Gulf Energy rises 1.5 percent on solid Q4 results from German wind farm

Gulf Energy Development (GULF), one of Thailand’s top private power producers, reported fourth-quarter core profit of 1.24 billion baht, driven by revenue from its investment in Borkum Wind Farm in Germany. The results exceeded some forecasts and pushed the share price to rise 1.49 percent to 34 baht Tuesday morning.

The fourth-quarter profits were up 85 per cent year-on-year, beating the prediction from KGI securities by 10.3 percent, but in line with the Bloomberg consensus. The company also announced a dividend per share of 0.38 baht to be paid on April 28, implying a dividend yield of 1.1 per cent.

Gulf’s full-year core profit stood at 4.48 billion baht, up 27.6 per cent from 2019, mainly from the Borkum Wind Farm project’s performance in the fourth quarter, said chief financial officer Yupapin Wangviwat, adding that the company benefited from sharp drop in the price of natural gas, a key input, and from dividend income from its stake in Intouch Holdings.

The company has held half of the shares in Borkum Wind Farm, in the North Sea off Germany, since September 2020. The project has an installed capacity of 464.8 megawatts.

Gulf net profits dropped in 2020 to 4.28 billion baht, down 12.4 percent from 2019. This was attributed to an exchange-rate gain of 1.38 billion baht in 2019 followed by an exchange-rate loss of 196 million baht the following year.

“The recording of such loss on exchange rate is an accounting transaction which has no impact on the cash flow and performance of the group at all,” said Yupapin.

Looking ahead, Gulf expects a 50-percent revenue growth in 2021 with help from an increase in the production capacity from 6,409 megawatt to 7,903 megawatt.

An analyst at KGI securities forecast Gulf’s core profit in the first quarter of 2021 to grow year-on-year and hit all-time high quarterly profits due to consolidation of Borkum Wind Farm and lower operational expenses.

KGI maintains an ‘Outperform’ rating on Gulf with a 2021 target price of 38.25 baht.

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