16 August 2002 03:41 [Source: ICIS news]
SINGAPORE (CNI)--Thailand's struggling National Fertiliser Co (NFC) posted a net loss of Baht510.4m ($12.2m/Euro12.4m) in the first half of its financial year to 30 June 2002 compared to a net loss of Baht488.4m in H1 2001 due to a sharp drop in fertiliser production caused by severe liquidity problems.
NFC, which had principle debt of Baht8.3bn at the end of 2001, is currently undergoing a debt restructuring exercise under the aegis of the Thai Asset Management Corp (TMC).
As result of its cash flow shortage, the company was forced to reduce its production capacity to 30.6%, cutting back output of compound fertiliser in H1 2002 to 153 014 tonne from 282 323 tonne in the first half of 2001. The company's fertiliser plant has a full capacity of 1m tonne/year.
NPC's sales fell by 32% to Baht1.33bn from Baht1.97bn a year earlier. The company said its lack of working capital had meant it had been unable to meet customer demand for its product which it described as a "lost opportunity".
An independent auditor, Deloitte Touche, was appointed by TMC in March this year to come up with a debt restructuring plan after two Thai banks, Krung Thai Bank and Siam City Bank, decided it was too risky to extend a Baht900m loan to the cash-strapped company.
NFC has incurred losses since mid-1997, when the rapid fall in the value of the Baht hit the company and triggered the Asia-wide recession.
The company added to its debt in 2001 by posting a Baht1.8bn loss. NFC had hoped to produce 620 000 tonne of fertiliser in 2002 and post an operating profit of Baht400m. However, its H1 results mean the company cannot hope to achieve its full-year financial targets.
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