Hyflux

[CY09]

Interesting knowledge has been added from the past few posts.

From what i see on the link: https://www.openelectricitymarket.sg/abo...sting-data

Currently the electrical companies are selling to SP powers at a price of about $0.15-$0.15857/Kwh based on the vesting data. To hyflux, it seems at this level, power generation is not profitable to them. This is because the marginal cost of their plant is likely more expensive than the LRMC of the bigger players.

With the liberalization of the electrical markets starting with Jurong, Hyflux is pricing to sell its electricity at $0.188 Kwh while Keppel Electric is pricing theirs at $0.165/Kwh.

Senoko, one of the largest Genco, in Singapore is selling at 5% off the market tariff of $0.2156 Kwh, this means about $0.205 Kwh. Adding a free 3 month to its 24 months contract, this means approximately $0.179 Kwh based on existing tariff rates. Geneco Co., which is another large Genco is selling at $0.1780 Kwh.

All in all, it seems Hyflux is going to have a tough competition when the market liberalizes. It is a small-medium player in the market with its 400MW plant. The bigger players have plants generating up to 3,000MW. There are many larger electrical players such as Geneco, Senoko, Keppel , Tuaspower and even Pacificlight. And from the prices these players are selling to Jurong residents, their offered electricity price is cheaper than Hyflux's. It also shows that they have a lower cost structure than hyflux's. After all, Hyflux had obtained the Tuas plant by positioning it as a desalination plant, bidded to sell water at a very low rate and selling the remaining electricity in a bid to cover cost. it is very likely why the Tuas project is making losses is because the revenue from water operations is also below the desalination cost.

If Hyflux could adjust the price of the water it is selling upwards, the whole Tuas spring project may turn profitable

<not vested in any Hyflux instruments any longer>

[amperex]

Thanks yeokiwi.

I'm wondering, when they allowed hyflux to sell their retail bonds to the general public ( not all bonds can be retail and  they are  selected on some criteria )and most of the generators  say they can't recover cost , probably due to the price fixed by EMA , and if hyflux were to go under...and many moms and pops with  their retirement funds decimated.what a big hoo ha it will be since the outcome is largely blamed at the ones who fixed the prices and the ones who allowed it to be sold...

Gosh. What's happening !!

I think no one can blame anyone. Nobody owes anybody a living whether you are moms and pops or brothers and sisters. If you don't know what a 6% perpetuals issued by Hyflux means and still want to buy them, then you are either lazy or stupid or greedy or lazy stupid and greedy.

hi amperex,
Certain points have already been made and it adds no value regurgitating it in a different form. Please take note of some of the descriptive words you have used - They are not encouraged on VB.com.

Moderator

Noted. Thanks

[AQ.]

Tuas Spring as a power generator may not attract much attention, but as a desalination plant, it has its value as a strategic asset for the Singapore government.  I doubt the replacement cost for a new desalination plant today is significantly lower than Hyflux's cost.  Optimistically, never underestimate our government's willingness to pay to maintain national sovereignty over water availability and water self-sufficiency..... of course, I am biased becos I really hate to see Hyflux/Olivia Lum goes down.

I won't be surprised if ST Marine injects some capital into Hyflux in return for expertise in handling the new desalination plant STM clinched. There's prob some value esp if STM intends to make water treatment a new focus now that O&G is in the dumps.
Makes sense esp now that Olivia stepped down from ST BOD so there's no conflict of interests.

Still, common equity is woefully insufficient and even if Olivia is willing to dilute massively,the absolute amount of equity that can be raised is still too little given market cap of ~200mio. Stemming bleed @ TuaSpring is still the most important.  

Personally i doubt if regulators will relent and increase the vesting levels but odds are not 0.

[cyclone]

Hyflux Awarded Contract for A Seawater Reverse Osmosis Desalination Package in Bandar Abbas, Iran

Hyflux Ltd announced that its wholly owned subsidiary, Hyflux International Pte Ltd, has been awarded a contract by Asia Water Development Engineering Company (AWDEC) to design, manufacture and supply a seawater reverse osmosis desalination package in Bandar Abbas, Iran. The project excludes local marine, civil and structural works, and is valued at approximately EUR 68.7 million, with an additional EUR 10.5 million for optional add-ons such as equipment and technical advisors.

