PTT Public Co., Ltd. · SET:PTT
PTT Public — Q2 2006 Earnings Presentation
42 slides from PTT Public's earnings presentation, Aug 17, 2006
Slide 1: 2nd Quarter/2006 Analyst Meeting
2nd Quarter /2006 Analyst Meeting 17 August 2006 1
Slide 2: Disclaimer
Disclaimer The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are base
Slide 3: 2Q/06 & 1H/06 Activities & Operational Results
2Q/06 & 1H/06 Activities & Operational Results Financial Highlights Growing the Future Conclusion 3
Slide 4: Strong 2Q/2006 results: Revenues +40% YoY
Strong 2Q/2006 results : Revenues +40% YoY Total Gas PTTEP Refining Petrochem Oil 2Q/06 313,251 Unit : Bt mn +40% +36% Revenues 313,251 Bt mn 267,718 224,368 2 mth. 196,262 Gas Group Conso. Conso. 20% RRC PTTCH Oil Group 13% +19% 67% Petchem 61,458 +54% -6% 51,766 +784% &Ref 33,861 31,890 19,749 18,
Slide 5: Strong 2Q/2006 results: EBITDA +35% YoY
Strong 2Q/2006 results : EBITDA +35% YoY 2Q/06 Total Gas PTTEP Refining Petrochem Oil Unit : Bt mn EBITDA 38,359 Bt mn 38,359 +35% TM ~11% Mkt ~ 6% Petchem GSP ~12% 28,334 2 mth. &Ref Conso. Conso. Gas Group +54% RRC PTTCH 25% 31% 16,811 +6% Oil 1% 11,263 11,961 10,932 +2,792% -18% PTTEP 4,328 5,994
Slide 6: Strong 2Q/2006 results: Net Income +73% YoY
Strong 2Q/2006 results : Net Income +73% YoY Other 2Q/06 Total PTT PTTEP RRC PTTCH Affiliates 31,658 Net Income 31,658 Bt mn Gain on Unit : Bt mn +73% Disposal of RRC 7,130 PTT Affiliates 23% 24% 18,355 2 mth. Subsidiary 9% PTTEP + 1 mth. Associate +68% RRC -1% 15% 7,956 7,867 23% 6% +33% 7,129 4,73
Slide 7: Pipeline Business: Stable Incomes & Solid Growth
Pipeline Business : Stable Incomes & Solid Growth 3rd Pipeline will be commercially start up in 4Q/2006 1st & 2nd Pipeline is at full capacity, Gas demand remains strong and growing Gas sales volumes (mmscfd) Customer Profile 2006 2005 2004 EGAT IPP SPP GSP Industry + 3.1% yoy 3,105 3,013 3,016 3,10
Slide 8: Gas Separation Plants: Strategic Value Creators
Gas Separation Plants : Strategic Value Creators Natural gas is utilized to the fullest potential through gas separation plants. Product Prices ($/ton) 1,114 1199 HDPE 1,015 1186 • GSPs performance PP improved yoy due to the 1,109 increase in both sales 985 volume and sales price by 7% 578 550 Napht
Slide 9: PTTEP: Growth Engine & Cash Generator
PTTEP : Growth Engine & Cash Generator PTT holds 66.31% in PTTEP (as of 30 June 2006). Unit : Bt mn 2Q/06 1H/06 • Strong potential in Myanmar, Vietnam, Oman %yoy %qoq % chg. and Algeria Projects. Revenue + 60% + 8% + 62% 44,869 • Arthit field is expected to start up in Jan 2008, however, PTTEP is ex
Slide 10: Oil Business: Strong Leadership Position with No.1 market share
Oil Business : Strong Leadership Position with No.1 market share PTT is a market leader in oil retails at 39% market share with 1,258 gas stations nationwide. Oil Marketing : sales volume ~ 237 kboe/d Thailand’s Market Share Unit : million liters + 0.5% yoy (as of June 2006) + 2.2% qoq 3,419 3,362 3
Slide 11: Refining Affiliates: Strong 2Q/2006 results from high GRM
Refining Affiliates : Strong 2Q/2006 results from high GRM Cooperation among refineries improves security of supply and helps helps manage supply chain more efficiently. PTT Group represents 33% of total refining capacity by equity portion Unit : Bt mn RRC 145 kbpd (PTT 49.99%) TOP 225 kbpd (PTT 49.
