Thai Oil Public Co. Ltd. · SET:TOP

Thai Oil Public — Q1 2020 Earnings Presentation

54 slides from Thai Oil Public's earnings presentation, May 13, 2020

  1. Slide 1: Q1/20 Analyst Presentation

    Thai Oil Public Company Limited Q1/20 Analyst Presentation 13 May 2020 Time : 10:00 - 12:00 hrs. Channel : Microsoft Team, TOP IR Application, Facebook Live

  2. Slide 2: Disclaimer

    -2- Disclaimer 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. Some statements mad

  3. Slide 3: Presentation Agenda (Q1/20)

    -3- Presentation Agenda (Q1/20) Q1/20 KEY HIGHLIGHTS Q1/20 PERFORMANCE ANALYSIS 2020 INDUSTRY OUTLOOK FINAL REMARKS

  4. Slide 4: Q1/20 Key Highlights

    Q1/20 KEY HIGHLIGHTS Vreven

  5. Slide 5: 2020 - A Perfect Storm

    -5- 2020 - A Perfect Storm Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights COVID-19 & Global Lockdown Oil Price War • Global economy expected to shrink to 3% (1) due to restrictions • March’20 : Failure of OPEC+

  6. Slide 6: Impact on Thaioil

    -6- Impact on Thaioil Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights Impact on TOP • Huge stock loss from sharp oil price drop, down 48% from $65/bbl in Dec’19 to $34/bbl in Mar’20 • However, resetting crude cos

  7. Slide 7: Crisis Response Measures

    -7- Crisis Response Measures Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights People First Care for people (staffs, stakeholders, community) - Proactive staff & contractors health & safety precaution - Business co

  8. Slide 8: People First

    -8- People First Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights Employee Health Protection and BCM Social Contribution Care for Employee Health • Thaioil CSR program support medical staffs • Establish I-COVID Ce

  9. Slide 9: Business Excellence - Last Man Standing

    -9- Business Excellence - Last Man Standing Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights Operation & Commercial Optimisation & Flexibility Productivity Improvement & Cost Control • More operational efficiency

  10. Slide 10: Capitalize on the Rebound – Agile & Flexible

    -10- Capitalize on the Rebound – Agile & Flexible Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights Business People & Digital Platform Crude Processing Optimisation People • Increase crude stock for operational fle

  11. Slide 11: Q1/20 Key Market Highlights

    -11- Q1/20 Key Market Highlights Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights Crude Oil (Dubai fell to $33.7/bbl from $64.9/bbl) Dubai ($/bbl) (ending price) 66.9 64.9 • Saudi-Russia oil price war in March’20

  12. Slide 12: Q1/20 Key Business Highlight & Financial Performance

    -12- Q1/20 Key Business Highlight & Financial Performance Key Highlights Performance Industry Outlook Final Remarks 2020 - A Perfect Storm Impact on TOP Crisis Response Measures Q120 Highlights Key Business Highlight TOP Group Net Profit Operational Q1/19 Q4/19 Q1/20 Unit :Million THB (MB) • Maintai

  13. Slide 13: Q1/20 Performance Analysis

    -13- Q1/20 PERFORMANCE ANALYSIS

  14. Slide 14: Refinery: High U-Rate and Robust Domestic & CLMV Sales

    -14- Refinery: High U-Rate and Robust Domestic & CLMV Sales Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others TOP/ Domestic Refinery Utilization Rate Domestic Oil Demand Unit: % Utilization Rate Mar’20 Mogas Jet/Kero Gasoil Total

  15. Slide 15: Refinery: Weak Mkt GRM Pressured by Lower Product Spread

    -15- Refinery: Weak Mkt GRM Pressured by Lower Product Spread Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Dubai Crude Price & Key Petroleum Product Spreads Refinery Utilization 2019 2020 2019 Q1/19 Q4/19 Q1/20 $/bbl Q1 Q2 Q

  16. Slide 16: Aromatic: Improving Contribution due to Low Feedstock Cost

    -16- Aromatic: Improving Contribution due to Low Feedstock Cost Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Aromatics Spreads and Margins Aromatics Production 2019 2020 2019 Q1/19 Q4/19 Q1/20 $/ton Q1 Q2 Q3 Q4 Q1 Q2TD* FY 9

