Thai Oil Public Co. Ltd. · SET:TOP
Thai Oil Public — Q2 2018 Earnings Presentation
122 slides from Thai Oil Public's earnings presentation, Aug 17, 2018
Slide 1: Thai Oil Public Company Limited Q2/18 Analyst Presentation
-1- Thai Oil Public Company Limited Q2/18 Analyst Presentation 17 August 2018 Time : 10.00 - 12.00 hrs. Venue : ENCO, C Building, 6th Floor - Synergy Hall
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
Slide 3: Corporate Vision, Mission and Values
-3- Corporate Vision, Mission and Values 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 sustainabil
Slide 4: Corporate Governance
-4- Corporate Governance Corporate Governance Policy Roles and Responsibilities The board of directors, management and all staff shall commit to moral principles, equitable treatment to all for Stakeholders stakeholders and perform their duties for the company’s interest with dedication, integrity,
Slide 5: Our Achievement in Sustainable Development
-5- Our Achievement in Sustainable Development 5th Consecutive Year as the Member of DJSI Emerging Markets 5th Consecutive Year of leading positions: Oil & Gas Refining & Marketing
Slide 6: Presentation Agenda
-6- Presentation Agenda Q2/18 KEY HIGHLIGHTS Q2/18 PERFORMANCE ANALYSIS Q4/18 MARKET OUTLOOK
Slide 7: Q2/18 Key Highlights
-7- Q2/18 KEY HIGHLIGHTS
Slide 8: Q2/18 Key Market Drivers Highlights
Key Highlights -8- Q2/18 Key Market Drivers Highlights Refinery Soften refinery margins pressured by weaken product spread Implication 1) especially gasoline from abundant inventory worldwide and lower Mkt GRM at 4.0 $/bbl middle distillate spread as winter demand ended (Q1/18 = 5.7 $/bbl) Risin
Slide 9: Q2/18 Key Achievements
Key Highlights -9- Q2/18 Key Achievements Key Achievements Q2/18 TOP Group Net Profit Operational Maintain high reliable production Unit : million THB (MB) Excellence Q2/18 Q1/18 Net Operating Profit F/X gain/(loss) Reversal of NRV/(NRV) & Adjusted to cost Others i.e. Hedging gain/(loss) & Refiner
Slide 10: Q2/18 Margin and Productivity Improvement
Key Highlights -10- Q2/18 Margin and Productivity Improvement (VS Corporate Plan) Cost Management General & Admin , Procurement & warehouse , Operation & Maintenance , Margin Improvement Project & Manpower (Hydrocarbon Management : HMR) management and Productivity Improvement Unit: million THB (Non
Slide 11: Q2/18 Performance Analysis
-11- Q2/18 PERFORMANCE ANALYSIS
Slide 12: Refinery: Maintain High Utilization Rate
Refining -12- Refinery: Maintain High Utilization Rate TOP/ Domestic Refinery Utilization Rate Domestic Oil Demand Unit: % Utilization Rate H1/17 H1/18 KBD 3.4% 114% 800 111% 112% 112% 113% 108% 112% 108% 108% 110% 600 2.0% 98% 98% 97% 400 90% 94% 94% 94% 3.6% 89% 90% 91% 7.8% 200 70% Q1/17 Q2 Q3 Q4
Slide 13: Q2/18: Softer Market GRM, Weaker Product Spread, Inventory Gain
Refining -13- Q2/18: Soften Mkt GRM pressured by Weaken Product Spread while Rising Crude Price led to Inventory Gain Dubai Crude Price & Key Petroleum Product Spreads Refinery Utilization 2017 2018 2017 Q1/18 Q2/18 1H/18 $/bbl Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY17 113% 108% 110% DUBAI (DB) 53.1 49.8 50.5
Slide 14: Q2/18: Softer Aromatics Contribution on Lower PX and BZ Spread
Aromatics/LAB -14- Q2/18: Soften Aromatics Contribution pressured by Lower PX and BZ spread Aromatics Spreads and Margins Aromatics Production 2017 2018 2017 Q1/18 Q2/18 1H/18 $/ton Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY17 90% 84% 87% PX**-ULG95 312 273 258 260 304 268 286 362 276 Q2/18 Market BZ**-ULG95 346
Slide 15: Q2/18: Stable Contribution, Softer Lube Base and Bitumen Spread
Lube Base Oil -15- Q2/18: Stable Contribution as Slightly Soften Lube Base & Bitumen Spread Base Oil & Bitumen Spreads & Margins Base oil Production 2017 2018 2017 Q1/18 Q2/18 1H/18 $/ton Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY17 89% 89% 89% 500SN-HSFO 451 556 528 458 512 481 497 432 528 % Base Oil & Specialt
Slide 16: Q2/18 Power Sector Performance
Power -16- Q2/18 Power Sector Performance…Growing Contribution to the Group Power Business Sector Equity holding in SPP GPSC **** [74%] [100%] Power & Steam Sales ***TOP shareholding 24.29% (8.91% via TOP and 20.79% via TP) GPSC is an associate company of TOP. Electricity(1) 2,504 Equity method is a
