Ruling may cost PTT 10% of earnings

       The earnings of PTT Group and its subsidiaries may fall 10% in 2010 due to court-ordered construction delays at its projects in the Map Ta Phut industrial estate in Rayong, according to Thanachart Securities.
       The court ruling, which affects 76 industrial projects, could also delay PTT's planned consolidation of its petrochemical units, the brokerage said yesterday.
       "If construction of PTT's sixth gas separation plant cannot finish by the first or second quarter of next year, the group's net profit in 2010 will be lower than the forecast," said Pichai Lertsupongkit, senior vice-president at Thanachart.
       The brokerage earlier forecast PTT's earnings would reach 78.13 billion baht next year, up from an estimated 54.88 billion this year.
       The 25 PTT projects affected by the court ruling in-B54.88bn clude PTTCH's one-million-tonne ethylene cracker, which was expected to start in the final quarter of 2009. In the worst-case scenario, PTTCH's new cracker and downstream businesses could be delayed from the original schedule to the end of 2010, slicing almost 36% from forecast earnings of 8.66 billion baht.
       Without its oil upgrading unit, PTTAR,an oil refining and petrochemical maker,could fall 5% short of its projected earnings of 11.6 billion baht, Thanachart said in its report released yesterday.
       The uncertainty continues to hang over the share prices of PTT, PTTAR,PTTCH and Siam Cement, another m-
       jor industrial conglomerate affected by the ruling, the report said.B78.13bn
       "It's highly likely the announcement of merger deals among PTT associates could be delayed further primarily due to the court order to suspend various projects of PTTAR and PTTCH."
       The suspension means the revision of valuations and swap ratios of these firms, the report added.
       "We believe the private sector should be protected as they have followed the government agencies' rules," it added.
       PTTAR executives yesterday declined to give a figure for the impact of the court decision, saying the affected companies could not evaluate the size of damages with the current information.
       "We don't even know what we can do, what we cannot do and what we have to do," said Chainoi Puankosoom,chief executive of PTTAR.
       "Each subsidiary of PTT is examining the court ruling in detail in order to evaluate the actual damages. We can't say anything otherwise we will be considered as bad guys. It's the government's responsibility to clear the issue."
       The company is considering how to cope with the effects of the operations'suspension, he added."We will talk with our contractors for the US$220-million upgrading project to consider our case as force majeure , as it was beyond our control. We hope they may understand and will not be to harsh in suing us," said Mr Chainoi.
       Construction on the upgrade was due to start by the year-end and operations were planned to start in 2011, he said.
       The Energy Ministry will also have to put off the new Euro 4 emission standard to 2011, since the upgraded oil refining units that could meet the standard cannot operate due to the court's ruling.
       "We are ready to do anything whether they [the environmentalists and the court] want us to go ahead, or make a new EIA (environmental impact assessment), health impact assessment or do both EIA and HIA, just say it. So far we are stuck. Everything seems very uncertain," said Mr Chainoi.
       PTT shares closed yesterday on the SET at 258 baht, down three baht, in trade worth 767.5 million baht. PTTAR fell 40 satang to 24.10 baht.