What makes up the earnings of JHDP ?
I realised that some are still pussled by the earnings of JHDP. Let me clarify;
Please take note that the demonstration below is kept simple for better comprehension. As unrealistic assumptions were made, hence, do not use the figures for evaluation purposes.
I extracted the information below from my previous article;
Jaks Resources - Effect of Plant Efficieny on Profit
https://klse.i3investor.com/blogs/Jaks%20resources/2020-03-14-story-h1484838111-Jaks_Resources_Effect_of_Plant_Efficiency_On_Profit.jsp
Therefore, potential EP profit based on Mong Duong II revenue for 2019 is;
Profit = (43.3% - 34.8%) / 34.8% x USD343m
Profit = 24.4% x USD343m = USD84m (1)
Earnings based solely on Capacity payment
Earnings = Capacity Payment – Loan receivable repayment – Interest Expense
Earnings = USD253m – USD67m – USD1,287m x 6% (Est)
Earnings = USD109m (2)
Assuming 25 years of equal
Capacity and Energy Payments, the total capacity and energy payment
received from Vietnam EVN will be;
Capacity Payment = USD253m X 25 years = USD6,325m
Energy Payment = USD343m X 25 years = USD8,575m
Total Payment Received = USD6,325m + USD8,575m = USD14,900m
To calculate total Net Profit for 25 years;
Total Capacity and Energy Payment = USD14,900m
Total Cash Injection = Total Project Cost - Construction Profit (23% margin) - Bank Loan
Total Cash Injection = USD1,870m - USD430m - USD1,402m = USD38m
Total Construction Profit = USD430m
Total Bank Loan Payment = USD1,402m
Total Interest Payment = (USD1,402m x 6% x 18 years) / 2 = USD757m
Total Fuel Costs = (USD343 - USD84m) x 25 years = USD6,475m
Hence;
Assuming zero taxes and O&M costs for simplicity
| USD million | |
| Capacity and Energy Payments | 14,900 |
| Less : Equity Capital Cash Injection | 38 |
| Less : Construction Profit (Equity capital) | 430 |
| Less : Bank Loan | 1,402 |
| Less : Bank Interest Expense | 757 |
| Less : Fuel Costs | 6,475 |
| Net Profit | 5,798 |
Part of the
net profit of USD5,798m will be reported as Interest Income as it is
considered financing in nature. Note that the construction profits were
recognised during the construction period and formed part of the equity
capital injection.
This article demonstrated that the BOT
operator recovers it capital, loans, construction profit, bank interest
expense as well as interest income through Capacity payment. While
Energy payment deals with day to day production of electricity.
Just a simple article to explain how JHDP recovers its capital costs with investment returns. I hope this article explained well.
Thank you for reading.
https://klse.i3investor.com/blogs/Jaks%20resources/2020-03-18-story-h1484863876-Jaks_Resources_What_makes_up_the_Earnings_of_JHDP.jsp
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