Slide 17: Integrated Margin & Competitive Cash Cost
Financial -17- Integrated Margin & Competitive Cash Cost Gross Refining Margin Refinery’s Cash Cost (Unit: US$/bbl) (Unit: US$/bbl) Market GRM Accounting GRM (Market GRM + Stock G/L) Operating Cost Interest Expense (net) (excl. one-time non- operating item) 9.0 Higher group cash cost in Q2/18 7.8 ma
Slide 18: Q2/18: Performance Breakdown by Business Unit
Performance Breakdown -18- Q2/18: Performance Breakdown by Business Unit Utilization/Production (%) & Net Profit (million THB) Key Points • Refinery: lower run rate due to planned MTA CDU 1 (50 kbd) during May-Jun’18 • Aromatic/LAB: lower contribution mainly from weaken product spread due to new PX
Slide 19: Q2/18 TOP Group Consolidated P&L
Financial -19- Q2/18 TOP Group Consolidated P&L QoQ analysis (Unit : MB) Q2/18 Q1/18 QoQ+/(-) Q2/17 YoY+/(-) 6M/18 6M/17 YoY+/(-) 5,093 (A) A Increase overall product Sales Revenue 96,710 91,617 80,053 16,657 188,328 167,649 20,679 prices following crude oil Hedging gain/(loss) 70 102 (32) 36 34 172
Slide 20: Q2/18 TOP Group Consolidated Cash Flow
Financial -20- Q2/18 TOP Group Consolidated Cash Flow (Unit: Million THB) (Unit: Million THB) Investments Operating Cash Flow 6M/18 6M/17 6M/18 6M/17 Investments 9,606 (12,664) Operating Cash Flow 11,184 15,895 Dividend income 568 491 Net income & non-cash adj. 17,666 16,309 + ST investments 10,420
Slide 21: Strong Financial Position & Financial Ratios
Financial -21- Q2/18 TOP Group Strong Financial Position & Financial Ratios Statements of Financial Position Consolidated Long-Term Debt as at 30 Jun 18 (Unit: million THB) Total IBD Net Cash 241,040 241,473 75,413 million THB 1,497 million THB 36,075 37,588 Trade Payable Cash & ST 76,910 / Others (
Slide 22: Q4-18 Market Outlook
Q4-18 MARKET OUTLOOK • Crude Oil • Petroleum Products • Aromatics • Base Oil & Bitumen • Linear Alkyl Benzene (LAB)
Slide 23: Crude Oil
CRUDE OIL
Slide 24: Recovering Oil Prices Driven by Strong Fundamentals and Geopolitical Risks
Crude Oil -24- Recovering Oil Prices Driven by Strong Fundamentals and Concern about Rising Geopolitical Risks Dubai Price Movement $/BBL Keystone & 2 Tight Supply Case: 100 Forties Pipeline Escalating Only China Imports OPEC-led Cut OPEC-led Cut leakage U.S. Re-imposed US-China Trade War Iranian Cr
Slide 25: Slightly Deficit Oil Market on Limited Supply and Solid Demand
Crude Oil -25- 1 Slightly Deficit Oil Market on Limited Supply and Solid Demand A Lower Supply from Iran Offsetting OPEC Increase B Solid Demand from Strong Global Economy MBD OPEC & Non-OPEC Supply Cuts Global Demand Growth by Region (YoY) MBD 3.0 2.0 Q2-18 Q3-18 Q4-18 1.54 1.5 2.0 0.93 1.0 1.0 0.5
Slide 26: Escalating Geopolitical Risks to Drive Deeper Market Deficit
Crude Oil -26- 2 Escalating Geopolitical Risks to Drive Deeper Market Deficit A U.S. Hard Stance Halt Iran’s Crude Oil Exports B Economic Uncertainty Weighs on Crude Outputs Iran’s Crude Oil Production Venezuela’s Crude Oil Production MBD MBD 4.0 3.0 2.5 3.5 2.0 3.0 -0.6 MBD -0.1 MBD (vs. Q3’18) 1.5
Slide 27: Petroleum Products
PETROLEUM PRODUCTS
Slide 28: Recovering Refining Margins Supported by Middle Distillate and Tighter Supply
Refinery -28- Recovering Refining Margins Supported by Strong Middle Distillate and Tighter Supply Singapore Cracking GRM ($/BBL) 8.5 8.0 8.2 7.9 7.6 7.7 6.7 7.2 7.1 7.0 6.1 6.2 6.5 6.4 6.0 6.3 5.0 5.2 Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2
Slide 29: Steady Gasoline from Limited Supply and Stable Chinese Exports
Refinery -29- 1 Steady Gasoline from Limited Supply and Stable Chinese Exports A Limited Supplies on High Refinery Maintenance D B Stable Chinese Exports on Limited Quota Global Refinery Maintenance Chinese Gasoline Export MBD CDU Loss Million Barrels Aug’18 : Force majeure Quota 2018 : 103.1 MBBL 1
Slide 30: Strong Middle Distillate Cracks from Solid Demand and Low Inventories
Refinery -30- 2 Strong Middle Distillate Cracks from Solid Demand and Low Inventories A Strong Demand Drives Lower Surplus B Firm Demand Pushes Inventory to below 5-Year Asia Pacific Middle Distillate Demand U.S/ARA/SING Middle Distillate Inventories MBD MBBL Q4’18 : 12.3 MBD (+0.68 MBD QoQ) 220 13.
