SGP predicts 10% gains in LPG sales
SET-listed Siamgas and Petrochemicals Plc (SGP), Thailand’s second-largest liquefied petroleum gas (LPG) trader, expects 2019 revenue to grow by 8-10% on sales volume of 3.86 million tonnes.
This year SGP aims for LPG sales volume of 3.51 million tonnes.
Jintana Kingkaew, deputy managing director and chief financial officer of SGP, said the growth will come from a new capacity expansion for trade in Myanmar and Malaysia, where an investment in LPG storage will begin operating in the third quarter of 2019.
SGP also plans to expand sales volume in Bangladesh and Laos next year.
“The LPG overseas market has doubledigit growth every year, mainly in Bangladesh and China, as well as Southeast Asia,” Ms Jintana said.
She said SGP’s revenue from overseas has gradually grown to be larger than domestic revenue. This year overseas sales makes up 68.6% of total revenue, up by 6.2 percentage points from 2017.
SGP expects overseas sales will represent 75% of revenue soon, with domestic holding at 25%.
Ms Jintana said SGP estimates the LPG price in Saudi Aramco’s contract price market in 2019 will be higher at US$600 per tonnes, compared with $542-545 per tonne this year.
SGP’s total revenue this year is expected
to reach its 65-billion-baht target, up 10% from 59 billion in 2017.
Revenue for the first nine months tallied 51.2 billion baht, up by 21.5% from the same period last year.
LPG sales volume rose by 10% to 3.51 million tonnes from January to September this year.
The local LPG market has seen fierce competition for several years, dating back to when global oil prices were higher and many motorists shifted to use LPG, replacing oil. In response, LPG traders expanded their businesses into storage, retail and logistics systems.
When oil prices collapsed in 2014,
LPG demand declined in the automotive sector, leaving the bulk of consumption to households.
To avoid shrinking LPG demand at home and a fluctuating price, SGP took over a 230-megawatt power plant in Myanmar worth $48 million (1.58 billion baht).
The combined-cycle power plant gives SGP higher income and return on investment, adding value to the company. This acquisition was made through Siam Gas Power, a wholly owned subsidiary registered in Singapore.
SGP shares closed yesterday on the SET at 9.40 baht, up 10 satang, in trade worth 55.8 million baht.