Thailand's largest coal miner Banpu Plc expects to perform better in the second half than in the first due to higher production volume from its Australian and Indonesian coal mines.
Ms Somruedee Chaimongkol, the chief financial officer, said production at the Sydney based Centennial Coal will return to a normal 3.6 million tonnes in the third quarter after falling to 3.3 million tonnes in the second.
Indonesian coal output is projected at 7.2 million tonnes for the third quarter, up from 6.62 million tonnes in the second. The Bharinto mine commenced production this quarter and is expected to produce 700,000 tonnes by year end. Normal annual capacity of the mine will be 4 million tonnes.
Banpu's total output will increase by 2 million tonnes to 44 million tonnes this year, rising to 45 to 46 million tonnes in 2013.
Ms Somruedee said that Australia's benchmark Newcastle price has rebounded by USD 5 a tonne in the past two weeks to above $90 after falling to a low of USD 85 to USD 87. She said prices are expected to edge up in the fourth quarter, but the year's average will be lower than last year's.
Banpu's net profit in the second quarter fell by 14% YoY and 2% by quarter to THB 2.73 billion. Revenue in the quarter increased by 19% YoY to THB 29.6 billion, with coal sales accounting for 95% or 28.1 billion and the rest power and stream revenue. Coal sales rose by 11% to 9.93 million tonnes.
The average coal selling price was USD 90.35 a tonne for the quarter, up by 5% YoY. The Indonesian price lost 3% YoY and 6% QoQ to USD 94.20 a tonne.
Indonesian coal generated THB 19.9 billion, with Australia contributing 8.2 billion and domestic coal 21 million. Earnings per share stood at THB 10.06, up from THB 1.63 in the same period in 2011. Banpu is now forecasting consolidated annual coal output of 55 million tonnes by 2015, up by 11 million tonnes from this year.
Mr Chanin Vongkusolkit CEO of Banpu said that it has been through several economic downturns and faced many short term setbacks. He added that "We have a strong component of power earnings and domestic coal sales that provides a degree of protection during periods of weak coal prices."
In the first half of 2012, nearly a third of operating earnings came from the power business and domestic coal sales. The remaining two-thirds came mainly from coal exports to large creditworthy industrial customers.
Mr Chanin said given the current market conditions, Banpu will cut costs and postpone some capital expenditures.
The weakening coal price has prompted Banpu to cut its capital expenditures for 2011-15 by 30% to USD 1.25 billion from nearly USD 1.75 billion.
Source - Bangkok Post
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