Thai Oil Public Co. Ltd. · SET:TOP
Thai Oil Public — Q2 2008 Earnings Presentation
38 slides from Thai Oil Public's earnings presentation, Aug 14, 2008
Slide 1: Q2 & 1H/08 Results Analyst Presentation
Q2 & 1H/08 Results Analyst Presentation August 14, 2008 Thai Oil Public Company Limited
Slide 2: Disclaimer
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. 2
Slide 3: Corporate Vision, Mission & Value
Corporate Vision, Mission & Value VISION MISSION • To be PTT’s flagship refinery through optimized management of the group’s refining portfolio TOP seeks to be one of the leading fully integrated • To expand facilities to better meet domestic refining and petrochemical companies in the region demand
Slide 4: Presentation Outline
Presentation Outline Q2/08 & 1H/08 Highlights Performance Analysis Business Outlook 4
Slide 5: Q2/08 Key Highlights
Q2/08 Key Highlights • TOP group reported a record net profit for Q2/08 of Bt 10,546 million, allowing 1H/08 net profit to achieve Bt 14,420 million. Overall • Expansion benefit, inventory gain and strong middle distillate spreads were key attributing factors to the foregoing favorable performance.
Slide 6: Thaioil Receives The Best ASEAN Energy Awards 2008
Thaioil Receives The Best ASEAN Energy Awards 2008 • This achievement is a result of the Company’s vision and commitment to energy saving gained through corporate culture, campaigns, and training. • Energy saving measures have been continuously and strictly implemented to achieve the highest energy
Slide 7: Financial Highlights
Financial Highlights Integrated Intakes Integrated Margins (Unit: KBD) (Unit: $/bbl) 18% 15% 15% 8% 301 294 256 255 Q2/07 Q2/08 Q2/08 1H/07 1H/08 1H/08 Q2/08 1H/08 Consolidated Net Profit Net Profit Breakdown* (Unit: MB) 15% 1H/07 1H/08 59% 12,562 MB 14,420 MB 14,420 12,562 10,546 6,619 7% 3% 4%3% 6
Slide 8: Presentation Outline
Presentation Outline Q2/08 & 1H/08 Highlights Performance Analysis Business Outlook 8
Slide 9: Oil Price Movement
Oil Price Movement Crude Prices (US$/bbl) 68.4 104.1 160 55 65 70 83 91 117 Dubai Tapis 120 Dubai 128 97 80 86 40 Q1/07 Q2 Q3 Q4 Q1/08 Q2 03-Jan-07 14-Feb-07 28-Mar-07 10-May-07 21-Jun-07 02-Aug-07 13-Sep-07 25-Oct-07 06-Dec-07 23-Jan-08 07-Mar-08 21-Apr-08 4 Jun 08 16 Jul 08 Extraordinary rise in o
Slide 10: Gross Refinery Margins
Gross Refinery Margins Spreads vs. Dubai (US$/bbl) TOP’s Crude Mix & Product Yield Product-DB Spreads(US$/bbl) 16.7 30.3 4% 4% F/E -29.2 * 16% LPG GO-DB 45 14.6 16.5 16.4 19.4 23.0 37.6 15% Local 20% 13.4 35 17% ULG Jet-DB 25 24% 30.2 12% GO-DB 15 Jet ULG95-DB M/E 5 81% 41% 30.3 45% -5 Diesel HSFO-D
Slide 11: Oil Demand for Q2/2008
Oil Demand for Q2/2008 Domestic Oil Demand / Refinery Intake Domestic Oil Demand (KBD) (KBD) 333 326 1,400 91% 91% 91% 90% 100% 313 86% 88% 91% 1H/07 1,200 77% 2H/07 80% 1,000 1H/08 3% 800 160 158 60% 18% 110 120 104 140 155 115 131 129 125 127 123 600 40% 111 12% 868286 74 400 738 743 738 72 65 724
Slide 12: Aromatics Business
Aromatics Business Aromatic Spot Prices & Margins (US$/Ton) 542 473 395 268 257 317 PX-ULG 95 1,600 PX • In Q2/08, spread of PX&MX MX 1,400 over ULG 95 were widen BZ 1,200 TL due to unplanned outage 1,000 from TPPI plant in ULG95 Indonesia. 800 600 • However, downstream 400 Q1/07 Q2 Q3 Q4 Q1/08 Q2 d
Slide 13: Lube Base Business
Lube Base Business Base Oil & Bitumen Spot Prices & Margins (US$/Ton) (US$/Ton) 637 538 466 380 434 535 500SN-HSFO 1,400 1,200 500SN • P2F improve QoQ 1,000 ($88/ton to $153/ton) & 800 YoY ($94/ton to 600 HSFO $153/ton). 400 Bitumen • Base oil price improved 200 due to tight supply as a 0 Q1/07 Q2 Q
