Scan Inter, a company engaged in natural gas-related businesses, next month plans to float up to 300 million capital-increase shares - or 25 per cent of its total outstanding shares after an initial public offering (IPO).
A major portion of funds raised from the IPO will be used to finance its "iCNG" project to supply compressed natural gas to the industrial sector, while the rest will go into expanding the capacity of its natural gas for vehicle (NGV) "mother station" that compresses and transports the gas to PTT stations.
Executive director Littee Kitpipit said Scan was engaged in diverse natural gas-related businesses, had a significant amount of "recurring incomes" and possessed a number of growth opportunities including from the iCNG project.
Littee said the project would offer a chance for factories that were located away from PTT’s natural gas pipeline network to access natural gas in substitution of oil or liquefied petroleum gas (LPG).
He said Scan started the iCNG business this month and had already secured long-term contracts from factories including those owned by Boonrawd Brewery and Kimberly Clarke.
It was the only iCNG business in Thailand because it registered the patent and no one else had the technology.
Pongsak Phrukpaisal, assistant managing director of Scan’s financial adviser Kasikorn Securities, said the company had grown by an average of 18 per cent per annum in the past three years and targeted achieving similar growth this year.
It reported a net profit of Bt377.89 million on total revenue of Bt1.74 billion for January to September, compared to Bt130.46 million and Bt1.67 billion for the same period a year earlier.
Excluding profits from the divestment of its solar farm business, the firm’s operating income totalled Bt218.97 million.
Natural gas-related businesses accounted for two-thirds of its sales revenue in the first nine months of last year, totalling Bt1.74 billion.
Of those businesses, the NGV mother station contributed 10.21 per cent; the NGV transport business 10.13 per cent; a CNG retailing station 8.33 per cent; design, installation, and maintenance of NGV equipment services 34.48 per cent; and NGV installations for vehicles 2.89 per cent.
Other businesses included a Mitsubishi car dealership on Tivanont Road, Nonthaburi that contributed 21 per cent of total sales, and the solar farm that it sold to a listed energy company last September that provided 2.02 per cent.
Major portion of its income
Littee said Scan earned a major portion of its income by providing CNG compression and transport services to PTT based on a 15-year contract that provided a minimum-purchase guarantee and a margin based on the amount of gas it handled.
Pongsak said Scan had fixed-service incomes, regardless of the ups and downs in oil prices.
"The change in world oil prices will not affect the company," he said.
"[During this period of tumbling oil prices], iCNG is instead our opportunity because the gas we buy is pegged to the price of oil, and it has helped our costs come down as well."
Scan managing director Thanachart Kitpipit said the firm was eyeing an opportunity arising from the liberalisation of the natural-gas industry.
Energy authorities are drafting the so-called third-party access regime with the aim of allowing private companies to take more of a role in the distribution of natural gas monopolised by PTT.
The Kitpipit family will cut its holding in Scan from 98.52 per cent to 73.89 per cent after the IPO.