Slide 31: Tight Refinery Market due to Demand Growth Outpacing Supply Addition
Refinery -31- Tight Refinery Market due to Demand Growth Outpacing 3 Supply Addition Asia Pacific and Middle East Effective CDU Addition VS Additional Demand AP & ME Demand Growth Middle East China Other AP Japan India Vietnam Teapot Thailand Net Addition Operating Rate [RHS] KBD Operating Rate, % 3
Slide 32: Thailand Oil Demand Growth
Domestic -32- Thailand Oil Demand Growth Thailand Oil Demand Growth (B) (B) 6M/18(B) Y2018F(C) Year on Year Y2016 Y2017 VS 6M/17 VS 2017 Mogas (A) +9.8% +3.7% +3.6% +3.6% Jet/Kero +6.8% +4.4% +7.8% +6.3% Diesel (A) +3.1% +2.9% +2.0% +2.6% Total +5.4% +3.4% +3.4% +3.5% GDP +3.2% +3.9%(D) +4.8%(E) +4.
Slide 33: Aromatics
AROMATICS
Slide 34: Stable PX and BZ Markets Supported by Uncertainty of New Supply
Aromatics -34- Stable PX and BZ Markets Supported by Uncertainty of New Supply Aromatics Market PX CFR Taiwan-ULG95 ($/TON) BZ FOB Korea-ULG95 ($/TON) 362 343 332 315 341 317 313 304 280 273 258 260 276 268 245 231 225 195 212 156 138 174 185 163 147 126 Y2016 Y2017 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-
Slide 35: Stable PX Market due to New Supply Uncertainty
Aromatics -35- Stable PX Market due to New Supply Uncertainty amid Good 1 Downstream Demand A Some Capacity Uncertainty May Cause Tight Supply B Higher Asian PX M/T than PTA to Support Market in Q4 AP/ME Effective PX Capacity Addition Asian PX&PTA Plant Maintenance MTON KTON PX Uncertainty PetroRabi
Slide 36: Stable BZ Market due to New Supply Uncertainty
Aromatics -36- Stable BZ Market due to New Supply Uncertainty amid Still- 2 High BZ Stock in East China A Some Capacity Uncertainty May Cause Tight Supply B C Higher SM Expect Capacity Rising Addition SM Operating Supports Rate after BZ M/T Seasonal Demand AP/ME Effective BZ Capacity Addition AP/ME
Slide 37: Base Oil & Bitumen
BASE OIL & BITUMEN
Slide 38: Softer Base Oil Market due to New Additional Supply
Base Oil & Bitumen -38- Softer Base Oil Market due to New Additional Supply 500SN – HSFO ($/TON) 1 AP Base Oil Effective Capacity Addition 556 528 512 482 427 409 443 451 458 498 432 Mil TON Group 1 Group 2 Group 3 Net Capacity 367 412 1.5 1.0 0.9 0.6 0.6 Y2016 Y2017 Q2-16 Q3TD-18* Q1-16 Q3-16 Q4-16
Slide 39: Stable Bitumen Market on Recovering Demand
Base Oil & Bitumen -39- Stable Bitumen Market on Recovering Demand Bitumen-HSFO ($/TON) 1 Recovering Import Demand from Major Importers KTON/MONTH KTON/MONTH -7 -13 200 India 200 Vietnam -38 -29 -45 -31 -48 -61 -49 -56 -67 -44 -80 100 100 Y2016 Y2017 Q3TD-18* Q1-17 Q1-16 Q2-16 Q3-16 Q4-16 Q2-17 Q3-1
Slide 40: Linear Alkyl Benzene (LAB)
Linear Alkyl Benzene (LAB)
Slide 41: Slightly Improving LAB Market on Better Demand
LAB -41- Slightly Improving LAB Market on Better Demand LAB Market LAB Spread** ($/TON) AP/ME Effective Maintenance/Closure* KTA 635 627 619 606 603 120 583 543 539 534 522 550 529 566 100 80 60 40 20 0 Y2016 Y2017 Q1-18 Q3TD-18* Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q2-18 Q1-18 Q2-18 Q3-1
Slide 42: Conclusion
CONCLUSION
Slide 43: Q4-18 Market Outlook Conclusion
Conclusion -43- Q4-18 Market Outlook Conclusion (vs. Q3-18) Crude Oil Recovering Oil Prices Driven by Strong Fundamentals and Concern about Rising Geopolitical Risks Recovering Refining Margins Supported by Strong Middle Refinery Distillate and Tighter Supply Stable PX and BZ Markets Supported by Un
Slide 44: Thank You
-44- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976
Slide 45: Appendix
-45- APPENDIX • Strategic Investment Plan • Optimized & Flexible Operations…Superior Performance • 2017 Dividend payment • CDU Addition VS Additional Demand – AP & ME • World GRM / Inventories • Thailand petroleum demand by products
Slide 46: Strategic Investment Plan Approved by Board of Directors
Updated CAPEX plan -Use only for KM Session- -46- Strategic Investment Plan Approved by Board of Directors CAPEX Plan (Unit US$ million) Planned capital investment Project 2017 2018 2019 2020 Reliability, Efficiency and Flexibility Improvement 40 44 19 3 Infrastructure Improvement - Lorry Expansion
Slide 47: Optimized & Flexible Operations…Superior Performance