Slide 14: TOP Group's Integrated Margins
TOP Group’s Integrated Margins (US$/bbl) 17.4 16.0 16.7 15.9 14.3 12.1 6.6 9.5 Product to Feed Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/07 1H/08 9.6 (US$/bbl) 7.9 6.3 7.1 7.1 3.9 4.7 4.5 Crude Market GRM* Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/07 1H/08 (US$/bbl) 23.2 15.9 14.2 15.1 18.3 12.1 10.5 13.4 Product to Feed * which
Slide 15: Performance Breakdown by Company - Q2/08
Performance Breakdown by Company - Q2/08 Refinery Aromatic Lube Base Plant Plant Ship Utilization Production Production Availability Utilization Utilization (KBD) (Kton/Day) (Kton/Day) 105% 109% 104% 99% Q2/07 87% 89% 91% 94% 92% 97% 80% Q2/08 288 0.78 51% 244 2.13 0.71 1.12 GRM P2F P2F (US$/bbl) (U
Slide 16: Consolidated Financial Performance
Consolidated Financial Performance 1) (US$/bbl) Q2/07 Q2/08 +/(-) % 1H/07 1H/08 +/(-) % TOP’s GRM 7.9 9.6 1.7 +22% 7.1 7.1 0.0 0% Integrated Margin 10.4 12.0 1.6 +15% 9.7 8.9 -0.8 -8% (MB) Sales Revenue 72,070 126,953 54,883 +76% 136,498 223,266 86,768 +64% 2) EBITDA 9,608 17,252 7,644 +80% 17,980 2
Slide 17: Solid Financial Position
Solid Financial Position Balance Sheet Consolidated Long-Term Debt (Unit: MB) 180,194 1H/08 136,570 42,333 LT Debt Bt. 42,333 mn. (US$ 1,305 mn.) 110,324 31,842 Other 56,654 Liabilities Current 30,452 32,891 1% Assets THB Loan 19,706 8% 25% US$ Bond 15% Non-Current 71,837 81,207 Equities 35% 60,166
Slide 18: Presentation Outline
Presentation Outline Q2/08 & 1H/08 Highlights Performance Analysis Business Outlook 18
Slide 19: Global Oil Demand Growth
Global Oil Demand Growth Global Oil Demand Growth 2007 2008 2009 Source: IEA, July 2008 • Global oil demand growth is forecast to decrease to 890 and 860 kbd in 2008 and 2009 respectively. • Lower demand in OECD due to high prices and economic slow down, offsetting by robust growth in developing cou
Slide 20: Strong Demand in Subsidized Countries
Strong Demand in Subsidized Countries Price Subsidy in the Region • High price subsidy in developing countries has limited impact on end- user’s consumption during high price period. • Robust demand growth continues in China and India. Source: IEA and PVM, July 2008 India and China Oil Demand 20
Slide 21: Limited Crude Supply
Limited Crude Supply Reduced Non-OPEC Supply High OPEC Utilization Projected Crude Supply Depletion • Non-OPEC supply declined, in particularly, major oil fields in North Sea, Mexico and Russia. • Even with higher OPEC production rate, it would tighten spare capacity in the years to come. • Assuming
Slide 22: Crude Reserve Outlook
Crude Reserve Outlook US Crude Stock OECD Europe Stock Source: PIRA, 07/08/08 Source: Norwegian Energy (Morgan Stanley), Eurostock, 09/07/08 Japan Crude Stock China Crude Stock Phase I: 2006-2007 Phase II: 2008-2010 Capacity 19 mbbl Capacity 73 mbbl Capacity 19 mbbl Capacity 31 mbbl Capacity 33 mbbl
Slide 23: USD Depreciation & Speculation
USD Depreciation & Speculation USD vs. Crude Oil Price Non-Commercial WTI Net Length Crude Price USD 1 Position = 1,000 bbl • High correlation between USD depreciation and crude price in 2007 up to Q1-08. • Due to concern on too high oil prices & slow oil demand, capital funds switched out from oil
Slide 24: Current Crude Oil Forward Price
Current Crude Oil Forward Price (Unit: US$/bbl) As of 12 Aug, 2008 Forward 2008 2006 2007 2005 24
