Asia Green Energy loss of THB 142.75 million for the H1 as coal prices fell but analysts expect higher prices in the H2 as world demand rises.

For the Q2 AGE reported a loss of THP 65.95 million compared with a net profit of 73.4 million a year earlier. The loss of THB 143 million against a net profit of 148 million in the first 6 months of last year was due mainly to a sharp drop in coal prices in line with the global economic slowdown.

A Phillip Securities analyst said that AGE bought coal at a high price early in the year and the price has fallen continually. AGE doesn't operate its own mine hence it has high risks when the global price of coal is volatile. While those firms that operate their own mine can manage cost efficiently, another key factor in a company's performance is the global economy.

Mr Panom Kuansataporn MD of Asia Green Energy said that the company had Q2 revenue of THB 1.17 billion down by 16.3% YoY but up by 58.7 million from the Q1. The current coal price is USD 85 per tonne down from USD 110 earlier this year. Progress has been made in establishing a subsidiary in Indonesia that increased its capital to USD 2.4 million from USD 1 million and is expected to be complete in the H2.

Mr Benjapol Suthvanich an analyst at Kiatnakin Securities said that even though AGE had no stock loss in the previous quarter, material costs remain high and could affect gross margin. Coal prices by the end of the Q2 fell to 2,500 baht a tonne down by 6% QoQ. AGE's gross margin fell to 1.6% in the second quarter from 8.1% in the first quarter.

Source - Bangkok post

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