ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Thai oil firm confident of foreign investors' stay despite Gulf of Thailand spill
Publication Date : 28-08-2013
PTT Global Chemical (PTTGC) believes foreign investors still have faith in the company despite the recent oil-spill crisis, as reflected by the 32.9-per cent rise in foreign holding of its shares from last year.
PTTGC was prompt in disclosing information to investors and the public about the recent oil-pipeline leak. It has allocated 1 billion baht (US$30 million) to prepare for future similar accidents.
Full-year profits are still hard to estimate, especially after increased product prices, but should become clearer after the current third quarter, said finance and investors relations manager Titipongse Julapornsiridee.
PTTGC kept foreign institutional investors informed of the situation and developments via video conference when the leak off the coast of Rayong province forced suspension of operations of some of its plants.
The company plans to use the "Thailand Focus" event being held by the Stock Exchange of Thailand today and tomorrow to assure foreign investors of its competitive edge in terms of relatively lower production costs than rivals.
Projected operational results (before the third-quarter figures are released) for this year are still hazy, as the company was affected (2 per cent of its full-year profits) by the closure of its LDPE (low-density polyethylene) plastic-pellets plant for repairs, as well as the expected three-to-five-month suspension for repairs on its fifth gas-separation plant, which was hit by lightning.
The impact on PTTGC's profits is estimated at about 400 million baht ($12 million) per month.
Furthermore, the short- and long-term damage done by the oil spill to marine life and the coastline environment are responsibilities PTTGC will have to resolve with the help of Chulalongkorn University, Burapha University and other state agencies.
PTTGC is undertaking surveys to determine the extent of the impacts. The company expects to secure insurance compensation by next year.
Meanwhile, PTTGC has set aside a 1 billion baht budget specifically for this case, which should eventually affect its profits.
The second half of the year is the high season for business, coupled with a rise in prices of products. As the global economic situation improves, the third-quarter results should be a good indicator of full-year performance.
PTTGC has set a $4.5 billion investment budget for the next five years, which will be funded by $2 billion in loans and $2.5-billion cash flow. It will invest 64 per cent of the funds in new projects and raise production productivity by 31 per cent.
The company plans to invest in the Indonesian petroleum sector jointly with a company there.
It hopes to sign the memorandum of understanding by late this year. PTTGC will hold a 49 per cent equity stake, and operations will commence next year.