Slide 25: Product Reserve Outlook
Product Reserve Outlook US Gasoline Stock Singapore Light Distillate Stock US Distillate Stock Singapore Middle Distillate Stock Source: PIRA, 07/08/08 Source: Platts, 07/08/08 25
Slide 26: Product Reserve Outlook - Europe
Product Reserve Outlook - Europe Distillate Stock • Low distillate stock and high residue stock will further support strong distillate margin and weak residue margin. Gasoline Stock Residual Stock Source: Norwegian Energy (Morgan Stanley), Eurostock, 09/07/08 26
Slide 27: Reuters Singapore GRM
Reuters Singapore GRM (US$/bbl) 1 27
Slide 28: Refinery Utilization Rate
Refinery Utilization Rate US Refinery Utilization MBD EU Refinery Utilization TOTAL CDU: 17.2 MBD TOTAL CDU: 7.8 MBD TOTAL CDU: 4.5 MBD TOTAL CDU: 1.3 MBD TOTAL CDU: 2.6 MBD TOTAL CDU: 1.3 MBD Source: FACTS 28
Slide 29: Refinery Utilization - China & India
Refinery Utilization - China & India KBD KBD Source: FACTS, AP Petroleum Monthly , Jul-08 • Impact of additional refining capacity in China and India of >1 mbd in 2008 is likely to be less severe than anticipated earlier due to price control and poor margin forcing inefficient refineries to cut runs
Slide 30: Conclusions
Conclusions ¾ Even at high crude price, distillate demand growth continues in subsidized countries. Together with low distillate stock in EU, high distillate margin is likely to sustain. ¾ Inflexibility of refining system to match structural shifts in demand growth has increased demand for certain c
Slide 31: Q&A
Q&A 31
Slide 32: Thank You
Thank You Should you have any queries, please contact: Investor Relations at email: ir@thaioil.co.th Tel: 662-617-8300 Fax: 662-299-0128 32
Slide 33: APPENDICES
APPENDICES 33
Slide 34: Domestic LPG Demand
Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight • LPG demand continues rising momentum on the capped price structure. • Transportation fuel switching causing local demand 6M up almost 20% LPG Demand by Sector Outlook 2008 • The delay of government action on increase of local LPG price w
Slide 35: Domestic Gasoline Demand
Domestic Gasoline Demand Thailand Gasoline Demand Gasoline Demand Highlight • Total gasoline demand continues dropping heavily causing by high price, NGV promotion and non- promoted LPG switching. Gasoline Demand by Type Outlook 2008 2005 2006 2007 2008 • Relatively high gasoline price will continue
Slide 36: Domestic JET Demand
Domestic JET Demand Thailand JET Demand JET Demand Highlight • Despite some growth compared with last year, higher fuel surcharge slowdown travel and growth started to taper off. JET demand and # of flights Outlook 2008 • Relatively high fuel price will continue to depress travel growth and demand i
Slide 37: Domestic Gasoil Demand
Domestic Gasoil Demand Thailand Gasoil Demand Gasoil Demand Highlight • Exceptional high gasoil price has depressed demand, causing overall growth 1H down 2.0%. B5 Sales Outlook 2008 • Negative impact from high price will depress demand further, where growth for 2H 2008 is projected to decline ~4%.
Slide 38: Domestic Fuel Oil Demand
Domestic Fuel Oil Demand Fuel Oil Demand Highlight Thailand Fuel Oil Demand • After a surge in FO demand in April as NG disruption, FO demand returned to normal trend of negative growth due to more NG supply. Outlook 2008 • Expect fuel oil demand drop ~ 10%. Source : Department of Energy Business, M
Thai Oil Public Company — Q2 2008 Earnings Presentation on 6ix