PTTGC budgets Bt300 bn for ten years

Firm seeks total revenue of Bt800 bn to Bt900 bn by 2022

PTT Global Chemical plans to invest Bt30 billion a year or Bt300 billion within 10 years to set up new petrochemical plants in Malaysia, Indonesia and China.

This will drive total revenue to between Bt800 billion and Bt900 billion in 2022, PTTGC CEO Anon Sirisaengtaksin said.

He added that the investment budget will come from the company's cashflow and issue of dollar debentures for $4.5 billion (Bt135 billion) to $5 billion within five years from now. The company issued debentures for $1 billion last year. The company plans to issue the next $1 billion in the last quarter of this year or may be in the first quarter of 2014. This will maintain its debt-to-equity ratio at not over 0.7:1 and debt to EBITDA (earnings before interest, taxes, depreciation and amortisation) at not over 2.4:1.

Currently, the company has a debt-to-equity ratio of 0.38:1 and debt-to-EBITDA of 1.3:1.

Meanwhile, the company plans to issue 10-year debentures to balance its business investment plan and also to manage its debt currency to match its income. As the company is investing overseas, it has to issue the dollar debentures. This is a part of managing foreign exchange risk by using natural hedging.

At present, 63 per cent of total debt is in baht and the rest 37 per cent in US dollars.

Following the investment plan, the company is studying to expand the investment in three countries, including Malaysia, China, and Indonesia.

In Malaysia, the company will join with Petronas Group, while Indonesia will join with Pertamina Group, and China will join with Sinochem Group.

"We will finalise the decision on the joint venture in the middle of this year, which will be the final only two projects for this year. This is a part of managing our financial debt," he said.

The company targets its EBITDA will grow an average 15-30 per cent within five years from now or an average growth of 5-6 per cent a year from now, recording Bt55 billion. This will drive its total revenue to between Bt800 billion and Bt900 billion in 2022, he said.

The company announced total revenue of Bt562 billion and net profit of Bt34 billion for 2012, up 12 per cent and 13 per cent respectively from 2011.

Meanwhile, PTT Exploration and Production plans to increase its share in Mozambique's Rovuma Offshore Area 1 after existing shareholder USA-based Anandarko Group and India-based Videocon announced their decisions to sell their 10-per-cent stake each, the company's president and CEO Tevin Vongvanich said.

Currently, Anandarko Group, who also operate Mozambique Rovuma Offshore Area 1, hold 36.5-per-cent stake in this offshore area, while Videocon hold 10 per cent.

PTTEP subsidiary Cove Energy Co holds only 8.5 per cent stake in Mozambique Rovuma Offshore Area 1.

Meanwhile, the company is also interested in investing in shale gas and shale oil in the US. That decision would depend on business opportunity as currently the company has a debt-to-equity ratio of only 0.35:1. There is enough room to raise funds or issue debentures to support business expansion in the future, he said.

The company announced total revenue of Bt218.13 billion and Bt57.31 billion net profit for 2012, up 25 per cent and 28 per cent respectively over 2011.

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Article source: http://www.thethailandlinks.com/2013/02/22/pttgc-budgets-bt300-bn-for-ten-years/