GLOW ENERGY PLC. - listed...

GLOW ENERGY PLC.

Date : 13 May 2015

Results for 1Q/2015

Disclaimer

The views expressed here may contain information derived from publicly available sources that

have not been independently verified. No representation or warranty is made as to the accuracy,

completeness or reliability of the information. Any forward looking information contained in this

presentation has been prepared based on number of assumptions which may be incorrect and/or

not properly represent actual situation incurring in the future. The actual information contained in

this presentation is for the purpose of illustration and presentation only. Should there be any

discrepancies with audited/reviewed financial statements, annual report, and other official filings to

SEC, the information presented in such documents should be relied upon as official information.

This presentation should not be relied upon as a recommendation or forecast by Glow Group.

This presentation shall not be construed as either an offer to sell or a solicitation of an offer to buy

or sell shares in any jurisdiction.

2 GLOW GROUP – Results of 1Q/2015 – 13/05/2015

HEADLINE

COMMENTS



Headline Comments • NNP reported at 2,286 MTHB for 1Q15, being 10% increase YoY and 13% increase QoQ.

• Robust operational performance.

• High maintenance activity (including Gheco1 and CFB3).

• Material Other Income items (Doosan Settlement: 733 MTHB at Gheco1 level; CFB3 Insurance: 250

MTHB).

• NNP excluding these Other Income items would have been 1.7 billion THB.

• Cogeneration Business

• CFB3 Insurance

• Volumes down slightly (power -1% YoY;

steam -4% YoY including as a result of

maintenance/tie-in activities for a major

customer).

• Still fairly stable spread environment

(notwithstanding drop in oil prices).

• 10 Satang Ft reduction in January; Ft

back to the Q1 2014 level.

• Gas-to-power spread down slightly YoY;

Coal-to-power spread up.

• Higher generation from CFB’s,

notwithstanding CFB3

scheduled/unscheduled maintenance.

• Gheco-One

• Doosan Settlement

• Maintenance (completed on schedule)

resulting in lower availability payments

for the quarter, lower energy margin and

higher maintenance costs.

• Strong availability and high dispatch

since re-commissioning.

• GIPP

• Significantly lower dispatch (60% YoY),

somewhat lower availability.

• HHPC

• Lower dispatch (2014 higher because of

2013 transmission line incident).

GLOW GROUP – Results of 1Q/2015 – 13/05/2015 5

RESULTS

OVERVIEW


• Financial Lease

• From 1Q/2014, Thai GAAP has started adopting a new accounting standard with respect to Financial Lease. In our view, the

changes resulting from the adoption of this new accounting standard do not affect cash flows and are therefore not directly

operations-related. We therefore show results excluding the impact of Financial Lease, except when mentioned.

• Normalized Net Profit

• Glow’s management focuses on core profitability. Therefore, we consider Normalized Net Profit (NNP) as our key profitability

metric. NNP is defined as Net Profit, excluding (i) Net Unrealized FX Gains/Losses, (ii) Deferred Tax Income/Expense, and

(iii) the impact of the Financial Lease treatment. NNP is also the metric we focus on in considering our dividend payments.

• Unrealized FX Gains and Losses.

o Glow IPP, GHECO-One and HHPC have outstanding loans in USD which will be repaid with USD linked cash flows.

o Under Thai GAAP the outstanding USD loan is converted at year-end to THB at the then current exchange rate. Any

difference in the outstanding loan amount in THB resulting from a change in exchange rate compared to last year

leads to an Unrealized FX Gain (THB appreciation) or Loss (THB depreciation).

o Since the USD loans in Glow IPP, GHECO-One and HHPC are served by USD linked cash flows, these Unrealized

FX Gains/Losses should, in Glow’s view, be ignored from an economic point of view.

• Deferred Taxes

o From 1Q/2013, Thai GAAP has started adopting Deferred Tax accounting practices. In our view, Deferred Tax

Income/Expense is an accounting item resulting from differences in accounting and tax book values, and is therefore

not directly operations-related.

