INTERVIEW-UPDATE 1-Toyo-Thai prepares for Myanmar, sees higher profit

Mon Feb 27, 2012 7:07am GMT

Quotes

   

* See higher 2012 net profit as order book surges

* Keen to invest in Dawei project and elsewhere in Myanmar

* Plans 2 bln baht investment in energy, utilities

(Adds quotes, details)

By Ploy Ten Kate and Wirat Buranakanokthanasan

BANGKOK, Feb 27 (Reuters) - Contractor Toyo-Thai Corporation Pcl TTCL.BK expects higher net profit in 2012 thanks to a healthy order book and wants to invest in natural gas in Myanmar to position itself for future growth, senior executives said.

Toyo-Thai, 26 percent owned by Japan's Toyo-Engineering (6330.T) and partly held by Chiyoda Corporation (6366.T), is looking at energy and utility businesses in Myanmar and hopes to win construction contracts for a petroleum complex in Dawei in Myanmar once a huge port and industrial project there gets going.

"The way we see it is that Myanmar will be big for us in the future," Suratana Trinratana, vice-president for its sales and procurement division, told Reuters in an interview.

The company set up a subsidiary in Myanmar last year to serve its potential investments and provide integrated engineering contractor services to clients.

Italian-Thai Development Pcl ITD.BK is leading the $8.6 billion Dawei port and infrastructure project that would make Myanmar an entry point for goods into the region, although progress on the project remains uncertain. [ID:nL4E8D336E]

"Even though the Dawei project hasn't happened yet, we're able to bring in people and train them now. The thing is, we're not just waiting for Dawei to happen, we can do our part by looking at opportunities in other areas," he said.

"In Yangon, for example, there's a shortage of gas ... Demand for it is rising, so it's one of the sectors that we're looking at."

Toyo-Thai, also 7-8 percent owned by top Thai builder Italian-Thai and associates, is expected to report a 39 percent rise in net profit to 557 million baht in 2012 on revenue of 11.1 billion baht, according to Thomson Reuters I/B/E/S.

On Friday, it posted an 18.5 percent rise in 2011 earnings to 399 million baht with sales up 69 percent at 8.9 billion baht.

Suratana said Toyo-Thai planned to spend 2 billion baht

($65.9 million) this year on investment in energy and utilities, with Toyo-Thai being both a contractor and holding stakes in the projects.

HEALTHY ORDER BOOK

Kobchai Thanasukarn, general manager for the finance and investor relations division, said delays in booking revenue from outstanding projects were likely to drive revenue growth until at least 2013.

"We have about 15 billion baht in backlog now, which is still very high despite a drop from a peak of 19 billion," he said, referring to outstanding orders. "Of this, we expect to realise at least 7-8 billion this year and that's why we're confident our revenue can grow 30-40 percent."

"The remainder will be carried over to next year."

Toyo-Thai operates a contractor business, including integrated design and engineering, procurement of machinery, equipment and materials, and construction services for turnkey projects for industrial and processing plants.

Its major clients are operators in the petroleum, petrochemical and chemical industries such as Thailand's PTT (PTT.BK) and Belgium's Solvay SA (SOLB.BR).

Toyo-Thai owns about 71 percent of Navanakorn Electric, the developer of a 110-MW combined-cycle plant in Pathum Thani provice that is due to begin operating in the first quarter of 2013, delayed by a quarter due to flooding last year.

"Return on investment is agreed at 10.5 percent of investment," Kobchai said.

Power utility Korea Midland Power Co (KOMIPO), owned by state-run Korea Electric Power Corp (KEPCO) (015760.KS), is in the process of buying about 30 percent in the small power plant from Toyo-Thai.

Kobchai said Toyo-Thai had a good chance of winning other projects overseas, especially a desalination project in Qatar in a consortium led by Japan's Mitsubishi Corp (8058.T) and Hitachi Zosen Corp (7004.T). The result is due in the second quarter.

At the midsession break, Toyo-Thai shares were down 0.7 percent at 14.20 baht but not far from a record high. The broad market .SETI was flat.

($1 = 30.37 Baht)

(Editing by Alan Raybould)

((ploy.tenkate@thomsonreuters.com)(+66 2 648 9735)(Reuters Messaging: ploy.tenkate.reuters.com@reuters.net)) Keywords: TOYOTHAI/

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