Bamboo Capital energy subsidiary reports 33-fold increase in H1 profit ahead of UPCoM listing

BCG Energy JSC, a subsidiary of Vietnam’s private conglomerate Bamboo Capital Group, recorded a post-tax profit of VND290.7 billion ($11.5 million) in H1/2024, a 33-fold year-on-year increase.

During this period, it posted consolidated net revenues of VND689.8 billion ($27.3 million), up 22% year-on-year.

BCG Energy attributed its strong performance to commercial operation of phase 2 of the 114-MW Phu My solar power plant in the central province of Binh Dinh, starting June 2023.

Other major factors were rooftop solar power projects totaling 74 MW and solar power projects of 594.4 MW, like BCG Long An 1 (40.6 MW), BCG Long An 2 (100.5 MW), BCG Phu my (330 MW), and BCG Vinh Long (49.3 MW).

BCG Energy said its impressive post-tax profit derived from reduction in financial costs, especially interest expenses. The post-tax profit in H1/2024 fulfilled 59% of the whole-year target.

As of end-June 2024, the value of BCG Energy's total assets had reached VND19,964.8 billion ($789.7 million), up 5% from the beginning of the year. New investments were a main factor in the increase, most notably in the Tam Sinh Nghia waste-to-energy plant in Ho Chi Minh City.

Liabilities increased 7% year-on-year to VND9,944.1 billion ($393.3 million), owing to the firm’s purchase of stakes in Tam Sinh Nghia Investment and Development Company, a partner in the waste-to-energy project.

BCG Energy’s debt-to-equity ratio fell from 1.9 in end-2022 to 0.96 in end-2023 and 0.99 as of mid-2024. Its loan-to-equity ratio dropped from 1.25 in end-2022 to 0.66 in end-2023 and 0.64 as of end-June 2024.

This improvement has not only created a financial advantage but also helped the company minimize risks related to the market and the overall economy. It has also enhanced the firm’s ability to meet capital needs for M&A activities and expand its project portfolio.

Separate financial statements of parent company BCG Energy have recorded a decrease in revenue and net profit compared to the same period in 2023.

In the first six months of 2024, the company received no financial revenue via dividends distributed from subsidiaries. With strong revenue growth from renewable energy projects expected to operate effectively in the near future, the dividend stream distributed to the parent company will continue to grow, delivering great yields to shareholders.

BCG Energy’s recent growth has been predicated on three solid core competencies of management, capital mobilization for projects, and capturing and restructuring M&A deals.

In addition to building relationships with large credit institutions and banks, BCG Energy has also focused on cooperating with international partners. In February 2024, it signed a cooperation agreement with SUS Vietnam Holding Pte. Ltd. for implementing the Tam Sinh Nghia waste-to-energy project. This has not only facilitated its entry into a new sector, but also raised new financial resources.

The company’s revenues and profits are expected to continue their strong growth, driven by a portfolio of 229 MW in ongoing projects and 670 MW in future projects. It aims to achieve a total capacity of 2 GW by 2026, while diversifying its renewable energy portfolio with low investment costs and an average IRR of 10-14%.

BCG Energy expects that its strengths in mobilizing domestic and international capital will help promptly meet capital needs in the early stages of projects as well as refinancing activities at reasonable cost.

Listing on the Unlisted Public Companies Market (UPCoM) is seen as an important step in the company’s development, especially in mobilizing capital for new energy projects.

Founded in 2017, the energy arm of Bamboo Capital is set to begin trading its 730 million BGE shares on the UPCoM on July 31, with an initial offering of VND15,600 ($0.62) per share.