Thai Oil Public Co. Ltd. · SET:TOP
Thai Oil Public — Q2 2015 Earnings Presentation
56 slides from Thai Oil Public's earnings presentation, Aug 18, 2015
Slide 1: Q2/2015 Analyst Presentation
Thai Oil Public Company Limited Q2/2015 Analyst Presentation 18 Aug 2015 Time : 2.00 - 4.00 pm. Venue : The Okura Prestige Hotel
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.
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 Policy
-4- Corporate Governance Policy Roles and Responsibilities for Corporate Governance Policy Stakeholders The board of directors, management • Truthfully report company’s situation and and all staff shall commit to moral future trends to all stakeholders equally principles, equitable treatment to all
Slide 5: Thaioil Group Sustainable Development
-5- Thaioil Group Sustainable Development Member of DJSI Emerging Markets for 2 consecutive years • Highest Ranked Level in RobecoSAM Gold Class of Global Oil & Gas Companies • No.1 in ENERGY industry around the WORLD (Industry Group Leader) • No.1 in Oil & Gas Producers Worldwide (Industry Leader)
Slide 6: Presentation Agenda
-6- Presentation Agenda Q2/15 KEY HIGHLIGHTS Q2/15 PERFORMANCE ANALYSIS Q4-15 & 1H-16 MARKET OUTLOOK
Slide 7: Q2/15 Key Highlights
-7- Q2/15 KEY HIGHLIGHTS
Slide 8: Q2/15 Key Industry Highlights
-8- Q2/15 Key Industry Highlights Refinery Implication $7/bbl rose in Dubai crude price from lower 2.5 $/bbl inventory gain Non-OPEC production & stronger than expected (from stock loss 1.5 $/bbl oil demand in Q1/15 ) Seasonally low middle distillates but partially Slightly soften GRM offset by
Slide 9: Q2/15 Key Operation and Financial Highlights
-9- Q2/15 Key Operation and Financial Highlights Operation / Financial Highlights TOP Group Net Profit Unit : million THB (MB) Utilization Maximized refinery Net Operating Profit (before tax) Stock G/(L) (before tax) Rate run and increased Reversal of NRV/(NRV) (before tax) Others i.e. FX G/(L), H
Slide 10: Key Project Progress Update: LAB
Project Update -10- Key Project Progress Update : LAB Project Detail Progress • TPX JV with Mitsui (75% : 25%) 98%* • Upgrade existing Benzene and Kerosene into higher Linear Alkyl valued product; LAB which is an intermediate feedstock Benzene in production of surfactant (detergent) (LAB) • Capacity
Slide 11: Key Project Progress Update: SPPs
Project Update -11- Key Project Progress Update : 2 SPPs Project Detail Progress • Low risk power business enhance income stability 91%* • Support reliability of electricity & steam supply for TOP Group TOP SPP • Develop 2 new SPP power plants; (2 blocks of SPP) • Total power capacity 239 MW (~20% u
Slide 12: Q2/15 Performance Analysis
-12- Q2/15 PERFORMANCE ANALYSIS
Slide 13: Thailand Leading Refinery: Superior Utilization/Commercial
-13- Thailand Leading Refinery : Superior Utilization/ Commercial Total Thailand crude refining capacity 1,241 kbd1 TOP’s Refinery Utilization vs Industry4 Thai Oil 22% Share Fang Nameplate Capacity TOP Refinery Overall Industry (Thailand) (3 kbd) Thai Oil (275 kbd) 106% 107% 107% PTT’s Principal Re
Slide 14: Q2/15: Healthy GRM & Stock Gain...Robust Earnings
Refining -14- Q2/15: Healthy GRM & Stock Gain…Robust Earnings Dubai Crude Price & Key Petroleum Product Spreads Refinery Utilization 2014 2015 2014 Q1/15 Q2/15 1H/15 $/bbl Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY14 106% 107% 107% DUBAI (DB) 104.4 106.1 101.5 74.4 51.9 61.3 56.6 55.3 96.6 Dubai ULG95 - DB 14.6
Slide 15: Q2/15: Improved Aromatics Margins & Higher Production
