The SET-listed PTT Global Chemical Plc (PTTGC), Thailand’s largest petrochemical firm, expects a better performance in the second half of this year.
Bowon: Industry bottoming out
Chief executive Bowon Wonsinudom yesterday said the petrochemical industry would bottom out during the second quarter.
Mr Bowon said brighter prospects are foreseen for the latter half, as new aromatic capacity is getting lower in the global market and the prices are bottoming out.
The paraxylene-condensate spread was US$330 a tonne in the first quarter, down from $669 in the same period last year, but is likely to bottom out this quarter, he said.
In the first quarter, PTTGC achieved revenue of 146 billion baht, up by 4% year-on-year, for a net profit of 6.29 billion, down by 47.6%.
Mr Bowon said the first-quarter profit was 2 billion baht below the forecast given a few weeks after a maintenance shutdown.
"We expect performance to improve in the second quarter thanks to higher olefin prices. Also, the company has resumed full-capacity production following the shutdown," he said.
Despite Thailand's economic slowdown and political impasse, PTTGC remains confident its full-year net profit will be better than last year, as the olefin price is expected to rebound sharply, Mr Bowon said.
Meanwhile, the company has been in talks with plastic compound and petrochemical producers to develop a plastic compounding business in Thailand to serve growing demand from the automotive and electrical/electronics sectors.
A final investment decision will be announced this year for at least two projects costing several hundred million baht.
Mr Bowon said Asian demand for plastic compounds in the automotive and electrical/electronic sectors was 12 million tonnes a year in 2012 out of 19 million tonnes globally. Of the total, 1 million tonnes came from Southeast Asia.
Chief financial officer Patiphan Sukhonthaman said PTTGC expected plastic compounds and high-value polymers would account for 25% of earnings before interest, taxes, depreciation and amortisation (EBITDA) within the next eight years, from less than 1% last year.
Last year, EBITDA was 50 billion baht and is expected to grow to 55 billion baht this year.
PTTGC shares closed yesterday on the Stock Exchange of Thailand at 69.75 baht, up 75 satang, in trade worth 735 million baht.