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PTT Pcl [SET:PTT], Thailand's largest state-controlled fully integrated gas and oil company, said on November 12, 2015, that its third-quarter 2015 revenues were 505.07 billion baht, down 33.34% year-on-year, missing the 640.19 billion baht consensus estimate of 5 analysts, according to the Financial Times. The company said the revenue shortfall was mainly due to lower prices of petroleum and petrochemical products, while the depreciation of the baht against the dollar led to a foreign exchange loss of 6.9 billion baht.
The company posted a net loss of 26.6 billion baht in the third-quarter, missing the average forecast for a loss of 24 billion baht from 8 analysts polled by Reuters. Its previous record loss was 26.6 billion baht in the fourth-quarter of 2014. According to the Financial Times, PTT reported a dividend of 11.00 baht a share in 2014, which represents a 15.38% decrease from 2013. The 21 analysts covering the company expect dividends to get trimmed to 9.45 baht a share for the upcoming fiscal year, a decrease of 14.13%.
Reuters reported last week that PTT said it plans to spend 297 billion baht over the next five years, mainly on building infrastructure such as natural gas pipelines. PTT CEO Tevin Vongvanich expects the oversupply of crude oil to last until 2017. In early December, PTT CFO Wirat Uanarumit told Bloomberg that the plunge in oil prices has provided the “chance of a lifetime" for acquisitions of weaker players, and the company has about 350 billion baht that it needs to invest to generate returns.
The next earnings announcement from PTT is expected on February 18. According to Reuters, analysts have already cut their earnings forecasts for PTT by 30-60%, to reflect the weaker performances of PTT's subsidiaries, which are affected by the falling global oil prices.
Technically, PTT has been moving in an ascending triangle chart pattern, with head resistance at around the 400 baht per share level, since 2007. The ascending triangle broke down in July, with a projected price of 120 baht per share. There are strong supports at levels between 200 and 175 baht per share, which can be bounced off of if a balance between crude oil supply and demand is established. Nonetheless, CEO Vongvanich said that this can last until 2017 so PTT shares could be under selling pressure until then.
As of December 28, 2015, the consensus forecast amongst 24 investment analysts polled by the Financial Times advises investors that the company will outperform the market, with the median 12-month price target of 318 baht per share.
Disclosure: No position and no recommendation. |
