April 28, 2014 8:00 pm JST

Thailand's PTTEP reports 44% 1Q profit fall on weak currency

YUKAKO ONO, Nikkei staff writer

BANGKOK -- Thailand's top resource developer, PTT Exploration and Production (PTTEP), saw its net profit for the first quarter tumble 44% on the year to $380 million. A reduction in foreign-exchange gain amounted to about $100 million as the ongoing political turmoil has been weighing heavily on the local currency.

     Revenue slipped 4% to $1.8 billion. 

     The baht market has been weak since the large-scale anti-government protests began in Bangkok last October. In January, the currency hit a four-year low of 33 against the dollar. Depreciation from its Australasia project also dragged down profit in the first quarter.

     PTTEP, the listed arm of the oil and gas exploration business of state giant PTT, hopes its operating results will improve from the second quarter, with its $1 billion acquisition of the Thai operations of America's Hess expected to boost sales volume. In the first quarter, average sales volume climbed 2% on the year to 298,621 million barrels of oil equivalent (BOE) per day. The company's initial target was 325 million BOE by the end of the year, but the acquisition is expected enable the company to exceed the target by 3-4%, a PTTEP official said.

     Regarding the takeover, Moody's Investors Service released a report last Friday saying it will increase the company's production and reserves and "can be accommodated under its Baa1 issuer and bond ratings with a stable outlook."

     PTTEP shares rose 0.94% in Monday's morning session. The first-quarter results were in line with market projections.