Thai Oil Public Co. Ltd. · SET:TOP
Thai Oil Public — Q3 2010 Earnings Presentation
54 slides from Thai Oil Public's earnings presentation, November 2010
Slide 1: Thai Oil Group
http://www.thaioilgroup.com
Slide 2: Confidentiality notice
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. 2
Slide 3: Vision, Mission, Value
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 sustainability • To emphasis good Corporate Governan
Slide 4: Corporate Governance Policy Roles and Responsibilities for Stakeholders
Corporate Governance Policy Roles and Responsibilities for Stakeholders The board of • Truthfully report company’s situation directors, management and all staff and future trends to all stakeholders shall commit to moral equally on a timely manner. principles, equitable treatment to all • Shall not
Slide 5: Itinerary
10.00 10.30 12.00 13.00 16.30 18.30 ITINERARY s\\ y/ | Arrive at Thaioil Refinery (Auditorium, Site Office) Welcome to Thaioil Refinery by Thaioil Management “Q3/10 Performance Presentation” Lunch at Function Center Plant Tour: Marine Trip (Jetty/CBM/SBM/Tank Terminal) Depart for Hotel (Amari Pattay
Slide 6: Presentation Outline
58 Presentation Outline Q3 & 9M/10 Highlights Co Performance Analysis c Market Outlook Co Frequently Asked Questions - |
Slide 7: Q3 & 9M/10 Highlights
Q3 & 9M/10 Highlights 7
Slide 8: Market Condition and Performance Highlights
Market Condition • GRM continued to recover from higher middle distillate margins, as a result of strong Chinese demand ahead of Asian Games and Asia’s turnaround season. • Aromatics margins weakened as supply glut from China & Middle East and higher feedstock cost following crude price. Currently t
Slide 9: Performance Analysis
Performance Analysis 9
Slide 10: Market GRM
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials + Winter demand kicks off LPG (controlled price) (Unit: $/bbl) GO + Inventories start to drawdown - High stocks to limit GO spike -16.4 -31.2 -29.2 -40.0 -41.3 -45.9 11.3 12.4 10.9 -47.5 -47.8 -48.5 8.9 8.9 7.0 7.0 7.6 6
Slide 11: Crude Oil Price, Stock Gain/Loss and Market GRM
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials (Unit: $/bbl) Crude Oil Price - Dubai Market GRM + Positive industrial data to support oil demand (Unit: $/bbl) + IEA, EIA, and OPEC revised up global oil 100 demand growth - Concern over global economic recovery 84 $/bb
Slide 12: Sources of Crude and Product Spreads
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Sources of Crude Spread over Dubai Spread over Dubai (US$/bbl) (US$/bbl) Others1 1% 4% -16.1 2 3% 2 7% -15.2 LPG 9% 4% Far East 14% 14% Platformate 11% Local 17% 9.7 16% 10.2 Gasoline 8.6 20% 11.3 Jet 19% Middle East 88%
Slide 13: Domestic Oil Demand and TOP's Domestic & Export Sales
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Domestic Oil Demand / Refinery Intake Domestic Oil Demand (KBD) 3% (KBD) 1,400 88% 86% 89% 89% 90% 89% 87% 100% 807 829 1,200 80% 1,000 9M/09 202 60% 0% 800 221 138 155 200 164 192 9M/10 600 40% 12% -3% 357 357 400 734 7
Slide 14: Aromatics Spot Prices & Margins
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Aromatics Spot Prices & Margins 2010 %Utilization (US$/Ton) Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 9M/10 Q2 Q3 9M PX-ULG95 384 475 355 321 286 226 218 243 88% 85% 87% BZ-ULG95 -60 79 160 178 215 159 132 169 Paraxylene (PX) (US$/Ton)
Slide 15: Base Oil & Bitumen Spot Prices & Margins
