Thai Oil Public Co. Ltd. · SET:TOP
Thai Oil Public — Q2 2011 Earnings Presentation
61 slides from Thai Oil Public's earnings presentation, August 2011
Slide 1: Thai Oil Group
http://www.thaioilgroup.com
Slide 2: Confidentiality notice
The information contained in this presentation is intended solely for your personal reference. Please do not circulate this material. If you are not an intended recipient, you must not read, disclose, copy, retain, distribute or take any action in reliance upon it. 2
Slide 3: Vision, Mission, Value
A LEADING FULLY INTEGRATED REFINING & PETROCHEMICAL VISION COMPANY IN ASIA PACIFIC • To be in top quartile on performance and return on investment • To create a high-performance organization that promotes MISSION teamwork, innovation and trust for sustainability • To emphasis good Corporate Governan
Slide 4: Corporate Governance Policy Roles and Responsibilities for Stakeholders
Corporate Governance Policy Roles and Responsibilities for Stakeholders The board of directors, management • Truthfully report company’s situation and and all staff shall commit to moral future trends to all stakeholders equally principles, equitable treatment to all on a timely manner. stakeholders
Slide 5: Presentation Outline
Presentation Outline * Q2/11 Highlights A «? Performance Analysis ° «? Market Outlook “° «? TOP Way Forward
Slide 6: Q2/11 Highlights
Thadoy Group 5@ a posh "ve 2/41 Highlights.
Slide 7: Q1/11 Highlights
• Global Econ • LPG Ex-Ref Price • Unrest in ME resulting • Local refineries • Colder than normal Floatation since Jan in a surge crude oil shutdown for Euro IV 2011 prices • Japan’s Quake Strong Higher Better Realized Market GIM Domestic Sales Optimization Stock gain Utilization Q1/11 106% Q1/11 3,
Slide 8: Q2/11 and 1H/11 Highlights
• Japan impact back to • Libya crude absence normal (1.3 MBD) • Local refineries are • Stable on crude price back to normal • EU debt impact • OPEC maintain level operation • Concern on US debt production Soften product Higher ME Normal level of No gain no loss spreads crude premium domestic sales 8
Slide 9: Performance Analysis
on "ve Performance Analysis
Slide 10: Dubai Crude Price
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials $/bbl Dubai Crude Price 160 140 ~102 $/bbl as of 8 Aug 120 106 100 80 78 62 60 40 44 59 68 75 77 74 75 84 101 111 20 Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2 High inflation led to series of OPEC-11 mainta
Slide 11: Market GRM
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials GO - DB + China suspended diesel export on fear of power LPG - DB (Unit: $/bbl) shortage + Heavy refinery turnaround in region -33.4 -38.4 -41.3 -43.3 -47.8 -48.5 -48.2 -54.5 18.2 19.5 18.8 • Before Jan’11 LPG price = CP
Slide 12: Market GRM, Stock Gain/Loss, Accounting GRM
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials (Unit: $/bbl) Crude Oil Price - Dubai Market GRM ~102 $/bbl (Unit: $/bbl) 160 as of 8 Aug 6.1 5.2 3.7 4.3 3.6 2.7 2.9 2.8 140 106 Q1/10 Q2 Q3 Q4 Q1/11 Q2 1H/10 1H/11 Stock Gain/Loss 120 (Unit: $/bbl) 78 100 6.2 62 3.6 3.
