BANGKOK - Thailand's Eastern Water Resources said on Tuesday it expected its net profit to rise 40 percent in 2009, better than analysts' forecasts, thanks to lower costs and a price increase.
The company planned to revise down its budget for its five-year business plan as a result of the government's stimulus packages, which aimed to invest in some water projects, President Praphant Asava-aree told reporters.
We have raised selling prices of untreated water to reflect higher costs, which should boost profit to show growth of 40 percent this year, he said, adding Eastern Water had been aggressive on cost savings and made an early debt repayment to save interest costs.
Two analysts polled by Thomson Reuters I/B/E/S expect a 30 percent rise in net profit for 2009 to 786 million baht ($23.7 million). The company reported a net profit of 662 million baht for the first nine months of 2009, up 44 percent from a year earlier.
Eastern Water, Thailand's biggest industrial water supplier, manages water resources and distribution systems in eastern Thailand, home to many industrial estates, refineries and petrochemical plants.
Untreated water contributes 70 percent of revenue and tap water the rest.
A pick-up in demand from industrial clients and an improving economy should help the firm beat its 2009 target for untreated water sales, while 2010 revenue was expected to rise 8-10 percent, with estimated untreated water sales of 239 million cubic metres, Praphant said.
Eastern Water, which is in the process of revising its business plan, planned to spend 1.3 billion baht next year to build a third water pipeline to serve rising demand, especially from clients at the Map Ta Phut industrial estate, he said.
On Tuesday, Eastern Water shares were down 0.5 percent at 4.08 baht, outperforming a 2.1 percent fall in the overall stock market. (Reporting by Pisit Changplayngam; Writing by Khettiya Jittapong; Editing by Alan Raybould)