Seasonal factors are likely to dampen Dynasty Ceramic's earnings this quarter, but the broker still anticipates a favourable result that is higher year-on-year.

Although prices fell slightly quarter on quarter, the tile-maker's gross margin should rise quarter on quarter helped by a higher capacity utilisation rate. Due to debt repayment, interest expenses should continue to decline to about 4 per cent from 6 per cent last quarter.

Dynasty Ceramic's earnings in the second half should improve year on year due to various factors, including rising demand after last year brought prolonged floods and the political crisis.

Production costs should decrease due to reduced electricity charges and the baht's appreciation. Fixed costs per unit should drop due to higher capacity utilisation, reduced gas consumption due to its energy-saving programme and lower interest costs as it switched to internal cash to repay its debts.

Selling and administrative expenses should also fall as a result of reduced oil prices and lower freight charges.