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Published on March 1, 2008

While BT Securities anticipated a 34-per-cent increase in revenue this year, chief executive officer Chanin Vongkusolkit said that though the average coal selling price could rise to about US$60 (Bt1,900) per tonne this year, the skyrocketing prices would probably have an impact on the performance of its coal-fired power plants in China.

"If the coal price surges more than 30 per cent, it will eat into the profit and cash flow of the three power plants in China," said Chanin.

Last year the net profit of its power business rose sharply, by 238 per cent to Bt4.411 billion. However, he said it had been difficult to achieve the strong growth of last year due to the rising coal price and high demand for thermal coal in China.

According to data from coal-research group McCloskey, supply of thermal coal will be around 580 million tonnes, while demand will be 473 million tonnes, mostly from Europe, North America and Asia. Demand and supply will become tighter because of supply problems in Australia and China.

The company targets production of 20 million tonnes of coal this year, most from its mines in Indonesia and only 500,000 tonnes from Thailand.

Banpu recorded a net profit in 2007 of Bt6.654 billion, an increase of 84 per cent from the previous year, thanks to higher equity income from the BLCP power plant and surging profits from its coal business.

Of total net profit, Bt5.92 billion came from its coal and power business and the remaining Bt734 million from selling share capital of its subsidiary PT Indo Tambangraya Megah Tbk and the disposal of 10 per cent of its investment in a coal firm.

However, the cost of sales also increased 1 per cent due to oil-price rises and an increase in the mine-stripping ratio.

Banpu's revenue dropped 3 per cent to Bt32.442 billion due to lower coal sales by volume from 21.7 million tonnes in 2006 to 19.3 million tonnes last year as well as the baht's rise.

Of total sales revenue, the coal business made up 88 per cent and the power-generation and steam business 12 per cent.

Chalida Ekvitthayavechnukul

The Nation