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business

Contagion not affecting coal business much, says top boss at AGE


The year of 2019 has proved to be very profitable for Asia Green Energy (AGE) as it earned Bt272 million compared to Bt120 million in the previous year.

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Panom Kuansataporn, the company’s managing director, said on Friday (April 24) that the company had set its sales target for this year at Bt8 billion and the Covid-19 outbreak has had slight impact.
“The contagion has not affected us much and the sales so far is in line with the target,” he said. “We believe the company would have certainly achieved the target if there was no outbreak, but will monitor the situation in the second quarter to see if it needs to adjust the 2020 goal.”
Panom added that apart from trading in coal, which accounts for 90 percent of total sales, AGE will also focus on its logistics business, which is expected to generate the remaining 10 percent.
“Expanding the logistics business will help the company make full use of its existing resources, such its ships and trucks,” he said. “The company will also invest about Bt100 million to expand and improve its cargo-handling system.”
He also believes the coal business will grow further in the next three years because demand will continue existing.
“It is the cheapest energy source in normal conditions, and even though the price of oil has dropped sharply, the company has gained from the drop in oil price because transportation has become cheaper,” he said.
As for the company’s stock price, he said it currently stands at Bt1.625 per share, which is lower than the initial public offering (IPO) price.
“The current stock price has a price-to-book-value ratio of 0.7 times, while its price-to-earnings is approximately 5 times,” he said.
Panom added that the company’s basic foundations are strong because it is still making a profit and believes that its performance this year will not drop like it did in 2017 and 2018 because it is expanding its logistics business.
“In fact, we want to buy back stocks because the stock price has dropped sharply, but we have to expand the business first,” he said.
“The company has also changed its dividend payment policy to paying only cash from its previous system of paying in both shares and cash, because the company wants to return its profits to shareholders during this economic downturn.”
He said the company is aiming for total sales to hit Bt10 billion.
“To achieve this goal, AGE may need to expand overseas,” he said. “The demand for coal in neighbouring countries is still rising, especially in Vietnam, so expanding overseas may prove to be more profitable in 2021.”
Panom revealed that the company’s revenue over the past three years from 2017 to 2019 stood at Bt5.949 billion, Bt7.956 billion and Bt6.235, respectively.
“The net profit in 2019 rose in contrast to the decrease in revenue because the cost of sales dropped more than coal price, while the strengthening baht made export costs cheaper,” he added.
“In addition, the company has put in place measures to cut costs and increase production efficiency to boost competitiveness.”

Published : April 23, 2020

By : The Nation