Slide 12: Petrochemical Affiliates: Better performance from volume & price
Petrochemical Affiliates : Better performance from vol. & price PTT focuses on gas- gas-based petrochemical business to create more values from natural gas assets. Capacity expansion and diversified portfolio Ethane, Propane, Ethylene HDPE PTT GSPs LPG, NGL PTTCH 1,146 kta 250 kta Propylene Raffinat
Slide 13: Financial Highlights
2Q/06 & 2H/06 Activities & Operational Results Financial Highlights Growing the Future Conclusion 13
Slide 14: Consolidated Income Statements: Q2/2006 & 1H/2006
Consolidated Income Statements : Q2/2006 & 1H/2006 THB (Bt mn) THB (Bt mn) 2Q/05 1Q/06 2Q/06 %YOY %QOQ 1H/05 1H/06 %Chg Sales 224,368 270,371 313,251 39.6 15.9 414,490 583,622 40.8 - S&A expenses 6,572 6,573 6,081 (7.5) (7.5) 11,198 12,654 13.0 EBITDA 28,334 36,766 38,359 35.4 4.3 53, 227 75,125 41.
Slide 15: Balance Sheets: Financial Philosophy – Solid & Secure
Balance Sheets : Financial Philosophy – Solid & Secure PTT is fully committed to maintain strong financial position. Balance Sheets Financial Ratios ICR • Recognized RRC, 12.9 Unit : Bt mn 12.6 • GSP#5 startup BCP, TPI under • Conso. PTTCH Equity Method 9.4 • Acquired & + 6% 1.4 Conso. RRC 1.3 688,7
Slide 16: Debt Profile: Control Cost & Manage Risk
Debt Profile : Control Cost & Manage Risk Debt portfolio is structured to minimize financial risks. Debt Portfolio Consolidated debt ~ Bt209bn ($5.5bn) Unit : Bt mn Yen USD 219,282 THB 209,208 PTTEP 201,526 8% 7,705 (4%) PTT PTTCH 84,285 9% 159,697 76% : TTM ~ 5% 80,561 (38%) 78,570 155,094 (37%) 7,
Slide 17: Growing the Future
2Q/06 & 1H/06 Activities & Operational Results Financial Highlights Growing the Future Conclusion 17
Slide 18: Energy Consumption: Growing along with Economic Expansion
Energy Consumption : Growing along with Economic Expansion Oil and gas are major sources of energy and likely to remain so for many years. Energy consumption forecast (CAGR during 2006-2015) kboed : Total ~ 5% 3,500 : Gas ~ 8% : Oil ~ 2% : Coal ~ 5% 3,000 2,863 Hydro/Others 3% 2,500 Coal 14% 1,740 2
Slide 19: Natural Gas: Strong and Increasing Demand over Long Term
Natural Gas : Strong and Increasing Demand over Long Term Natural gas is a fuel of choice for power producers and increasingly increasingly transportation industry. Gas demand forecast (CAGR during 2006-2015) mmscfd : Total ~ 8% 8,000 : Power ~ 6% : GSP ~ 11% : Industry ~ 17% 7,000 6,750 6,000 Indus
Slide 20: CAPEX & Investments: Growing the Future
CAPEX & Investments : Growing the Future PTT plans to invest Bt239bn ($6bn) during 2006- 2006-2010, mostly into expanding gas business. Gas Oil JV Others PTTEP PTT’ PTT’s CAPEX ~ Bt238,794m ($6.0bn) Unit : Bt mn 79,620 during 2006- 2006-2010 Others 71,085 1% JV 21% 21,993 64,140 Oil 5% Gas 10,464 73
Slide 21: Strategic Roadmap: Core Value Creators
Strategic Roadmap : Core Value Creators Infrastructure is under expansion to enhance capability to meet rising gas demand. Gas Demand Outlook Unit : mmscfd 6,000 -2 0 1 0 ) ~ 11% 005 5,000 CAGR (2 Industry ~ 18% 4,000 GSP ~ 20% 3,000 2,000 Power ~ 62% 1,000 0 2005 2006 2007 2008 2009 2010 3rd Pipeli
Slide 22: Strategic Roadmap: Integrated Value Enhancers
