denominated in a foreign currency (USD), in which the Group is required to record

unrealized gain (loss) on exchange rate incurred from translating long-term debts denominated in

USD to Thai Baht using the exchange rate at the end of the accounting period. In cases where the

Thai Baht appreciates against USD, the Group will record a gain on exchange rate, as the Group’s

amount of outstanding debts converted to Thai Baht is lower. The reverse will occur if the Thai Baht

depreciates against USD. However, since the long-term debts have not reached the due dates yet,

such gain (loss) on exchange rate is only recognized as unrealized gain (loss).

The exchange rates at the end of Q1’18, Q4’18 and Q1’19 were equal to 31.4063, 32.6148 and

31.9785 baht/USD, respectively (the Thai Baht in Q4’18 depreciated compared to Q1’18, and

appreciated in Q1’19 compared to Q4’18). As a result, the Group recognized a gain on exchange

rate in Q1’19 of 319.8 million baht, an increase of 770.3% QoQ from the gain on exchange rate of

36.7 million baht in Q4’18, and a decrease of 47.4% YoY from the gain on exchange rate in Q1’18 of

608.5 million baht.

Nonetheless, in this report, the Group separates effects from unrealized exchange rate of the

associate (mainly the associate GJP, which has similar effects from exchange rate as GMP) and of

subsidiaries (mainly GMP) attributable to the owners of the parent. This will explain the Group’s

performance accurately and appropriately. Details of which are set forth below:

Gain (loss) on exchange rate Q1’18 Q4’18 Q1’19 Change


Gain (loss) on exchange rate 608.5 36.7 319.8 -47.4% 770.3%

Less: Gain (loss) on exchange rate attributable to non-controlling interests 261.8 3.1 123.5 -52.8% 3,820.7%

Gain (loss) on exchange rate attributable to the owners of the parent 346.7 33.6 196.4 -43.4% 484.5%

Add: Gain (loss) on exchange rate attributable to share of profit from an associate 605.1 (2.0) 239.6 -60.4% N.A.

Total gain (loss) from exchange rate attributable to owners of the parent

951.8 31.6 436.0 -54.2% 1,279.7%

– Translation –


12

3. Analysis of the Group’s Financial Position as of March 31, 2019

The following table shows the Group’s financial position in respect to the consolidated financial statements

Financial position

As of December 31,

As of March 31,

Change

2018 2019

Mil Baht Mil Baht %

Cash, cash equivalents and short-term investment

18,793.5 19,136.6 1.8%

Trade accounts receivable 3,512.1 4,458.6 26.9%

Investments in an associate and joint ventures

21,658.9 22,129.6 2.2%

Advance payments for land and power plant construction

5,417.5 4,327.5 -20.1%

Property, plant and equipment, net

67,664.2 73,362.4 8.4%

Other assets

6,622.4 6,953.2 5.0%

Total assets 123,668.7 130,367.8 5.4%

Accounts payable for power plant construction

5,504.0 4,046.0 -26.5%

Interest-bearing debts due in 1 year

9,649.2 3,214.7 -66.7%

Interest-bearing debts due over 1 year

59,882.5 71,956.9 20.2%

Other liabilities

3,844.7 4,310.7 12.1%

Total liabilities 78,880.4 83,528.3 5.9%

Issued and paid-up capital

10,666.5 10,666.5

0.0%

Share premium

20,889.3 20,889.3

0.0%

Unappropriated retained earnings

3,923.9 5,216.6

32.9%

Other equity 1,057.2 905.7 -14.3%

Total equity attributable to owners 36,536.9 37,678.2 3.1%

Non-controlling interests

8,251.3 9,161.4

11.0%

Total equity 44,788.2 46,839.5 4.6%

Debt to equity 1.76 1.78 1.14%

– Translation –


13

3.1 Total assets

Total assets as of March 31, 2019 was 130,367.8 million baht, an increase of 6,699.2 million baht or

5.4% from December 31, 2018. The increase was attributable to the following factors:

• An increase in property, plant and equipment, net of 8.4% or 5,698.2 million baht, of which over 80%

was from from the construction of gas-fired SPP power projects under the GMP group and gas-fired

IPP power project, GSRC. The remaining 20% came from the construction work of TTCIZ-02 and GCG.

• An increase in trade accounts receivables of 26.9% or 946.5 million baht from the SPP power projects

under the GMP group in which two power plants began commercial operation in Q1’19.

• Goodwill of 351.0 million baht from the increase in investment in TTCIZ-02 from 49.0% to 90.0% in

which the difference between the consideration paid for the shares and the net assets acquired are

recorded as goodwill.

3.2 Total liabilities

Total liabilities as of March 31, 2019 was 83,528.3 million baht, an increase of 4,647.9 million

baht or 5.9% from December 31, 2018. The increase was attributable to the following factors:

• An increase in loans of 4,138.5 million baht mainly from the drawdowns for the construction of

power projects under the GMP group and the GSRC power project under the IPD group.

• Increase in debentures of 1,501.4 million baht from the issuances of new debentures of 7,492.8

million baht which offset with the repayments of existing debentures of 5,991.4 million baht (net

of transaction fees)

3.3 Total equity

Total equity as of March 31, 2019 was 46,839.5 million baht, an increase of 2,051.3 million baht or

4.6% from December 31, 2018 due to two main factors: • Equity attributable to owners of the parent increased by 1,141.2 million baht from the previous period

mainly as the Group recorded an increase in net profit for the period of 1,292.7 million baht.

• An increase in non-controlling interests of Mitsui group, WHA group, HITEC group and TTC Group from

the increase in paid-up capital of GMP as well as an increase in net profit of the power projects under

the GMP group, resulting in an increase of 910.1 million baht in non-controlling interests.

3.4 Capital structure

As of March 31, 2019, the Group had a debt to equity ratio of 1.78 times, an increase from 1.76 times

as of December 31, 2018 primarily as the Company is in the construction phase of its SPP power projects

under the GMP group and the GSRC power project, which has gradually made the loan drawdowns while

the Company has not recognized revenue and profit from such projects. Nonetheless, most of the

Company’s loans are under project finance agreements with the terms of over 20 years.

Documents

Gulf Energy Development Public Company Limited · Total 262.1 35.0 161.3 22.7 As of the end of the 3-month period ending March 31, 2019, the Company has a total of ten SPP projects