Thailand: Tirathai eyes post-2017 revenue surge

Thailand: Tirathai eyes post-2017 revenue surge

SET-listed Tirathai Plc (TRT), a transformer manufacturer, expects to miss
its 2017 revenue target of 3 billion baht, citing the persistent economic
slowdown.

Chief executive Sumpan Vongphan said full-year revenue will reach an
estimated 2.6 billion baht, up 15% year-on-year.

Of the total revenue, domestic sales generated around 70% of revenue, with
the rest from exports.

Previously, the company expected revenue next year to grow beyond 3 billion
baht, a growth of approximately 20%.

Tirathai expects several transformer jobs and services to be available for
bids next year, worth up to 8.6 billion baht. Of the total, 4.3 billion baht
is expected to be from the state power utility, 1.03 billion baht from the
private sector, 870 million baht from the export market and around 2.3
billion baht from transformer services, he said.

In total, the company expects 20-25% of total bids next year to be awarded
to the company.

Mr Sumpan said Tirathai has a backlog of transformer and services jobs worth
2.22 billion baht. Of the total, jobs worth around 829 million baht will be
completed and delivered by the fourth quarter of this year, around one
billion baht will be completed by next year and around 386 million baht will
be completed by 2018.

He said the estimate for jobs next year excludes a 10-billion baht contract
for the Electricity Generating Authority of Thailand (Egat), which is part
of the Egat project to develop high voltage transmission lines nationwide,
an investment of over 300 billion baht to be developed from next year to
2020. Tirathai is one of the companies qualified to join the bidding.

Mr Sumpan said other potential transformer and steel fabrication jobs over
the next two years will come from privately-invested renewable power plants.

He said transformer jobs and services in Asean are rising in potential
because countries are experience rapid economic growth, bringing about
strong growth in power and power transformer services.

In light of these expected changes, Tirathai estimates revenue over the next
two years will rise to above 5 billion baht despite missing its revenue
target of 3 billion baht next year.

To achieve this, Tirathai plans to invest 400 million baht towards improving
production facilities of new transformers in its existing factories in Bang
Pu Industrial Estate.

The new facilities are expected to start operating by the end of this year
and will contribute to expand the company's capability to produce
500-kilovolt transformers that match new jobs it will be awarded over the
next few years, he said.

Its new factory will have the ability to build transformers of up to 9,000
megavolt amperes, up from the current 5,000 MVA amperes.

Tirathai expects its balance sheet this year will move into the black after
its loss of 58.3 million baht in 2015 due to the cost overrun from its main
project.

TRT shares closed yesterday on the Stock Exchange of Thailand at 3.90 baht,
down 14 satang, in trade worth 7.86 million baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1159741/tirathai-eyes-post-2017-rev
enue-surge

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com