Slide 13: Crude Sources and Product Spreads
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Sources of Crude Spread over Dubai Spread over Dubai (US$/bbl) (US$/bbl) Others1 4% -33.4 2 8% 5% -43.3 2 9% LPG Far East 2% 4% 14% 16.6 14% 18.3 Platformate 9% Local 11% 15% 12.6 15% 14.3 Gasoline 20% 20.2 20.4 Jet 21%
Slide 14: Domestic Oil Demand, Refinery Intake and Sales
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Domestic Oil Demand / Domestic Refinery Intake Domestic Oil Demand (KBD) Utilization = 99% (KBD) +7% 1,400 89% 89% 90% 90% 84% 89% 89% 87% 100% Q2/10 1,200 785 80% Q2/11 732 1,000 +7% 800 138 155 120 160 80 134 147 107 6
Slide 15: Aromatics Spot Prices and Margins
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Aromatics Spot Prices & Margins 2011 % Aromatics Production (US$/Ton) Q1/10 Q2 Q3 Q4 Q1/11 Q2 1H Q1 Q2 1H 94% 90% 92% PX-ULG95 286 226 218 456 669 446 558 BZ-ULG95 215 159 132 152 185 86 135 Paraxylene (PX) (US$/Ton) 296
Slide 16: Base Oil and Bitumen Prices and Margins
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Base Oil & Bitumen Spot Prices & Margins 2011 % Base oil Production Q1 Q2 1H (US$/Ton) Q1/10 Q2 Q3 Q4 Q1/11 Q2 1H 98% 100% 100% 500SN-HSFO 435 541 607 593 629 781 705 BIT-HSFO 27 38 46 -25 -97 -85 -91 Lube Base Oil 544 6
Slide 17: Accounting GIM and Market GIM
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials (US$/bbl) 17.4 23.6 19.2 21.5 15.7 13.4 14.5 12.0 Product to Feed Q1/10 Q2 Q3 Q4 Q1/11 Q2 1H/10 1H/11 6.1 5.2 3.7 3.6 4.3 Market 2.7 2.9 2.8 Crude GRM* (excluded stock gain / loss) Q1/10 Q2 Q3 Q4 Q1/11 Q2 1H/10 1H/11 22.
Slide 18: 1H/11 Net Profit Breakdown
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Refinery Aromatic Lube Base Plant Plant SAKC Ship Utilization Production Production Availability Utilization Utilization Utilization 102% 97% 95% 96% 94% 88% 91% 93% 100% 91% 88% 82% 89% 39% 1H/10 1H/11 . Acc GRM P2F P2F
Slide 19: Financial Results Summary
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials (US$/bbl) Q2/11 Q1/11 Q2/10 QoQ+/(-) 1H/11 1H/10 YoY+/(-) Market GRM 4.3 6.1 2.9 (1.8) 5.2 2.8 2.4 Market GIM 7.9 9.7 5.0 (1.8) 8.9 5.2 3.7 (MB) Sales Revenue 109,167 111,842 79,148 (2,675) 221,009 158,105 62,904 EBITDA
Slide 20: Financial Position, Debt and Ratios
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Statements of Financial Position Consolidated Long-Term Debt 1) (Unit: MB) 169,541 Total LT Debt Net Debt 146,607 As of Trade Payable Bt. 47,282 mn. Bt. 30,376 mn. 39,206 30 Jun’11 / Others (US$ 1,531 mn.) (US$ 983 mn.)