General Comments


1Q/2015 Headline P&L 1Q2015 Act 1Q2015 Act without lease

with lease without lease vs with lease

Revenue 15,999 16,256 257

Gross Margin 6,001 6,257 257

EBITDA 4,696 4,953 257

Depreciation 1,104 1,188 84

EBIT 3,592 3,765 173

Exchange Gain(Loss) 109 109 0

- Realised exchange gain / loss (69) (69) 0

- Unrealised exchange gain / loss 178 178 0

Profit Before Tax 2,925 3,098 173

Corporate Income Tax 429 429 (0)

Deferred Tax (4) 25 29

Net Profit 2,183 2,319 137


1Q/2015 P&L Comparison (without lease) Difference

2015 Act 2015 Act

2014 Act 2015 Act vs 2014 Act vs 2014 Act (%)

Revenue 18,197 16,256 (1,941) -10.7%

Gross Margin 5,762 6,257 495 8.6%

EBITDA 4,734 4,953 219 4.6%

EBIT 3,492 3,765 272 7.8%

Exchange Gain(Loss) 191 109 (82) (42.8%)

- Realised exchange gain / loss 14 (69) (82) -596.5%

- Unrealised exchange gain / loss 177 178 1 0.4%

Profit Before Tax 2,835 3,098 262 9.2%

Corporate Income Tax 262 429 167 63.6%

Deferred Tax 33 25 (9) (26.4%)

Net Profit 2,177 2,319 142 6.5%

Normalised Net Profit 2,076 2,286 210 10.1%


SELECTED

KEY DRIVERS

1227

897

YTD Mar/2014 YTD Mar/2015


IPP Availability and Dispatch IPP Business

GHECO1 Dispatch (GWh)

HHPC Dispatch (GWh)

1291

510


118 98


GIPP Dispatch (GWh)

-60.5%

GIPP Availability

98.1% 95.36%


GHECO1 Availability

89.25% 56.26%


1,272 (-1.5%)

796 (-37.4%)

963 (+21.0%)

1,292 509 (-47.1%)

414 415 463

360 467 445 458

126 212

272

426

265

83 75

351

0

200

400

600

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15

310

438 479 467 484 475 492 471 448 475 473 450

43

364

490

0

100

200

300

400

500

600


1,426 (+16.3%)

1,411 (-1.1%)

1,398 (-0.9%)

1,227 897 (-35.8%)

226 (+92.6%)

119 (-47.5%)

146 (+22.9%)

117 98 (-33.1%)

0

43

74 72 77 77 65

26 28

68

43 35

10

26

61

0

20

40

60

80

100


Extensive periods of reserve shutdown during 1Q 2015 (Unit1: 39 days and Unit2: 42 days).

Planned maintenance during Jan-Feb/2015.

Transmission Line outage in 4Q/2013 and restoration works completed in

Jan/2014.

Planned maintenance during 27/Jan-05/Feb/2015.

-26.9%

-16.9%

670

732


GLOW GROUP – Results of 1Q/2015 – 13/05/2015

592

700


12

Cogen Main Assets Generation Volumes Cogen Business

CFB 1-3 Dispatch (GWhe)

+18.3%

Phase5 Dispatch (GWhe)

810 (+21.0%)

726 (-10.3%)

813 (+12.0%)

670 732 (-10.0%)

233

159

278 276 269 265 241 258

227 273 266 275

232 210

291

0

50

100

150

200

250

300

350


CFB2: 6 days of unplanned outages in Feb/2015

CFB3 :Load gear incident during 10/Jan/2014 – 12/Jul/2014 (70% load); 32 days scheduled/unscheduled maintenance during Jan

to Feb.

