* Deepening slump in exports hits SE Asian companies
* PTT cuts investment budget to 54.6 bln baht from 100.6 bln
* Board reviews 5-year budget on Aug. 3
(Adds analyst comments, details)
BANGKOK, July 11 Thailand's top oil and gas
firm, PTT Pcl, has slashed its 2013 investment budget
by 46 percent to 54.6 billion baht ($1.75 billion), joining
other Thai companies in scaling back spending in response to
lower-than-expected global economic growth.
In the one of the strongest steps taken by a top regional
company since a slump in Southeast Asian exports in recent
months, state-controlled PTT said most of its cutbacks involved
planned foreign investment.
"We need to be more cautious because there are signs that
global economic growth will be weaker than expected after
several domestic and foreign research houses revised down their
projections," chairman Parnpree Bahiddha-Nukara told reporters
Parnpree, who took office last week, added some projects at
home have been delayed because it would take time to complete
mandatory environmental and health impact assessments.
"It's quite reasonable because PTT doesn't need to spend a
lot of money in the short term. It will help boost cash flow and
reduce costs," said Parin Kitchatornpitak, a senior analyst at
PTT shares responded positively, rising 2 percent after the
cuts were announced.
"It's good in the sense that PTT will have more cash in
hand," said Parin. "The growth in the global economy should slow
in the second half or until early next year."
On Tuesday the International Monetary Fund cut its forecast
for global growth in 2013 to 3.1 percent from 3.3 percent.
Projections for Thailand are also being scaled back as
exports are subdued and local investment and consumption slow.
On June 27 the Finance Ministry forecast GDP growth of 4.5
percent for this year, down from 5.3 percent projected in March.
PTT had been among big Thai firms that have bought overseas
assets in the past few years.
Charoen Pokphand Foods Pcl, Thailand's largest meat
and animal feed producer, has slashed its five-year investment
budget by a third, while Thai Union Frozen Products Pcl
, the world's largest canned tuna marker, has cut
investment this year by 17 percent.
A deepening slump in exports has sent tremors through Asia,
threatening to undermine some booming emerging economies that
have surged ahead in recent years on a heady combination of easy
credit, buoyant consumer demand and strong domestic investment.
Export growth throughout Asia has sagged in recent months,
hit by slackening demand from the United States, Europe and
China and by slumping commodity prices. Leading indicators are
also pointing to weaker factory activity in the coming months.
The slowdown is being felt most keenly by Southeast Asian
countries whose strong domestic economies are sucking in imports
more rapidly and which now face sharp deteriorations in their
trade balances that could spook investors.
PTT previously had a budget of 100.9 billion baht for this
year. Its five-year budget running until 2017 was unchanged for
now, Parnpree said, but the board will review it at a meeting on
He did not give details about specific foreign projects.
At home, an onshore gas pipeline project is facing delays
after construction contractors ran into cash flow problems.
PTT, Asia Pacific's third-biggest listed oil and gas firm by
market value, has interests in coal and palm oil in Indonesia.
It withdrew from an investment in Egypt in 2011.
Through its 66-percent-owned PTT Exploration and Production
Pcl, PTT has interests in oil and gas assets in
Southeast Asia, Australia, Algeria, Canada and Mozambique.
($1 = 31.2750 Thai baht)
(Reporting by Khettiya Jittapong and Wilawan Pongpitak; Editing
by Alan Raybould and Jeremy Laurence)