Politics, China's policy hurt AOT'S profit

Corporate May 15, 2014 00:00


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Airports of Thailand's net profit in the second quarter dropped by 18.05 per cent year on year to Bt3.694 billion.

Total revenues also dropped by Bt888.10 million. Total expenses rose by Bt337.83 million, though income-tax expenses decreased by Bt431.23 million. 
In a statement to the Stock Exchange of Thailand, AOT said the economic recoveries in the United States, the European Union and Japan between October and March boosted growth in Thailand’s tourism and airline industries. 
“However, the enforcement of the Chinese tourism law since October 2013 had a significant impact. Meanwhile, the ongoing local political instability also affected the operations of Airports of Thailand,” it said.
The total number of passengers at all six of AOT’s airports in the six-month period expanded by only 5.09 per cent. In the first three months of 2014, the growth rate was only 0.32 per cent. 
Nine of the 11 members of the National Broadcasting and Telecommunications Commission (NBTC) board yesterday voted to approve the draft plan to auction two telecom licences for the 900-megahertz spectrum.
Pravit Leestapornwongsa and Supinya Klangnarong, the two members who voted against the draft, raised concerns that the starting bid price was too low, said NBTC secretary-general Takorn Tantasith.
He added that both members said the combined reserve price of the two licences should be Bt28.14 billion, the full value of the spectrum, instead of the Bt19.705 billion as approved by the NBTC telecom committee.
The NBTC will auction two licences on the spectrum, one for 10MHz bandwidth at a starting price of Bt11.26 billion, and the other 7.5MHz at a reserve price of Bt8.445 billion. Supinya and Pravit said the prices should be Bt16.08 billion and Bt12.06 billion respectively.
The NBTC will put the draft and the concerns of Pravit and Supinya to public hearing soon. It plans to auction the 900MHz licences in November.
The Securities and Exchange Commission is allowing broader investment in foreign investment products and permitting more business operators to provide services in foreign-currency-denominated securities. 
SEC secretary-general Vorapol Socatiyanurak said the Capital Market Supervisory Board recently approved a revision of regulations to expand the list of investment products denominated in foreign currencies permissible for accredited investors. 
This is in preparation for the capital account liberalisation plan of the Bank of Thailand to allow retail investors to make overseas investments directly. 
The number of foreign tourists to Thailand is expected to reach 26.19 million this year, down 1 per cent when compared to 26.7 million last year, according to the Tourism Authority of Thailand.
Tourism revenue is expected to reach Bt1.24 trillion this year, up 3 per cent from last year.
Govt agency hopes to register 70,000 new firms this year 
In spite of the political instability, the Business Development Department is optimistic that it will register 70,000 new companies this year.
Pongpun Gearaviriyapun, director-general of the department, said many new investors would continue to recognise the opportunities offered by Thailand’s good economic fundamentals. Last year, about 67,000 new companies set up in Thailand.
To attract more new investors, the department will allow new enterprises to register outside their own districts. The new measure will take effect on June 2. 
More Central products
Central Food Retail Co is investing more than Bt30 million to raise the profile of its in-house brand, adding 3,000 more products. 
These will include the best of Otop (One Tambon, One Product) from across the country, with foreigners as the main target customers. The company expects sales to increase by 25 per cent or Bt2 billion from last year’s.
SCG gets into flexible packaging 
Siam Cement has taken a 22-per-cent stake worth Bt340 million in Prepack Thailand Co through a new share subscription, marking the group’s first flagship expansion into the flexible-packaging industry.
SCG’s investment was made via Thai Containers Group Co (TCG), a 70:30 joint venture between SCG Paper, an SCC subsidiary, and Rengo Co Ltd (Japan). 
Prepack is an integrated producer and service provider of flexible packaging products, with a capacity of 14,000 tonnes per year. Its plants are located near its customer base in Samut Songkram, 90 kilometres from Bangkok, and Rayong, 190km from the capital. 
In fiscal 2013, Prepack registered sales of Bt1.47 billion and assets of Bt965 million.
SCG Paper focuses on two strategic chains – packaging and fibrous. Prepack is in the packaging chain, and represents its strategic positioning as an integrated packaging solution provider. 
TCG is constructing a flexible-packaging facility in Vietnam with a rated capacity of 3,000 tonnes per year, which will begin commercial operations this quarter.
Used primarily in food and consumer products, flexible packaging has a demand growth rate that is one of the highest among all forms of packaging. 
New Toshiba entity
Toshiba Solutions has expanded into Asean with the establishment of an entity in Thailand to provide ICT (information and communication technology) services to Toshiba Group and affiliates and other companies operating in Thailand.
In April last year, Toshiba Solutions set up its presence in Singapore, and the new entity in Thailand is its second step to enhance business in the Asean region.
The Thai entity will provide cloud base and cloud services to Japanese and local companies. The human-resource management system, which has a proven track record in Japan and is implemented in Toshiba Group companies in Thailand, will be introduced to Japanese companies with operations in this country. 
Gunkul LED lighting company
Gunkul Engineering has established a subsidiary called Gunkul LED Lighting Co with registered capital of Bt10 million to carry out the manufacturing and distribution of light-emitting diodes for bulbs.
Sales up, net profit down
at Jubilee Enterprise
Jubilee Enterprise, a listed company, has announced sales of Bt346.92 million for the first quarter, up 1.66 per cent from the same period last year. 
Net profit was posted at Bt45.9 million, down 14.76 per cent year on year, said Unyarat Pornprakit, chief financial officer and director.
She said the decline in net profit was due to higher expenditure, in line with the company’s business expansion this year. 
Jubilee Enterprise’s target is to increase its number of outlets from 112 currently to 130 by year-end. 
The company however expects to generate Bt1.8 billion in sales for the full year, which is in line with its earlier target, she added. 
Two may leave SET 50 
in second-half 
Thai Airways International may be evicted from the SET-50 index in the latter half of this year, brokerage houses say. In a research note, Asia Plus Securities said Ch Karnchang might share the same fate. 
They are likely to be replaced by MK Restaurants and Kiatnakin Bank when the Stock Exchange of Thailand announces the new list for the calculation in the July-December round, Asia Plus said.
Kim Eng Securities (Thailand) noted that THAI appeared to be headed for a bigger loss this year than previously expected. 
At an analysts’ meeting last week, THAI estimated that it would show a Bt3.5-billion loss in the first quarter. However, Kim Eng said the actual loss could be 20 per cent higher. 
The airline will face the low season in the second quarter, while political conflicts will dent travelling demand among Asian travellers, who account for 51 per cent of the company’s revenue.
Meanwhile, analysts were told that THAI planned to decommission two more aircraft, to bring the total to 15 this year.
It also announced a cut in its investment budget by 28 per cent to Bt18 billion and the lay-off of some 2,000-3,000 employees in the next three years. 
The SET-50 Index is calculated from the stock prices of the top-50 listed companies in terms of market capitalisation, high liquidity and compliance with requirements regarding the distribution of shares to minor shareholders.
Gunkul Engineering sets up 
LED lighting subsidiary
Gunkul Engineering has established a subsidiary called Gunkul LED Lighting with registered capital of Bt10 million to carry out the manufacturing and distribution of light-emitting diodes for bulbs.