Absolute Clean Energy Public Company Limitedace.listedcompany.com/misc/presentation/20200528... · The information contained in this presentation is strictly confidential and is provided

Absolute Clean Energy Public Company Limited

Analyst Meeting Q1’2020

2 Strictly Private & Confidential

The information contained in this presentation is strictly confidential and is provided by Absolute Clean Energy Public Company Limited (the "Company") to you solely for your

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Disclaimer


Operating performance

Financial Highlights

Business UpdatesI

III

Table of Contents for Analyst Presentation

II

Business Updates

Strictly Private & Confidential5

92%

Q1’20 Key Highlights : Key Events in Q1’20 + Events after the reporting date

Project Under Construction

MSW Krabi 5 MW

• January 2020 : EXIM refinance ABA’s project loan at Prime rate -2.5%

• February 2020 : AAA’s loan contract revision 1) PN at MLR -2.5% till 2021 2) Loan at MLR -2.5% from 2022-2023 and MLR -1.5%

throughout loan term

• Other related event : 10 April, SCB decrease MLR rate to 5.375%

22 May, SCB decrease MLR rate to 5.25%

Capital Structure

Waste landfill Project, Udon Thani

32%

Q1’2020 Status

Insurance Claim

During the period ended 31 March 2020, an indirect subsidiary received claims from an insurance company totalling Baht 171.95 million. The

compensation claim was for the event of damaged machinery during the test run (Commissioning & Test Run) of a power plant in 2016 for which

the machinery has been restored to normal operating conditions/2.

Remark: /1 Current status is 47%

/2 The powerplant did go into commercial operation on schedule

Solar Rooftop(ACE Solar) 0.83 MW

Q1’2020 Status Q1’2020 Status/1

37%

Expected COD Q1’2021 Currently in operation Expected operate Q3’2020


85.2

209.5 210.5 212.2214.47

421.37 421.37

1,000

2016 2017 2018 2019 2020 2021 2022 2024

421.37

“To be the world practical model of Clean energy powerplant, which is responsible for environment, society, and shareholders”

1979/1 (40 years

ago): Shaiyo Triple

A Group

Board of directors

have experienced to

lead rice, corns,

cassavas and

woodchips producer

and exporter, has

expertise in

agriculture industry

and R&D in the fast

growing tree and

intrigued in exploring

the energy sector.

2016:

First COD of VSPP

“ALCP” MSW Power

Plant

2015:

Established

Absolute Clean

Energy (ACE) as a

Holding Company

with initial paid-up

capital of THB 0.5

mm.

2017:

First COD of SPP

“AAA” Cogeneration

Power Plant

2017:

Won and secured 4

SPP Hybrid Bidding

of total 93 capacity

MW

2018:

First COD of VSPP

Solar Rooftop

2012:

First COD of VSPP

“ACP1” Biomass

Power Plant

2024:

Expected to secure

an installed capacity

of 1,000 PPA MW

and becomes

Thailand’s largest

biomass power

producer

2022:

Estimated to

COD all

projects/2

(421.37 MW)/3

Unit: MW

ACE’s Key Development Milestones

Remark : /1 http://www.saaa.co.th/SAA_ENG/home.php

/2 Estimated timeline: Currently, Arbitration result states that PEA has to return PPA to ACE and with the assumption that normally power project’s

construction period is approx. 2 years

/3 Including APP’s capacity MW of 9.9, Currently, APP’s shareholders sent LOI for APP share purchase proposal to ACE

ACE’s Total Capacity MW/3 over time

2019:

Listed in Stock

Exchange of

Thailand


A ACE Business Portfolio in Thailand

Power Type

Biomass Co-generation MSW Solar

ACE’s Holding

Stake in Projects100.0% 100.0% 100.0% 100.0% 100.0%

Existing + Pipeline

Projects9+14+1/1 1+0 1+1 4+2

Capacity MW

(Total Capacity

MW)

PPA MW to

Government & IU

(Total PPA MW)

