Partner Content
Bangchak Group disclosed its performance in the first quarter of 2023 with sales and services revenue of 80.38 billion baht.
“For the second quarter of this year, the crude oil price is expected to continue facing pressure due to concerns that the economy is heading for a recession, particularly in Europe,” said Chaiwat Kovavisarach, the group’s Chief Executive Officer and President of Bangchak Corporation.
“However, it was also driven by growing supply tightness concerns after OPEC+’s decision to cut oil production,” he said.
Furthermore, the refining margin of cracking refineries in Singapore is expected to decline from the first quarter, he said.
Volatile energy prices and looming concerns over the global economic slowdown, which could affect oil consumption, also means that the group will continue to closely monitor energy prices, he said.
The group’s sales and service recorded a revenue of 80.38 billion baht in the first quarter of 2023, which represents a decrease of 5% from the previous quarter but rose 16% from the same period in 2022.
The group’s earnings before interest, tax, depreciation, and amortization (EBITDA) was 10.99 billion baht, which represents a 58% increase from the previous quarter, but decreased by 20% when compared to the same period last year.
Net profit attributable to owners of the parent was 2.74 million baht, an increase of more than 100% from the previous quarter but decreasing 37% from the same period in 2022, representing earnings per share of 1.91 baht.
The Refinery and Oil Trading Business Group recorded the highest-ever production of 124.7 thousand barrels per day (KBD).
The Natural Resources Business and New Business Development Group, via Norway’s OKEA ASA, recorded a new-high revenue, with sales volume exceeding the production from the lifting of two cargoes from Draugen field and full-quarter revenue recognition from Brage field, which was acquired from Wintershall Dea.
The Refinery and Oil Trading Business Group recorded an EBITDA of 4.03 billion, an increase of 83% from the previous quarter, but down 20% from the first quarter of 2022.
During the first quarter, Bangchak Refinery recognized gains from the forward contracts of crude oil and oil products (including gains on fair value measurements per the accounting standards) improved from the previous quarter since crack spreads of contracted products tended to decline.
Operating gross refining margin (GRM) decreased from US$14.68 per barrel in the fourth quarter of 2022 to $11.44 per barrel. The decrease was due mainly to the lower crack spreads of diesel products in line with global market developments.
Diesel is the product with the highest yield for Bangchak Refinery. In this quarter, there was an inventory loss of $4.41 per barrel, or equivalent to 1.69 billion, decreasing from the previous quarter due to a global crude oil price adjustment at a lower rate.
The Power Plant Business Group had an EBITDA of 852 million baht, representing a decrease of 15% compared to the previous quarter and a decrease of 72% compared to the first quarter of 2022.
During the first quarter of 2023, the electricity sales volume of solar power plants in Japan and Thailand recorded an increase (17% and 4% from the previous quarter respectively) due to the higher irradiation from a seasonal factor.
Similarly, wind power projects in Thailand saw an increase in electricity production by 38% compared to the previous quarter, attributed to higher wind capacity.
Additionally, the share of profit from Combined Cycle Gas Turbine (CCGT) power in the United States of America, started to be recognized in March 2023.
However, the hydroelectric power plants in Laos have temporarily halted electricity production in this quarter to prepare for selling electricity to Vietnam Electricity (EVN).
The Natural Resources Business and New Business Development Group recorded an EBITDA of 5.41 billion baht, an increase of 44% from the previous quarter, and 27% from the first quarter of 2022.
The increase was due to the sales volume of OKEA which significantly expanded over 100% from the previous quarter, owing to 2 lifting cargoes from Draugen field and full-quarter revenue recognition from Brage field, which was acquired from Wintershall Dea.
As a result, OKEA achieved its highest revenue record in this quarter while continuing to seek opportunities for continuous business expansion.
Most recently, OKEA signed an agreement to acquire 28% of the working interest in the Statfjord petroleum field on the Norwegian Continental Shelf (NCS).
This acquisition is expected to increase the combined production capacity to 40,000 barrels of oil equivalent per day, compared to the previous level of 20,000-25,000 barrels of oil equivalent per day.
The transaction is expected to be completed by the end of the fourth quarter of 2023.