Slide 21: 2011-12 Market Outlook
2011-12 Market Outlook •Macroeconomics & Crude Prices •Petroleum Market •Aromatics & Base Oil •Conclusion 21
Slide 22: Macroeconomics & Crude Prices
Macroeconomics & Crude Prices Lackluster global economy… High volatility oil prices 22
Slide 23: Global Oil Demand Outlook 2010/2011/2012
Global Oil Demand Outlook 2010/2011/2012 Thousands barrels per day Europe FSU North America 289 126 94 -109 -37 516 -153 -3 -207 Middle East 287 Asia 218 268 1459 959 780 Africa Latin America 125 54 40 302 219 245 Source: IEA, Oil Market Report, July 2011 Demand Growth Demand Growth Demand Growth IE
Slide 24: Manufacturing, Labor and Consumer Indicators
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Manufacturing Index US Labor Market 65 12.0 600 400 60 10.0 Thousand of change 200 Unemployment Rate (%) 55 8.0 0 50 6.0 -200 45 EU Mfg PMI Index -400 4.0 40 China Mfg PMI Index Nonfarm Payrolls -600 35 2.0 US IS
Slide 25: The US Debt Mess
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion The US Debt Mess US avoided default on August 2nd after the Congress approved the $2.4 trillion 10-year deficit reduction plan and $2.1 trillion debt ceiling increase, enough to last beyond November 2012 Presid
Slide 26: Euro Zone Debt and Rescue Package
Q1-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Government Gross Debt to GDP Ratio • Euro zone leaders agreed on the 2nd rescue package, 180 totaling 159 billion euro, for Greece since July 21st 160 140 • However, the package cannot implement until the 120 Gre
Slide 27: Impact from US credit downgrade expected to be contained
The impact from US credit downgrade is expected to be contained We expect oil demand in the US and Europe to remain weak, but global consumption continues to grow from emerging countries. 22 90 World (RHS) US Europe 89 20 88 87 18 86 85 16 84 83 14 82 81 12 80 27
Slide 28: Global Oil Demand (MBD)
Global Oil Demand (MBD) 60 US Europe OECD Pacific Others 48.3 50 43.2 44.0 40 30 20.0 18.5 18.7 20 15.3 14.2 14.1 8.9 10 7.3 7.1 0 1Q08 2Q09 2Q11 Pre-Recession Bottom Latest 28
Slide 29: OPEC to fill up the gap to meet rising demand in 2H-11
OPEC to fill up the gap to meet rising demand in 2H-11 OPEC to raise production quota to match actual supply to balance the market Growth Rate (MBD) MBD 100 2011 2012 90 +1.2 +1.5 Call on Call on 80 OPEC Crude OPEC Crude 2011 2012 70 30.6 MBD 30.7 MBD 60 +0.6 +0.4 50 +0.5 +0.9 40 OPEC Crude Q1 Q2 Q3
Slide 30: Fund Flows, Hurricane Season, MENA Unrest
Q1-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Fund Flows : Volatile More fund flows into MENA Unrest Continue commodity market to hedge Unrests continue in Libya, against inflation and weak USD Yemen and Syria Uncertainty on econ may hurt risk appetite o
Slide 31: What the Others Say
Q1-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion What the Others Say Brent oil prices to be softer from the current level in H2-11……from “Debt Problem & Sluggish growth” Oil Price Forecast BRENT Unit : USD/BBL Q3-11 Q4-11 2011 2012 2013 BofAML 110.0 102.0 108.6
Slide 32: What We See
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion What We See We maintain average Dubai for 2011 at $106 in 2011 on MENA unrest, strong demand from Asia & middle east and more fund flows. $/BBL $/BBL 120 120 $111 $109 $108 110 $106 $106 110 $100 100 $94 $95 100
Slide 33: Petroleum Market
Petroleum Market Optimistic GRM … Q3 Tight Supply & Q4 Strong Seasonal Demand 33
Slide 34: Petroleum Product Spreads Outlook
