Thailand's Polyplex to more than double net income in fiscal 2011

05 January 2011 07:40  [Source: ICIS news]

SINGAPORE (ICIS)--Polyethylene terephthalate (PET) producer Polyplex (Thailand) is expected to more than double its net income in its fiscal year 2011 on the back of strong demand growth and higher margins, DBS Vickers Securities said in a research note on Wednesday.

The firm, a wholly owned subsidiary of India's Polyplex Corporation, was forecast to post a net income of baht (Bt) 2.73bn ($91.2m) for the full fiscal year of 2011, versus a gain of Bt1.04bn in the previous year, according to the note.

Polyplex’s fiscal year 2011 ends on 31 March this year.

The company was also expected to post higher earnings in the second half of fiscal year 2011, which runs from July-December 2010, after posting a record net profit of Bt762m in the second quarter of the fiscal year, DBS Vickers said.

Estimated revenue for fiscal year 2011, meanwhile, was expected to be 49% higher year on year at Bt10.6bn, it said.

“Polyplex, the world’s fourth largest film producer, will benefit from a structural change in film applications as well as demand growth,” Naphat Chantaraserekul, an analyst at DBS Vickers, said in the report.

The company could also profit from higher PET spreads in 2011, which reached a record high of $2,500/tonne (€1,875/tonne) at the end of last year, led by an increase in global demand for non-packaging applications such as electronics and photovoltaic components, the report said.

Anti-dumping measures by the US on PET imported from China, Taiwan, South Korea, India and Brazil could also benefit the firm, it added.

“The import rate for Polyplex’s products is at the normal rate of 4.2%, making its products competitive… Going forward, PET film demand should be mainly driven by developing countries in Asia, the US and Japan,” DBS Vickers said.

The US and Japan were the two largest importers of PET film, it added.

Polyplex’s PET films are used in three market segments - packaging, industrial and electrical - which represent 92% of global consumption, according to the report.

The firm’s third quarter financial figures were not immediately available.

An investor relations official at the company declined to comment on DBS Vickers’ full-year earnings projections.

Polyplex was expected to release its October-December earnings figures in the last week of January this year, the company source said, without elaborating.

($1 = Bt29.93, $1 = €0.75)

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By: Nurluqman Suratman

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