Reading between the lines in the 2Q26 Management Discussion and Analysis of Earth Tech Environment Public Company Limited (ETC): Revenue up 13.2%. Net profit up 196.0%. And a Bt128m loan to the parent company that is not identified in 1Q26.
The numbers
Higher volumes lift the top line
Earth Tech Environment is a waste-to-energy power producer operating three plants, ETC, AVA, and RH, selling electricity under long-term power purchase agreements. In 2Q26, total revenue rose 13.2% YoY to Bt199m. Revenue from sales and services rose 13.9%, which the MD&A attributes to a 10.1% increase in electricity sales volume to 29.48m units. Electricity revenue rose across all three plants, led by AVA, up 16.2%.
Finance costs carry net profit
Gross margin was 32.4% in 2Q26, down from 33.0% in 2Q25, and profit from operating activities fell 2.8% YoY. Finance costs fell to Bt2m from Bt25m, following the reduction in the Group’s debt. Net profit rose 196.0% YoY to Bt36m, for a net margin of 18.1%.
Dividends and repayments shrink the balance sheet
Total liabilities fell 32.5% to Bt208m from Bt309m at FY25, with interest-bearing debt down to Bt84m from Bt146m. Equity fell Bt31m to Bt3,495m, as dividends of Bt108m paid in 1H26 exceeded net profit of Bt76m for the period.
What the numbers don’t show
Comparing the 2Q26 MD&A with 1Q26, a couple of things stand out.
A loan to the parent company is identified in 2Q26
The 2Q26 MD&A lists a long-term loan and accrued interest receivable from the parent company totaling Bt128m, net of the portion due within one year, which is 3.5% of total assets. The parent company is ETC’s controlling shareholder. The cash flow section records Bt50m in repayments from related parties during 1H26.
The 1Q26 MD&A does not identify the loan. Its list of significant assets includes five items, with the smallest at 4% of total assets. Its cash flow section reports Bt25m in interest received from “loans and investments” in 1Q26. Neither filing discloses the loan’s interest rate, maturity, or current portion.
Administrative expenses rise 15.4% in 1H26, with no driver named
The 1Q26 MD&A did not discuss administrative expenses. The 2Q26 MD&A adds a section reporting that administrative expenses and management remuneration rose 15.4% YoY to Bt54m in 1H26, contributing to an 18.0% decline in profit from operating activities. It provides only a six-month figure and does not explain what drove the increase. Quarterly selling, administrative and other expenses were Bt24m in 2Q26, compared with Bt16m in both 1Q26 and 2Q25.
The concluding paragraphs also differ. The 1Q26 conclusion cited long-term power purchase agreements and long-term growth opportunities. The 2Q26 conclusion refers to neither and names managing fuel costs and expenses as an area of focus.