Thai Oil Public Co. Ltd. · SET:TOP

Thai Oil Public — FY2019 Earnings Presentation

56 slides from Thai Oil Public's earnings presentation, Feb 25, 2020

  1. Slide 1: Q4 & FY/19 Analyst Presentation

    - 1- Thai Oil Public Company Limited Q4 & FY/19 Analyst Presentation 25 February 2020 Time : 14:00 - 16:30 hrs. Venue : Centara Grand Ladprao Bangkok Hotel

  2. Slide 2: Disclaimer

    -2- - 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 statement

  3. Slide 3: Presentation Agenda (Q4 & FY/19)

    -3- - 3- Presentation Agenda (Q4 & FY/19) Q4 & FY/19 KEY HIGHLIGHTS Q4 & FY/19 PERFORMANCE ANALYSIS 2020 INDUSTRY OUTLOOK FINAL REMARKS

  4. Slide 4: Q4 & FY/19 Key Highlights

    -4- - 4- Q4 & FY/19 KEY HIGHLIGHTS

  5. Slide 5: Q4 & FY/19 Key Market Highlights

    -5- - 5- Q4 & FY/19 Key Market Highlights Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP QoQ Crude Oil (Dubai rose to $64.9/bbl from $61.1) YoY Crude Oil (Dubai rose to $64.9/bbl f

  6. Slide 6: 2019 Key Achievement

    -6- - 6- 2019 Key Achievement Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP Operational Commercial Financial • Completion of the historic major turnaround • Captured higher domest

  7. Slide 7: 2019 Key External Events

    -7- - 7- 2019 Key External Events Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP Delayed IMO impact Rising Crude premium $/BBL Key Product Spreads $/BBL Market Crude Cost vs Dubai

  8. Slide 8: Q4 & FY/19 Financial Performance

    -8- - 8- Q4 & FY/19 Financial Performance Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP TOP Group Net Profit Unit : million THB (MB) Net Profit Contributions Q3/19 Q4/19 FY/18 FY/

  9. Slide 9: 2019 Productivity Improvement (VS Corporate Plan)

    -9- - 9- 2019 Productivity Improvement (VS Corporate Plan) Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP Cost Management Margin Improvement (Hydrocarbon Management : HMR) and 905

  10. Slide 10: 2019 Awards & Recognitions

    -10- -10- 2019 Awards & Recognitions Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP Management Finance / Investment Sustainability • Human Resource Management Excellence • Outstand

  11. Slide 11: CFP Project

    -11- -11- CFP Project Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP Strategically located in AEC & EEC CFP Benefits for Thailand $4.825 billion First mega project in EEC provinces

  12. Slide 12: CFP Key Progress

    -12- -12- CFP Key Progress Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP Key Progress in 2019 Overall Project Progress Budget Utilization Key Progress in 2019 • Completed ERU carv

  13. Slide 13: CFP Key Progress

    -13- -13- CFP Key Progress Key Highlights Performance Industry Outlook Final Remarks Market Achievement & External Event Financial Performance Productivity Improvement Awards & Recognitions CFP CFP Plan in 2020 Module Fabrication Foundation Completion Module Delivery • Fabrication work at local and

  14. Slide 14: Q4 & FY/19 Performance Analysis

    -14- -14- Q4 & FY/19 PERFORMANCE ANALYSIS

  15. Slide 15: Refinery: Higher U-Rate and Robust Domestic & CLMV Sales

    -15- -15- Refinery: Higher 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 KBD 2018 2019 1.8% 120% 113

  16. Slide 16: Refinery: Soften Mkt GRM Pressured by Lower Product Spread

    -16- -16- Refinery: Soften 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 2018 2019 2018 Q3/19 Q4/19 FY/18 FY/19

  17. Slide 17: Aromatic: Improving Contribution Despite Weak Aromatic Margins

    -17- -17- Aromatic: Improving Contribution Despite Weak Aromatic Margins Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Aromatics Spreads and Margins Aromatics Production 2018 2019 2018 Q3/19 Q4/19 FY/18 FY/19 $/ton Q1 Q2 Q3 Q

  18. Slide 18: Base Oil: Improving Contributions from Robust Lube&Bitumen Spread

    -18- -18- Base Oil: Improving Contributions from Robust 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 2018 2019 2018 Q3/19 Q4/19 FY/18 FY/19 $/ton Q

  19. Slide 19: Integrated Margin & Competitive Cash Cost

    -19- -19- 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) Higher refinery operating cash Market GRM Accounting

  20. Slide 20: Power Sector Performance…Growing Contribution to the Group

    -20- -20- 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.