Crude -47- Optimized & Flexible Operations…Superior Performance Crude Assays based on Sources of Product Domestic demand for Reference Price TOP configuration* Crude output petroleum products** Thai Oil is able to diversify its type of crude intake and product outputs to maximize demand and margin %
Slide 48: 2017 Dividend Payment
Financial -48- 2017 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 4.39 4.57 2.75 3.75 3
Slide 49: Asia Pacific and Middle East Refinery Addition
Refinery -49- Asia Pacific and Middle East Refinery Addition AP & ME Demand Growth Middle East China Other AP Start-up Nameplate Country Company Japan India period) (KBD) Vietnam Teapot Q1-18 (Aug’18 > Feb’18) 120 Bandar Abbas - PGSOC/1 Net Addition Iran (Phase 2) KBD Q3-18 China (Mar’18 > Jul’18) 1
Slide 50: Asian Margin Vs. US-EU Margin
World GRM -50- Asian Margin Vs. US-EU margin $/BBL SINGAPORE GRM EU - US Margins $/BBL 12 10 40 8 30 6 20 4 2 10 0 0 -2 -10 -4 Apr-15 Jul-15 Apr-16 Jul-16 Apr-17 Jul-17 Apr-18 Jul-18 Jan-15 Oct-15 Jan-16 Oct-16 Jan-17 Oct-17 Jan-18 Apr-15 Jul-15 Apr-16 Jul-16 Apr-17 Jul-17 Apr-18 Jul-18 Jan-15 Oct-1
Slide 51: Global Crude Oil Inventories
Inventories -51- Global Crude Oil Inventories U.S. Crude Stocks (excl. SPR) Crude Oil, Cushing, Oklahoma MBBL MBBL Source : EIA Source : EIA 600 80 550 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 2018 2017 avg 13-16
Slide 52: Global Gasoline Inventories
Inventories -52- Global Gasoline Inventories U.S. Gasoline Stocks Singapore Gasoline Stocks MBBL MBBL Source : EIA Source : IE Singapore 280 20 260 240 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 2018 2017 avg 12-16 5yr-range 2018 2017 avg 12-16
Slide 53: Global Middle Distillate Inventories
Inventories -53- Global Middle Distillate Inventories U.S. Diesel Stocks Singapore Middle Distillate Stocks MBBL MBBL Source : EIA Source : IE Singapore 180 20 160 140 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 2018 2017 avg 13-17 5yr-range 2018
Slide 54: Global Fuel Oil Inventories
Inventories -54- Global Fuel Oil Inventories U.S. Residual Fuel Oil Stocks Singapore Residual Fuel Oil Stocks MBBL MBBL Source : EIA Source : IE Singapore 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 2018 2017 avg 13-17 5yr-range 2018 20
Slide 55: China's Refined Product Exports
China Export -55- China’s Refined Product Exports KBD China’s Gasoline Exports KBD China’s Gasoil Exports Source : China Custom Source : China Custom 500 600 400 500 400 300 300 200 200 100 100 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 2015 2
Slide 56: Domestic LPG Demand
Thailand petroleum demand by products -56- Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight KT/Day 2018 2015 2016 2017 • In H1/2018, LPG demand jumped by 7.1% YoY 20 on the back of 25.5% YoY higher demand from 18.1 petrochemical sector, as a result of higher 17.5 17.8 17.8 18.0 substitut
Slide 57: Domestic Gasoline/Gasohol Demand
Thailand petroleum demand by products -57- Domestic Gasoline/Gasohol Demand Thailand Gasoline/Gasohol Demand GASOLINE/Gasohol Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Mogas demand rose moderately by 34 3.6% YoY to an average 30.9 ML/day. Although, 31.5 31.7 the retail price of Moga
Slide 58: Domestic Jet Demand
Thailand petroleum demand by products -58- Domestic Jet Demand Thailand JET Demand JET Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Jet consumption increased 21.6 22 21.0 21.2 significantly by 7.8% over the corresponding 19.7 period last year mainly owning to booming 20 tourism industr
Slide 59: Domestic Gasoil and NGV Demand
Thailand petroleum demand by products -59- Domestic Gasoil and NGV Demand Thailand Gasoil Demand Diesel Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Diesel demand rose moderately by 72 69.7 70.2 2.0% YoY as a result of higher growth of Thai 70 economic recovery, according to higher 68
Slide 60: Domestic Fuel Oil Demand
Thailand petroleum demand by products -60- Domestic Fuel Oil Demand Thailand Fuel Oil Demand Fuel Oil Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Fuel Oil consumption rose slightly 10 by 0.2%YoY, as a result of 12.2% YoY higher demand from transportation sector which takes 8 approxima
Slide 61: Thank You
