Bangchak Corporation (BCP) posted record-high earnings of 25.8 billion baht last year thanks to the global oil and gas price surge.
The rise in earnings before interest, tax, depreciation and amortisation was driven by revenue from oil refineries and oil trade as well as Norway-based Okea ASA, an oil and gas drilling company that was acquired by BCP several years ago, said Chaiwat Kovavisarach, president and group chief executive.
Higher sales at Okea in response to rising oil demand after the easing of lockdowns and the onset of winter contributed 16% of Bangchak Group’s total revenue.
Mr Chaiwat also attributed the good performance to BCP’s business process redesign as cuts of unnecessary expenses saved 1.6 billion baht.
In 2021, BCP recorded a 46% increase in revenue to 199 billion baht and rebounded to net profit of 7.62 billion baht, up from a loss of 6.96 billion in 2020.
Revenue in the refinery and oil trade segments increased to 11.5 billion baht, mainly because of inventory gains of 6 billion baht.
Gross refining margin (GRM) rose to US$4.52 per barrel in 2021, up from $1.31 per barrel.
An improved oil refinery business driven by exports was good for GRM and mitigated the impact of falling domestic demand for oil.
Despite turnaround maintenance in the first quarter of last year, BCP’s oil production stood at 99,000 barrels a day on average, which accounted for 83% of capacity utilisation.
In the oil trade segment, total sales volumes declined by 6%, but overall trade remained satisfactory as the company benefited from oil inventory gains.
The company’s electricity generation business grew by 15%, mainly attributed to an increase in sales from clean power plants, including four new solar plants in Thailand and the Nam San B hydropower plant in Laos.
BCP’s power business also gathered momentum from higher power tariff rates and lower financial costs.