Strategic Roadmap : Integrated Value Enhancers New businesses are under development to utilize assets, enhance competitiveness, and diversify risks. 2005 2006 2007 2008 2009 2010 Olefins & Plastics Debot I4/1 Debot I4/2 : Ethylene 1,146 kta Ethylene 130 kta, Ethylene 100 kta, : Propylene 377 kta Pro
Slide 23: Conclusion
2Q/06 & 1H/06 Activities & Operational Results Financial Highlights Growing the Future Conclusion 23
Slide 24: Outlook for 2H/2006
Outlook for 2H/2006 • Growing demand and fear of supply interruption continue to support high oil prices, favorable to E&P and refining businesses. • Slight delay on the 3rd pipeline causing minor adjustment on the gas demand outlooks for 2006, which expected to grow by ~4 - 5%. • Petrochemical pric
Slide 25: Thank you
Thank you PTT Public Company Limited – Capital Market & Investor Relations Department Tel. +66 2 537-2792, Fax. +66 2 537-2791, Email: ir@pttplc.com, http://www.pttplc.com/ 25
Slide 26: Supplement
Supplement 26
Slide 27: Hydrocarbon Value Chain
Hydrocarbon Value Chain PTT Group has strong presence in various sectors throughout the hydrocarbon value chain. Fully Integrated Portfolio & Strong Leadership Position Upstream Intermediate Downstream End Customers Natural Gas Mix Electricity Power Plants Natural Gas Industry Gas Gas Products Gas S
Slide 28: Corporate Structure
Corporate Structure PTT Petrochemical & Gas Business Group Oil Business Group Refining • Exploration and production Marketing Trading • Gas-based petrochemicals • Transmission and distribution • Integrated and complex refineries • Processing • Commercial • Crude & Condensate • Retails • Refined prod
Slide 29: PTT: The Largest Public Company in Thailand
PTT : The Largest Public Company in Thailand Ownership : Ministry of Finance ‘Direct and Indirect’ Indirect’ ~ 68%, Public ~ 32% PTT Group represents a significant portion of Thai economy Total Market Cap. ~ Bt5.2tr ($134bn) TPI 9.0% TOP 8.5% PTTCH 6.2% PTT RRC 3.6% PTTEP 25.5% 13.4% PTT Group ATC 1
Slide 30: Recognition: Confidence & Credibility
Recognition : Confidence & Credibility PTT is widely recognized among business community both local and international. PTT ratings are comparable to sovereign ratings • Foreign : Moody’s (A2) / S&P (BBB+) • Local : Moody’s (A2) / S&P (A-) Rewards & Recognitions 265rd : World’ World’s Largest Corpora
Slide 31: Strategic Intents Drive Specific Sector Actions
Strategic Intents Drive Specific Sector Actions Roles in Portfolio Business Areas Strategic Intents Strategic actions Grow aggressively in E&P • Aggressive International growth Thailand Plus “Core value and beyond creators” Gas Defend the core • Reduce reliance on power sector pursue growth vigorous
Slide 32: Performance Highlights: Larger, Stronger, and Better PTT
Performance Highlights : Larger, Stronger, and Better PTT 2005 performance (Baht per share) : Revenues ~ 332.4, EBITDA ~ 40.8, 40.8, Net Income ~ 30.6 Revenues 2004 2005 Unit : Bt mn 929,716 Revenues Gas Group Gas Group 22% 30% + 44% Oil Group Oil Group 13% 66% 4% 65% Petchem Petchem&Ref &Ref 644,69
Slide 33: PTTEP: Growth Engine & Cash Generator
PTTEP : Growth Engine & Cash Generator PTT hold 66.32% in PTTEP (as of 31 Dec 2005). Unit : Bt mn Revenues Operations Sales Vol. (boepd) Avg. Sales Prices ($/boe) 68,355 31.47 31.59 29.37 28.14 25.42 23.38 % 43 + 142,685 139,035 160,678 171,333 134,070 153,531 EBITDA 1Q 2Q 3Q 4Q 2004 2005 50,011 47,
