BAFS to step up dollar hedging to lessen blow

SET-listed Bangkok Aviation Fuel Services Plc (Bafs), the country's largest jet refuelling provider, plans to step up the hedging of its foreign-currency revenue to lessen the impact from baht appreciation.

About 90% of the company's total revenue, currently at $3 million per month, is in US dollars, and Bafs has been experiencing a foreign-exchange loss of three million baht each month as the local currency continues to appreciate, managing director M.R. Supadis Diskul said yesterday.

''The management will ask the board of directors to expand the currency-hedge ceiling to more than 50% of total revenue for more than three months,'' he said.

The company's hedging policy is now set to not exceed 50% of total revenue for no more than three months.

Chathaya Bandhaya, Bafs' finance and accounting manager, said the company expected its revenue to grow by 7% this year to 1.64 billion baht, higher than the previous projection of 5%, due to higher-than-expected demand at Suvarnabhumi Airport in the year's first two months.

The company projects its refuelling volume at the airport at 4,423 million litres this year, compared to 4,271 million litres recorded last year.

Bafs posted total revenue in 2006 of 1.53 billion baht, an increase of 25%, and a net profit of 461.5 million baht, up 10.5%.

The company announced a dividend payment of 42 satang per share for the second-half operation of 2006, divided into 40 satang per share in cash and two satang per share in stock dividend, which is offered at a ratio of five existing shares to one dividend share.

M.R. Supadis also said the company's subsidiary, JP One, had withdrawn a lawsuit filed against rival Thai Petroleum Pipeline Co Ltd (Thappline), a subsidiary of PTT Plc, claiming 5.18 billion baht in compensation for the latter's alleged tort and violation of the Trade Competition Act.

''We have reached a compromise with PTT. PTT agrees to rent our pipelines for two years before we both enter into full competition,'' he said.

He added that Bafs aimed to maintain its refuelling service market share at 85% at Suvarnabhumi Airport this year, down from 91% last year. The decline was aimed at helping its only competitor at the airport, ASIG, to survive.

''We don't want new and stronger competitors if ASIG fails to be commercially viable here,'' he said.

M.R. Supadis said Bafs would expand the operation at Don Muang airport from March 25 when the airport opens again.

Bafs's refuelling volume will rise to 700,000 litres per day from 40,000 litres per day currently to service three airlines moving to the old airport. They are some operations of Thai Airways International, Nok Airlines, and One-Two-Go. At Don Muang, it charges six US cents per gallon, higher than the five cents charged at Suvarnabhumi.

Bafs shares (BAFS) closed yesterday on the SET at 10.90 baht, unchanged, in trade worth 1.32 million baht.

 

Source: Bangkok Post by Aranee Jaiimsin
Wednesday March 21, 2007

 

BAFS dividend clarified

CORRECTION: In a story titled "BAFS to step up dollar hedging to lessen blow", published on page 12 of yesterday's Business section, the dividend of Bangkok Aviation Fuel Services Plc was misstated.

In fact, The company will pay a dividend for 2006 second half operations of 42 satang per share, of which 22 satang will be paid in term of cash dividend and the remainder in the equivalent of stock dividend at the ratio of five existing shares to one dividend share to its shareholders.

 

Source: INBrief, Bangkok Post
Thursday March 22, 2007