89.1

201.9

114.35

3.56

1.46

6.05.0

Remark: /1 Including APP’s capacity MW of 9.9. Currently, APP’s shareholders sent LOI for APP share purchase proposal to ACE

/2 Electricity Sale Agreement (ESA) with IU

Total: 291.0/1 Total: 114.35 Total: 11.0

Total: 5.02/2

72

164.3190 4.54.4

Total: 236.31/1 Total: 90 Total: 8.9

Total: 5.02

Existing Under Development + Pending for Development

Overview of ACE’s Portfolio

/1

/1

3.56

1.46

COD: 213.01

Pipeline: 208.36

Total: 421.37

COD: 15

Pipeline: 18/1

Total: 33/1

COD: 170.06

Pipeline: 170.17

Total: 340.23


Assets Overview

Surin:

• No. 3

Khonkaen:

• No. 2 and 9

Roi-et:

• No. 5

Nongkhai:

• No. 6

Lampang:

• No. 7

Ubonratchathani:

• No. 8

Chachoengsao:

• No. 10

Kanchanaburi:

• No. 11

Kampangphet:

• No. 18, 19

• SPP – Hybrid

Srisaket:

• No. 27

Supanburi:

• No. 20

Nakornpathom:

• No. 21

Amnatcharoen:

• No. 24

Lopburi:

• No. 25

Krabi:

• No. 17

Pracheenburi:

• No. 26

Ranong:

• SPP - Biomass

▪ Operating projects

▪ Under development projects and

Pending for development projects

Nakhon Si Thammarat:

• 2 SPP - Biomass

COD Biomass

SCOD Biomass

COD Cogeneration

COD MSW

SCOD MSW

SCOD 4 SPP-Hybrid

Solar

Well-Balanced Portfolio with Diversified Locations

Source: Company information as of May 2020

Remark: /1 Including APP’s capacity MW of 9.9, Currently, APP’s shareholders sent LOI for APP share purchase proposal to ACE /2 Estimated timeline: Currently, Arbitration result states that PEA has to return PPA to ACE and with the assumption that normally power project’s construction period is approx. 2 years

Chonburi:

• No. 1, 12, 14, 23, 28

Samut Sakhon:

• No.15

Nakhon Ratchasima:

