The stock started the day at Bt58.50 and fell to the day's lowest level at Bt57 before closing at the same level as the opening price.

AOT was among the losers yesterday as the SET index dropped 1.30 per cent on profit-taking, following a 7-per-cent rally over the past few weeks.

Analysts, however, gave mixed responses on AOT's outlook following King Power's lawsuits claiming compensation of Bt68.9 billion for the "unlawful" nullification of contracts to run duty-free shops at Suvarnabhumi, Phuket and Hat Yai international airports.

Transport Minister Theera Haocharoen said King Power has a right to file the lawsuits but he had not received any official report about this from AOT.

As a state-owned enterprise, AOT will have to hold discussions with the Office of the Attorney-General regarding defence of the case.

He said there should be no problem as "AOT's board of directors is confident of winning the case".

An analyst at Ayudhya Securities said the broker has maintained its "hold" recommendation as the lawsuits were in line with expectations.

"Our house has already revised Airports of Thailand's normalised earnings estimate downward this year to Bt529 million. This is based on Bt4 billion in revenue from King Power shaved off this year as AOT has nullified the contracts," the analyst said.

In March, AOT's board terminated two contracts with King Power, the sole operator of duty-free shops and commercial areas at Suvarnabhumi Airport, saying the contracts were illegal. The decision was made on the grounds that the contracts should have been scrutinised by state agencies under the Public-Private Joint Venture Act because they were worth over Bt1 billion each.

The analyst said AOT would receive new revenues after the court case is settled by providing contracts to operate duty-free shops to other firms.

Seamico Securities said in a note that it recommended selling AOT stock at a fair value of Bt52 for 2007. The fair value has yet to factor in revenues contributed from King Power that have now disappeared.

The broker estimated that AOT's normalised profit would drop to Bt540 million.

"If AOT must pay the compensation claim, it would have a significant impact on the company," the broker said.

AOT's acting president, Kulya Pakakrong, yesterday said in a filing with the Stock Exchange of Thailand (SET) that the lawsuit won't affect the company's revenue during the legal process as King Power has made advance payments of Bt4 billion covering the next two years.

The company has excluded revenue from its lease contract with King Power in calculating its earnings, she added.

In filing the lawsuits, Chulchit Bunyaket, King Power's deputy chairman, said late on Monday: "We have to defend our rights since the termination of the contract has affected our businesses."

Oranan Paweewun

The Nation