Slide 34: Refining Affiliates
Refining Affiliates Cooperation among refineries improves security of supply and helps helps manage supply chain more efficiently. PTT Group represents 38% of total refining capacity TOP* 2004 2005 %Chg. RRC* 2004 2005 %Chg. : Revenues 184,801 249,111 35% RRC (145 kbpd) : Revenues 97,399 123,347 27%
Slide 35: Petrochemical Affiliates
Petrochemical Affiliates PTT focuses on gas- gas-based petrochemical business to create more values from natural gas assets. PTT has become a regional player in petrochemical industry Ethane, Propane, Ethylene HDPE PTT GSPs LPG, NGL PTTCH 1,146 kta 250 kta Propylene Light Naphtha Naphtha & Raffinate
Slide 36: Natural Gas Price Structure
Natural Gas Price Structure Gas prices are mostly agreed under long- long-term contracts and volatility pass- pass-through to ensure stable returns. Sales Price Structure Customers Gas Pool Price + Supply Margins + Pipeline Tariffs Power Producers ~ 74% : EGAT ~ 35% 1.75% Average Purchased : IPP ~ 2
Slide 37: Schedule: Major Projects, Natural Gas Pipeline Network
Schedule : Major Projects Thailand Natural Gas Transmission System Key projects are strategically linked and timely corresponding to to meet demand. PTT’s Natural Gas Pipeline Network • 3rd Pipeline (Onshore & Offshore) Onshore: completed in March 2006 Offshore: COD ~ 4Q/2006 West pipeline, 42”, • P
Slide 38: Refining Industry
Refining Industry Strong leadership position ensures stable supply to downstream and and related businesses. PTT Group represents 33% of total refining capacity by equity portion Total refining capacity ~ 1,012 kbpd RPC 2% ESSO 14% ESSO (145 kbpd) TOP TOP (220 kbpd) 22% (PTT 49.54%) RPC (17 kbpd) TP
Slide 39: Petroleum Demand/Procurement: 2005
Petroleum Demand/Procurement : 2005 Demand ~ 1,157,000 boepd (+ 2.1%) 2005 boepd %Chg. Total 1,157,000 + 2.1% - Gas 437,900 + 5.1% : EGAT 180,900 + 1.9% Diesel 29.3% : IPP/SPP 212,800 + 8.0% EGAT ~ 15.6% Gas Oil : Industry 43,200 + 1.9% IPP/SPP ~ 18.4% : NGV 1,000 + 67.7% 37.8% 62.2% - Oil 719,100 +
Slide 40: Gross Refining Margins
Gross Refining Margins Continuing demand growth while tight supply creates favorable environment environment for refining industry Gross Refining Margins for Complex Refineries GRM ($/bbl) 12 10.2 10.6 10 9.2 9.2 8.5 7.9 8.0 7.7 8 6.8 2004 (avg) 6.7 6.2 2005 (avg) 6 4 3.3 2 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Slide 41: Dividend Policy & Historical Payments
Dividend Policy & Historical Payments PTT is firmly committed to pay dividend at no less than 25% of net net income. EPS DPS % Dividend Payout 32.4% 32.6% 29.8% 30.1% 30.3% PTT’s minimum payout ratio 25% 30.57 22.40 13.43 8.75 9.25 7.71 6.75 4.00 2.50 2.85 2001 2002 2003 2004 2005 Note : All figures
Slide 42: Reference: Product Prices
Reference : Product Prices 2005 2006 YOY QOQ 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FX – THB/USD (@end period) 39.2543 41.4091 41.1075 41.1746 38.9417 38.3295 (7.4%) (4.0%) Crude ($/bbl) : WTI 49.63 53.03 63.05 59.99 63.32 70.30 + 32.6% + 11.0% : Dubai 41.21 47.89 55.32 52.85 57.89 64.78 + 32.5% + 11.9% Refined Pr