• No. 4, 13 ,22,29 and 30

TypeInstalled /

Equity MWPPA MW Location

COD / SCOD

DateStatus

1 VSPP - Biomass 9.9 8 Chonburi 24/4/2012

2 VSPP - Biomass 9.9 8 Khonkaen 2/5/2012

3 VSPP – Biomass 9.9 8 Surin 30/10/2012

4 VSPP – Biomass 9.9 8 Nakhon Ratchasima 16/1/2013

5 VSPP – Biomass 9.9 8 Roi-et 4/6/2013

6 VSPP – Biomass 9.9 8 Nongkhai 26/12/2013

7 VSPP – Biomass 9.9 8 Lampang 9/7/2014

8 VSPP – Biomass 9.9 8 Ubonratchathani 14/8/2015

9 VSPP – MSW 6 4.5 Khonkaen 29/11/2016

10 SPP - Cogen 114.35 90 Chachoengsao 10/2/2017

11 VSPP – Biomass 9.9 8 Kanchanaburi 16/8/2017

12 VSPP – Solar Rooftop 1 Chonburi 20/11/2018

13 VSPP – Solar Rooftop 0.73 Nakhon Ratchasima 22/2/2019

14 1 Solar Rooftop 1 Chonburi 27/9/2019

15 1 Solar Rooftop 0.83 Samut Sakhon May 2020 COD

3 SPP – Hybrids

1 SPP – Hybrid93 76.31 2021

EIA process

EIA Approved

17 VSPP – MSW 5 4.4 Krabi Q1 2021 Under Construction

18 VSPP – Biomass 9.9 8 Kampangphet Within 2022

19 VSPP – Biomass 9.9 8 Kampangphet Within 2022

20 VSPP – Biomass 9.9 8 Supanburi Within 2022

21 VSPP - Biomass 9.9 8 Nakornpathom Within 2022

22 VSPP - Biomass 9.9 8 Nakhon Ratchasima Within 2022

23 VSPP - Biomass 9.9 8 Chonburi Within 2022

24 VSPP - Biomass 9.9 8 Amnatcharoen Within 2022

25 VSPP - Biomass 9.9 8 Lopburi Within 2022

26 VSPP - Biomass 9.9 8 Pracheenburi Within 2022

27 VSPP – Biomass 9.9 8 Srisaket Within 2022Under consideration

of Administrative

28 VSPP – Biomass/1 9.9 8 Chonburi Within 2022

Under negotiation

SCOD/2

29 1 Solar farm 0.77 Nakhon Ratchasima 2020 Under construction

30 1 Solar farm 0.69 Nakhon Ratchasima 2020 Under construction

Total Projects 421.37 335.21

Under negotiation

SCOD/2

COD

Under

Development

and pending

for

development

(18 projects)

Existing

Projects

(15 Projects)

2

1


Project Type Location Project Name Installed MW PPA MW Equity Stake Target SCOD Current Status Construction Progress

SPP Hybrid Nakhon Si Thammarat BPP2 25 21.5 100.00% 2021 EIA Approval Process N/A

SPP Hybrid Kampangphet BPP3 20 13.31 100.00% 2021 EIA Approved N/A

SPP HybridNakhon Si

ThammaratACE Solar 1 25 21.5 100.00% 2021 EIA Approval Process N/A

SPP Hybrid Ranong ACE Solar 2 23 20 100.00% 2021 EIA Approval Process N/A

VSPP – MSW Krabi ALCP 6 5 4.4 100.00% Q1 2021 Under Construction

VSPP – Biomass Kampangphet ACP4 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP – Biomass Kampangphet ACP7 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP – Biomass Supanburi ACP5 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP - Biomass Nakornpathom ACP6 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP - Biomass Nakhon Ratchasima AAPP3 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP - Biomass Chonburi ALCP5 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP - Biomass Amnatcharoen AFT1 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP - Biomass Lopburi BPP1 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP - Biomass Pracheenburi PSPR1 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

VSPP – Biomass Srisaket ALCP4 9.9 8 100.00% Within 2022Under consideration of

Administrative CourtN/A

VSPP – Biomass/1 Chonburi APP1 9.9 8 100.00% Within 2022 Under negotiation SCOD N/A

Solar Rooftop Samut Sakhon ACE Solar 5 0.83 0.83 100.00% 2020 COD in May 2020

Solar farm Nakhon Ratchasima ACE Solar 6 0.77 0.77 100.00% 2020 Under development N/A

Solar farm Nakhon Ratchasima ACE Solar 7 0.69 0.69 100.00% 2020 Under development N/A

Waste landfill Udon Thani - - - 100.00% Q3 2020 Under construction

Total 209.19 171.00

Q1’20 Key Highlights : Project Updates

32%

92%

Remark: /1 Including APP’s capacity MW of 9.9. Currently, APP’s shareholders sent LOI for APP share purchase proposal to ACE

37%

Operating Performance


ACE’s Biomass Powerplant

ACP1 Ban Bueng

ACP2 Phonthong

ACP3 Bo Ploy ABA1 Thoen

ALCP1 Si Chiang Mai

ALCP2 Sirindhorn

AAPP2 Chokchai

AAPP1 Tanee

AAP1 Nam Phong


ACE’s Biomass Operating Performance

Plant Performance (9 Projects) Gross Profit and Margin

Availability Factor*

Capacity Factor**

Key Observation

• Gross Profit and Gross Profit Margin

▪ QoQ : +5% in Gross Profit and +1% in Gross Profit Margin

▪ YoY : +31% in Gross Profit and +7% in Gross Profit Margin

Unit : THB mln

Remark:

* Availability Factor = Total operating hours/(Days*24 hours)** Capacity Factor = Electricity Unit sold /(Total operating hours*Total selling

Capacity))