Aromatics -15- Q2/15: Improved Aromatics Margins & Higher Production Aromatics Spreads and Margins Aromatics Production 2014 2015 2014 Q1/15 Q2/15 1H/15 $/ton Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD ** FY14 66% 84% 75% PX*-ULG95 273 220 371 252 255 246 251 228 279 Paraxylene (PX) BZ-ULG95 285 254 327 207 98 115 1
Slide 16: Q2/15: Improved Lube Margins from Strong Demand
Lube Base Oil -16- Q2/15: Improved Lube Margins from Strong Demand Base Oil & Bitumen Spreads & Margins Base oil Production 2014 2015 2014 Q1/15 Q2/15 1H/15 $/ton Q1 Q2 Q3 Q4 Q1 Q2 1H Q3TD* FY14 79% 88% 84% 500SN-HSFO 486 501 500 493 369 399 384 512 495 Lube Base Oil BITUMEN-HSFO (69) (77) (66) 85 2
Slide 17: Integrated Margin & Competitive Cash Cost
Financial -17- Integrated Margin & Competitive Cash Cost Gross Refining Margin Refinery’s Cash Cost (Unit: US$/bbl) (Unit: US$/bbl) Marketing GRM Accounting GRM (Marketing GRM + Stock G/L) Operating Cost Interest Expense (excl. one-time non- (net) 9.9 operating item) 8.8 7.4 8.1 8.6 7.3 5.34.5 5.7 4
Slide 18: Q2/15: Performance Breakdown
Performance Breakdown -18- Q2/15: Performance Breakdown Utilization/Production (%) & Net Profit (million THB) Key Points • TOP: max run to capture strong ***74% holding GRM • TPX/TLB: increased run due to higher price and demand • TP: stable contribution as lower Refinery Aromatic Lube Solvents Mari
Slide 19: Consolidated Financial Performance
Financial -19- Consolidated Financial Performance (million THB) Q2/15 Q1/15 QoQ+/(-) Q2/14R YoY+/(-) 1H/15 1H/14R YoY+/(-) Sales Revenue 79,036 71,366 7,670 101,063 (22,027) 150,402 213,291 (62,889) Hedging Gain (187) 76 (263) 593 (780) (111) 1,196 (1,307) EBITDA 10,004 6,209 3,795 4,467 5,537 16,21
Slide 20: 1H/15 Consolidated Cash Flow
Financial -20- 1H/15 Consolidated Cash Flow (Unit: Million THB) (Unit: Million THB) Operating Cash Flow Investments 1H/15 1H/14R 1H/15 1H/14R Operating Cash Flow 12,301 16,041 Investments (9,769) (8,243) Net income & non-cash adj. 14,502 10,058 + ST investments (3,351) 2,512 CAPEX (PP&E) & other (6,
Slide 21: Strong Financial Performance
Financial -21- Strong Financial Performance Statements of Financial Position Consolidated Long-Term Debt as at 30 Jun 15 1) (Unit: million THB) Total Long-Term Debt Net Debt 193,607 198,327 70,518 million THB 31,954 million THB Cash & ST Trade Payable (US$ 2,079 million (US$ 942 million investment 4
Slide 22: Q4-15 & 1H-16 Market Outlook
-22- Q4-15 & 1H-16 MARKET OUTLOOK • Crude Oil • Petroleum Products • Aromatics • Base Oil & Bitumen
Slide 23: Crude Oil
& ~ Group CRUDE OIL -23-
Slide 24: Crude Prices Under Pressure Until Q4-15 and Gradually Recover in 1H-16
Refinery -24- Crude Prices Under Pressure Until Q4-15 and Gradually Recover in 1H-16 Dubai Price Movement $/BBL Shale Oil Boom Greek Debt Default 120 Dramatic Declines in Iranian Oil Exports to China’s Stock 100 Oil Rigs & CAPEX Cuts Hit the Market Market Bubble (by mid-2016) 80 Conflict in Yemen Po
Slide 25: Crude Prices Under Pressure Until Q4-15
Refinery -25- Crude Prices Under Pressure Until Q4-15 1 Slowing Chinese Economic Growth 2 Concerns over Rising Iran’s Oil Exports A Stock Market Crash and Yuan Devaluation A Iran’s Supply to Rise by 500-700 KBD by 1H-16 Stock Index Spot FX* Gradual release of floating oil and condensate (Point) (Yua
Slide 26: Decelerated Non-OPEC Oil Supply Growth
Refinery -26- Crude Prices to Recover in 1H-16: 3 Decelerated Non-OPEC Oil Supply Growth A Declined U.S. Oil Rig Count B Slowing U.S. Shale Production Growth U.S. Oil Rig Counts vs. WTI MBD US Shale Production Oil Rigs USD/BBL 6 1,800 Oct-14, 120 1609 5 1,600 100 4 1,400 80 1,200 Jun-15, 3 631 60 2
Slide 27: Solid Oil Demand Bolstered by Lower Oil Prices
