Thailand: Banpu expects 20% growth in revenue

Thailand: Banpu expects 20% growth in revenue

SET-listed Banpu Plc, Thailand's largest coal producer, expects 2017 revenue
to grow by 20% from US$2.26 billion (76.9 billion baht) last year on the
back of rising global coal prices, according to chief executive Somrudee
Chaimongkol.

She said that while many countries have developed renewable power projects
over the past two years, demand for coal-fired power is still growing
steadily, enabling Banpu to reap higher revenue as coal prices climb.

The company forecasts an average sales price for coal of $63 a tonne this
year, up 20% from last year's $51.50, pushing coal sales revenue higher
despite flat sales volume.

Ms Somrudee said Banpu has agreed to deals for selling 21 million tonnes of
coal in advance. Of the total, 60% is committed at a fixed price to secure
revenue.

Demand for coal from China's power-generating system is expected to be even
higher next year as major reservoirs need to discharge little water to
prevent floods, forcing the operations of major hydropower plants to be
automatically suspended, Ms Somrudee said.

She said there were numerous mergers and acquisitions in coal businesses in
Australia, indicating a rising trend in the future.

On the Chinese front, she said demand for coal is steadily rising. Even
though most major cities are switching to cleaner energy from renewable
sources, fossil fuels are still needed for China's real sector.

Ms Somrudee said Banpu is also in talks to acquire a coal mine in Indonesia,
but gave no details, only saying the deal is expected to be finalised by
year-end.

She said Banpu is implementing a plan to expand its existing coal mine
reserve in Indonesia to 15 years of production, up from 11 years. That
increase in reserve could raise the company's total coal production volume
to 375 million tonnes.

Coal production in Indonesia represents almost half of Banpu's total sales
volume each year, she added.

The International Energy Agency (IEA) estimates that global energy demand
could rise 40% to 18 billion barrels of oil in 2035, up from 13 billion in
2017. But fossil fuels' portion of global energy demand will drop to 60% in
2035 from 70% this year, the IEA said.

BANPU shares closed yesterday on the SET at 16 baht, up 30 satang, in trade
worth 946 million baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1286159/banpu-expects-20-growth-in-
revenue

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com