Thai Oil Public Co. Ltd. · SET:TOP
Thai Oil Public — Q3 2019 Earnings Presentation
55 slides from Thai Oil Public's earnings presentation, Nov 12, 2019
Slide 1: Q3/19 Analyst Presentation
-1- Thai Oil Public Company Limited Q3/19 Analyst Presentation 12 November 2019 Time : 13:30 - 16:00 hrs. Venue : Grand Ballroom 1 @ Grand Hyatt Erawan
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: Presentation Agenda (Q3/2019)
-3- Presentation Agenda (Q3/2019) KEY HIGHLIGHTS PERFORMANCE ANALYSIS INDUSTRY OUTLOOK (2020 & BEYOND) FINAL REMARKS
Slide 4: Key Highlights
KEY HIGHLIGHTS Sanaon
Slide 5: Key Market Highlights
-5- Key Market Highlights Key Highlights Performance Industry Outlook Final Remarks Market Business Financial Performance ESG Recognitions Crude Oil (Dubai soften to $61/bbl from $67) Average Dubai Crude Price ($/bbl) 70.1 • M.E. crude supply disruption due to drone attack in Saudi Arabia. (Disrupte
Slide 6: Key Business Highlight
-6- Key Business Highlight Key Highlights Performance Industry Outlook Final Remarks Market Business Financial Performance ESG Recognitions Operational Commercial Financial • Completion of MTA in Jul’19 - CDU-3 • Captured higher domestic & • Interim Dividend 2019 at 1.00 Baht & Aromatics Complex of
Slide 7: Net Income Performance
-7- Net Income Performance Key Highlights Performance Industry Outlook Final Remarks Market Business Financial Performance ESG Recognitions TOP Group Net Profit Unit : million THB (MB) Net Profit Contributions Q2/19 Q3/19 9M/18 9M/19 Excluding Stock Gain/(loss) Others 567 MB (683) MB 14,961 MB 4,293
Slide 8: Sustainability / ESG
-8- Sustainability / ESG Key Highlights Performance Industry Outlook Final Remarks Market Business Financial Performance ESG Recognitions Goals: Sustainability through ESG / DJSI & Credit Rating To maintain DJSI Industry Leader as Global Recognition Environmental Social Governance • Operate with ECO
Slide 9: Key Milestones / Recognitions
-9- Key Milestones / Recognitions Key Highlights Performance Industry Outlook Final Remarks Market Business Performance ESG Recognitions Drive Awards 2019 Thaioil’s 58th Anniversary 2019 Sustainability Award Excellence By RobecoSAM by the MBA Chula Alumni Association • 58th Anniversary of the establ
Slide 10: Performance Analysis
-10- PERFORMANCE ANALYSIS Sanaon
Slide 11: Refinery: Lower U-Rate, while Robust Domestic & CLMV Sales
-11- Refinery: Lower U-Rate, while 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 9M/18 9M/19 116% 1.8% 113%
Slide 12: Refinery: Improved Mkt GRM Supported by Higher Product Spread
-12- Refinery: Improved Mkt GRM Supported by Higher 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 Q2/19 Q3/19 9M/19 2018 2019 2018 103% 97%
Slide 13: Aromatic: Weak PX Spread pressured Aromatic Contribution
-13- Aromatic: Weak PX Spread pressured Aromatic Contribution 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 Q2/19 Q3/19 9M/19 $/ton Q1 Q2 Q3 Q4 Q1 Q2 Q3 9M Q4T
Slide 14: Base Oil: Lower Contribution pressured by Lower Lube Spread
-14- Base Oil: Lower Contribution pressured by Lower Lube 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 Q2/19 Q3/19 9M/19 $/ton Q1 Q2 Q3 Q4 Q1 Q2
Slide 15: Integrated Margin & Competitive Cash Cost
-15- Integrated Margin & Competitive Cash Cost Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Gross Refining Margin Refinery’s Cash Cost (Unit: US$/bbl) (Unit: US$/bbl) Market GRM Accounting GRM (Market GRM + Stock G/L) Operat
