The Company achieved a net consolidated profit of Bt 1,765 million more than triple the profit of 2005 (Bt 561 million) and corresponding to a net return on capital employed (ROCE) of 42%. Net Earnings per share are 7.81 Baht compared to 2.48 Baht in 2005.
The total revenue from sales and services amounted to Bt 10,305 million, an increase of Bt 4,154 million (+68%).
The increase of the zinc price pushed the income of the company significantly upwards, even if it was partially limited by the locked-in forward sales price and the lower production.
Market information
The local market demand was surprisingly sustained in the first half but slowed down in Q3 to fall by 24% in Q4 amidst political uncertainty and a zinc price that impacted the end-users. On a year basis, the demand grew only by 2% compared to 2005
Sales of metal totaled 94,823 tons of metal, some 7,000 tons lower than in 2005 reflecting the reduction in exports (mainly of alloys). Despite the drop in Q4, domestic sales over the period actually increased by 4% compared to the previous year.
The income was also limited by a further reduction of import duty for zinc from 5.5% to 3.25% that, due to the soaring zinc price went almost unnoticed by the market.
Production
Production of ingots was 96,469 tons, a 5% decrease year on year due to the combined low availability of concentrates on the market and the lower grade produced at the Mae Sot mine.
Outlook
Even though the structural deficit of zinc may partially ease in the short term, the prospects for the zinc business remain very good for the coming year.
The Company is presently in the process of discussing the final EIA and expects to receive the new Mining Lease before mid October, the date of expiration of the present lease, although the complexity of the administrative procedure may induce some delay. Raw materials have been provided for that eventuality.
The study of the Puthep deposit (a joint venture with Pan Australian in Loei province) has finally resumed after a long holiday due to the land accessing process. The feasibility study has started early January and is expected to last until 2008. The resources identified represent a potential project of 50,000 ton of copper during 6 years.
Exploration has also started in Laos, Kasi sector in the 800 km² concession recently granted for prospection.
Established on April 10, 1981, Padaeng Industry Public Company Limited is listed on SET in the sector Mining. It is the only producer of SHG zinc in Southeast Asia with an annual production capacity of 110,000 metric tons of zinc metal and alloys.
The Company?s zinc mine and smelter are located in Tak province; the roaster plant is located in Rayong province and the head office in Bangkok. The Company employs about 1,020 employees.
