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Bangchak Corporation Plc (BCP), one of Thailand’s leading refinery and retail gasoline operators, reported healthy quarterly profits for its operations during the 1st quarter of 2024 with clean energy and its ‘natural resource’ business being the star performers.
BCP, which early last year completed its acquisition of Exxon Mobile’s refinery and retail operations (ESSO), said that the star performers for the 1st quarter of 2024 were the ‘Clean Power Business Group’ which reported 35% quarter-on-quarter (QoQ) and 66% year-on-year (YoY) growth in earnings before interest, tax, depreciation and amortization (EBITDA).
BCP said that this increase was due to a higher share of profit from investments in the USA natural gas power plants.
At the same time, the total revenue of the ‘Natural Resource Business Group’ hit a new record high, thanks to a significant growth in production and sales volume from a full-quarter performance recognition of the Statfjord field, which was acquired by OKEA in December 2023. The Hasselmus field that started commercial operations in Oct 2023 also contributed to the group’s performance.
OKEA is a subsidiary of BCP in Europe that undertakes exploration and production of oil & gas, is a key asset under the BCP umbrella.
Another area of growth seen by BCP was in its gasoline retail business unit, or the so called the ‘Marketing Business Group’ which set a new record with total sales volume across all channels reaching 3,541 million liters, growing by 5% QoQ and more than 100% YoY.
Key factors behind such growth included an extensive network of over 2,217 service stations nationwide, particularly in Bangkok and metropolitan areas, integrated marketing strategies, and increased sales from BSRC service stations after rebranding to Bangchak.
Bangchak’s acquisition of ESSO last year pushed its total retail network across Thailand to hit 2,217 stations from 1,353 stations it had before it undertook the 55 billion Baht acquisition of Exxon Mobile’s Thai operations that included the retail outlets and the refinery business.
The acquisition has helped Bangchak gain market share with current market share of the retail market at 29.2% against 28.8% seen in 2023. The aim is to raise the market share further as it looks to expand more stations across the country during 2024.
The acquisition of the refinery has also helped and Bangchak says that it wants to raise the capacity run to a new historic high after hitting one during the 1st quarter of 2024.
“In Q1/2024, Sriracha Refinery managed to raise its average crude run from 119,000 barrels per day in the previous quarter to 150,000 barrels/day, achieving a utilization rate of 86% and marking a historic quarterly high. The company targets to further boost the average crude run at Sriracha Refinery to 155,000 barrels/day within this year,” the company said in a statement to the Stock Exchange of Thailand (SET).
Gross Refining Margins (GRM), a benchmark for how well the refining company is doing, has also shown a tremendous improvement with GRM of Bangchak being far ahead of its peers.
In Q1/2024, Bangchak Group recorded total revenue from sales and services of 135.38 billion Baht (-5% QoQ, +68% YoY) and an EBITDA of 15.31 billion Baht (+48% QoQ, +39%YoY).
The Refinery and Oil Trading Business Group was mainly driven by Bangchak’s refineries, which achieved a record-high average crude run of 271,700 barrels/day. This was attributed to the increased capacity of 150,000 barrels/day at Sriracha Refinery, combined with a gradual increase in operating GRM and lower inventory loss.
Bangchak Group reported total profit attributable to owners of the parent of 2.44 billion Baht (+>100% QoQ, -11% YoY) and earnings per share of 1.68 Baht.