The desalination plant is designed to produce 200,000 cubic metres of water per day, and will form one out of five desalination plants which AWDEC plans to build as part of the proposed Saghi Kosar (SAKO) Desalination and Power Plant in Bandar Abbas, Iran. The SAKO Desalination and Power Plant will feature five desalination plants able to produce 1,000,000 cubic metres of water per day, and a 300 - 400 MW power plant. When completed, the SAKO Desalination and Power Plant will address the growing domestic water scarcity in Iran and serve industries in the South East of Iran.

The contract is to be fulfilled over 2 to 3 years, and is expected to contribute to the financials of Hyflux for the financial year ending 31 December 2018.

[sgdividends]

Thanks cyclone..

I wonder whether the Iranian entity looked into the financials of hyflux.

I mean many properly developers in our surrounding countries leave infrastructure half built.

The Iranians must have lots of faith! Hopefully , it's not a cheaply sold project. EUR 68.7 seems small.

Hope it's good news. ..

Vested at IPO. And last week vested again small smsll

[yeokiwi]

http://www.businesstimes.com.sg/energy-c...ercapacity

PRESSURE is mounting in the Singapore power generation sector. Mired in massive overcapacity for the past few years, all generation companies (gencos) but one have slipped into the red.

And if the situation persists, there is a possibility a genco could go bust, some warn

[BRT]

http://www.businesstimes.com.sg/energy-c...ercapacity

PRESSURE is mounting in the Singapore power generation sector. Mired in massive overcapacity for the past few years, all generation companies (gencos) but one have slipped into the red.

And if the situation persists, there is a possibility a genco could go bust, some warn

"Today's overcapacity can be traced back to the high prices in 2012 which led gencos to add new capacity, said Chong Zhi Xin, associate director at IHS Markit's power, gas, renewables and coal practice."

"EMA, while taking the stand that investments in generation capacity are commercial decisions taken by companies themselves, said it also recognises the importance of a well-functioning and sustainable market for both suppliers and consumers."

generally agree with EMA's stance. if you increase capacity when prices are high, and ask for a lifeline when they are low, something seems off with that.

[yeokiwi]

generally agree with EMA's stance. if you increase capacity when prices are high, and ask for a lifeline when they are low, something seems off with that.

To a certain extend, Yes. But since EMA is also regulating the price of electricity and, it is not as if you can sell electricity without license from EMA, it is not really that fair to base their profitability solely on their "poor" decision.

It is not really that nice to let them bleeding red continuously. Do it long enough, taxpayers will have to pay for all future gencos building cost or the BOT cost will be marked up significantly.

[sgdividends]

Price high or low is dependent on EMA.

Whether gencos go bust or not is not left to the market forces.

[karlmarx]

http://www.businesstimes.com.sg/energy-c...ercapacity

PRESSURE is mounting in the Singapore power generation sector. Mired in massive overcapacity for the past few years, all generation companies (gencos) but one have slipped into the red.

And if the situation persists, there is a possibility a genco could go bust, some warn

1) Most are in the red for only a year or two. Only Tuaspring has been in the red since it started for the past 5 years. With the exception of Tuaspring, the rest of the gencos should be able to survive more than a few years.

2) Hence, if EMA were to adjust price upward, there will be few reasons to doubt that the intent is to save Tuaspring.

3) If the present situation persists, maybe Tuaspring can only be sold for a third of its book. But if EMA intervenes to the benefit of gencos, there is a good chance that it can be sold for close to book. I sense that someone wants to save the Hyflux debt holders.

4) BT's opinion is that demand for electricity is unlikely to grow sufficiently to benefit gencos, hence the need for EMA intervention. But what if demand grows more than expected, a few years down. Then what? Is EMA going to sympathise with the businesses/consumers? Will BT then report that high electricity prices are "unsustainable" for businesses/consumers?