-61- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976
Slide 62: Thai Oil Public Company Limited Q2/18 Analyst Presentation
-62- Thai Oil Public Company Limited Q2/18 Analyst Presentation 17 August 2018 Time : 10.00 - 12.00 hrs. Venue : ENCO, C Building, 6th Floor - Synergy Hall
Slide 63: Disclaimer
-63- 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 ma
Slide 64: Corporate Vision, Mission and Values
-64- Corporate Vision, Mission and Values 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 sustainabi
Slide 65: Corporate Governance
-65- Corporate Governance Corporate Governance Policy Roles and Responsibilities The board of directors, management and all staff shall commit to moral principles, equitable treatment to all for Stakeholders stakeholders and perform their duties for the company’s interest with dedication, integrity,
Slide 66: Our Achievement in Sustainable Development
-66- Our Achievement in Sustainable Development 5th Consecutive Year as the Member of DJSI Emerging Markets 5th Consecutive Year of leading positions: Oil & Gas Refining & Marketing
Slide 67: Presentation Agenda
-67- Presentation Agenda Q2/18 KEY HIGHLIGHTS Q2/18 PERFORMANCE ANALYSIS Q4/18 MARKET OUTLOOK
Slide 68: Q2/18 Key Highlights
-68- Q2/18 KEY HIGHLIGHTS a
Slide 69: Q2/18 Key Market Drivers Highlights
Key Highlights -69- Q2/18 Key Market Drivers Highlights Refinery Soften refinery margins pressured by weaken product spread Implication 1) especially gasoline from abundant inventory worldwide and lower Mkt GRM at 4.0 $/bbl middle distillate spread as winter demand ended (Q1/18 = 5.7 $/bbl) Risi
Slide 70: Q2/18 Key Achievements
Key Highlights -70- Q2/18 Key Achievements Key Achievements Q2/18 TOP Group Net Profit Operational Maintain high reliable production Unit : million THB (MB) Excellence Q2/18 Q1/18 Net Operating Profit F/X gain/(loss) Reversal of NRV/(NRV) & Adjusted to cost Others i.e. Hedging gain/(loss) & Refine
Slide 71: Q2/18 Margin and Productivity Improvement
Key Highlights -71- Q2/18 Margin and Productivity Improvement (VS Corporate Plan) Cost Management General & Admin , Procurement & warehouse , Operation & Maintenance , Margin Improvement Project & Manpower (Hydrocarbon Management : HMR) management and Productivity Improvement Unit: million THB (Non
Slide 72: Q2/18 Performance Analysis
-72- Q2/18 PERFORMANCE ANALYSIS
Slide 73: Refinery: Maintain High Utilization Rate
Refining -73- Refinery: Maintain High Utilization Rate TOP/ Domestic Refinery Utilization Rate Domestic Oil Demand Unit: % Utilization Rate H1/17 H1/18 KBD 3.4% 114% 800 111% 112% 112% 113% 108% 112% 108% 108% 110% 600 2.0% 98% 98% 97% 400 90% 94% 94% 94% 3.6% 89% 90% 91% 7.8% 200 70% * Q1/17 Q2 Q3
Slide 74: Q2/18: Softer Market GRM, Weaker Product Spread, Inventory Gain
Refining -74- Q2/18: Soften Mkt GRM pressured by Weaken Product Spread while Rising Crude Price led to Inventory Gain Dubai Crude Price & Key Petroleum Product Spreads Refinery Utilization 2017 2018 2017 Q1/18 Q2/18 1H/18 $/bbl Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY17 113% 108% 110% DUBAI (DB) 53.1 49.8 50.5
Slide 75: Q2/18: Softer Aromatics Contribution on Lower PX and BZ Spread
Aromatics/LAB -75- Q2/18: Soften Aromatics Contribution pressured by Lower PX and BZ spread Aromatics Spreads and Margins Aromatics Production 2017 2018 2017 Q1/18 Q2/18 1H/18 $/ton Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY17 90% 84% 87% PX**-ULG95 312 273 258 260 304 268 286 362 276 Q2/18 Market BZ**-ULG95 346
Slide 76: Q2/18: Stable Contribution, Softer Lube Base and Bitumen Spread
Lube Base Oil -76- Q2/18: Stable Contribution as Slightly Soften Lube Base & Bitumen Spread Base Oil & Bitumen Spreads & Margins Base oil Production 2017 2018 2017 Q1/18 Q2/18 1H/18 $/ton Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY17 89% 89% 89% 500SN-HSFO 451 556 528 458 512 481 497 432 528 % Base Oil & Specialt
Slide 77: Q2/18 Power Sector Performance
Power -77- Q2/18 Power Sector Performance…Growing Contribution to the Group Power Business Sector Equity holding in SPP GPSC **** [74%] [100%] Power & Steam Sales ***TOP shareholding 24.29% (8.91% via TOP and 20.79% via TP) GPSC is an associate company of TOP. Electricity(1) 2,504 Equity method is a