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Base Oil & Bitumen Spot Prices & Margins 2010 %Utilization (US$/Ton) Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3/10 9M/10 Q2 Q3 9M 500SN-HSFO 398 268 404 429 435 541 607 528 94% 94% 94% BIT-HSFO 70 -5 -3 -23 27 38 46 37 Lube Base Oil (US
Slide 16: Accounting GIM and Market GIM
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials (US$/bbl) 20.6 20.3 20.7 20.2 15.7 21 13.4 12.0 13.7 Product to Feed Q1/09 Q2 Q3 Q4 Q1/10 Q2/10 Q3/10 9M/09 9M/10 (US$/bbl) 3.8 2.7 2.9 3.7 3.1 1.2 1.9 Market 0.7 Crude GRM* -1.4 Q1/09 Q2 Q3 Q4 Q1/10 Q2/10 Q3/10 9M/09 9M
Slide 17: Operating Performance and Q3/10 Net Profit Breakdown
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Refinery Aromatic Lube Base Plant Plant SAKC Ship Utilization Production Production Availability Utilization Utilization Utilization 93% 97% 102% 97% 97% 88% 85% 94% 94% 83% 93% 74% Q2/10 Q3/10 . 13% 0% * HDS-2 S/D 13 da
Slide 18: Financial Results Summary
Performance Refining Aromatics Lube Base Integrated Margin Financials Breakdown QoQ+/(- 9M/10 9M/09 YoY+/(-) % (US$/bbl) Q3/10 Q2/10 Q3/09 ) 3.1 1.9 1.2 63% Market GRM 3.7 2.9 0.7 0.8 5.5 4.9 0.6 12% Market GIM 6.1 5.0 3.7 1.1 (MB) Sales Revenue 79,041 79,148 78,035 (107) 237,146 205,179 31,967 16%
Slide 19: Balance Sheet, Financial Ratios, Debt
Performance Refining Aromatics Lube Base Integrated Margin Financials Breakdown Balance Sheet Consolidated Long-Term Debt 1) (Unit: MB) 137,745 139,817 9M/10 42,13 42,51 LT Debt* Total LT Debt Net Debt Current 4 9 Bt. 42,519 mn. Bt. 30,535 mn. Assets 23,92 24,40 (US$ 1,391 mn.) (US$ 999 mn.) Trade P
Slide 20: 2011 Market Outlook
2011 Market Outlook •Q4-2010 Market Highlight •Macroeconomics & Crude Prices •Petroleum Market •Aromatics & Base Oil •Conclusion 20
Slide 21: Q4-2010 Market Highlight
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion ‘10 ‘10 ‘10 Q2 Q3 QTD Crude rose above $80/bbl on Fed’s QE2 Dubai 78 74 81.6 plan, which weakened USD and boosted investment in commodities MO-DB 9.4 8.6 9.4 French strike & diesel shortage in China JET-DB 11.7 1
Slide 22: Macroeconomics & Crude Prices
Macroeconomics & Crude Prices 22
Slide 23: Oil price rose as USD weakened on Fed QE2
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion “ Oil price rose as USD weakened on Fed QE2 ” US Unemployment Rate 10.5% Quantitative Easing II 10.0% 9.6% 9.5% 9.0% 8.5% 8.0% 7.5% Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 50% US Home Sales 40% 30
Slide 24: Positive Responses Elevated the Floor of Oil Price to $80
“ Positive Responses Elevated the Floor of Oil Price to $80 ” Index US Consumer Sentiment 80 Nov10 75 71.6 70 65 60 55 50 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 US Personal Consumption %MoM %YoY 1.0% Oct10 3.0% + 2.3%YoY US consumer sentiment rebounded 0.5% 2.0% sharply, while per
Slide 25: Worries over EU debts and China rate hike pressured crude prices
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion “ Worries over EU debts problem and China rate hike pressured gain on crude prices ” Irish Banks CDS PBOC Policy Rate 20 5 Year CDS – Basis Point 1200 Allied Irish Banks 16 1000 Bank of Ireland 800 12 Deposit EU
Slide 26: OPEC Supply easily fill the gap
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion 100 Global Oil Demand 80 Call on OPEC crude 60 OPEC NGLs mbd 40 Non-OPEC Supply 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 35.0 32.5 Call on OPEC crude 30.0 mbd 27.5 OPEC Supply 25.0 2005 2006 20
Slide 27: WTI Prices vs Dow Jones, USD:EUR and Net Long