Slide 16: Power Sector: Stable Contribution to Group
-16- Power Sector: Stable Contribution to 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 GPSC **** 74% 100% Power & Steam Sales **** TOP shareholding 24.29% (8.91% (1) via TOP
Slide 17: Performance Breakdown
-17- Performance Breakdown Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others (1) (2) Others & (3) Consolidated Stock Consolidated Petroleum Petrochemical Power Net Profit Gain/ Net Profit New Business (exclude stock gain/loss) (L
Slide 18: Q3 & 9M/19 TOP Group Consolidated P&L
-18- Q3 & 9M/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 Q2/19 QoQ+/(-) Q3/18 YoY+/(-) 9M/19 9M/18 YoY+/(-) (A) (D) (F) Sales Revenue 82,329 91,962 (9,633) 100,72
Slide 19: 9M/19 TOP Group Consolidated Cash Flow
-19- 9M/19 TOP Group Consolidated Cash Flow Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others 9M/19 9M/18 Investments (Unit: Million THB) 35,896 3,816 9M/19 9M/18 Dividend income 763 768 Operating Cash Flow 6,838 7,213 ST investm
Slide 20: Q3/19 TOP Group Strong Financial Position & Financial Ratios
-20- Q3/19 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 30 Sep 19 (Unit: million THB) 256,453 255,863
Slide 21: New Benchmark USD Bond Issuance
-21- New Benchmark USD Bond Issuance Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others Bond Highlights Transaction Highlights Investors Demography Issuer TTC Lowest-ever 30-year coupon out of Thailand By Region By Type Guaranto
Slide 22: Successful GPSC Injection
-22- Successful GPSC Injection Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others TOP Injection : 17,973 MB GPSC Shareholder Structure Transaction date 4 October 2019 TOP Group 24.29%* Public 26% 74% 11,381 MB TOP Group 6,592 MB E
Slide 23: New Accounting Standard Impact to TOP on 1 Jan 2020
-23- New Accounting Standard Impact to TOP on 1 Jan 2020 Key Highlights Performance Industry Outlook Final Remarks Refinery Aromatic Base Oil GIM Power All business F/S & others TFRS 9: Financial Instruments TFRS 16: Leases Implication to Financial Statement Key concept : Key concept : Statement of
Slide 24: Industry Outlook (2020 & Beyond)
INDUSTRY OUTLOOK (2020 & Beyond) • Crude Oil • Refinery • Aromatic • Base Oil & Bitumen
Slide 25: OPEC Balancing Oil Market amid Uncertain Oil Demand Growth
-25- OPEC Balancing Oil Market amid Uncertain Oil Demand Growth Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Higher Supply led by Non-OPEC BC OPEC Cuts to Reduce Market Surplus Non-OPEC and Iran/Venezuela Supply Growth MBD OPEC-11* Produ
Slide 26: Refining Margins Boosted by Higher Demand from IMO
-26- Refining Margins Boosted by Higher Demand from IMO 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 6.1 6.4 6.4 6.1 6.1 6.5 5.9 5.0 5.2 4.2 3.9 3.2 3.5 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-
Slide 27: IMO 2020 Drives Light Crude and Middle Distillate Demand
-27- IMO 2020 Drives Light Crude and Middle Distillate Demand Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Required Additional Low Sulphur Fuel Supply INDUSTRY IMPLICATION Asian 0.5% Bunker Fuel Supply and Demand IMO impacts on Refinery
Slide 28: Higher Domestic Demand Growth Aligning with Economic Expansion