91% 93% 92% 94%

0%

20%

40%

60%

80%

100%

2017 2018 2019 Q1'2020

97% 98% 98% 98%

0%

20%

40%

60%

80%

100%

2017 2018 2019 Q1'2020

736

913

186 233 244

28.2%

35.1%

29.7%

35.3% 36.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

200

400

600

800

1,000

2018 2019 Q1'2019 Q4'2019 Q1'2020

Gross Profit % GPM


ACE’s MSW Powerplant

MSW Khon Kaen


ACE’s MSW Operating Performance

Plant Performance (1 Project) Gross Profit and Margin

Availability Factor

Capacity Factor

Key Observation


▪ QoQ : +2% in Gross Profit and +2% in Gross Profit Margin

▪ YoY : +57% in Gross Profit and +17% in Gross Profit

Margin

from decrease in ash disposal fee (change to THB 560/ Ton from

THB 580/ Ton since June 2019)

Unit : THB mln

85%92% 95% 100%

0%

20%

40%

60%

80%

100%

2017 2018 2019 Q1'2020

92% 94% 96% 97%

0%

20%

40%

60%

80%

100%

2017 2018 2019 Q1'2020

114136

2843 44

43.3%

50.0%

43.7%

59.1% 61.1%

0%

10%

20%

30%

40%

50%

60%

70%

0

40

80

120

160

200

2018 2019 Q1'2019 Q4'2019 Q1'2020

Gross Profit % GPM

50.8%/1

Remark : /1 adjusted gross profit margin retrospectively from extended concession period


ACE’s Co-generation Powerplant

AAA Chachoengsao


ACE’s Co-Gen Operating Performance

Plant Performance (1 Project) Gross Profit and Margin

Availability Factor

Capacity Factor Key Observation


▪ QoQ : -5% in Gross Profit and stable Gross Profit Margin

from minor overhaul for gas turbine in Q1’20 resulting in

decrease of unit production and unit sold

▪ YoY : -1% in Gross Profit from minor overhaul for gas turbine

in Q1’20 resulting in decrease of unit production and unit sold

+2% in Gross Profit Margin from using Company staffs

for operation and maintenance work instead of ESCO’s

outsourcing ( decrease in maintenance cost THB 11.2 mln and

increase in staff cost THB 1.0 mln) which results in cost saving

of THB 10.2 mln per quarter approximately.

