Rayong Refinery's net profit drops by 35 per cent
Rayong Refinery's 2006 net profit plunged 35.24 per cent from Bt11.98 billion to Bt7.76 billion due to the decline in gross refinery margin (GRM) and the absence of gain from debt restructuring.
The company said in a filing with the Stock Exchange of Thailand (SET) yesterday that its GRM in 2006 fell from US$7.10 (Bt253) per barrel on average in the previous year to $5.60 per barrel. In the fourth quarter last year, the oil refiner's GRM stood at $4.11 per barrel. Even though the company's revenues from sales of goods and services rose significantly from Bt142.99 billion in 2005 to Bt178.44 billion in 2006, its gross profit declined from Bt13.77 billion to Bt9.40 billion. Its earnings before interest, tax, depreciation and amortisation last year amounted to Bt8.95 billion, compared with Bt13.20 billion in the previous year. Rayong Refinery in 2006 recorded no gain on debt restructuring while in the previous year it booked a Bt5.42 billion gain, the company said. The company's fourth-quarter operating expenses, however, were lower than the same period last year by $0.30 per barrel due to high maintenance costs for a turnaround shutdown for 36 days in 2005 and lower intake caused by the shutdown. In 2006, operating expenses were reduced by $0.06 per barrel from 2005 to $0.83 per barrel as the plant returned to normal operation. The company's interest expenses in 2006 were substantially reduced from 2005, resulting from a reduction in loans outstanding following repayments using funds from the initial public offering and cash generated from operation. The interest expenses for the fourth quarter in 2006 were only $0.32 per barrel, a reduction by $0.63 per barrel from the corresponding period a year ago, while interest expenses for 2006 were $0.51 per barrel, a reduction of 38 per cent from 2005. From both factors, the company's cash cost for 2006 was only $1.34 per barrel, a reduction of 22 per cent from 2005. Its sales for 2006 were 85 per cent domestic and 15 per cent exports. Sales to PTT at the domestic market price represented 77 per cent of total capacity. Sales of reformate to Aromatics (Thailand) and light naphtha to PTT Chemicals amounted to 3 per cent and one per cent of total sales, respectively. Product exports last year were mostly to China, Singapore and Vietnam. Meanwhile, its board of directors has approved that the company pay an annual dividend of Bt1 per share for 2006's financial results. The dividend payment will be available on May 15.
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