SET-listed WP Energy, Thailand's third-largest liquefied petroleum gas (LPG) trader, is maintaining its 2022 revenue growth target at 5% as the government continues to gradually reduce its LPG price subsidy.
Revenue is expected to increase to 12 billion baht this year, up from 11.5 billion baht in 2021, said deputy chief executive Noppavong Omathikul.
Sales volume is also expected to rise by 7.1% to 765,000 tonnes from 714,738 tonnes last year.
The price of LPG, which is used as cooking gas, increased to 348 baht per 15-kilogramme cylinder in May, up from 318 baht which had remained unchanged since March 2020, according to the Energy Policy Administration Committee.
It will increase to 363 baht this month but is still lower than the market price which is currently above 400 baht.
Authorities need to limit the amount of subsidy as the Oil Fuel Fund is almost 82 billion baht in the red.
The fund faced the highest loss of 82 billion baht in October 2005 after the money was spent to subsidise diesel and LPG prices between 2004 and 2005. One month after the record high, the government decided to reduce its subsidies.
WP expects its LPG sales growth will mainly come from higher demand in the industrial sector this year though manufacturers are facing higher energy prices.
The company's sales will be also driven by LPG exports to Vietnam amounting to 25,000 tonnes this year.
WP plans to allocate capital spending worth 860 million in 2022, a 72% increase from 500 million baht last year.
About half of the fund will be used for the expansion of WP's rooftop solar energy business, with a goal to increase installed electricity generation capacity to almost 20 megawatts from 6MW last year.
The other half of the budget will be allocated for the development of a LPG distribution facility.
WP is planning to focus on new businesses, including rooftop solar panels, and downstream LPG trading business this year in order to earn additional revenue.
