INTERVIEW-Thai Banpu sees higher coal sales, no financial woes

BANGKOK, Feb 12 - Banpu PCL <BANP.BK>, Thailand's top coal miner, expects no financial problems over the next few years despite economic gloom as low debt and sustained sales growth should help it maintain cash flow, its top executive said.

"Our cash flow should not drop this year because our sales are still growing," Chief Executive Chanin Vongkusolkit told Reuters in an interview. "Considering our overall financial position, we should be safe over the next 2-3 years."

Banpu, which had a net debt to equity ratio of 0.4 times, planned several measures to mitigate risks from the global economic crisis, including forward contracts for coal sales for 2009 and 2010, Chanin said.

Despite the growing impact of the global recession on energy demand, consumption of coal used by Asia's power plants should not fall as much as other energy sources, providing some cushion against a drop in coal prices, he said.

Some 90 percent of Banpu's thermal coal is sold to power plants, mostly in Japan, Taiwan and South Korea.

Banpu's gross profit margin would be flat at 45 percent this year, as rising costs from opening new mines in Indonesia would be offset by falling energy costs, while 2009 selling prices should be stable at around $72 per tonne, Chanin said.

Banpu, also the fourth-largest operator in Indonesia, maintained its sale volume forecast of 20.5 million tonnes, up 11 percent from an estimated 18.5 million tonnes last year.

That meant 2009 revenue should rise about 10-12 percent from about 50 billion baht ($1.43 billion) last year, he said.

Fifteen analysts polled by Reuters Estimates forecast 2009 revenue would rise 5 percent to 52.5 billion baht. Net profit was expected to rise 12 percent to 11 billion baht in 2009.

As part of its attempt to minimise financial risks, Banpu planned to sell up to 7 billion baht of bonds in the domestic market in the second or third quarter of this year to refinance existing debt, Chanin said.

The bonds should have maturities of three to five years, he said. ($1=35.07 Baht)