PTTEP results top expectations
Written by Writer on Wednesday, October 29th, 2008
PETROLEUM
PTTEP results top expectations
BUSRIN TREERAPONGPICHIT
PTT Exploration & Production Plc yesterday reported a stronger-than expected third-quarter profit of 12.98 billion baht (3.93 baht a share), up 84% from the year before. Nine-month net profit rose 66% to 34.88 billion baht (10.57 baht a share) from 20.97 billion (3.68 baht a share) in the same period last year. Higher production and high natural gas and petroleum lifted third-quarter sales 80% year-on-year to 40 billion baht. Average selling prices rose to $54.52 per barrel of oil equivalent per day (boed) from $38.75 a year earlier.
Average daily petroleum sales climbed to 240,839 boed from 15 projects from 207,533 boed in the first half of the year.
Analysts expect sales volume to rise to 250,000 boed in the last quarter due to the startup of the Arthit North field in the Gulf of Thailand and a rise in crude production at its gas field in Vietnam.
However, Kitichan Sirisukarcha, a Tisco Securities analyst, forecasts a slight earnings drop in the fourth quarter in line with the plunge in world crude prices.
”But the fall is very marginal, since the gas price in the fourth quarter is still strong. There are price increases in some fields, so the fall of crude may not be that significant,” he said.
He forecast full-year net profit of 46 billion baht, against 28.46 billion in 2007, with average sales volume for this year to rise by 25% to at least 223,000 boed.
Mr Kitichan said the company would remain a strong performer in the long term despite highly volatile crude prices, since 70% of its revenue came from natural gas, for which prices are more steady.
Analysts are also upbeat about PTTEP’s long-term strategy as it is considered a low risk compared to other energy firms, and its gas prices are reviewed quarterly.
Even though demand declines across the globe are foreseen, the company may have felt only a slight impact, Mr Kitichan said. It is flexible in adjusting its plans and investment budgets to serve the current situation.
”You will see its investment plan being revised from time to time while its loans and earnings all are in dollar terms which is a natural hedge. It won’t be hurt even during a time when the baht is weakening,” he said.
PTTEP also has three projects in the pipeline scheduled to start between 2008 to 2010, which could drive its sales volume to grow around 15% a year, he added.
PTTEP was the most active stock on the SET yesterday, and closed at 81 baht, up six, in trade worth 2.27 billion baht.
Bangkok Post
Wednesday October 29, 2008