709 (+19.8%)

806 (+13.7%)

704 (-12.7%)

591 700 (-0.06%)

259 235

97

205

267 237

264 275 267 263

215 226 279

223 199

0

50

100

150

200

250

300


1) Average steam conversion - Gas is 3.95 ton/MWheq and Average steam conversion – Coal is 2.90 ton/MWheq

+9.4%

8-day planned minor maintenance (27/Feb-06/Mar/2015).

Major maintenance in Mar/2014.

1839

1762


1265

1247



Industrial Customer Volumes Cogen Business

IC Power Sales (GWh)

IC Steam Sales (ktons)

1,284 (+1.5%)

1,332 (+3.7%)

1,219 (-8.5%)

1,265 1,247 (+2.3%)

450 379

436 444 437 403

434 451 447 444 372

403 437

390 420

0

100

200

300

400

500


1,814 (-1.4%)

1,948 (+7.4%)

1,785 (-8.4%)

1,840 1,762 (-1.3%)

616 587 637 616 594 604 654 664 630 630 539

616 634 560 568

0

100

200

300

400

500

600

700


Mostly maintenance (and tie-in) activities for 2 key customers.

Favorable impact of market conditions (including high ethylene, HDPE and PP spreads) compensated by site-specific

factors for 1 key customer.

-1.4%

-4.2%

0.9

1.1

1.3

1.5

1.50

2.00

2.50

3.00

3.50



Normalized Spread Trends Cogen Business

1) PEA Price = Base Tariff at 2.8 THB/kWh + actual FT 2) Gas Cost = Blended Cogen gas price in THB/mmBTU x normalized gas-fired

heat-rate at 8,600* BTU/kWh / 10^6 3) Coal Cost = Average FOB coal price in THB/mmBTU x normalized coal-fired

heat-rate at 10,300 BTU/kWh / 10^6

Note :

2.43 THB/kWh

0.54 THB/kWh

Avg. PEA Price

(LHS)

Gas Cost

(LHS)

Coal Cost

(RHS)


YoY Prices/Spreads Comparison Cogen Business


326

330 Average Gas Price (THB/mmBTU)

+1.0%


87.92

76.22

Average Coal Price (USD/ton JPU)


3.37 3.37

Average PEA Price (THB/kWh)

0.0%

-13.3%


0.57

0.54

Average Gas Spread (THB/kWh)


2.26

2.41

Average Coal Spread (THB/kWh)

+6.5%

-5.2%


VARIANCE

ANALYSIS


1Q/2015 vs. 4Q/2014

NNP 4Q/2014 Act Cogen Business GIPP GHECO-1 HHPC NNP 1Q/2015 Act

2,018

367 8 (61) (46) 2,286

NNP 1Q/2014Act

NNP 2Q/2014Act

NNP 3Q/2014Act

NNP 4Q/2014Act

Gross Profit MaintenanceCosts

OtherOperating

Costs

Depreciation& Asset

Replacements

FinanceExpenses

Income Tax MinorityInterest(MI)

NNP 1Q/2015Act

2,076

3,133

2,442 2,018

229 (163) 254 71 42 (198) 33 2,286

EBITDA Impact +320 MTHB Below EBITDA

-85 MTHB

NNP 1Q/2014 Act Gross Profit MaintenanceCosts

Other OperatingCosts

Depreciation &Asset

Replacements

Finance Expenses Income Tax MinorityInterest(MI)

NNP 1Q/2015 Act


1Q/2015 vs. 1Q/2014

NNP 1Q/2014 Act Cogen Business GIPP GHECO-1 HHPC NNP 1Q/2015 Act

2,076

372 (64) (81) (17) 2,286

2,076

EBITDA Impact +178 MTHB

Below EBITDA -41 MTHB

495 11

54 72 (167) 33 2,286 (328)