  17. Slide 17: Base Oil: Lower Contributions from Soften Lube & Bitumen Spread

    -17- Base Oil: Lower Contributions from Soften Lube & Bitumen Spread Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Base Oil & Bitumen Spreads & Margins Base oil Production 2019 2020 2019 Q1/19 Q4/19 Q1/20 $/ton Q1 Q2 Q3 Q4 Q1

  18. Slide 18: Integrated Margin & Competitive Cash Cost

    -18- Integrated Margin & Competitive Cash Cost Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Gross Refining Margin Refinery’s Cash Cost (Unit: US$/bbl) (Unit: US$/bbl) Market GRM Accounting GRM (Market GRM + Stock G/L) Operat

  19. Slide 19: Power Sector Performance…Growing Contribution to the Group

    -19- Power Sector Performance…Growing Contribution to the Group Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Power Business Sector Equity holding in SPP **** 74% 100% Power & Steam Sales **** TOP shareholding 24.29% (8.91% v

  20. Slide 20: Performance Breakdown

    -20- Performance Breakdown Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Petrochemical & (2) Others & (3) Consolidated Net Stock Gain/ Consolidated Net Petroleum (1) Power Profit Profit Lube Base New Business (excl. Stock G/(

  21. Slide 21: Q1/20 TOP Group Consolidated P&L

    -21- Q1/20 TOP Group Consolidated P&L Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others (MB) Q1/20 Q4/19 QoQ+/(-) Q1/19 YoY+/(-) (A) (A) Sales Revenue 76,652 96,263 (19,611) 91,626 (14,974) Net realized gain/(loss) on financial i

  22. Slide 22: Q1/20 Consolidated Cash Flow

    -22- Q1/20 Consolidated Cash Flow Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others (Unit: MB) Q1/20 Q1/19 Q1/20 Q1/19 Operating Cash Flow (4,011) 3,891 Investments (33,218) 7,878 Net income & non-cash adj. (13,692) 4,472 Dividen

  23. Slide 23: Q1/20 TOP Group Strong Financial Position & Financial Ratios

    -23- Q1/20 TOP Group Strong Financial Position & Financial Ratios Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Statements of Financial Position Consolidated Long-Term Debt as at 31 Mar 20 (Unit: million THB) 283,445 272,366

  24. Slide 24: Finance Strategy

    -24- Finance Strategy Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Liquidity Management Efficiency & Cost Management Investment Rationalization & Fund Raising • Pursue more cost control • Revisit/reprioritize CAPEX • Ensure

  25. Slide 25: 2020 Industry Outlook

    -25- -25- 2020 INDUSTRY OUTLOOK • Crude Oil • Refinery • Aromatic • Base Oil & Bitumen

  26. Slide 26: OPEC & Non-OPEC Production Cut

    Recovering Oil Demand from Easing COVID-19 Concerns and -26- -26- OPEC & Non-OPEC Production Cut Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A OPEC+ and G20 Agreed For Supply Cuts B Oil Demand Collapse After COVID-19 Outbreak Demand Growt

  27. Slide 27: Expected Recovery in Refinery Margin after COVID-19 Reliefs

    -27- -27- Expected Recovery in Refinery Margin after COVID-19 Reliefs Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Singapore Cracking GRM ($/BBL) 7.7 8.2 6.7 6.2 7.2 7.1 7.0 6.5 6.4 6.4 6.1 6.1 5.9 5.0 5.2 4.3 3.2 3.5 3.7 1.7 1.2 -1.1 Q1-1

  28. Slide 28: Rising Product Stocks on Weak Demand despite Refinery Cut Run in Q2-20

    -28- -28- Rising Product Stocks on Weak Demand despite Refinery Cut Run in Q2-20 Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Weakening Global Oil Demand to Overtake Supply loss B SG Stocks Build due to Weak Demand on COVID-19 Change in

  29. Slide 29: Low Crude OSP to Support Refinery Margin

    -29- -29- Low Crude OSP to Support Refinery Margin Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Sharply Dropped in Middle East Crude OSP Price Resulting from Crude Oil Price War $/BBL Official Selling Price (OSP) Spread over Benchmark Crud

  30. Slide 30: Recovering Demand in 2H-20 after Lifting City Lockdown Policy

    -30- -30- Recovering Demand in 2H-20 after Lifting City Lockdown Policy Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A COVID-19 to Hit Transportation Demand on Lockdown B Falling Global Gasoline Demand on City Lockdown Global Main Product

  31. Slide 31: Recovery of Domestic Demand Growth in 2H-20

    -31- -31- Recovery of Domestic Demand Growth in 2H-20 Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Recovery of Gasoline Demand on Higher Consumer Spending in 2H-20 BC Recovery of Jet Demand on Higher Tourism in 2H-20 Gasoline Demand vs.