-28- Higher Domestic Demand Growth Aligning with Economic Expansion Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Steadily High Car Sales to Support Gasoline BC Higher Jet Demand Following Flight Movement Gasoline Demand vs. Passenger Car
Slide 29: Weak Aromatic Market from New Capacity Addition
-29- Weak Aromatic Market from New Capacity Addition Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Market Pressured by New Capacity Addition B Lower Chinese Import due to New Plant Startup AP/ME PX Capacity Addition vs. Demand Growth Chin
Slide 30: Weak Base Oil Market from High Supply amid Steady Demand
-30- Weak Base Oil Market from High Supply amid Steady Demand Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Market Pressured by New Capacity Addition B Higher Domestic Bitumen on New Road Projects AP Base Oil Capacity Addition vs. Demand
Slide 31: 2020 Industry Outlook Conclusion
-31- 2020 Industry Outlook Conclusion (vs. 2019) Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion Softer to Stable Crude Price on Higher Supply despite OPEC Crude Oil Production Cut Higher Refining Margins Supported by Rising Middle Refinery D
Slide 32: Beyond 2020 Industry Outlook
-32- Beyond 2020 Industry Outlook Key Highlights Performance Industry Outlook Final Remarks Crude Refinery Aromatic Lube&Bitumen Conclusion A Higher Oil Supply Led by Medium and Heavy Crude B Higher Oil Demand Led by Middle Distillate Global Oil Supply Global Product Demand MBD MBD 110 110 100 100 O
Slide 33: Beyond 2020 Industry Outlook (2)
-33- Beyond 2020 Industry Outlook (2) 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 100
Slide 34: Final Remarks
FINAL REMARKS Sanaon
Slide 35: Clean Fuel Project (CFP) Project Update
-35- Clean Fuel Project (CFP) Project Update Key Highlights Performance Industry Outlook Final Remarks Project Description Capacity Product Yield Crude Intake Benefit to Thaioil • Investment Size (4,825 $M) • Rejuvenate our facilities • Technical / Construction Magnitude • Capacity growth & Features
Slide 36: Thaioil's Strategic Direction 2030
-36- Thaioil‘s Strategic Direction 2030 Key Highlights Performance Industry Outlook Final Remarks Vision Empowering Human Life through Sustainable Energy and Chemicals Measurement Growth | Diversity | Returns | Sustainability | Stakeholder Portfolio To transform TOP to a World-Class refinery with co
Slide 37: Key Focused Areas
-37- Key Focused Areas Key Highlights Performance Industry Outlook Final Remarks S trengthen Refinery & Power • CFP – on time & on budget • Emphasize healthy profitability thru Biz transformation • Operations & Commercial Excellence • Strengthen market positioning & distribution (regional market exp
Slide 38: Thank You
-38- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976
Slide 39: Appendix
-39- APPENDIX • Strategic Investment Plan • Dividend Payment • Optimized & Flexible Operations…Superior Performance • CDU Addition VS Additional Demand – AP & ME • World GRM / Inventories • Thailand petroleum demand by products
Slide 40: TOP Group Strategic Investment Plan
Strategic Investment Plan -UseonlyforKMSession- -40- TOP Group Strategic Investment Plan CAPEX Plan (Unit US$ million) Estimated Budgeting for 5-year Investment Plan Total Project 2019 - 2023 2019 2020 2021 2022 2023 CFP project * 4,015 935 1,920 1,080 463 (383) GPSC’s Equity Injection 574 574 Total
Slide 41: Dividend Payment
Dividend -41- 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 4.97 4.39 4.57 2.75 3.75 2.
