TPI Polene (TPIPL) announced rather disappointing 2Q06 earnings with a normalised profit of Bt244mn (norm EPS Bt0.31), down 52% yoy, but up 52% qoq. This was a rather low base for earnings comparisons.
The cement business was affected by the slowdown in cement demand and much higher energy costs, while petrochemical business was hit by a low spread between LDPE - Ethylene. If including extra items, the net profit would have been Bt344mn (EPS Bt0.44), down 70% qoq, but up from last year’s loss of BtBt256mn. In 2Q2006, TPIPL realised a foreign exchange gain of Bt99mn compared to a foreign exchange loss of Bt765 mn in 2Q2005.
The 2006 earnings will continue to disappoint the market due to the lower cement demand affected by the construction activity slowdown and the problem of high energy costs. However, TPIPL will have good news on gains from debt restructuring, under the debt repurchase process (DPR) of around Bt2,542mn in the second half.