Banpu's China plants should boost income
Banpu Plc, one of the country's leading energy companies, yesterday reported second-quarter growth in sales revenues, but net profit was down 49 per cent on year to Bt807 billion, due to higher production costs resulting from surging oil prices.
CEO Chanin Vongkusolkit expected full-year sales revenues to grow 20 per cent to Bt30 billion, thanks to expected revenues from three power plants in China. The plants are expected to generate combined revenues of Bt2.5 billion, or 8 per cent of Banpu's total earnings. He also said the company's sales revenues next year would be more than 20 per cent higher than the Bt30 billion expected this year. The higher revenue projection is based on future income from the 1,400-megawatt BLCP power plant. He predicted that the income from the plant would generate one-third of the firm's total income. Banpu has a 50-per-cent stake in the BLCP power plant, which is expected to begin generating 700 megawatts of power in October and be running at full capacity by next February. Chanin said company revenues from its coal business had been stable so far this year, but Banpu would continue to focus on cost management by energy conservation and logistics management. As part of its cost-saving measures, the company has closed the Kitadin-Embalut Mine in Indonesia, which was providing a low return on the investment. About 90 per cent of Banpu's earnings this year are expected to come from coalmining in Thailand and Indonesia and the rest from the power-generation plants in China. However, once the power plants in Thailand and China start operating next year, the company predicts that 30-40 per cent of its revenues will come from power plants. Chanin said volatile oil prices were making earnings forecasts difficult, because Indonesia earlier this year imposed a new export tax requiring Banpu to pay US$1.50 (Bt56.25) per tonne. From its $611-million capital-expenditure plan for 2005-08, Banpu has already spent $211 million, and it will pay out another $70 million for BLCP in November. Chief financial officer Somruedee Sompong said Banpu planned to buy coalmines in China with an investment budget of $120 million by next year if it could negotiate the deal at a sensible price. She said China was an interesting country to invest in coalmines, because it had a huge demand for energy from coal.
Chalida Ekvitthayavechnukul The Nation
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