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Q4-10 Q1-11 Q2-11 Q3-TD Q4-11 2012* LPG ($/t) 798 860 910 843 MO-DB 10.7 12.6 14.3 16.2 JET-DB 14.3 20.2 20.4 19.4 GO-DB 13.0 18.2 19.5 18.3 FO-DB -8.2 -8.6 -8.6 -4.2 GRM 3.6 6.1 4.3 * vs.2011 • Softer middle dis
Slide 35: Short-Term Bullish for Oil & Aromatics
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Formosa Unit Formosa incidents Refinery KBD CDU 1 180 Short-Term CDU 2 180 CDU 3 180 Bullish for Oil Total CDU 540 & Aromatics RFCC 1 84 Spreads RFCC 2 84 Total RFCC 168 • Formosa has shutdown its entire refinery
Slide 36: Regional refining market to stay balance till 2015
Regional refining market to stay balance till 2015 Product demand growth from Middle East & Asia Pacific are expected to range between 0.9-1.3 MBD per year ME Additional Demand KBD AP Additional 3,000 Demand Taiwan 2,500 Breathing Period 2.8 MBD ME 2,000 Vietnam 1,500 3.9 MBD AP Others 1,000 Japan 5
Slide 37: Temporary no oil fuel fund on gasoline and gasoil
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion … Comparison of Petroleum Price (Before & After Changes in Oil Fund) “Temporary no oil fuel fund on Regular Gasoline 91, 95 & Gasoil” Cheaper retail prices will result in higher domestic demand, particular on ULR
Slide 38: Aromatics
Aromatics PARAXYLENE …. Sustainable Real Growth 38
Slide 39: Paraxylene Spread over Naphtha
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion $/ton $/ton $/bbl Period of S/D 1,000 Paraxylene Spread over Naphtha Kuwait declared FM Japan Quake New PTA 900 Yisheng New PTA A fire @ AMSB 800 Hanbang Malaysia 700 2011 YTD New PX Plant $614/t 600 Series of ou
Slide 40: World Polyester Production
World Polyester Production 70 90% 60 “ Polyester demand in fiber market 85% M illion Tonnes 50 quadruple in the last 20 years. ” 40 80% 30 20 “ Production keeps strong growth at 75% 10 about 9% CAGR during 2009-2012 driving 0 70% by China and India. ” 2009 2010 2011 2012 Staple Filament PET Resin Fi
Slide 41: New PTA and PX Capacity
“ Bullish demand amid supply disruptions strongly support 2H-11 perspective” New PTA Location KTA When “Look ahead till 2015, PX remains short Yisheng (Ningbo) China 2,000 Jun-Jul ‘11 as new supply cannot catch up with Yisheng (Dahua) China 750 Jul ‘11 demand growth” Sanfanxiang China 1,200 Aug-Sep
Slide 42: Aromatics Spreads Outlook
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Q4-10 Q1-11 Q2-11 Q3-TD Q4-11 2012* PX*-UG95 471 689 466 415 BZ-UG95 152 185 86 72 TL-UG95 91 40 28 72 * vs.2011 *CFR Taiwan … Yisheng’s 1.5mta PTA plant is Seasonal demand for solvent and less expected to star
Slide 43: Lube Base & Bitumen
Lube Base & Bitumen End of heavy plants maintenance amid Strong Base Oil & Bitumen Demand 43
Slide 44: Base Oil and Bitumen Outlook
Q2-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Mill Tons 14 China Base Oil Market 12 Q4-10 Q1-11 Q2-11 Q3-TD Q4-11 2012* Capacity Demand 10 8 500SN-FO 593 629 781 785 6 4 Bitumen-FO -25 -97 -85 -109 2 - * vs. 2011 2010 2011E 2012E 2013E 2014E 2015E 2016E …
Slide 45: Conclusion
Conclusion 45
Slide 46: Conclusion on Crude, Aromatics, Lube Base and Strategy
CRUDE & REFINERY “High and volatile oil prices from supply constraint & fund flow” “Buoyant GRM on strong domestic & regional demand” AROMATICS “Supportive margin on strong PX demand from new PTA plants” LUBE BASE “Sustainable margin from strong base oil & bitumen demand and strong contribution from
Slide 47: TOP Way Forward
Thadoy. XZ 508 vosths (ve TOP Way Forward 47
Slide 48: Moving toward HPO, CG, CSR and Branding
