Analyst Presentation Q3/07 and 9M/07 Results Thai Oil Public Company Limited 9 November 2007
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Corporate Vision, Mission and Value Corporate Vision, Mission and Value Vision Mission To be PTT’s flagship refinery through optimized • management of the group’s refining portfolio TOP seeks to be one of the leading fully integrated To expand facilities to better meet domestic demand • refining and petrochemical companies in the region growth recognized for our sustainable growth, optimum To enhance the competitive advantage of our power • stakeholder value, and commitment to environmental generation operations to further solidify the core refining business and social well-being. To create a high-performance organization that • promotes teamwork, innovation and trust Value P = Professionalism O = Ownership & Commitment S = Social Responsibility I = Integrity T = Teamwork and Collaboration I = Initiative V = Vision Focus E = Excellent Striving 3
Presentation Outline Presentation Outline Q3/07 and 9M/07 Highlights Q3/07 and 9M/07 Highlights Consolidated Financial Performance Consolidated Financial Performance Progress of Investment Projects Progress of Investment Projects Business Outlook Business Outlook 4
Q3/07 Highlights Q3/07 Highlights • Q3/07 remained quite favorable, in view of seasonality. Oil prices continued to rise as geopolitical tension persisted and hurricane season’s approaching. • GRM stood at 6 US$/bbl (vs. $2.84/bbl in Q3/06) supported by rising crude and middle distillate prices (Jet & Gas Oil), although gasoline price was pressured by high inventory & the ending of driving season in the US Overall • Soften aromatic price & squeezed base oil margin pressured TOP’s integrated margin to $ 7.7 US$/bbl, 37% lower QoQ but 18% higher YoY. • Refinery was operated at 100%, amidst planned shutdown of CDU-2 for 14 days to allow for the tie-in with TPX’s TATORAY. The 800,000 barrels of LR was produced in Q3/07 & kept as stock for further processing in Q4/07. • IPP bid was submitted on 19 October 2007 for 735 MW, gas fired project. At the same time, another SPP proposal was submitted to EGAT for 79 MW electricity sales. Business • Equity of 86 Baht million was injected into Maesod Clean Energy Co., Ltd to fund the construction work for 200,000 L/D of Ethanol plant in Tak province. • Thaioil Marine is expanding its fleet by acquiring additional 5 oil products, bitumen & chemical vessels. • Capitalizing on Baht strengthening, TOP took opportunity to unwind the $150 million CCS Finance and realized cash gain of Baht 596 million. 5
Financial Performance YTD Well in Line Financial Performance YTD Well in Line Net Profit Breakdown* Consolidated EBITDA Q3/06 Q3/07 Mn Bt +8% Bt. 3,528 mn. Bt.2,509 mn. Power & LB -12% Others LB 23,009 17% Power& 21,317 PX 7% 15% -29% PX 48% Others 27% Refinery 16% Refinery 5,652 4,992 50% 19% Q3/06 Q3/07 9M/06 9M/07 Consolidated Net Profit 9M/06 9M/07 Bt. 14,555 mn. Bt. 14,561 mn. Mn Bt Power Power & & Others Others LB LB PX 9% 6% 7% 11% PX 22% -29% 14,561 14,555 -0.04% 28% Refinery Refinery 52% 65% 3,528 2,509 Q3/06 Q3/07 9M/06 9M/07 6 *Percentage was based on total amount before deducting inter-company transaction.
Continuing High Oil Prices and Spreads Continuing High Oil Prices and Spreads Oil Product & Crude Prices High crude prices were supported by • Jet 100 Diesel prolong geopolitical tension – 90 Gasoline between Iran/UN and unrest in 80 Dubai Nigeria 70 Fuel Oil 60 higher demand following the start- – 50 up of several refineries 40 Concern on hurricane season in – 30 Mexico Gulf 20 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 Product oil price, except for Gasoline • Product - Dubai Spreads continued to rise in Q3/07. 35 Gasoline price was pressured by high • inventory & the ending of driving season Jet-DB 25 in the US GO-DB 15 ULG95-DB 5 Product spreads were high except • Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 -5 Gasoline due to end of US driving season FO-DB -15 -25 7