Slide 42: Optimized & Flexible Operations…Superior Performance
Crude & Production yield -42- 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 Domestic demand for Reference Price TOP configuration* Crude output pet
Slide 43: Asia Pacific and Middle East Refinery Addition
Refinery -43- Asia Pacific and Middle East Refinery Addition Start-up Nameplate Country Company AP & ME Demand Growth Thailand period) (KBD) Teapot Vietnam Q2-19 400 Hengli Petrochemical China Dalian India Japan South Korea 37 Hyundai Lotte - Seosan Other AP China Zhejiang Rongsheng ME Close Middle
Slide 44: Asian Margin Vs. US-EU margin
World GRM -44- Asian Margin Vs. US-EU margin SINGAPORE GRM EU - US Margins $/BBL $/BBL 14 40 12 10 30 8 6 20 4 2 0 10 -2 -4 0 -6 -8 -10 Jul-17 Apr-18 Jul-18 Apr-19 Jul-19 Oct-17 Jan-18 Oct-18 Jan-19 Jul-17 Apr-18 Jul-18 Apr-19 Jul-19 Oct-17 Jan-18 Oct-18 Jan-19 SING CRACK SING HYDRO BRENT CRACK BREN
Slide 45: Global Crude Oil Inventories
Inventories -45- 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 2019 2018 avg 14-18
Slide 46: Global Gasoline Inventories
Inventories -46- Global Gasoline Inventories MBBL U.S. Gasoline Stocks MBBL Singapore Gasoline Stocks 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 2019 2018 avg 14-18 5yr-range 2019 2018 avg 14-18
Slide 47: Global Middle Distillate Inventories
Inventories -47- 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 2019 2018 avg 14-18 5yr-range 2019
Slide 48: Global Fuel Oil Inventories
Inventories -48- Global Fuel Oil Inventories MBBL U.S. Residual Fuel Oil Stocks MBBL Singapore Residual Fuel Oil 50 Source : EIA 40 Stocks Source : IE Singapore 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 2018 avg 14-18 5yr-range 2019 20
Slide 49: China's Refined Product Exports
Chinese Export -49- China’s Refined Product Exports China’s Gasoline Exports China’s Gasoil Exports KBD KBD Source : China Custom Source : China Custom 500 700 450 600 400 350 500 300 400 250 200 300 150 200 100 100 50 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul A
Slide 50: Domestic LPG Demand
Thailand petroleum demand by products -50- Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight KT/Day 2019 2016 2017 2018 • In 9M2019, LPG demand expanded 1.2% YoY. on 20 the support of 12.1% YoY increasing from 18.8 petrochemical sector, due to higher substitute 18.1 18.1 18.3 18.2 17.7 17
Slide 51: Domestic Gasoline/Gasohol Demand
Thailand petroleum demand by products -51- Domestic Gasoline/Gasohol Demand Thailand Gasoline/Gasohol Demand GASOLINE/Gasohol Demand Highlight MML/Day 2019 2016 2017 2018 • In 9M2019, Gasoline demand rose by 3.9% YoY 34 to an average 32.1 ML/day. Besides the retail 32.6 32.8 32.2 32.3 31.6 32.2 32.2
Slide 52: Domestic Jet Demand
Thailand petroleum demand by products -52- Domestic Jet Demand Thailand JET Demand JET Demand Highlight MML/Day 2019 2016 2017 2018 • In 9M2019, Jet consumption slightly increased 22 by 0.2% YoY. Despite of economic slowdown and strengthening of Thai Baht, flight number which is 20 a main support of
Slide 53: Domestic Gasoil and NGV Demand
Thailand petroleum demand by products -53- Domestic Gasoil and NGV Demand Thailand Gasoil Demand Diesel Demand Highlight MML/Day 2019 2016 2017 2018 • In 9M2019, Diesel demand slightly increased by 72 1.4% YoY due mainly to 4.7% YoY increasing 70 amount of accumulated registered diesel cars. 68 Howe
Slide 54: Domestic Fuel Oil Demand
Thailand petroleum demand by products -54- Domestic Fuel Oil Demand Thailand Fuel Oil Demand Fuel Oil Demand Highlight MML/Day 2019 2016 2017 2018 • In 9M2019, Fuel Oil consumption fell by 5.4% 8 YoY, as a result of the decrease in industrial sector by 9.5% to using environmental friendly fuel. 6 To
Slide 55: Thank You
-55- 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 — Q3 2019 Earnings Presentation on 6ix