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion WTI Prices vs Dow Jones Index WTI Prices vs USD:EUR $/BBL Points 100 12,000 $/BBL 90 USD/EUR 1.57 90 11,000 80 1.50 80 10,000 70 70 1.43 9,000 60 60 1.36 8,000 50 50 1.29 40 7,000 40 1.22 30 6,000 30 1.15 WTI Non
Slide 28: What the Others Say
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion What the Others Say Crude prices continue to move upward in a $80 - $100 range . . . Oil Price Forecast WTI BRENT Unit : USD/BBL 2010 2011 2010 2011 Barclays 77.75 85.00 77.45 85.00 BNP Paribas 80.00 86.00 80.00
Slide 29: What We See
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion What We See Average Dubai $83/barrel, ranging $75-90/barrel with a chance to hit $100/barrel upon unexpected events $/BBL 110 100 Dubai 2010 Dubai $77.00 2011 Dubai $83.00 90 80 70 60 50 40 2005 2006 2007 2008 20
Slide 30: Petroleum Market
Petroleum Market GRM continues on upward trend … On stronger demand & less new supply 30
Slide 31: US, EU and Singapore Cracking Margins
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion 20 20 20 US Cracking Margin EU Cracking Margin Singapore & TOP Margin 16 16 16 S’Pore Crk S’Pore Hydro 12 12 12 8 8 8 4 4 4 0 0 0 -4 -4 -4 -8 -8 -8 Jun-07 Nov-07 Apr-08 Feb-09 Jun-07 Nov-07 Apr-08 Feb-09 Jun-07 N
Slide 32: Drawdown in middle distillates stocks will support margins
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Source: EIA, Reuters, Thai Oil The drawdown in middle distillates stocks will support margins this winter 32
Slide 33: Expect only 1.7 MBD new additional capacity between 2010-2012
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion “ Expect only 1.7 MBD new additional capacity between 2010-2012 ” CDU Capacity Addition VS Additional Demand in AP and ME KBD ME Additional Demand +5.5 M BD in 2006-2010 2,500 +2.5 M BD in 2011-2015 AP Additional
Slide 34: Diesel shortages hit major cities
“ Diesel shortages hit major cities China Diesel Net Import ” 250 200 Thousand Barrels per Day BEIJING 150 Nov10 100 +80 KBD NANJING 50 CHONGQING - China’s 11th FYP suggested to reduce its energy intensity in SHANGHAI (50) 2010 by 20% of 2005 level (100) (150) Power supply rationing forced Jan-06 Ja
Slide 35: Aromatics
Aromatics Market turns strong, Better outlook from new PTA plants on stream 35
Slide 36: Supports for Aromatics Business
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Supports for Aromatics Business Healthy polyester demand Cotton shortage push producers towards polyester Major producers reduce run rate Producers kept low run rate on poor margin since July “Several Outages wit
Slide 37: Heated up Cotton & PTA market
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion “ Heated up Cotton & PTA market ” “ PX supply chain build up stock before CNY’11” Shaoxing Fabric Transaction (Daily Average) “ New Chinese PTA plant Start Up” Source: PCI Company: Hanbang Petrochemical (Chengxin
Slide 38: Paraxylene, Benzene and New Plant Start-ups
Paraxylene 2009 2010 2011 Company Location PX BZ TL PTA When Hangbang China - - - 600 2010-Q4 Yangzi PC China - 38 26 - 2011-Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 S-Oil Korea 900 280 320 - 2011-Q1 Benzene Urumqi PC China 1,000 300 220 - 2011-Q2 Yisheng Nigbo China - - - 2,000 2011-Q2 Yisheng Dahua
Slide 39: Paraxylene, Benzene, Toluene Outlook
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Paraxylene Benzene Toluene 6.2% 4.4% 1.9% • In 2011, PX market will improve from 2010 especially in H2 when the demand from new PTA plants arrive to capture surplus. • Import BZ demand from US is expected to decl
