Thai sugar miller KSL sees 2009 earnings up

(Reuters) - Thailand's fourth-biggest sugar miller, Khon Kaen Sugar Industry KSL.BK, expects firmer sugar prices and increased demand to push up revenue and net profit by 5-10 percent this year, a company executive said on Monday.

Chalush Chinthammit said global sugar consumption is likely to rise 1-2 percent this year, on par with growth last year, while raw sugar prices are likely to move in a range of 12-14 cents per pound, stronger than last year.

"The global economic downturn is unlikely to have a strong impact on the sugar industry. It's a basic good and we expect sugar consumption to grow steadily this year," Chalush said.

A Reuters poll of analysts showed last Wednesday that the global sugar market will move deeper into deficit next season, helping to support prices even though the global economic downturn will dampen demand.

The world supply/demand deficit is expected to widen to 5 million tonnes in 2009/10 (mostly Oct-Sept) from 3.75 million tonnes in 2008/09, the median forecasts in the poll of 12 analysts showed.

On Monday, IntercontinentalExchange March SBH9 raw sugar futures prices were down 0.04 cent at 12.63 cents per lb. LIFFE March LSUH9 white sugar futures prices ended $4.80 higher at $373.50 a tonne on Friday.

Prices have rallied strongly already this year with March raws up as much as 10 percent and March whites up as much as 16 percent.

Analysts expect world sugar production to rise in 2009/10 to 165 million tonnes, from 160.9 million in 2008/09. Consumption is also forecast to increase, to 167.8 million tonnes in 2009/10, from 164 million in 2008/09.

Chalush predicted a 5-10 percent rise in revenue and net profit in 2009, roughly in line with market expectations.

Three analysts polled by Reuters Estimates expected the company to report average 2008/2009 revenue of 11.5 billion baht ($329 million), up 3.5 percent from last year, with net profit seen rising 11.3 percent to 957 million baht.

It cut spending this year to 3.5-4.0 billion baht, from 5.0 billion baht, as it delayed a relocation of the second phase of its mill in the western Kanchanaburi province to next year, he said, adding that the funds would come from bank loans.

Khon Kaen expected to crush 5.8-5.9 million tonnes of sugar cane in its 2009 financial year to Oct. 31, up from 5.7-5.8 million tonnes a year earlier, as its two new sugar mills in Cambodia and Laos started production from March, Chalush said.

Khon Kaen exports about 60 percent of the sugar from its four Thai plants, and operates an ethanol plant with a daily production capacity of 150,000 litres (26,400 gallons) and a 30-megawatt power plant.

Sugar contributes more than 60 percent of revenues while revenues from ethanol, electricity and a carbon credit business make more than 30 percent.

At 0901 GMT, Khon Kaen shares were down 0.8 percent at 6.0 baht while the main Thai stock index .SETI was down 1.8 percent.

Shares in the firm, which has a market value of around $270 million, have gained about 20 percent in the last three months but are down some 60 percent over the past year, hit by global financial market turmoil and a sharp fall in commodities prices. ($1=34.96 baht)