moving toward HPO CG CSR Today TOP Group Branding 48
Slide 49: Investment Roadmap
• Optimized utilization to achieve maximum profitability and improve margin through dynamic operational excellence and synergy with PTT group • Refinery industry would be recovery gradually along with global growth, led by China & ME. • Aromatic business will improve especially in H2 when new PTA pl
Slide 50: PTT Flagship Refinery
PTT FLAGSHIP REFINERY Specialty OPERATIONAL FINANCE & & BUSINESS A STAKEHOLDER B EXCELLENCES C MANAGEMENT Refin LT: Baa1 TOP – TQC, March 2010 Green TLB – TQC 2009 agenda F LT: BBB focus LT: AA-(tha) & ST: F1+(tha) D E Commodity Refinery Focus Chemical Focus Best IR Companies - 2nd Place (Sell Side)
Slide 51: Q and As
Tharotl co ae a (ve oP QandAs 51
Slide 52: Thank You
Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976 52
Slide 53: Appendices
Thadoy Group 5@ a posh "ve 53
Slide 54: Regional Cracking Margins and Refinery Runs
Q1-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion 24 20 20 US Cracking Margin EU Cracking Margin Singapore Margin 20 16 16 16 S’Pore Crk S’Pore Hydro 12 12 12 8 8 8 4 4 4 0 0 0 -4 -4 -4 -8 -8 -8 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Jan-07 Jan-08 Jan-09 Jan-10 Jan-
Slide 55: Crude Stocks
y Thatol Pos(/\ve Group q “niyes® US crude stocks fell on higher refinery runs US, Crude Stocks ex. SPR mbbis Source: ElA, Range 06-10 270 Re TT ©' 7 13 19 25 31 37 43 49 == === Av. 06-10 09 10 11 US, Crude Stocks, Cushing mbbis Source: ElA, Range 06-10 ©' 7 13 19 25 31 37 43 «49 09 10 11 Eur16, Cru
Slide 56: Product Stocks
Q1-2011 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion • Stocks start building up after refineries come back from maintenance shutdown Source: EIA, Norwegian Energy, Thai Oil 56
Slide 57: Thailand LPG Demand
Thailand LPG Demand LPG Demand Highlight ML/Mth • LGG Demand in Jun 2011 contracted 2.5% 1,000 932 953 928 mom but expanded at 11.8%YoY driven mainly 900 904 907 by transportation and household sector: 800 816 2008 2009 700 2010 600 2011 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec LPG Demand
Slide 58: Thailand Gasoline Demand
Thailand Gasoline Demand Gasoline Demand Highlight ML/Mth • Gasoline demand in Jun 2011 expanded 700 1.9%mom and 0.9% yoy from economic 650 recovery 632 2008 615 618 611 623 • Portion of gasohol & gasoline sales is 600 2009 596 2010 relatively maintained at around 60% : 40% 550 2011 • Average ethano
Slide 59: Thailand JET-A1 Demand
Thailand JET-A1 Demand JET Demand Highlight ML/Mth • Jet consumption, which correlated with 500 472 464 number of flights, has edged down 1.6% 450 mom but expanded 12% yoy. 425 418 400 2008 380 374 2009 350 2010 300 2011 250 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Outlook 2011 JET-A1 demand
Slide 60: Thailand Gasoil Demand
Thailand Gasoil Demand Gasoil Demand Highlight ML/Mth • Gasoil demand in Jun 2011 edged down 1,800 4.7%mom but largely expanded 6.5% YoY due to 1,700 1,705 1,686 government’s policy to limit diesel price not to 1,658 1,600 1,624 1,606 exceed 30 Baht/litre. 2008 1,500 • Since May 2011 onwards, Thaila
Slide 61: Thailand Fuel Oil Demand
Thailand Fuel Oil Demand Fuel Oil Demand Highlight ML/Mth • FO demand Jun 2011 expanded 27.5% mom 450 400 and 9.8% yoy owing to electricity sector as 350 there PTT’s off-shore gas pipeline leaked. 2008 300 250 2009 226 200 184 210 207 190 177 2010 Outlook 2011 150 2011 100 • Expect Fuel Oil demand t
Thai Oil Public Company — Q2 2011 Earnings Presentation on 6ix