Refinery Crude Prices to Recover in 1H-16: 4 Solid Oil Demand Bolstered by Lower Oil Prices A World Oil Demand and Supply B Demand Growth over 1 MBD in 2016 World’ s Demand Growth by Region (YoY) MBD Non-OPEC supply MBD 98 growth slows down 1.75 1.6 2014 2015 2016 96 1.4 1.25 94 0.8 Recovering World
Slide 28: Petroleum Products
& ~ Group PETROLEUM PRODUCTS
Slide 29: Recovered Refinery Margin in Q4-15 Supported by Strong Gasoline Demand
Refinery -29- Recovered Refinery Margin in Q4-15 Supported by Strong Gasoline Demand and Winter Season Singapore Cracking GRM ($/BBL) Chinese Winter New Year Strong Gasoline Margin demand End of winter season Q1/15: $8.6/BBL Q2/15: $7.9/BBL Q1/14: $6.3/BBL Q4/14: $6.2/BBL Restocking Ramadan Q2/14: $
Slide 30: Healthy Gasoline Market on Strong Demand and U.S. Supply Outages
Refinery -30- Healthy Gasoline Market on Strong Demand and 1 U.S. Supply Outages A AP Gasoline Demand B AP Gasoline Demand Growth MBD % YoY China India Philippines Malaysia Total AP 7.0 Low oil Australia’s Ramadan Driving Season 15% prices 6.5 10% 6.0 5.5 5% 5.0 0% Jan Feb Mar Apr May Jun Jul Aug Se
Slide 31: Recovering Middle Dist. and Fuel Oil cracks in Q4/15
Refinery -31- Recovering Middle Dist. and Fuel Oil cracks in Q4/15 2 On Improved Demand and Tighter Supplies A Improving Demand during Winter B Tighter Supplies as MTA* & Run Cuts AP Gasoil Demand (MBD) Global Refinery Maintenance (MBD) 9.5 8 Heating 7 9.0 Demand 6 8.5 5 4 8.0 Jan Feb Mar Apr May Ju
Slide 32: Deferred Paradip Refinery Startup to 2016
Refinery -32- Deferred Paradip Refinery Startup to 2016 Addition CDU Addition VS Additional Demand – AP & ME (start-up Country Nameplate Company (KBD) AP Additional Demand ME Additional Demand period) ME Addition China Q1-15 UAE 417 Ruwais Australia Japan Q2-15 China 100 Local Rizhao Lanqiao India V
Slide 33: Strong Thailand's Oil Demand in 2015
Thailand Oil Demand -33- Strong Thailand’s Oil Demand in 2015 Year on Year 1H-2014 1H-2015 Y 2014 Y 2015(B) Mogas (A) +0.3% +14.1% +3.8% +10.8% Jet/Kero +1.3% +8.1% -1.0% +6.2% Diesel (A) +0.3% +2.5% +0.9% +1.9% Fuel Oil -0.9% -7.1%(C) -3.9% -3.6% Total +0.4% +5.3% +1.0% +4.6% GDP 0.3% N.A. +0.9% +3
Slide 34: Aromatics
& ~ Group AROMATICS -34-
Slide 35: Stable Aromatics Market in Q4-15 on Rising BZ Demand
Aromatics -35- Stable Aromatics Market in Q4-15 on Rising BZ Demand Aromatics Market PX-ULG95 ($/TON) BZ-ULG95 ($/TON) 371 326 280 273 269 286 252 255 246 254 221 229 207 126 101 116 2Q14 Y2014 1Q14 3Q14 4Q14 1Q15 2Q15 3QTD 4Q15 Y2015 1H16 Y2014 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3QTD 4Q15 Y2015 1H16 Act
Slide 36: Sustains PX Market in Q4-15 on Rising PX Demand
Aromatics -36- Sustains PX Market in Q4-15 on Rising PX Demand 1 Leading to Improving Operating Rate Improving AP Demand in Q4-15 A AP PX Plant Turnaround Supports PX Price B Encourages PX Market 0.8 MTA Jurong and Mil ton/month Utilization (%) Mil ton/year 1.6 MTA Dragon expects 3.2 90 1.6 Forecast
Slide 37: Upward Trend of U.S. BZ and SM Demand Stimulates Market in Q4-15
Aromatics -37- Upward Trend of U.S. BZ and SM Demand 2 Stimulates Market in Q4-15 A Open Arbitrage Window from Asia to U.S. B Firm AP SM P2F Sustains BZ Demand $/TON BZ US Gulf - BZ FOB Korea $/TON SM P2F 300 300 278 243 250 250 217 200 200 163 156 150 150 134 150 131 82 100 87 100 69 58 50 19 50 2
Slide 38: Base Oil & Bitumen
& ~ Group BASE OIL & BITUMEN -38-
Slide 39: Softer Base Oil Spread in Q4-15 on Stronger Fuel Oil Crack
Base Oil & Bitumen -39- Softer Base Oil Spread in Q4-15 on Stronger Fuel Oil Crack Base Oil Market Base Oil Benchmark Spread ($/TON) Gr.II-Gr.I Price Difference $/TON 512 80 495 486 501 499 492 369 399 60 40 20 0 Y2014 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3QTD 4Q15 Y2015 1H16 -20 2012 2013 2014 2015* * YTD
