Power plants, coal at core of new Banpu plan
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Banpul Plc is preparing a new five-year business plan in preparation for the current plan ending in 2015, the company has revealed.
Chief executive Chanin Vongkusolkit said the investment budget might be lower than in the past under the new plan and would focus mainly on the company’s power plant business, while the company would also focus on managing its current coal assets.
Chanin added that there would be no problem with Banpu’s investment fund, which had already been allocated, even though the company’s profit had declined because of weak coal prices globally.
The developments came as a securities broker revised down Banpu’s profit for this year by 26 per cent to reflect coal prices.
Chanin said the company would focus on power plants in Asean and China - both for current projects and new business opportunities.
He said Banpu would focus on its current coal-asset management amid weak prices and there were good future prospects.
In Australia, Banpu had reduced its operations costs in line with its plans. Banpu’s production base in Indonesia and China remained strong.
Chanin said Banpu had the means to manage its financial liquidity as it had managed its debt well.
Based on the company’s U$735 million (Bt24.1 billion) investment in China’s Shanxi Lu Guang 1,200 megawatt power plant, KKTRADE Securities Co Ltd appraised the appropriate price-level range of its stock as Bt0.90 – Bt1.12 per share.
The power plant is expected to commence operations by 2017, with Banpu having a 30-per-cent equity holding in it and the rest a loan.
The cash flow from its power plant business should be more stable than the coal business, which is subject to price volatility and helps Banpu diversify business risks.
However, the power plant project is still in the early development stage and is susceptible to changes in the future.
Banpu has revised down its projected net profit for 2014 from Bt4 billion to Bt3 billion to reflect currency exchange losses over the past nine months of over Bt295 million and a Bt778 million loss in special expenses related to taxes on coal and mining in general in Australia.