  32. Slide 32: Pressured Aromatic Market from New Additional Capacity

    -32- -32- Pressured Aromatic Market from New Additional Capacity Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Market Pressured by Surplus Capacity B Lower Chinese Import due to Additional Capacity in China AP/ME PX and BZ Capacity Additi

  33. Slide 33: Weaker Base Oil Market amid Less Capacity Addition

    -33- -33- Weaker Base Oil Market amid Less Capacity Addition Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Less Capacity Addition to Ease Surplus Situation B Pressured Product Spread from Higher HSFO Price and Wet Weather in 2H-20 AP Base

  34. Slide 34: 2H-20 Industry Outlook Conclusion

    -34- -34- 2H-20 Industry Outlook Conclusion (vs. 1H-20) Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Crude Oil Recovering Oil Demand from Easing COVID-19 Concerns and OPEC & Non-OPEC Production Cut Refinery Recovering Refinery Margin on Lo

  35. Slide 35: Final Remarks

    FINAL REMARKS Vreven

  36. Slide 36: Looking Forward

    -36- -36- Looking Forward Key Highlights Performance Industry Outlook Final Remarks • Crude prices poised to bottom out Stock gain / reversal of NRV • Recovered demand from lockdown ease & economic stimulus • Our planned optimisation & flexibility to capture Improved GRM / GIM rebounding market oppo

  37. Slide 37: Thank You

    -37- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976

  38. Slide 38: Appendix

    -38- APPENDIX • Strategic Investment Plan • Dividend Payment • Optimised & Flexible Operations…Superior Performance • CDU Addition VS Additional Demand – AP & ME • World GRM / Inventories • Thailand petroleum demand by products

  39. Slide 39: TOP Group Strategic Investment Plan

    CAPEX -39- TOP Group Strategic Investment Plan CAPEX Plan (Unit US$ million) Updated as of April 2020 Estimated Budgeting for Investment Plan Project Total 2020 2021 2022 2023 2024 2020 - 2024 CFP project * 3,263 1,660 1,434 492 (323) Total Ongoing CAPEX 223 128 58 31 5 1 Reliability, Efficiency and

  40. Slide 40: Dividend Payment

    Dividend -40- Dividend Payment Dividend Policy : Not less than 25% of consolidated net profit after deducting reserves, subject to cash flow and investment plan Unit : THB/Share EPSR 2H dividend 1H dividend Year Dividend 12.18 10.40 9.19 9.40 8.66 7.82 7.28 5.91 6.04 5.97 4.57 4.97 4.39 2.75 3.75 3.

  41. Slide 41: Optimised & Flexible Operations…Superior Performance

    Crude & Production -41- Optimised & Flexible Operations…Superior Performance Thai Oil is able to diversify its type of crude intake and product outputs to maximise demand and margin Crude Assays based on Sources of Product Reference Domestic demand for TOP configuration* Crude output Price petroleum

  42. Slide 42: Asia Pacific and Middle East Refinery Addition

    Refinery -42- Asia Pacific and Middle East Refinery Addition AP & ME Demand Growth Middle East Start-up Nameplate ME Close China Country Company period) (KBD) Other AP Japan India Vietnam Q1-20 India 56 BPCL Mumbai Thailand Net Addition North Refining Company – Q2-20 Iraq 66 Baiji KBD South Refining

  43. Slide 43: Asian Margin Vs. US-EU margin

    World GRM -43- Asian Margin Vs. US-EU margin $/BBL $/BBL SINGAPORE GRM EU – US Margins 30 15 25 10 20 5 15 0 10 -5 5 -10 0 -15 -5 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 Feb-20 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 Feb-20 SING CRACK SING HYDRO BRENT CRACK BRENT HYDRO WTI CRACK MBD U.S. Crude Refinery Input