Slide 78: Integrated Margin & Competitive Cash Cost
Financial -78- Integrated Margin & Competitive Cash Cost Gross Refining Margin Refinery’s Cash Cost (Unit: US$/bbl) (Unit: US$/bbl) Market GRM Accounting GRM (Market GRM + Stock G/L) Operating Cost Interest Expense (net) (excl. one-time non- operating item) 9.0 Higher group cash cost in Q2/18 7.8 ma
Slide 79: Q2/18: Performance Breakdown by Business Unit
Performance Breakdown -79- Q2/18: Performance Breakdown by Business Unit Utilization/Production (%) & Net Profit (million THB) Key Points • Refinery: lower run rate due to planned MTA CDU 1 (50 kbd) during May-Jun’18 • Aromatic/LAB: lower contribution mainly from weaken product spread due to new PX
Slide 80: Q2/18 TOP Group Consolidated P&L
Financial -80- Q2/18 TOP Group Consolidated P&L QoQ analysis (Unit : MB) Q2/18 Q1/18 QoQ+/(-) Q2/17 YoY+/(-) 6M/18 6M/17 YoY+/(-) A Increase overall product Sales Revenue 96,710 91,617 5,0934 (A) 80,053 16,657 188,328 167,649 20,679 prices following crude oil Hedging gain/(loss) 70 102 (32) 36 34 17
Slide 81: Q2/18 TOP Group Consolidated Cash Flow
Financial -81- Q2/18 TOP Group Consolidated Cash Flow (Unit: Million THB) (Unit: Million THB) Investments Operating Cash Flow 6M/18 6M/17 6M/18 6M/17 Investments 9,606 (12,664) Operating Cash Flow 11,184 15,895 Dividend income 568 491 Net income & non-cash adj. 17,666 16,309 + ST investments 10,420
Slide 82: Strong Financial Position & Financial Ratios
Financial -82- Q2/18 TOP Group Strong Financial Position & Financial Ratios Statements of Financial Position Consolidated Long-Term Debt as at 30 Jun 18 (Unit: million THB) Total IBD Net Cash 241,040 241,473 75,413 million THB 1,497 million THB 36,075 37,588 Trade Payable Cash & ST 76,910 / Others (
Slide 83: Q4-18 Market Outlook
Q4-18 MARKET OUTLOOK • Crude Oil • Petroleum Products • Aromatics • Base Oil & Bitumen • Linear Alkyl Benzene (LAB)
Slide 84: Crude Oil
CRUDE OIL
Slide 85: Recovering Oil Prices Driven by Strong Fundamentals and Geopolitical Risks
Crude Oil -85- Recovering Oil Prices Driven by Strong Fundamentals and Concern about Rising Geopolitical Risks Dubai Price Movement $/BBL Keystone & 2 Tight Supply Case: 100 Forties Pipeline Escalating Only China Imports OPEC-led Cut OPEC-led Cut leakage U.S. Re-imposed US-China Trade War Iranian Cr
Slide 86: Slightly Deficit Oil Market on Limited Supply and Solid Demand
Crude Oil -86- 1 Slightly Deficit Oil Market on Limited Supply and Solid Demand A Lower Supply from Iran Offsetting OPEC Increase B Solid Demand from Strong Global Economy MBD OPEC & Non-OPEC Supply Cuts Global Demand Growth by Region (YoY) MBD 3.0 2.0 Q2-18 Q3-18 Q4-18 1.54 1.5 2.0 0.93 1.0 1.0 0.5
Slide 87: Escalating Geopolitical Risks to Drive Deeper Market Deficit
Crude Oil -87- 2 Escalating Geopolitical Risks to Drive Deeper Market Deficit A U.S. Hard Stance Halt Iran’s Crude Oil Exports B Economic Uncertainty Weighs on Crude Outputs Iran’s Crude Oil Production Venezuela’s Crude Oil Production MBD MBD 4.0 3.0 2.5 3.5 2.0 3.0 -0.6 MBD -0.1 MBD (vs. Q3’18) 1.5
Slide 88: Petroleum Products
PETROLEUM PRODUCTS
Slide 89: Recovering Refining Margins Supported by Middle Distillate and Tighter Supply
Refinery -89- Recovering Refining Margins Supported by Strong Middle Distillate and Tighter Supply Singapore Cracking GRM ($/BBL) 8.5 8.0 8.2 7.9 7.6 7.7 6.7 7.2 7.1 7.0 6.1 6.2 6.5 6.4 6.0 6.3 5.0 5.2 Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2
Slide 90: Steady Gasoline from Limited Supply and Stable Chinese Exports
Refinery -90- 1 Steady Gasoline from Limited Supply and Stable Chinese Exports A Limited Supplies on High Refinery Maintenance D B Stable Chinese Exports on Limited Quota Global Refinery Maintenance Chinese Gasoline Export MBD CDU Loss KBD Quota 2018 : 282 KBD Aug’18 : Force majeure 10 on gasoline e
Slide 91: Strong Middle Distillate Cracks from Solid Demand and Low Inventories
Refinery -91- Strong Middle Distillate Cracks from Solid Demand and 2 Low Inventories A Strong Demand Drives Lower Surplus B Firm Demand Pushes Inventory to below 5-Year Asia Pacific Middle Distillate Demand U.S/ARA/SING Middle Distillate Inventories MBD MBBL Q4’18 : 12.3 MBD (+0.68 MBD QoQ) 220 13.
