Bangchak Corporation Plc. Analyst Meeting Q2/19 14 th August 2019
Table of Content 01 02 04 03 Q2/19 Q2/19 Appendices Business Performance Financial Updates Update Performance
BCP Group Performance – Q2/19 Key Takeaways EBITDA Refinery & Trading 3,335 Performance • Crude run at 112.67 KBD 36 • Total GRM recovered QoQ to 4.53 $/BBL from recovering UNL spread, Unit: THB Million 171 but YoY still weak from oil product oversupply 762 2,189 1,959 Natural Resources 145 Marketing 509 136 Bio-Based Products • Total sales volume expanded, mainly from retail sales which grew 8% YoY 194 • Net MKM at 83 st./litre increased following crude oil price downward trend, and Power Plant 721 737 increased retail sales portion Marketing • Maintained 2 nd rank (15. 8 %) retail sales market share as of 6 M19 1,929 630 Refinery & Trading 610 Power Plant 650 517 • Electricity generation remained stable YoY but increased QoQ (23) • New COD of 9 MW Lom Ligor Wind power plant in Apr’19 • Wind power plant entering low season in Q2 resulted in an operating loss Q2/18 Q1/19 Q2/19 • Geothermal power plant operating profit lower from its shutdown maintenance Bio-Based Product • B100 sales volume increased from gov’t B20 diesel promotion Net Profit • Ethanol sales volume grew YoY from capacity added, lower QoQ from plant maintenance attributable to • Intense B100 market competition and decreasing price of ethanol and glycerin resulting in owners of the biofuel margin squeeze 985 parent 214 528 Natural Resources Unit: THB Million Q2/18 Q1/19 Q2/19 • Realize share of profit from OKEA at 102 MB, comprised of 94 MB gain from changes in investment interest in OKEA, PPA revision and technical impairment on goodwill from lowered gas price of Gjoa oil field 3 Bangchak Corporation Plc.
EBITDA Performance – BCP Group 1H/19 Performance Compare to Target by Business Unit Unit: THB Million 200% Power Plant Marketing 150% 1,458 1,240 Refinery 1,167 Target 100% 100% 35% Biofuel E&P 30% 330 122 28% 8% 50% 3% Accounting EBITDA 4,147 Million Baht 0% 0.5 1.5 2.5 3.5 4.5 5.5 EPS EBITDA 1.56 0.54 Unit: THB/Share Unit: THB Million 6,358 Net Profit 1/ 4,147 2,153 Unit: THB Million 742 1H/18 1H/19 1H/18 1H/19 4 1/ Profit attributable to owners of the parent Bangchak Corporation Plc.
Refinery Business – Maintain high production rate & smooth operation 2Q/19 Refinery Group Production Profile Acc. EBITDA 650 MB (-66% YoY, +26% QoQ) Operating EBITDA 812 MB Crude Run Utilization Actual Crude Run Unit: KBD GRM weaken YoY from global production over supply and US – China trade war 94% 93% situation 92% 140 73% 130 90% 120 GRM better QoQ mainly due to UNL spread recovery, and refinery’s smooth 56% 70% 110 100 112.7 111.4 production 110.1 50% 90 80 88.0 30% 70 107 MB Inventory Loss from the sharp crude price fall in Jun’19 (Q2/18 and 60 10% 66.8 50 Q1/19 Inventory Gain(Loss) at 856 MB and (9) MB respectively) 40 -10% 30 20 -30% BCP Trading transaction volume grew YoY from products and trade partners 10 0 -50% expansion, but soften QoQ from weak oil demand from the effect of trade war Q2/18 Q1/19 Q2/19 1H/18 1H/19 TAM TAM * Operating EBITDA : exclude Inventory gain/loss, One-time items, Gain/loss from FX forward contracts GRM Performance Unit: $/BBL AVG Crude oil price movement ($/BBL) AVG Crack spread movement ($/BBL) 90 IK/DB 12.82 Market GRM Hedging Inventory Gain/Loss 20 GO/DB 15 DTD 80 4.39 8.84 10 UNL95/DB 1.55 70 5 4.02 DB 3.49 4.53 0 60 8.81 0.09 7.51 -5 4.95 4.20 FO/DB 3.43 -10 50 (0.09) (0.22) (0.18) (0.39) (0.03) (0.33) Q2/18 Q1/19 Q2/19 1H/18 1H/19 5 Bangchak Corporation Plc.
