In 2012, Thailand witnessed steady economic growth following the quick rebound of the private sector from the ravaging floods in late 2011, propelled by the government’s economic stimulus package and the optimal financial conditions. In the meantime, despite the impact of the global economic downturn that had spilled over to the Thai economy since the second half of the year, its repercussions were limited to exports and the export-oriented manufacturing sector. As a consequence, this opened opportunities for strong businesses with capabilities to drive growth to continue to prosper, making it a successful year for business corporations prepared and equipped with operational strategies that reflected the prevailing circumstances.
Regarding the energy situation, specifically electricity, electricity consumption in 2012 totaled 173,133 million units, an increase of 14,233 million units or 8.96%, resulting in the peak power demand to reach 26,121 MW compared to 23,900 MW in 2011, up 2,221 MW or 9.29%.
Electricity Generating Public Company Limited or EGCO Group is committed to developing its business to achieve sustainable growth and progress as Thailand’s first independent power producer. The Group attaches significance to maximizing the efficiency of existing power plant operations and constantly seeking investment opportunities by means of developing new projects and acquiring projects from private power producers in Thailand and the ASEAN region. The goal is to increase income and market shares as the leading energy company along with creating sustainable economic value for all stakeholders.
In 2012, EGCO Group was successful in expanding its investment in Thailand and ASEAN, as well as entering into new businesses. The Group acquired stakes in commercially operating assets, including 5 solar power plants, namely “SPP2” in Saraburi province, “SPP3” in Srisaket province, “SPP4” in the boundary between Srisaket and Ubon Ratchathani province, “SPP5” in Roi Et province, and power plants phase 1-3 operated by G-Power Source Company Limited (“GPS”) in Nakhon Sawan and Chainat province. The total installed capacity is 46 MW Equity. The Group also acquired more stakes in a ASEAN power plant, including the Quezon coal fired electricity generation plant in the Philippines, with an additional installed capacity of 230 MW Equity. In addition, it invested in two other businesses - the Semi-solid Palm Oil Biodiesel Plant in Rojana Industrial Park, Rayong province, and the Manambang Muara Enim (MME) coal mine in Indonesia.
Four projects under construction include the very small wind power plant, namely, “Theppana” in Chaiyaphum province, the solar power plant “GPS” located in Petchaboon provice, the solar power plant project “Solarco” including six power plants in Nakhon Pathom and Supanburi province, and the “Hat Yai Municipal Waste Power Plant Project” in Songkhla province. The total capacity of these projects is 41 MW Equity.
Three projects under development include three Small Power Producer (SPP) projects – “TJ Cogen” power plant project in Pathum Thani province, “TP Cogen” and “SK Cogen” in Ratchaburi province with a total installed capacity of 375 MW.
EGCO Group currently runs 20 operating plants and 10 projects under construction and development in Thailand and overseas with a total installed capacity of 5,288 MW Equity. The total contracted capacity with EGAT and PEA under long-term PPA is 3,922 MW. This resulted in EGCO Group’s market share in Thailand of 12% from a total installed capacity of 32,600 MW.
In 2012, the EGCO Group recorded better-than-expected operating results. Operating profit before FX and accounting gains on business combination was 6,060 million baht, a rise of 759 million baht or 14% from the previous year. Of which, 625 million baht came from the power business whereas the remaining 134 million baht came from other businesses. The EGCO Group’s total assets totaled 109,324 million baht, an increase of 36,368 million baht, or 49.85% compared to the year before. EGCO’s Board of Directors will propose to the shareholders in the 2013 Annual General Meeting to consider the dividend payment for the year was 6 baht per share. The Group pledges to retain the dividend distribution at an appropriate and satisfactory level.
Aside from its relentless commitment to driving business growth and prosperity, the EGCO Group realizes that environmental and social sustainability is essential to the survival and success of almost every business, thereby conducting business in alignment with the vision “To contribute to the environment and social development”. To accomplish the objectives, the Group stresses the importance of environmental stewardship to minimize its operating impacts. The Group also collaborates with the government and private sectors as well as the communities to carry out projects dedicated to developing society and the environment encompassing three areas: the promotion and development of quality of life in the community, the promotion of learning about energy and the environment among youths, and natural resources conservation. In addition, EGCO encourages its employees to take part in the efforts as a means to develop their potential and capabilities along with inculcating public-mindedness, enabling them to be accountable for the organization and society as a whole. The demonstrated commitment gained EGCO Group numerous awards and recognition from various institutions in 2012. Examples included the Excellent Corporate Governance Performance in 2012 Award by IDO; an Excellent (Top 100 Scores) for the 4th executive year from the Annual General Meeting (AGM) conducted by Thai Investors Association; Investors’ Choice Award 2012 from the Securities and Exchange Commission and the Stock Exchange of Thailand as a corporation that valued shareholders’ benefit; and SET Awards for the listed companies with the market capitalization over 10,000 million baht, hosted by the Stock Exchange of Thailand (SET), and the Finance and Bank Magazine: Outstanding Corporate Social Responsibility Awards, and Top Corporate Governance Report Awards.
Other power plants under the EGCO Group also won scores of awards and recognition from different institutions. For instance, Khanom Power Plant obtained the Outstanding Corporate Governance Award 2011 as a 10 million baht registered capital company from the Ministry of Commerce and the National Safety Award for the 13th consecutive year from the Ministry of Labour. Likewise, Roi Et Green Power Plant received the National Safety Award for the 3rd consecutive year from the Ministry of Labor. All the achievements resulted from the continued support of all concerned parties including shareholders, customers, business partners, the community, and society that has enabled the EGCO Group to operate efficiently and successfully over the years. On behalf of the Board of Directors of Electricity Generating Public Company Limited, I wish to express appreciation to all shareholders and other involved parties for your continued trust and cooperation that have rendered our success today. This inspires and encourages the management as well as each and every employee to drive the company forward to achieve even further success, creating better returns for shareholders through the practice of good corporate governance and adherence to ethics and fairness to all stakeholders. We believe that by doing so, the EGCO Group will prosper as will Thai society in the years to come.