VPower Group International Holdings Limited(“VPower Group”, stock code: 1608), announced its interim results for the six months ended 30 June 2017 (the “Period”).
IBO Business Continues to be the Growth Driver
Revenue and net profit of the Company recorded a year-on-year growth of 34.8% and 176.5% to approximately HK$936.4 million and HK$150.2 million respectively, mainly driven by the significant growth of IBO business and higher than industry average SI business growth.
During the Period, revenue of IBO business soared 95.4% to approximately HK$337.7 million, mainly attributable to the revenue contributed by the full operation of 3 IBO projects in the Period, including 49.9 MW Kyauk Phyu II project in Myanmar, 149.8 MW Myingyan project in Myanmar and 56.4 MW Jambi project in Indonesia.
Gross profit of IBO business reached HK$196.8 million, representing 97.8% growth and accounting for 59.8% of the Company’s gross profit (1H 2016: 47.8%). As of 30 June 2017, the Group had 9 distributed power generation (“DPG”) projects in commercial operation in Indonesia, Myanmar and Bangladesh with an aggregate installed capacity of 561.1 MW.
Building Global Network for Sustainable Growth over Long Run
This year, the Group are entering into 3 new markets for IBO business. In May 2017, the Group first extended its footprint to Latin America by participating in an IBO project in Peru by offering a 3-year convertible loan of US$30 million to an 80MW heavy fuel oil with contract length of 20 years. In early August 2017, the Group also secured 3 DPG tenders in Brazil with a planned install capacity of 70.3MW marking its further expansion in Latin America. The Group also won its first biogas project using combined heat and power generation system in China with a planned install capacity of 26.8MW and contract length of 15 years.
Leveraging on its SI global clientele to accelerate business development, the Group entered into a joint venture agreement F.K., a long-standing customer of the Group to explore the business opportunities in Latin America and Israel. The Group also announced its potential formation of a joint venture to acquire our existing SI customer which is one of the largest power rental and modular system solution providers in the Gulf Cooperation Council. Such potential acquisition is expected to expand the Group’s business into the fast growing Middle East market.
Mr. Rorce AU YEUNG, Co-Chief Executive Officer of VPower Group, concluded, “We are delighted to deliver a strong growth in the first half and built a global network for future business expansion. We also see a great achievement in diversifying our IBO portfolio with new forms of fuel and longer contract terms, which are expected to bring us stable recurring revenue over longer term. Looking ahead, we see a strong market outlook as a result of the ongoing structural power deficit in developing countries and the power reform of using more renewables in developed countries. With our strategic partnership with existing SI customers and success in our existing markets in Southeast Asia, we are well-prepared to expand our business into our target markets. In addition, we are actively pursuing strategic business opportunities in the developed. Supported by effective expansion strategy and growing market demand, we are confident to maintain a strong and sustainable growth momentum to achieve higher performance.”
About VPower Group International Holdings Limited (Stock code: 1608)
VPower Group is one of the world’s leading large gen-set system integration providers, and Southeast Asia’s largest private gas-fired engine-based DPG station owner and operator. The company derives operational synergies between its System Integration (SI) and Invest, Build and Operate (IBO) businesses. Under its IBO business, the company invests in, builds, and operates utility-grade DPG power stations. It is headquartered in Hong Kong and was listed on the Stock Exchange of Hong Kong in 2016.