WP maintains revenue growth target of 5%

SET-listed WP Energy, Thailand’s third-largest liquefied petroleum gas (LPG) marketer, is maintaining its revenue growth target of 5% for 2022 as the government continues to phase out its LPG price subsidy.

Revenue is expected to rise to 12 billion baht this year from 11.5 billion baht in 2021, deputy chief executive Noppavong Omathikul said.

Sales volume is also expected to increase by 7.1% to 765,000 tonnes from 714,738 tonnes last year.

The price of LPG, which is used as cooking gas, rose to 348 baht per 15-kilogram bottle in May from 318 baht which had remained unchanged since March 2020, according to the Energy Policy Administration Committee.

It will rise to 363 baht this month but remains below the market price which is currently above 400 baht.

The authorities must limit the amount of the subsidy because the Oil Fuel Fund is in the red at nearly 82 billion baht.

The fund suffered the highest loss of 82 billion baht in October 2005 after the money was spent to subsidize diesel and LPG prices between 2004 and 2005. A month after the record, the government decided to reduce its subsidies.

WP expects its LPG sales growth to come mainly from higher demand in the industrial sector this year, although manufacturers face higher energy prices.

The company’s sales will also be driven by LPG exports to Vietnam which amount to 25,000 tons this year.

WP plans to allocate capital expenditure worth 860 million in 2022, a 72 percent increase from last year’s 500 million baht.

About half of the fund will be used for the expansion of WP’s rooftop solar business, with the aim of increasing installed power generation capacity to nearly 20 megawatts from 6 MW the year last.

The other half of the budget will be allocated to the development of an LPG distribution facility.

WP plans to focus on new business including rooftop solar panels and downstream LPG trading business this year to generate additional revenue.

Sallie R. Loera