SET Announcements

September 2007 was 50.8% compare to plan of 61.0%. Major causes of this "behind schedule" came from 1) a very tight schedule in various fabrication shops due to lots of demand from several project constructions around the region, 2) potential shortage of skilled workers. The company is now in the process of discussion with the main contractor (CTCI) for recovery plan. However, as major equipments/machineries which required special attention due to specific design as well as materials and require longer time for fabrication collectively called Long Lead Items (LLIs) are very important for the overall construction schedule, the company had already identified 9 items to be under LLIs category and had preordered the LLIs since late 2005. Currently, all 9 LLIs has been completed and already been delivered to the construction site and some of which has been successfully installed. As the LLIs have been completed, the company still confident that the potential delay of other equipments is manageable and the construction completion is achievable within 2008. The oil prices will still be major parameters effecting operating result of the Company. Furthermore, another factor which may have effect on the Company's performance is the foreign exchange fluctuation (mostly Baht and USD). The Company purchases oil on US dollar term and sell its product on US dollar related basis and records transactions as trade payable and trade receivable respectively. Since the Company has assets greater than liabilities, the appreciation of Thai Baht will cause the decrease in net assets and vise versa. However, the Company has had the policy to leveling differences of US dollar assets and liabilities whenever it becomes appropriate. In the mean time, the Company has partly mitigated this risk by utilizing some financial instruments. The Company has appointed a specific department and from a special committee called Price Risk Management Committee (PRMC) which consists of top management executives to keep a close look on the situation and to give policy to perform risk management on the matter.