  21. Slide 21: Performance Breakdown

    -21- -21- 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. Stoc

  22. Slide 22: Q4 & FY/19 TOP Group Consolidated P&L

    -22- -22- Q4 & FY/19 TOP Group Consolidated P&L Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Unit : million Baht (MB) Q3/19 Q4/19 QoQ+/(-) Q4/18 YoY+/(-) FY/18 FY/19 YoY+/(-) (A) (D) (F) Sales Revenue 82,329 96,263 13,934 10

  23. Slide 23: 2019 Consolidated Cash Flow

    -23- -23- 2019 Consolidated Cash Flow Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others FY/19 FY/18 (Unit: MB) FY/19 FY/18 Investments 23,342 (26,167) Operating Cash Flow 13,089 18,313 Dividend income 763 772 Net income & non-cas

  24. Slide 24: Q4/19 TOP Group Strong Financial Position & Financial Ratios

    -24- -24- Q4/19 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 Dec 19 (Unit: million THB) 268,213 283

  25. Slide 25: 2020 Industry Outlook

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

  26. Slide 26: Oil Market Surplus on Softer Oil Demand Growth amid OPEC+ Supply Cut

    -26- -26- Oil Market Surplus on Softer Oil Demand Growth amid OPEC+ Supply Cut Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Oil Demand Pressured by Coronavirus (COVID-19) B Supply Tighten by OPEC-10 Deepen Cut MBD Global Oil Demand Growt

  27. Slide 27: Challenging Refinery Margin on COVID-19 amid Lower Supply on Plants Run Cut

    -27- -27- Challenging Refinery Margin on COVID-19 amid Lower Supply on Plants Run Cut Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Singapore Cracking GRM ($/BBL) 7.7 8.2 6.7 7.2 7.1 7.0 6.2 6.4 6.4 6.1 6.1 6.5 5.9 5.0 5.2 4.3 3.7 3.2 3.5 1

  28. Slide 28: Resume Product Demand after COVID-19 Reliefs

    -28- -28- Resume Product Demand after COVID-19 Reliefs Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Soft Global Jet Demand on COVID-19 Outbreak B Slight Impact on Gasoline and Gasoil from COVID-19 2020 Global Jet Demand Impacted from COV

  29. Slide 29: Lower Supply on Plant Run Cut and Maintenance to Support Market

    -29- -29- Lower Supply on Plant Run Cut and Maintenance to Support Market Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Lower Supply on Refinery Run Cut impacted by COVID-19 B Tighter Supply during Refinery Maintenance 2020 Asian Refinery

  30. Slide 30: VLSFO Market Approaching Equilibrium after Months of Volatility

    -30- -30- VLSFO Market Approaching Equilibrium after Months of Volatility Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A VLSFO Gaining Share in Singapore’s Bunker Sales B Rising Low Viscosity VLSFO Demand to Support Gasoil Demand Mil.Ton/m

  31. Slide 31: Challenging Domestic Demand Growth on Struggling Economy

    -31- -31- Challenging Domestic Demand Growth on Struggling Economy Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Slower Gasoline Demand Growth by Lower Consumer Spending Growth BC Jet Demand Growth Pressured by COVID-19 Outbreak Gasoline

  32. Slide 32: Weak Aromatic Market from New Capacity Addition

    -32- -32- Weak Aromatic Market from New Capacity Addition Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Market Pressured by Surplus Capacity B Low Polyester Run Rates From Extended Chinese Holidays AP/ME PX and BZ Capacity Addition vs. De

  33. Slide 33: Lower Base Oil Capacity Addition amid Steady Demand

    -33- -33- Lower Base Oil Capacity Addition amid Steady Demand Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Less Capacity Addition to Ease Surplus Situation B Base Oil Production Cut due to Limited Tank Ullage from COVID-19 AP Base Oil Gr

  34. Slide 34: Industry Outlook Conclusion

    -34- -34- 2020 (vs. 2019) Industry Outlook Conclusion Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Crude Oil Oil Market Pressured by Soft Demand Growth from COVID-19 amid Expected Deepen Oil Production Cut from OPEC+ Refinery Expected Reco

  35. Slide 35: Beyond 2020 Industry Outlook

    -35- -35- Beyond 2020 Industry Outlook Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Oil Demand Growth Outpaces Refinery Addition in Medium-term KBD Asia Pacific/Middle East Crude Capacity Addition vs Demand Growth Operating Rate, % 3500 Ch

  36. Slide 36: Final Remarks

    -36- -36- FINAL REMARKS

  37. Slide 37: Key Strategic Projects

    -37- Key Strategic Projects Key Highlights Performance Industry Outlook Final Remarks Vision Empowering Human Life through Sustainable Energy and Chemicals Measurement Growth | Diversity | Returns | Sustainability | Stakeholder Portfolio To transform TOP to a World-Class refinery with competitive &

  38. Slide 38: ESG/Sustainability

    -38- ESG/Sustainability Key Highlights Performance Industry Outlook Final Remarks Industry Leader in Oil & Gas Refining & Marketing Industry (OGR) in 2019 Member of DJSI Emerging Market For 7 consecutive years in OGR *Industry Leader in OGR from 2014-2019 2020 6th year of leading position Sustainabi

