Thailand: Banpu expects Q2 sales to show 10% growth

Thailand: Banpu expects Q2 sales to show 10% growth

SET-listed Banpu Plc, Thailand's largest coal miner, expects to post a 10%
increase in sales volume in the second quarter against the previous three
months, as it continues to cash in on the rising price of the commodity.

Chief executive Somrudee Chaimongkol told the Bangkok Post that output from
Indonesia is expected at 6 million tonnes in the three months to June, up
10% from the previous quarter, with an additional 4 million coming from its
Australian coal operations.

The sales volume, however, is relatively unchanged year-on-year.

The increased sales were largely driven by growing demand from China where
floods have diminished the country's hydroelectric power capacity.
Coal-fired power plants have been active in meeting this shortfall, Ms
Somrudee said.

"Coal demand in China is up for both domestic output and imports," she said.
This has benefited Banpu, which has coal mines in China and exports to the
mainland from its Indonesian and Australian operations.

The two Chinese mines in which Banpu holds a 45% stake produce a total of 8
million tonnes. Exports from Australia and Indonesia to the mainland account
for about 8% of Banpu's annual sales volume of 45 million tonnes.

Coal imports into China are likely to be similar to last year at about 170
million tonnes as Beijing has focused more on buying coals from domestic
mines but this means "Banpu's Chinese coal mines can produce and sell more
coal in the country", said Ms Somrudee.

She said coal prices have been rising as demand from most Asian countries
remains solid. The benchmark price of high-quality coal closed last Thursday
at US$96 per tonne, up from around $60 last year.

"We have seen coal prices moving up since the first quarter. Prices this
quarter are even better. We can say Banpu's average selling price will be
better than our forecast," Ms Somrudee cited.

Banpu has said it average selling price will rise from $55 per tonne in 2016
to $67 this year. Coal in the paper market is now quoted at $83-$84 per
tonne.

Coal price in the Chinese market, meanwhile, has hit a ceiling of 600 yuan
per tonne ($90), and the price has been increasing every month, she added.

Analysts estimate that Banpu's quarter-on-quarter sales revenue will rise
slightly. Maybank Kim Eng estimates Banpu's sales revenue will increase 2-3%
from the first three months to 23 billion baht in the quarter to June
through the sales of 9 million tonnes.

Revenue forecast took into account the appreciation of Thai baht, said
analyst Sutthichai Kumworachai.

Yuanta Securities projects Banpu's second-quarter revenue from its coal and
power generation businesses would edge down by 1.7% from the first quarter
to 21.9 billion baht as coal prices slid 3.7% from the first three months.

Ms Somrudee said the coal market has stabilised, balancing demand and
supply, partly thanks to China's moves to shut down coal mines that were not
environmentally-friendly.

BANPU shares closed yesterday on the Stock Exchange of Thailand at 17.30
baht, unchanged, in trade worth 692 million baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1302695/banpu-expects-q2-sales-to-s
how-10-growth

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com