Unit : THB mln

96% 98% 99% 96%

0%

20%

40%

60%

80%

100%

2017 2018 2019 Q1'2020

83% 80% 82%74%

0%

20%

40%

60%

80%

100%

2017 2018 2019 Q1'2020

567 577

141 147 139

29.0%27.9%

27.1%

29.1% 29.5%

15%

17%

19%

21%

23%

25%

27%

29%

31%

0

200

400

600

800

2018 2019 Q1'2019 Q4'2019 Q1'2020

Gross Profit % GPM

Financial Highlights


354425 428

29.2%

34.2% 35.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

200

400

600

800

Q1'19 Q4'19 Q1'20

Gross Profit % GPM

1,213 1,243 1,217

14 6173

0

200

400

600

800

1,000

1,200

1,400

1,600

Q1'19 Q4'19 Q1'20

Sales revenue Other revenue

Q1’20 Financial Highlight P&L

Revenue/1 Gross Profit and Margin

Total Revenue

1,227

Remark: 1/ Exclude construction revenue

1,2491,390

+11% QoQ

+13% YoY

Revenue in Q1’20 was THB 1,390 mln

• QoQ : +11% results from a significant increase in other income from

THB 6 mln to THB 173 mln., which outweighs a slight decrease in

sales

• YoY : +13% result from 1) significant increase in other income 173

mln 2) Biomass sales increase 46 mln and 3) Co-Gen sales

decrease 52 mln from change in natural gas price and minor

overhaul in Q1’20

Unit : THB mlnUnit : THB mln

Gross Profit in Q1’20 was THB 428 mln

• QoQ : +1% from GP of Biomass increases by THB 11 mln

GP of MSW remains stable

GP of Co-Gen decreases by THB 8 mln

• YoY : +21% from GP of Biomass increases by THB 58 mln

GP of MSW increases by THB 16 mln

GP of Co-Gen decreases by THB 2 mln

Gross Profit Margin in Q1’20 was 35.2%

• QoQ : +1% and YoY : +6% from increase in %GP of every power

plant type

+21% YoY+1% QoQ


4,833 4,951

1,213 1,243 1,217

1633

14 6 173

0

1,000

2,000

3,000

4,000

5,000

2018 2019 Q1'2019 Q4'2019 Q1'2020

Sales Revenue Other Revenue

Financial Highlight – Revenue/1

Remark: 1/ Exclude construction revenue

Total Revenue

4,8494,984

1,227 1,249 1,390

Unit : THB mln


Financial Highlight - Gross Profit

1,417

1,626

354 425 428

29.3%

32.8%

29.2%

34.2%35.3%

0%

10%

20%

30%

40%

0

500

1,000

1,500

2,000

2018 2019 Q1'2019 Q4'2019 Q1'2020

Gross Profit % GPM

Unit : THB mln


Q1’20 Financial Highlight P&L

Core Profit/ Net Profit

133

245

594

+61% YoYUnit : THB mln

Core Profit in Q1’20 was THB 260 mln

• QoQ : +5% from an operating cost improvement despite a slight

decrease in sales from Co-gen of 30 mln

• YoY : +61% from increase in sales from improving of production

efficiency and decrease in fuel cost from improvement of fuel

material management and production process

Net Profit in Q1’20 was THB 594 mln

• QoQ : +142% mainly from FX gain 112 mln, Gain from forward

contract 50 mln and insurance claim of 172 mln totaling 334 mln

EBITDA and EBITDA Margin

Unit : THB mln

EBITDA in Q1’20 was THB 656 mln

• QoQ : +37% and YoY : +58% from EBIT margin improvement

where significant increase came from insurance claim 172 mln

+5% QoQ

+58% YoY

+37% QoQ

Net Profit

161 248 260

(28) (19)

112

50

172

16

13.3% 20.0%

21.4%

10.9%

19.7%

48.8%

-5.0%

5.0%

15.0%

25.0%

35.0%

45.0%

55.0%

-100

-

100

200

300

400

500

600

700

Q1'19 Q4'19 Q1'20

Core profit FX Gain/(loss)

Gain from Forward contract Insurance claim

Reverse Impairment Core margin

Net margin

414 479 484

172

34.1%

38.5%

53.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

-

100

200

300

400

500

600

700

800

900

1,000

Q1'19 Q4'19 Q1'20

EBITDA Insurance Claim Margin

39.8%

( without

Insurance

Claim )


Financial Highlight – Net Profit / Core Profit / Core Profit Margin

Net Profit

547

815

133

245

594

Unit : THB mln

557

901

161 248 260

(10)(102)

(28) (19)

112

50

172

16

16 11.5%

18.2%

13.3%

20.0%

21.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-200

-

200

400

600

800

1,000

2018 2019 Q1'2019 Q4'2019 Q1'2020

Core profit FX Gain/(loss)

Gain form Forward contract Insurance claim

Reverse Impairment Core margin


Financial Highlight - EBITDA

Unit : THB mln

1,635

1,865

414 479 484

172

33.8% 37.7% 34.1%38.5%

53.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2018 2019 Q1'2019 Q4'2019 Q1'2020

EBITDA Insurance Claim Margin

( without Insurance

Claim )