  39. Slide 39: Thank You

    --39- 39- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976

  40. Slide 40: Appendix

    -40- -40- APPENDIX • Strategic Investment Plan • Dividend Payment • Optimized & Flexible Operations…Superior Performance • CDU Addition VS Additional Demand – AP & ME • World GRM / Inventories • Thailand petroleum demand by products

  41. Slide 41: TOP Group Strategic Investment Plan

    CAPEX -41- -41- TOP Group Strategic Investment Plan CAPEX Plan (Unit US$ million) Updated as of January 2020 Estimated Budgeting for Investment Plan Project Total 2019 2020 2021 2022 2023 2019 - 2023 CFP project * 3,923 653 2,110 1,080 463 (383) GPSC’s Equity Injection 576 576 Total Ongoing CAPEX 34

  42. Slide 42: Dividend Payment

    Dividend -42- -42- 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.

  43. Slide 43: Optimized & Flexible Operations…Superior Performance

    Crude & Production -43- -43- Optimized & Flexible Operations…Superior Performance Thai Oil is able to diversify its type of crude intake and product outputs to maximize demand and margin Crude Assays based on Sources of Product Reference Domestic demand for TOP configuration* Crude output Price petr

  44. Slide 44: Asia Pacific and Middle East Refinery Addition

    Refinery -44- Asia Pacific and Middle East Refinery Addition AP & ME Demand Growth Middle East ME Close China Start-up Nameplate Country Company Other AP Japan period) (KBD) India Vietnam Q1-20 India 56 BPCL Mumbai Thailand Net Addition Q2-20 China 200 Sinopec Zhanjiang KBD 2500 Saudi Arabia 400 Jaz

  45. Slide 45: Asian Margin Vs. US-EU margin

    World GRM -45- Asian Margin Vs. US-EU margin SINGAPORE GRM EU - US Margins $/BBL $/BBL 14 40 12 10 8 30 6 4 20 2 0 -2 10 -4 -6 0 -8 -10 -12 -10 -14 Jul-17 Apr-18 Jul-18 Apr-19 Jul-19 Oct-17 Jan-18 Oct-18 Jan-19 Oct-19 Jan-20 Jul-17 Jul-18 Jul-19 Jan-18 Jan-19 Jan-20 Oct-17 Apr-18 Oct-18 Apr-19 Oct-1

  46. Slide 46: Global Crude Oil Inventories

    Inventories -46- 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

  47. Slide 47: Global Gasoline Inventories

    Inventories -47- 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

  48. Slide 48: Global Middle Distillate Inventories

    Inventories -48- 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

  49. Slide 49: Global Fuel Oil Inventories

    Inventories -49- 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

  50. Slide 50: China's Refined Product Exports

    Inventories -50- China’s Refined Product Exports China’s Gasoline Exports China’s Gasoil Exports KBD KBD Source : China Custom Source : China Custom 600 700 500 600 500 400 400 300 300 200 200 100 100 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

  51. Slide 51: Domestic LPG Demand

    Thailand petroleum demand by products -51- -51- Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight KT/Day 2019 2016 2017 2018 • In 2019, LPG demand decreased 0.2% YoY due to dropping in cooking, industrial and transport. LPG 20 18.8 18.3 18.2 17.9 demand in cooking, industrial and transpor

  52. Slide 52: Domestic Gasoline/Gasohol Demand

    Thailand petroleum demand by products -52- -52- Domestic Gasoline/Gasohol Demand Thailand Gasoline/Gasohol Demand GASOLINE/Gasohol Demand Highlight MML/Day 2019 2016 2017 2018 • In 2019, Gasoline demand rose by 3.7% YoY to an 34 32.8 33.2 average 32.2 MML/day. Besides lower retail price of 32.7 32.4

  53. Slide 53: Domestic Jet Demand

    Thailand petroleum demand by products -53- -53- Domestic Jet Demand Thailand JET Demand JET Demand Highlight MML/Day 2019 2016 2017 2018 • In 2019, Jet consumption slightly increased by 0.8% 22 YoY. Despite of economic slowdown and strengthening of Thai Baht, flight number which is a main support of

  54. Slide 54: Domestic Gasoil and NGV Demand

    Thailand petroleum demand by products -54- -54- Domestic Gasoil and NGV Demand Thailand Gasoil Demand Diesel Demand Highlight 2019 2016 2017 2018 MML/Day • In 2019, Diesel demand slightly increased by 1.2% YoY 72 mainly supported by 4.4% YoY increasing amount of 70 68 accumulated registered diesel c

  55. Slide 55: Domestic Fuel Oil Demand

    Thailand petroleum demand by products -55- -55- Domestic Fuel Oil Demand Thailand Fuel Oil Demand Fuel Oil Demand Highlight MML/Day 2019 2016 2017 2018 • In 2019, Fuel Oil consumption fell by 10.5% YoY, as a result 8 of the decrease in industrial sector by 7.5% to using environmental friendly fuel.

  56. Slide 56: Thank You

    --56- 56- 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 — FY2019 Earnings Presentation on 6ix