Rising fuel costs to hit eternity profit

Eternity Grand Logistics expects its full-year net profit will fall 15 per cent short of target due to higher fuel costs.

Managing director Poonsak Thiapairat said yesterday that the company had negotiated with four new customers for logistics services to smooth its future income.

"Three of the four companies have high potential to sign contracts," said Poonsak, adding that if successful, Eternity would earn a combined annual income of around Bt41 million from the three prospective new clients.

He said the expected annual income from the fourth would be about Bt60 million.

The firm's first-quarter income was Bt259 million, down from Bt260 million from the same period last year and a fall of 10.68 per cent from Bt290 million the previous quarter.

Meanwhile, Eternity's first-quarter net profit was Bt11 million, unchanged from the same period of 2007, but sharply down - by 35.29 per cent - from the previous quarter.

However, Poonsak said the company's full-year net profit would be greater than the Bt44 million recorded last year. He expects 2008 sales will reach Bt1.3 billion, against Bt1.08 billion last year.

He also unveiled the names of the company's newest corporate clients: Thai Carbon Black, providing an expected annual income of Bt33.6 million, Thai Gypsum with Bt40 million, Taito with Bt16.8 million and Tipco with Bt1.2 million.

Previously, Eternity announced an increase in capital, under which 25 million shares will be sold to private investors, bringing its paid-up capital to Bt140 million.

Poonsak said the share sale should be concluded over the next few months, with more than Bt100 million expected from new investors.

He said proceeds from the mobilised funds would be used to establish a new 70:30 joint venture though a subsidiary to offer logistics services in Laos. The rest will be used to pay back short-term debts.

Poonsak said the company was also in talks with two Thai energy firms to set up two joint ventures. Eternity will hold a 20-per-cent stake in one of the ventures and 30 per cent in the other.

Eternity provides nationwide distribution, customs clearance and other logistics-related services.