Distribution channel – Retail market sales continues to grow as our main priority Total Sales Volume 2Q/19 Marketing Group – Acc. EBITDA 630 MB (+24% YoY, +3% QoQ) Unit: ML/Mo 364 Total marketing sales volume +6% YoY and +1% QoQ 342 334 350 307 Retail sales volume +8% YoY and +6% QoQ from customer base Retail 284 300 expansion, service station sales push, and B20 diesel promotion 250 Industrial sales volume +1% YoY but -8% QoQ from the intensified Industrial 190 competition 184 179 200 167 150 Total Marketing Margin increased from the higher retail sales portion, 150 Exports (FO & UCO) 112 111 and the lower product cost following crude oil price downward trend 86 93 100 68 58 51 50 Net Marketing Margin 82 50 Unit: Baht/Litre Wholesales 50 0.83 0 0.79 0.77 Q1/15 Q3/15 Q1/16 Q3/16 Q1/17 Q3/17 Q1/18 Q3/18 Q1/19 0.75 0.71 Q2/18 Q1/19 Q2/19 1H/18 1H/19 Total Sales Volume Non-oil business (% Portion of total sales volume in 2Q/19) Bangchak Retail Revenue grew 28% YoY and 7% QoQ, and cost controlling measure still implemented Retail Bangchak Retail Revenue 58 % 400 Unit: THB Million 308 Industrial Service Export 206 Wholesale Factories, 193 161 Stations 24 % Jobbers, 11% 8% Aviations Q2/18 Q1/19 Q2/19 1H/18 1H/19 Very low sulfur Other oil 6 companies Fuel Oil Bangchak Corporation Plc.
Marketing Network – Increasing Market Share & Thruput per station Service stations outlets Retail sales volume Market Share (%) 41.2% 6M/18 6M/19 Source: DOEB 40.2% 1,185 New Service +21 service stations Stations as of Jun 2019 1H/19 6 15 sites 15.8% Standard Type 5 70 sites COOP Type 15.5% (≈ 21% of Retail Sales Volume) (≈ 79% of Retail Sales Volume) 12.6% 12.2% 12.1% 12.1% 10.2% 9.3% 1.8% 1.7% 1.7% 1.7% 1.6% 1.9% 4.3% 4.1% Thruput per station Unit: K.Litre/Mo BCP Supporting non-oil businesses 510 Standard 496 496 495 479 AVG Major oil 464 436 452 446 437 Jun ’19 Jun ’19 46 stores 541 branches 131 128 BCP Co-op 125 118 118 +18 stores +1 stores 1H/19 1H/19 2015 2016 2017 2018 6M/19 7 Bangchak Corporation Plc.
Bangchak B20 promotion campaign Bangchak B20s is better than normal B20 products, with - S Super Booster - Boost combustion efficiency, engine runs smoothly giving a more responsive driving experience both on flat terrain and inclines - S Super Purifier - Able to cleanse injectors even more, and protects the engine, lowering corrosions helps reduce pollution, but sells at the same price, allow more energy for the engine, and more economical for the customers B20 is currently available in + 400 stations nationwide and still expanding % compared to total 13.9% Diesel sales through marketing business 10.5% 6.4% B20 Sales Volume 35 29 Unit: Million Litre 3.4% 1.8% 17 1.3% 9 5 4 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 8 Bangchak Corporation Plc.
BCP Group Portfolio – Subsidiaries BCP Group Portfolio – Refinery & Marketing Business Powe BCP Group Portfolio Subsidiaries Bio-based Natural Resources Power Plant Products Business Business Business 9 Bangchak Corporation Plc.
Power Plant Business – BCPG Electricity Sales 156.8 157.2 2Q/19 Power Plant Group – Acc. EBITDA 721 MB (-5% YoY, -2% QoQ) Unit: Million kWh JP TH 9.5 Electricity Sales slightly higher : 24.0 TH : Increase both YoY & QoQ from: 81.6 76.0 81.3 • Irradiation rate higher from more favorable weather YoY & QoQ 5.4 147.8 14.9 • Apr’19 – COD Lom Ligor Wind project (9 MW PPA) 4.1 132.7 JP : decrease YoY but increase QoQ: 75.9 71.9 66.7 • Irradiation rate seasonally higher QoQ • Sep’18 – Nikaho & Nagi project sold (total 19 MW PPA) Q2/18 Q1/19 Q2/19 1H/18 1H/19 Share of profit from associated companies : • Geothermal power plant: 74 MB / Wind power plant: -12 MB Operating Capacity (MW PPA) 336 326 335 14 14 14 Wind 158 158 158 Geothermal 15 Solar 15 34 148 139 Solar 130 Wind Q2/18 Q1/19 Q2/19 10 Bangchak Corporation Plc.
Bio-Based Product Business – BBGI Biodiesel Production & Sales Volume Ethanol Production & Sales Volume 153 Unit: Million litres Sales Production Unit: million litres Sales Production 141 141 132 98 94 82 81 74 71 70 68 67 61 54 48 46 44 39 35 Q2/18 Q1/19 Q2/19 1H/18 1H/19 Q2/18 Q1/19 Q2/19 1H/18 1H/19 2Q/19 Bio-based products group Biofuel Price Movement Acc. EBITDA 136 MB (-21% YoY, -30% QoQ) Unit: Baht/litre Biodiesel 36 Ethanol B100 Sales volume +20% YoY and +15% QoQ from B20 promotion 34 32 Gross margin -37% YoY and -1% QoQ, due to the squeezed glycerin margin 30 from its oversupply situation, and higher price competition on B100 product 28 26 Ethanol 24 Sales volume +29% YoY from capacity increment of KGI plant (+100 22 KL/day), but -4% QoQ from BBE annual maintenance 20 Source: EPPO Gross margin +5% YoY from higher sales volume, but -30% QoQ from 18 ethanol price and sales volume decline BBE started raw material price management program, which could result in a better profitability from Q3/19 onwards 11 Bangchak Corporation Plc.
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