FINANCIAL

STATUS

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

23 17 18 13

7 7 8

8

9 10 10 11 10

66 60 57 63

37 33 30 36 35

29 24 29 25

88


Debt Maturity Profile

2015 2016 2017 2018 2019 2020 2021

4,000

5,500

1,000

1,500

4,600

4,000 3,400

5,555

Glow Cogen Repayment Profile (MTHB)

5,500 5,500 5,600

4,000

3,400

5,555

Bank loan Bond

Note: 1) Value of debts for IPP Business consists of 19,359 MTHB for GHECO-One, 2,313 MTHB for Glow IPP, and 2,635 MTHB for HHPC

2) GHECO-One Loan consists of USD tranche and THB tranche (converted @ 30 Baht/USD)

3) HHPC outstanding debt as of 31 March 2015 is 81 MUSD after refinancing in January 2015

GHECO-One(2)

HHPC(3)

Glow IPP

Consolidated Glow Group Gross Debt

1Q2014 1Q2015

28,038 24,307

36,193

30,070

USD loan (excluding tranches swapped into THB), as of Mar 2015

• GIPP: 71 MUSD

• GHECO-One: 363 MUSD

• HHPC: 81 MUSD

Total Gross consolidated Debt was

• 64,231 MTHB in 1Q 2014 versus

• 54,377 MTHB in 1Q 2015

Cogen Business

IPP Business(1)

64,231

54,377


Gearing Indicators

1Q2014

1Q2015

D/E Ratio

Conso: Gross D/E (Net D/E) 1.50 (1.32) 1.13 (0.98)

Cogen: Gross D/E (Net D/E) 0.84 (0.79) 0.63 (0.58)

Debt to EBITDA (Conso)

Gross Debt to EBITDA (Net Debt to EBITDA) 3.47 (3.07) 2.58 (2.23)

Note: 1.) Gross D/E = Total Outstanding Debts / Total Equities

Net D/E = (Total Outstanding Debts – cash) / Total Equities

Gross Debt to EBITDA = Total Outstanding Debts / EBITDA

Net Debt to EBITDA = (Total Outstanding Debts – cash) / EBITDA


Dividends Policy and History

• Our policy is (in simplified terms) to pay “a normal dividend of not less than 50% of NNP”.

• Additionally, since our IPO (2005) we have grown our (normal) dividend by at least 5% per year.

• 2013 and 2014 dividend growth reflects strong increase in profitability following the completion of our 2008/2012 expansion

program (80% increase in installed capacity).

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0.600 0.600 0.600 0.700 0.735 0.772 0.810 0.851 1.100

1.500

0.975 1.054 1.136 1.123

1.179 1.238

1.300

1.904

2.205

0.750

Special

Annual

Interim

Dividend Split (THB/share)

2.250

1.575 1.654

1.736 1.823

1.914 2.010

2.110

2.755

3.305

+5% +5% +5%

+5% +5%

+5%

+31%

+20%

38% 36% 35% 38% 38% 38% 38% 31% 33%


SELECTED

UPDATES


Gheco-One’s “Doosan Settlement”

Nov-11 ---------------------- Aug-12 ------------------- Mar-15 Apr-15

Record DLD Record DLD

Net Cash

Settlement Record DLD

Scheduled

COD

Actual COD

Costs resulting

from Delay Last Milestone

Payment Withheld

25 – Yrs PPA

• Full and final settlement of all disputes (including with respect to DLD’s, damages, etc.) with respect to the Gheco-

One EPC contracts.

• Settlement Agreements have been executed in March 2015.

• Cash Settlement has occurred in April 2015.

• Other Income 1Q 2015 (733 MTHB or approximately 24 MUSD) reflects earlier accrual of expected DLD’s:

• 546 MTHB in (4Q) 2011.

• 1,046 MTHB in (1Q) 2012.

• Net Cash Settlement in April 2015 (payment of approximately 32 MUSD from Doosan to Glow) reflects, among

others:

• Previously withheld milestone payment (due to Doosan).

• Structure comprises a (smaller) in kind component.


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