39.8%

Core EBITDA Margin


ACE Outstanding Debt and Leverage Ratio

ACE’s Leverage Ratio

Unit: THB mln December 31 March 31

2017 2018 2019 Q1’20

Current Interest-bearing debt 3,328 1,166 1,084 700

Non-Current Interest-bearing debt 5,197 6,632 1,911 1,933

Total interest-bearing debt 8,525 7,798 2,995 2,633

Equity (THB mln) 5,022 5,572 10,793 11,387

Unit : THB mln

5,0225,572

10,79311,387

1.7x

1.4x

0.3x0.2x

0.0x

0.3x

0.6x

0.9x

1.2x

1.5x

1.8x

0

3,000

6,000

9,000

12,000

15,000

2017 2018 2019 Q1'20

Equity IBD/Equity


Key Competitive Advantages of ACE to Win The Bidding

2 Operational Expertise &

Economy of Scale

✓ Lower plant heat rate = less fuel

consumption by up to 30%

✓ Artificial Intelligence, IoTs and Big

data for cost control and

improvement

✓ Environmental friendly

✓ Proven track record in building and

running 13 projects

✓ Continuous operational improvement

✓ Economy of scale

✓ Strong feedstock purchasing team

1 Advance Technology

3 Relationship with Key

Stakeholder

✓ Major shareholders’ plantation

business can support long-term

feedstock development plan

✓ Strong & long-term relationship with

community and farmers

✓ Strong relationship with lender

ACE’s 3 Core Value Represent Competitive Advantage to Secure New PPAs

R&D

Sustainability

✓ Potential Fuel Crops from Major

Shareholders’ plantation

business

✓ New Biomass Fuel Types

✓ Machinery and Powerplant

Design

✓ Feed stock security

✓ Financial security

✓ Community support

Knowhow

✓ Low O&M cost

✓ Big & strong Professional Teams get

ready to handle New Projects.


ACE’s Key Strengths and Opportunities

2

3

Efficient Operational Capabilities with Continuous Improvement

▪ Lower Feedstock and O&M cost which leads to higher margin

▪ Stronger creditworthiness which leads to lower financing cost

▪ Peer-to-Peer Electricity Trading which leads to additional electricity sales

Low Downside Risk

▪ Secured Demand & Cashflow

▪ Proven Operational Excellence & Feedstock Management

▪ Commitment to the greater good i.e., ESG and TSI (Total Societal Impact)

Continuous Growth from Projects in the Pipeline and Future

▪ VSPP’s PPA with exceptional tariff rate

▪ Better technology which leads to higher efficiency and less feedstock / kWh

▪ Economy of Scale from lower CAPEX, OPEX, and SG&A

▪ Appreciation of THB potentially leads to lower CAPEX

▪ 28% share in the latest biomass bidding

5

World Megatrend

▪ “Electrification” Era

▪ Global & Thailand Commitment to Zero Carbon which implies the rise of renewable energy

▪ Biomass becomes one of the most reliable renewable energy

▪ ESG Business

1 Thailand’s Leading Integrated Power Producer with Highest Growth Potential

▪ Largest biomass Power Producer supported by PPA with PEA in Thailand

▪ No. 1 Renewable Power Producer in Thailand in term of Equity MW Growth

4


Total Societal Impact(TSI) and Environmental, Social and Governance (ESG)

Biomass Powerplant

MSW Powerplant

Contribute to the Paris Agreement Decreasing Greenhouse Gas Emission.

Future Potential To provide base-load to grid instead of conventional energy

• Saves government’s spending on putting down forest fires and farm fires

• Saves government’s spending on PM 2.5 related health problems such as respiratory

complications, masks distributions, water spraying in cities, etc.

• Prevents economic loss from the decrease in tourism due to PM 2.5 problem

Solves PM 2.5 problem at the root

• Additional income to farmers

• Stabilize income for farmers under market uncertainty → reduce empty subsidies that government

have to give out

• Stabilize electricity price preventing electricity price from increasing in the future

• Distribution of revenue to grassroots : Shift from expensive LNG imports to purchasing fuel from

Thai farmers

Positive Economic and Societal

Impact

GDP Contribution/1 1.8 Billion THB / year / 9.9 MW biomass power plant

Source: Thailand Energy Academy

Contribute to the Paris Agreement decreasing Greenhouse Gas Emission.

Future Potential To provide base-load to grid instead of conventional energy

Solves MSW mountain problems Save healthcare and environmental spending for government from problems caused by MSW in landfills

Thank You

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