Slightly Weaken Domestic Demand Slightly Weaken Domestic Demand Domestic Oil Demand / Refinery Intake Domestic Oil Demand by Product Kbd Utilization Unit: kbd 1,400 91% 91% 91% 91% 100% 89% 89% 88% 87% 86% Q3/06 326 Q2/07 1,200 (Intake) 303 80% 291 Jul-Aug/07 944 948 946 940 897 921 928 906 903 1,000 60% 101 800 150 110 83 120 66 157 143 104 127 600 40% 113 121 127 121 106 97 400 83 765 751 75 739 738 731 82 724 689 695 695 74 62 20% 200 0 0% LPG Gasoline Jet/Kero Diesel FO Q1/06 Q2 Q3 Q4 Q1/07 Q2 Jul- 1H/06 1H/07 Aug Domestic Demand/Sales Net Export Petrochem & Others Utilization Rate TOP ’ s Domestic / Export Sales Source: DOEB, Ministry of Energy. 9% 13% 22% PTT TPX 12% TOP ’ s Sales Breakdown Export Shell / Domestic in Q3/07 12% Caltex 50% 91% 87% 78% 3% BCP 14% 5% 4% Domestic Jobbers 2H/06 1H/07 Q3/07 8 Export = 9%
Strong Gross Refinery Margin Strong Gross Refinery Margin TOP ’ s Crude Mix and Oil Product Yield Oil Prices / Spreads – MOPS (US$/bbl) Jet - DB ULG 95 Diesel - Fuel Oil TP TP-DB DB - DB DB - DB (F/E) (M/E) 0% 3% 6% 7% F/E 14% Q2/07 75.0 65.2 9.8 20.5 17.1 16.1 -11.6 Light 20% 16% 24% 26% LPG Local 79.4 70.1 9.3 11.5 17.1 16.3 -11.0 Q3/07 17% Gasoline +4.4 +4.9 -0.5 -9.0 - +0.2 +0.6 ∆ QoQ 11% 20% 19% Q3/06 75.3 65.9 9.4 11.7 20.0 17.0 -16.8 Middle +4.1 +4.2 -0.1 -0.2 -2.9 -0.7 +5.8 M/E ∆ YoY Jet/Kero 81% 80% 43% Diesel 38% 40% TOP ’ s Accounting GRM (US$/bbl) Heavy Fuel Oil 14% 11% 9% Accounting GRM 9M/07 FY/06 Market GRM 10.56 10.56 Stock Gain / (Loss) Thailand’s 8.28 8.34 Oil Demand 6.00 5.98 8.00 7.93 4.81 2.84 6.06 6.29 5.39 4.35 4.00 3.77 0.73 3.62 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3* 9M/06 9M//07 * include LR stock kept for further processing in Q4/07 9
Soften PX and LB Margins Soften PX and LB Margins PX, MX and ULG 95 Spot Prices / Margins 402 398 732 575 540 473 395 PX-ULG 95 PX prices softened during Q3/07 • 1,600 from lower demand as a result of 1,400 lower PTA plants operations and 1,200 shutdown of MEG plants in Saudi PX 1,000 Arabia. MX 800 PX margin in Q3/07 was pressured • ULG95 600 by higher ULG price / feedstock cost. 400 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 500 SN & HSFO Spot Prices / Margins 480 525 623 687 637 538 466 500SN-HSFO 1,200 500 SN – HSFO spread in Q3/07 • 1,000 was further reduced as a result of: 500SN 800 600 – soften regional demand 400 HSFO – higher feedstock costs 200 0 10 J an- 0 6 Feb- 0 6 M ar 0 - 6 Apr - 0 6 M ay 0 - 6 un- J 0 6 ul J - 0 6 Aug- 0 6 Sep- 0 6 Oc t 0 - 6 Nov - 0 6 Dec - 0 6 an- J 0 7 Feb- 7 0 M ar - 0 7 Apr - 0 7 M ay - 0 7 un- J 0 7 J ul - 0 7 Aug- 0 7 Sep- 7 0 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3
Healthy Integrated Margin Healthy Integrated Margin (US$/T) 732 575 540 511 473 469 402 398 395 PX – ULG 95 Plat Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/06 9M/07 (US$/bbl) Oil Products Crude GRM 10.56 10.56 8.28 8.34 6.00 5.98 4.81 2.84 0.73 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/06 9M/07 L/R (US$/T) 687 637 623 547 543 525 537 480 466 LB - HSFO Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/069M/07 Integrated Margin 1) (US$/bbl) 12.64 12.32 10.40 1.15 0.87 9.98 1.48 1.40 Despite softening PX / LB margins in Q3/07, 1.10 8.65 0.57 7.03 7.69 3.95 1.51 6.51 1.78 0.97 0.71 Group’s integrated margin remained high at 0.67 0.59 1.97 1.12 1.75 2.69 9.98 US$/bbl for 9M/07, (+15% yoy). 1.22 2.04 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/06 9M/07 11 1) calculated from integrated intake
Performance Breakdown by Company Performance Breakdown by Company Utilizations and productions for all plants in Q3/07 Refinery Utilization PX Production Lube Production Availability Utilization Utilization 108 (%) 100 98 97 97 97 96 95 94 90 90 88 Q3/06 Q3/07 TOP TPX TLB IPT TP TM TOP TPX TLB IPT TP TM Unit: Baht mn Q3/07 EBITDA 3,116 916 382 405 157 19 +/- Q3/06 1,714 (1,194) (462) (358) (46) (1) Q3/07 Net Profit 1,429 748 203 232 61 7 +/- Q3/06 902 (1,217) (495) (331) (23) 0 12
Presentation Outline Presentation Outline Q3/07 and 9M/07 Highlights Q3/07 and 9M/07 Highlights Consolidated Financial Performance Consolidated Financial Performance Progress of Investment Projects Progress of Investment Projects Business Outlook Business Outlook 13
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