  44. Slide 44: Global Crude Oil Inventories

    Inventories -44- Global Crude Oil Inventories MBBL U.S. Crude Stocks (excl. SPR) MBBL Crude Oil, Cushing, Oklahoma 600 Source : EIA 80 Source : EIA 550 70 500 60 50 450 40 400 30 350 20 300 10 250 0 1 5 9 13 17 21 25 29 33 37 41 45 49 1 5 9 13 17 21 25 29 33 37 41 45 49 5yr-range 2019 2020 avg 15-19

  45. Slide 45: Global Gasoline Inventories

    Inventories -45- Global Gasoline Inventories U.S. Gasoline Stocks Singapore Gasoline Stocks MBBL Source : EIA MBBL 280 20 Source : IE Singapore 260 240 10 220 200 180 0 1 5 9 13 17 21 25 29 33 37 41 45 49 1 5 9 13 17 21 25 29 33 37 41 45 49 5yr-range 2019 2020 avg 15-19 5yr-range 2019 2020 avg 15-19

  46. Slide 46: Global Middle Distillate Inventories

    Inventories -46- Global Middle Distillate Inventories U.S. Diesel Stocks Singapore Middle Distillate Stocks MBBL MBBL 180 Source : EIA 20 Source : IE Singapore 160 140 10 120 100 80 0 1 5 9 13 17 21 25 29 33 37 41 45 49 1 5 9 13 17 21 25 29 33 37 41 45 49 5yr-range 2019 2020 avg 15-19 5yr-range 2019

  47. Slide 47: Global Fuel Oil Inventories

    Inventories -47- Global Fuel Oil Inventories U.S. Residual Fuel Oil Stocks Singapore Residual Fuel Oil Stocks MBBL MBBL Source : IE Singapore Source : EIA 50 40 30 40 20 30 10 20 0 1 5 9 13 17 21 25 29 33 37 41 45 49 1 5 9 13 17 21 25 29 33 37 41 45 49 5yr-range 2019 2020 avg 15-19 5yr-range 2019 20

  48. Slide 48: China's Refined Product Exports

    Inventories -48- China’s Refined Product Exports China’s Gasoline Exports China’s Gasoil Exports KBD KBD Source : China Custom Source : China Custom 600 800 500 700 600 400 500 300 400 200 300 200 100 100 0 0 1 2 3 4 5 6 7 8 9 10 11 12 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 2019 2020 2

  49. Slide 49: Domestic LPG Demand

    Thailand petroleum demand by products -49- Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight KT/Day 2020 2019 2018 2017 • In 2M’20, LPG demand plunged by 12.8% YoY following the decrease in all sectors, especially in the petrochemical sector. 20 LPG demand in the petrochemical sector decr

  50. Slide 50: Domestic Gasoline/Gasohol Demand

    Thailand petroleum demand by products -50- Domestic Gasoline/Gasohol Demand Thailand Gasoline/Gasohol Demand GASOLINE/Gasohol Demand Highlight MML/Day • In 3M’20, Gasoline demand decreased by 2.3% YoY to an 2020 2019 2018 2017 average 31.1 MML/day. The demand growth was mainly 34 pressured by the CO

  51. Slide 51: Domestic Jet Demand

    Thailand petroleum demand by products -51- Domestic Jet Demand Thailand JET Demand JET Demand Highlight MML/Day 2020 2019 2018 2017 • In 3M’20, Jet consumption decreased by -17.1% YoY as the 24 22.4 COVID-19 pandemic had initially started and become more vital since the end of January leading to ban

  52. Slide 52: Domestic Gasoil and NGV Demand

    Thailand petroleum demand by products -52- Domestic Gasoil and NGV Demand Thailand Gasoil Demand Diesel Demand Highlight MML/Day 2020 2019 2018 2017 • In 3M’20, Diesel demand decreased by 2.9% YoY as it was pressured 72 by 3.8% YoY lower in manufacturing product transportation due to temporary shutd

  53. Slide 53: Domestic Fuel Oil Demand

    Thailand petroleum demand by products -53- Domestic Fuel Oil Demand Thailand Fuel Oil Demand Fuel Oil Demand Highlight 2020 2019 2018 2017 MML/Day • In 3M’20, Fuel Oil consumption fell by 29.9% YoY, as the demand 8 for bunker still dropped by 43.6% YoY due to lower goods import and export. Together

  54. Slide 54: Thank You

    -54- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976

Thai Oil Public Company — Q1 2020 Earnings Presentation on 6ix