WP expects LPG sales to increase 9.2% this year

SET-listed WP Energy, Thailand’s second-largest liquefied petroleum gas (LPG) trader, expects its 2022 sales to grow by 9.2% to 765,000 tonnes, increasing from a low baseline as the country’s economy reopens, says deputy chief executive Noppavong Omathikul.

Sales for 2021 are estimated at 700,000 tonnes.

WP plans to focus more on downstream LPG trade in 2022 to earn extra revenue as well as continue its new businesses, especially rooftop solar panels.

The company diversified into the rooftop solar energy business in early 2021 by teaming up with business partners. The cooperation enabled WP, through its subsidiary WP Sollar Co, to achieve electricity generation capacity of five megawatts.

Mr Noppavong plans to increase the capacity to 20MW in 2022.

In the LPG segment, WP diversified into a gas cylinder repair business last October by buying Thai Gas Cylinder Co for 79 million baht. The move is expected to help WP cut its operations expenses.

WP set a long-term goal of increasing its gross profit from non-LPG businesses, including rooftop solar panels, to 30% of total profits, up from 2% in 2021.

The company intends for profit from the LPG trade to decline to 70%, down from 98%, he said.

To achieve the goal, WP plans to allocate capital spending worth 400500 million baht, spending 100 million to develop the power business and 300400 million on the LPG business.

“We believe the business outlook in 2022 should not be worse than the situation in the fourth quarter of 2021, given that the new Covid-19 variant Omicron is not a virulent strain causing severe symptoms like the Delta variant,” said Mr Noppavong.

The company is drafting a long-term business plan based on current conditions, scheduled for completion in 2022.

WP’s revenue declined the past five years by an average of 7.6% annually to around 11 billion baht in 2021, down from 14.7 billion in 2018 and 16.3 billion in 2016.

In the third quarter of 2021, earnings from LPG sales fell by 13% to 166,158 tonnes, down from 191,860 tonnes in the same period of 2020, because of the third wave of Covid-19 flaring up in early April.