Slide 92: Tight Refinery Market due to Demand Growth Outpacing Supply Addition
Refinery -92- Tight Refinery Market due to Demand Growth Outpacing 3 Supply Addition Asia Pacific and Middle East Effective CDU Addition VS Additional Demand AP & ME Demand Growth Middle East China Other AP Japan India Vietnam Teapot Thailand Net Addition Operating Rate [RHS] KBD Operating Rate, % 3
Slide 93: Thailand Oil Demand Growth
Domestic -93- Thailand Oil Demand Growth Thailand Oil Demand Growth (B) (B) 6M/18(B) Y2018F(C) Year on Year Y2016 Y2017 VS 6M/17 VS 2017 Mogas (A) +9.8% +3.7% +3.6% +3.6% Jet/Kero +6.8% +4.4% +7.8% +6.3% Diesel (A) +3.1% +2.9% +2.0% +2.6% Total +5.4% +3.4% +3.4% +3.5% GDP +3.2% +3.9%(D) +4.8%(E) +4.
Slide 94: Aromatics
AROMATICS
Slide 95: Stable PX and BZ Markets Supported by Uncertainty of New Supply
Aromatics -95- Stable PX and BZ Markets Supported by Uncertainty of New Supply Aromatics Market PX CFR Taiwan-ULG95 ($/TON) BZ FOB Korea-ULG95 ($/TON) 362 343 332 315 341 317 313 304 280 273 258 260 276 268 245 231 225 195 212 156 138 174 185 163 147 126 Q2-16 Y2016 Y2017 Q3TD-18* Q1-16 Q3-16 Q4-16
Slide 96: Stable PX Market due to New Supply Uncertainty
Aromatics -96- Stable PX Market due to New Supply Uncertainty amid Good 1 Downstream Demand A Some Capacity Uncertainty May Cause Tight Supply B Higher Asian PX M/T than PTA to Support Market in Q4 AP/ME Effective PX Capacity Addition Asian PX&PTA Plant Maintenance MTON KTON PX Uncertainty PetroRabi
Slide 97: Stable BZ Market due to New Supply Uncertainty
Aromatics -97- Stable BZ Market due to New Supply Uncertainty amid Still- 2 High BZ Stock in East China A Some Capacity Uncertainty May Cause Tight Supply B C Higher SM Expect Capacity Rising Addition SM Operating Supports Rate after BZ M/T Seasonal Demand AP/ME Effective BZ Capacity Addition AP/ME
Slide 98: Base Oil & Bitumen
BASE OIL & BITUMEN
Slide 99: Softer Base Oil Market due to New Additional Supply
Base Oil & Bitumen -99- Softer Base Oil Market due to New Additional Supply 500SN – HSFO ($/TON) 1 AP Base Oil Effective Capacity Addition 556 528 512 482 427 409 443 451 458 498 432 Mil TON Group 1 Group 2 Group 3 Net Capacity 367 412 1.5 1.0 0.9 0.6 0.6 Y2016 Y2017 Q4-16 Q3TD-18* Q1-16 Q2-16 Q3-16
Slide 100: Stable Bitumen Market on Recovering Demand
Base Oil & Bitumen -100- Stable Bitumen Market on Recovering Demand Bitumen-HSFO ($/TON) 1 Recovering Import Demand from Major Importers KTON/MONTH KTON/MONTH -7 -13 200 India 200 Vietnam -38 -29 -45 -31 -48 -61 -49 -56 -67 -44 -80 100 100 Y2016 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Y2017
Slide 101: Linear Alkyl Benzene (LAB)
Linear Alkyl Benzene (LAB)
Slide 102: Slightly Improving LAB Market on Better Demand
LAB -102- Slightly Improving LAB Market on Better Demand LAB Market LAB Spread** ($/TON) AP/ME Effective Maintenance/Closure* KTA 635 627 619 606 603 120 583 543 539 534 522 550 529 566 100 80 60 40 20 0 Y2016 Y2017 Q3TD-18* Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q1-18 Q2-18 Q3-
Slide 103: Conclusion
CONCLUSION
Slide 104: Q4-18 Market Outlook Conclusion
Conclusion -104- Q4-18 Market Outlook Conclusion (vs. Q3-18) Crude Oil Recovering Oil Prices Driven by Strong Fundamentals and Concern about Rising Geopolitical Risks Recovering Refining Margins Supported by Strong Middle Refinery Distillate and Tighter Supply Stable PX and BZ Markets Supported by U
Slide 105: Thank You
-105- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976
Slide 106: Appendix
-106- APPENDIX • Strategic Investment Plan • Optimized & Flexible Operations…Superior Performance • 2017 Dividend payment • CDU Addition VS Additional Demand – AP & ME • World GRM / Inventories • Thailand petroleum demand by products
Slide 107: Strategic Investment Plan Approved by Board of Directors
Updated CAPEX plan -Use only for KM Session- -107- Strategic Investment Plan Approved by Board of Directors CAPEX Plan (Unit US$ million) Planned capital investment Project 2017 2018 2019 2020 Reliability, Efficiency and Flexibility Improvement 40 44 19 3 Infrastructure Improvement - Lorry Expansion
Slide 108: Optimized & Flexible Operations…Superior Performance