Slide 40: Softer Bitumen Spread in Q4-15 on Stronger Fuel Oil Crack
Base Oil & Bitumen -40- Softer Bitumen Spread in Q4-15 on Stronger Fuel Oil Crack Bitumen Market Bitumen Benchmark Spread ($/TON) Domestic Bitumen Demand KTA Average Demand Growth in 2011-2015: 6% p.a. 85 70 1000 23 20 800 -32 600 -69 -77 -66 400 200 2Q14 Y2014 1Q14 3Q14 4Q14 1Q15 2Q15 3QTD 4Q15 Y20
Slide 41: Conclusion
& ~ Group CONCLUSION -41-
Slide 42: Q4-15 and 1H-16 Market Outlook Conclusion
Conclusion -42- Q4-15 and 1H-16 Market Outlook Conclusion Q4-15 1H-16 Improved product Recovered margins as Refinery spreads from winter demand outpaces demand refinery additions Firm Aromatics spread Stable Aromatics Spread on recovering on maintaining low PX Aromatics demand during winter operatin
Slide 43: Thank You
-43- Thank You Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976
Slide 44: Appendix
-44- APPENDIX • World GRM / Inventories • Thailand petroleum demand by products • Strategic Investment Plan
Slide 45: Asian Margin Vs. US-EU Margin
World GRM -45- Asian Margin Vs. US-EU margin 97.6% 60.7% 54.6% Total Capacity: 17.0 MBD Total Capacity: 4.9 MBD Total Capacity: 17.5 MBD Source: EIA, Norwegian Energy, Thai Oil
Slide 46: Crude Inventory
Inventories -46- Crude Inventory Source: Norwegian Energy
Slide 47: Global Distillate Inventory
Inventories -47- Global Distillate Inventory Source: Norwegian Energy
Slide 48: Fuel Oil Inventory
Inventories -48- Fuel Oil Inventory Source: Norwegian Energy
Slide 49: China's Product Export
China Export -49- China’s Product Export Source: Norwegian Energy
Slide 50: Domestic LPG Demand
-50- Domestic LPG Demand Thailand LPG Demand LPG Demand Highlight • In first half of 2015, LPG demand fell steeply by 7.4%YoY on account of lower usages in cooking, transportation and petrochemical sectors. Most of the decline came from cooking sector that faced higher retail prices and slowly-than-
Slide 51: Domestic Gasoline Demand
-51- Domestic Gasoline Demand Thailand Gasoline Demand GASOLINE Demand Highlight • In first half of 2015, Mogas demand jumped sharply by 14.1% from the same period last year to an average 25.78 mml/day. This was mainly due to a significant drop in retail prices and low-based last year which had the
Slide 52: Domestic Jet Demand
-52- Domestic Jet Demand Thailand JET-A1 Demand JET Demand Highlight • In first half of 2015, Jet consumption increased significantly by 8.1% over the corresponding period last year mainly owning to reviving tourism sector. The expansion in tourism sector was a result of the return of Chinese and Ma
Slide 53: Domestic Gasoil and NGV Demand
-53- Domestic Gasoil and NGV Demand Thailand Gasoil Demand Diesel Demand Highlight • In first half of 2015, Diesel demand rose gradually by 2.5% YoY as relatively low retail prices boosted the consumption amidst strong agricultural demand from the peaking of harvesting season. Nevertheless, demand g
Slide 54: Domestic Fuel Oil Demand
-54- Domestic Fuel Oil Demand Thailand Fuel Oil Demand FUEL OIL Demand Highlight • In first half of 2015, Fuel Oil consumption dropped significantly by 7.1% from a year earlier as a result of lower maintenance day of natural gas fields from Myanmar, JDA and local fields, comparing to the last year.
Slide 55: Strategic Investment Plan
Updated CAPEX plan -55- Strategic Investment Plan CAPEX Plan (Unit US$ million) Remaining capital investment Our CAPEX Projects COD Total Project investments will Cost 2014 2015 2016 2017 2018 cover improvements Refinery upgrading 2014 137 32 in plants reliability, efficiency & Reliability, efficien
Slide 56: Thank You
-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 — Q2 2015 Earnings Presentation on 6ix