Revenue dip for GGC after tough 3 months

SET-listed Global Green Chemicals (GGC) posted a revenue dip in the first half of 31% year-on-year to 6.11 billion baht on bearish business during April to June.

GGC posted a net loss of 16 million baht from January to June, compared with a net profit at 131 million in the same period in 2018.

The company’s statement reported total revenue in the second quarter of 3.29 billion baht, down by 22% from the same quarter last year.

Earnings before interest, taxes, depreciation and amortisation for the period was 88 million baht, a 36% decrease year-on-year.

Witoon Suewatanakul, GGC’s managing director, said this was primarily the impact of glycerine prices declining as a result of higher global glycerine supply.

In addition, the biodiesel blending rate has been raised by the majority of biodiesel producers worldwide, resulting in increased glycerine volume (a byproduct of methyl ester).

Biodiesel B100 profitability was pressured by high competition and a low crude palm oil price, he said.

According to GGC, overall palm oil production and crude palm oil inventory in the second quarter remained high in both domestic and international markets, a consequence of lower crude palm oil and crude palm kernel oil prices.

“Under these circumstances, the government maintained the biodiesel mandated at B7 in the second quarter, but it added B10 and B20 as fuel options by subsidising the retail prices to be lower than B7 by one baht and five baht per litre, respectively,” said Mr Witoon.

For B10 and B20, many Thaimade pickups are compatible with those fuels and the government has promoted the use of biodiesel to customers.

The government has delegated the Electricity Generating Authority of Thailand (Egat) to purchase 360,000 tonnes of crude palm oil continuously for power generation.

Egat has bought 220,000 tonnes so far.

For the natural fatty alcohols market, the second quarter brought improvements because the price was more attractive than synthetic fatty alcohols because of decreases in the crude palm kernel oil price.

Supply from natural fatty alcohols and synthetic fatty alcohols were tight following the announcement of a permanent shutdown of a synthetic fatty alcohols plant in Europe and temporary shutdown of fatty alcohols plants in China.

The shutdown was a result of stricter safety controls and more stringent environmental regulations.

GGC runs two plants — methyl ester and fatty alcohols — located at Map Ta Phut Industrial Estate, Rayong.

GGC is a subsidiary of PTT Global Chemical, which holds a 72.3% stake in GGC.