Thai Bangchak sees lower 2010 EBITDA, sets investment

Thai oil refiner Bangchak Petroleum (BCP.BK) forecast lower 2010 earnings on Thursday and said it would spend 6.0-7.5 billion baht ($180-226 million) over the next two years to boost efficiency and invest in ethanol.

A drop in refining margins expected in 2010 would push earnings before interest, tax, depreciation and amortisation (EBITDA) below the roughly 8 billion baht targeted this year, President Anusorn Sangnimnuan told reporters.

"The reason we expect lower EBITDA is largely because we see refining margins falling to $4-5 a barrel," Anusorn said.

Its EBITDA for the first nine months of 2009 stood at 6.6 billion baht, and its refining margin, excluding the impact from oil inventories, was above $8 a barrel, compared with the industry's $4-5 a barrel, Anusorn said.

BCP is majority-owned by the Thai Finance Ministry and state-controlled energy giant PTT (PTT.BK).

Anusorn said Bangchak was on track for record profits this year, fuelled by high gross refining margins from output at a new unit and oil hedging.

The company made a net profit in the third quarter of 2.15 billion baht against a loss of 252 million baht a year earlier.

Refining capacity in 2010 was expected to be 90,000 barrels a day, up from an average 80,000 barrels this year on the back of the economic recovery, Anusorn said.

Bangchak, which plans no major plant shutdown in 2010, would finalise partnership plans for its 2 billion baht ethanol business by the end of this year or early 2010, Anusorn said, expecting a return on investment of about 10 percent.

The company would also increase the number of its gas stations to 250-260 next year from this year's expected 130.

source: reuters