Financial Lease accounting standard implemented at Glow IPP.
Starting 2014, Thai accounting standards started applying IFRS standard corncerning Financial Lease. The only operating asset of Glow Group to apply this accounting standard is Glow IPP, a 713 MW gas-fired IPP in which Glow holds 95% stake. The major changes in accounting are recording of Properties, Plants and Equipment (and related depreciation) and revenue recognition of the Availability Payment (reclassificed as Financial Lease Income).
Mr.Suthiwong Kongsiri, CFO of Glow, commented: “The changes are merely accounting adjustment which has no impact to cash flow or ability to distribute dividend from Glow IPP. We still analyze our operating performances based on the old accounting standard, and maintain dividend policy to pay not less than 50% of Normalized Net Profit excluding adjustments for Financial Lease since the cash flow from operation from Glow IPP stays unchanged despite change in revenue recognition method.”
EBITDA and NNP of the first quarter 2014 increased by 6% and 3% respectively.
For the first quarter of 2014, Glow Group (“Glow”) posted:
- Consolidated total revenue of THB 18,197 million,
- Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of THB 4,734 million,
- Net Profit of THB 1,582 million, and
- Normalized Net Profit (“NNP”) (net profit excluding foreign exchange gains/losses and deferred tax incomes/expenses and excluding adjustments for Financial Lease accounting standard) of THB 2,076 million.
The EBITDA and NNP of the first quarter of 2014 increased by 6% and 3% year-on-year respectively.
Solid operation from both Cogeneration and IPP business
Mr. Esa Heiskanen, CEO of Glow, commented: “We had solid operation in the first quarter of 2014. GHECO-One, a 660 MW coal-fired IPP in which we hold 65% stake, continued to show excellent performance. Except for the two weeks planned outage that we had in January, GHECO-One has operated very smoothly throughout the quarter. HHPC, a 152 MW hydro plant in which we hold 67.25% stake, resumed electricity sales to EGAT in February, after repair of transmission tower damage in September 2013. HHPC sales volume of February and March 2014 is already higher by 20% comparing to the first quarter of 2013. For Cogeneration business, sales volume and operating margin continued to be stable, despite the planned maintenance of CFB 1 and 2, 150 MW coal-fired cogeneration units, and Phase 5, a 382 MW gas-fired cogen unit.”