Slide 40: Base Oil & Bitumen
Base Oil & Bitumen Demand growth to balance with supply, supported prices 40
Slide 41: Base Oils Tighter Supply; Bitumen Slower Demand
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Base Oils : Tighter Supply $/MT 500SN Ex-Tank Singapore Prices “Several plants shut down” Formosa Source : ICIS Lubricant change to winter grade • Petamina Base Oils demand pick up • S-Oil Prolonged S/D of Taiwan
Slide 42: AP Base Oils: Supply & Demand
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion AP Base Oils : Supply & Demand KMT Supply expect to be tight Source: Kline Estimate 20,000 18,000 16,000 14,000 FORMOSA 12,000 10,000 8,000 6,000 4,000 2,000 Schedule plant shut down 0 Shut Down Period 2010 2011
Slide 43: Chinese less import expected in 2011
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion Chinese less import expected in 2011 Indian government emphasis on infrastructure investment Demand Supply +Import/-Export Demand Supply +Import/-Export 35,000 7,000 30,000 6,000 25,000 5,000 20,000 4,000 15,000
Slide 44: Conclusion
Conclusion 44
Slide 45: 2011 Outlook and Strategy
Q4-2010 Market Highlight Macro & Crude Petroleum Market Aromatics & Base Oil Conclusion 2011 Outlook Strategy Moderate economic growth with slower Refinery growth from Asia and Europe Max sales, max production Expect crude prices to trade in the range of $75-90/barrel on growing demand Operational e
Slide 46: Frequently Asked Questions
Frequently Asked Questions FAQ’s 46
Slide 47: Conclusion
mu nae Group —_— _— 47
Slide 48: Thank You
Thank You Any queries, please contact: Investor Relations at email: ir@thaioilgroup.com Tel: 662-797-2999 Fax: 662-797-2976 48
Slide 49: Appendices
Appendices 49
Slide 50: LPG Demand Highlight
Thailand LPG Demand LPG Demand Highlight ML/Mth • LPG Demand in 9M grew 12.1% YoY driven 1,000 950 mainly by industry sector: 900 855 834 Household +9.9% YoY 850 816 801 830 800 801 793 2008 Transportation -0.5% YoY 750 769 729 700 2009 Industry +39.4% YoY 650 2010A Petrochemical +10.8% YoY
Slide 51: Gasoline Demand Highlight
Thailand Gasoline Demand Gasoline Demand Highlight ML/Mth • Gasoline demand contracted 2.7% YoY 9m 800 750 2010 due to higher retail price comparing to 700 last year 637 650 619 607 606 620 607 2008 • Portion of gasohol & gasoline sales is 600 617 550 599 2009 relatively maintained at around 60% : 4
Slide 52: Jet Fuel Demand Highlight
Thailand JET-A1 Demand JET Demand Highlight ML/Mth 500 • After BKK crackdown in May, in-bound tourists have rebounded continuously 450 425 422 leaning support JET fuel demand in 400 387 378 366 369 2010, where growth is 6.2% YoY 9M 335 2008 350 334 2009 300 334 2010A 250 200 Jan Feb Mar Apr May Jun
Slide 53: Gasoil Demand Highlight
Thailand Gasoil Demand Gasoil Demand Highlight ML/Mth • Gasoil demand was flat 9M despite the 1,800 rising retail prices compared with last year. 1,700 1,688 (Partially supported by robust 1,600 1,588 1,517 manufacturing growth) 1,546 1,500 1,566 2008 1,550 1,431 1,509 2009 1,400 • Current Portion b
Slide 54: Fuel Oil Demand Highlight
Thailand Fuel Oil Demand Fuel Oil Demand Highlight ML/Mth • FO demand grew 4.1% YoY 9M 2010 thanks to 500 strong requirement from power plants as the 450 400 occurrence of NG disruption & also recover 350 global trade led to more demand for bunker 2008 300 292 251 fuel 2009 250 210 216 219 224 206 2
Thai Oil Public Company — Q3 2010 Earnings Presentation on 6ix