WP eyes comeback from string of losses

SET-listed liquefied petroleum gas (LPG) trader WP Energy expects to become profitable in 2019 after annual balance sheets remained in the red during 2014-18.

WP’s financial performance will resume profitability for the first time in six years, said deputy chief executive Noppavong Omathikul.

He said WP also aims to make a 2019 dividend payment to all shareholders after discontinuing payments roughly a decade ago.

“We sold a plot worth 130 million baht, expecting to offset all losses,” Mr Noppavong said. “Growth in the LPG business in 2019 will come from the new synergy with TGC [Thai Gas Corporation].”

Through a subsidiary, WP Gas, WP last October acquired 80% of TGC in a deal worth 168.8 million baht.

Once WP performs profitability, the company plans to expand LPG sale agents in the North and Northeast and diversify into new businesses like renewable energy with a planned budget of 600 million baht, Mr Noppavong said.

WP is budgeting 500 million baht in 2019 to double existing LPG terminal capacity in Chachoengsao’s Bang Pakong district.

WP operates five wholly owned LPG terminals in four provinces: Chachoengsao, Lampang, Samut Songkhram and Khon Kaen.

The capacity expansion will start development in 2019 and come on stream in 2020. Total capacity of LPG terminals will reach 20,000 tonnes a year, up from 10,000.

“WP has been very keen on the expansion of LPG business over the last three years,” Mr Noppavong said.

A budget of 100 million baht is earmarked for new asset acquisition. WP is interested in LPG cylinder production to support its core business.

“WP will conclude the new acquisition deal by December,” Mr Noppavong said.

WP is the third-largest LPG trader in Thailand after PTT and Siamgas and Petrochemicals.

In 2019, WP’s total sales volume sales of LPG are expected to grow by 3% to 840,000 tonnes in line with overall economic growth in the country.

Demand for LPG as motor fuel continues to decline as other fuels are more affordable for Thai motorists.

Two sectors that drive WP’s sales volume are cooking and industrial gas.

“They offset the bearish sales of LPG for cars,” Mr Noppavong said. “Cooking gas accounts for WP’s revenue at 56% in 2019, up from 43% in a year before and the industrial segment represents 27% in 2019, up from 21% in 2018.”

Motor fuel is expected to drop from 30% of WP’s total sales in 2018 to 23% in 2019, he said.

Mr Noppavong said WP is conducting a feasibility study on LPG re-exports to neighbouring countries where demand has sufficient potential to make it worth the effort.

WP plans to make the first shipment of 1,000 tonnes to Myanmar some time this.

The company will also focus on safety management at LPG facilities across the country, Mr Noppavong said.