Eastern wire shares hit 3-month low

Shares immediately fell to Bt9.60 from its price before suspension of Bt11.20, shortly after trading resumed in the first session, but they regained some ground to end the day at Bt10.20

Company director Chairath Rattanavichai explained in a statement to the SET yesterday it had forecast a Bt167-million loss for its subsidiary Ua Withya this year because the company had based its estimate for a 500-kilovolt (KV) power generation construction project on 2007 building-material prices.

"The price of raw materials has increased this year and UWC has contracted to deliver 9,900 tonnes of steel structures. The difference in the price from the date the company gave its estimate compared to the current price is not less than Bt15,000 per tonne and the price UWC will have to pay is equal to Bt148.5 million [excluding processing costs). In conclusion, the total loss from this project will be Bt167 million," the statement said.

The loss might cause UWC to cancel its dividend payment for its 2008 earnings, even though it recorded a net profit the previous year. The company used its 2007 profit to invest in other projects, the statement said.

"The SET has said the prospectus for the sale of UWC common shares had not included any information on the erroneous cost estimation of the loss-making project.

"The company would like to clarify that the estimation in the UWC prospectus was only for 2007 and the agreement for the project assessment was made on October 2, 2007 and signed at the beginning of 2008. This is why the estimation was not included in the UWC prospectus and also the detrimental effect of the higher price of steel," it said.

On Wednesday, EWC's stock was suspended as the SET requested the company disclose information regarding UWC's loss forecast.