Coal market lifts Banpu profit 73%

       Banpu Plc, one of the region's biggest coal miners, posted a strong increase of 73% in net profit for the second quarter on higher coal sales volume and value,according to chief executive Chanin Vongkusolkit.
       The SET-listed company's secondquarter profit totalled 3.98 billion baht,up 73% year-on-year, on sales of 12.93 billion, a 17% increase from a year earlier.First-half profit doubled 8.78 billion baht from 4.37 billion.
       The company said higher sales volume and a higher grade of coal resulted in better selling prices from its Indonesian mines, while it also saw gains from its holding in a Chinese coal mining business.
       Hebi Mine, a joint venture with Asian American Coal Inc, generated equity income to Banpu of 1.76 billion baht, a 55% increase from the first quarter, as a result of higher output and strong coal prices in China.
       Banpu's average coal sales price in the second quarter was US$73.89 per tonne, a 12% decrease from $84.23 a quarter earlier as its contracts for the quarter were priced during the second half of 2008 when market prices were down.
       Despite the softening average price,its coal sales volume in the quarter was up 1% to 4.51 million tonnes from the first quarter, on higher production and better management of coal shipments from Indonesia.
       Mr Chanin said the company expected to increase its coal output in the latter half of the year in line with the expansion of its Indominco production area in Indonesia.
       Meanwhile, its power subsidiary BLCP contributed profit of 1.25 billion baht,up 122% from the first quarter, helped by 286 million baht in foreign-exchange gains.
       The China-based power business,Banpu Power Investment (China) Ltd (BPIC), which operates combined heat and power plants, reported a net profit of 101 million, down 55% from the first quarter this year as a result of lower steam demand in line with the postwinter season.
       Around 92% of Banpu's total revenue came from coal, rising 18% in revenue to 11.84 billion. Total sales of power and steam from the three combined heat and power plants in China were 1.08 billion baht, accounting for 8% of total sales revenue.
       According to Siam City Research Institute, Banpu's net profit in the latter half of the year is likely to weaken mainly due to a shutdown of production at BLCP,and softening coal prices. The brokerage forecasts full-year net profit at 10.9 billion,an increase of 19% year-on-year.
       Banpu is also exploring investment opportunities in resource-rich countries such as India and Australia.
       Banpu shares closed yesterday on the Stock Exchange of Thailand at 408 baht,down two baht in trade worth 1.31 billion baht.