Crude -108- Optimized & Flexible Operations…Superior Performance Crude Assays based on Sources of Product Domestic demand for Reference Price TOP configuration* Crude output petroleum products** Thai Oil is able to diversify its type of crude intake and product outputs to maximize demand and margin
Slide 109: 2017 Dividend Payment
Financial -109- 2017 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 4.39 4.57 2.75 3.75
Slide 110: Asia Pacific and Middle East Refinery Addition
Refinery -110- Asia Pacific and Middle East Refinery Addition AP & ME Demand Growth Middle East China Other AP Start-up Nameplate Country Company Japan India period) (KBD) Vietnam Teapot (Aug’18 > Feb’18) Bandar Abbas - PGSOC/1 Net Addition Q1-18 Iran 120 (Phase 2) KBD Q3-18 China (Mar’18 > Jul’18)
Slide 111: Asian Margin Vs. US-EU Margin
World GRM -111- Asian Margin Vs. US-EU margin $/BBL SINGAPORE GRM EU - US Margins $/BBL 12 10 40 8 30 6 20 4 2 10 0 0 -2 -10 -4 Apr-15 Jul-15 Apr-16 Jul-16 Apr-17 Jul-17 Apr-18 Jul-18 Jan-15 Oct-15 Jan-16 Oct-16 Jan-17 Oct-17 Jan-18 Jul-15 Jul-16 Jul-17 Jul-18 Apr-15 Apr-16 Apr-17 Apr-18 Jan-15 Oct-
Slide 112: Global Crude Oil Inventories
Inventories -112- Global Crude Oil Inventories U.S. Crude Stocks (excl. SPR) Crude Oil, Cushing, Oklahoma MBBL MBBL Source : EIA Source : EIA 600 80 550 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 2018 2017 avg 13-1
Slide 113: Global Gasoline Inventories
Inventories -113- Global Gasoline Inventories U.S. Gasoline Stocks Singapore Gasoline Stocks MBBL MBBL Source : EIA Source : IE Singapore 280 20 260 240 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 2018 2017 avg 12-16 5yr-range 2018 2017 avg 12-1
Slide 114: Global Middle Distillate Inventories
Inventories -114- Global Middle Distillate Inventories U.S. Diesel Stocks Singapore Middle Distillate Stocks MBBL MBBL Source : EIA Source : IE Singapore 180 20 160 140 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 2018 2017 avg 13-17 5yr-range 201
Slide 115: Global Fuel Oil Inventories
Inventories -115- Global Fuel Oil Inventories U.S. Residual Fuel Oil Stocks Singapore Residual Fuel Oil Stocks MBBL MBBL Source : EIA Source : IE Singapore 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 2018 2017 avg 13-17 5yr-range 2018 2
Slide 116: China's Refined Product Exports
China Export -116- China’s Refined Product Exports KBD China’s Gasoline Exports KBD China’s Gasoil Exports Source : China Custom Source : China Custom 500 600 400 500 400 300 300 200 200 100 100 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 2015
Slide 117: Domestic LPG Demand
Thailand petroleum demand by products -117- Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight KT/Day 2018 2015 2016 2017 • In H1/2018, LPG demand jumped by 7.1% YoY 20 on the back of 25.5% YoY higher demand from 18.1 petrochemical sector, as a result of higher 17.5 17.8 17.8 18.0 substitu
Slide 118: Domestic Gasoline/Gasohol Demand
Thailand petroleum demand by products -118- Domestic Gasoline/Gasohol Demand Thailand Gasoline/Gasohol Demand GASOLINE/Gasohol Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Mogas demand rose moderately by 34 3.6% YoY to an average 30.9 ML/day. Although, 31.5 31.7 the retail price of Mog
Slide 119: Domestic Jet Demand
Thailand petroleum demand by products -119- Domestic Jet Demand Thailand JET Demand JET Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Jet consumption increased 21.6 22 21.0 21.2 significantly by 7.8% over the corresponding 19.7 period last year mainly owning to booming 20 tourism indust
Slide 120: Domestic Gasoil and NGV Demand
Thailand petroleum demand by products -120- Domestic Gasoil and NGV Demand Thailand Gasoil Demand Diesel Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Diesel demand rose moderately by 72 69.7 70.2 2.0% YoY as a result of higher growth of Thai 70 economic recovery, according to higher 68
Slide 121: Domestic Fuel Oil Demand
Thailand petroleum demand by products -121- Domestic Fuel Oil Demand Thailand Fuel Oil Demand Fuel Oil Demand Highlight MML/Day 2018 2015 2016 2017 • In H2/2018, Fuel Oil consumption rose slightly 10 by 0.2%YoY, as a result of 12.2% YoY higher demand from transportation sector which takes 8 approxim
Slide 122: Thank You
-122- 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 — Q2 2018 Earnings Presentation on 6ix