TPI : disappointing 2Q04, but full year 2004 promising, Thailand

TPI Polene (TPIPL) announced disappointing 2Q04 earnings with a normalised net profit of Bt701m down 46% QoQ, but up 44% YoY. This is below estimated normalised net profit of Bt1216m, this was due mainly to the high cost of goods sold, high SG&A expenses and high interest payments.

Although 2Q04 earnings were disappointing, sales and normalised earnings for the first 6 months were Bt10,459mn and 2,004m, respectively, or around 48 per cent of full year estimates. So 2004 forecast for sales are maintained to Bt21,978m, up 15% and a normalised profit of Bt4,219m (EPS Bt5.22) up 49 per cent .

TPIPL major businesses of cement (64%), petrochemicals (24%) and mixed concrete (12%) will benefit from expansion in construction from the property sector and government infrastructure projects, while the LDPE/EVA business will continue to benefit from the high cycle in petrochemicals through 2006.