GC Opportunity Day FY2018 Performance Presentation The Stock Exchange of Thailand 26 February 2019 1
Disclaimer This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward- looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward- looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 2
Vision and Mission 3
PTTGC Sustainable Development 4
Agenda 2018 Financial Result 01 2018 Key Achievement 02 5
Overview of business unit performance FY18 net profit at 40,069 MB, +2% yoy, because of Operating rate • Increasing in sale volume from having high operating rate and new capacity of LLDPE II, 400KTA, which COD in March • Average HDPE price, $1,330/T, increase by +14% yoy, meanwhile improving in phenol performance and increasing in share of profit of investment as full year realize the benefit from asset injection project. This mainly support from upside of acrylonitrile business. • These partial offset by effect to stock loss in Q4, from dropping of oil price at the end of the year. 6
Performance comparison YoY Stock Gain/(Loss) & NRV&Commodity Hedge Unit : MB 2018 = (3,331) 2017 = 1,383 Operating Profit Others from main BUs 4,394 4,714 40,069 2,516 39,298 469 1,894 Sharing from FX Gain/(Loss) Subsidiaries, 2018 = 407 Loss from GGC’s inventory (72.29%) net DTA = (1,272) JV & Associate 2017 = 2,301 2018 = 7,209 2017 = 2,816 2017 2018 • Comparing with previous year, the main operation was improved especially from increasing in volume as a result of improving in operating rate and additional capacity of LLDPE II since March 2018. Phenol performance is also improve from tight supply in the market. Sharing from JV & Associate was increased mainly from PTTAC which AN was increased as well as improving in performance from NatureWorks because of accessing to high value product market. In 2018, GC has fully realize the benefit from asset injection project, which was completed in July 2017. • Nevertheless, the soften in oil price, impact from US-China trade war and geopolitical have impact to product price and demand growth, which lead to softening in polyethylene price and stock loss, especially in the last quarter. Refinery GRM is also impact from decreasing in ULG and Naphtha spread and Aromatic BTX margin is slightly decrease from pressure of expecting new capacity in 1H but recovery after gaining support from PX downstream demand and less than expectation of new volume to the market in 2H. 7
Performance comparison QoQ Stock Gain/(Loss) & Unit : MB NRV&Commodity Hedge 2,153 12,793 Q4 ’ 18 = (6,749) Q3 ’ 18 = 578 529 7,327 ’ DTA from GGC’s inventory loss = Operating Profit Sharing from ’ from main BUs Others FX Gain/(Loss) Subsidiaries, JV & Associate Q4 ’ 18 = 252 Q4’18 = 1,580 Q3 ’ 18 = 167 1,191 4,060 Q3’18 = 2,108 85 Q3-18 Q4-18 • Overall operating profit from main BUs in Q4’18 was lower than previous quarter as a consequence of Mainly from dropping in oil price and polyethylene price in the period, while there are S/D of 3 polymer plants in the o period, which leads to high selling volume of ethylene that facing downward trend in this quarter. This quarter is also has impact from stock loss from decreasing of oil price. Sharing from JV & Associate was decreased from decreasing of product spread of main product i.e. PP, AN. o 8
Strong Financial Position Statements of Financial Position • Cash & ST Investment (54 billionTHB) and private fund Dec 31,2018 Dec 31,2017 and inhouse management of 6.8 billion THB at the end 469 Bn 435 Bn Cash +ST of 2018. 54 69 Investment Liab. 55 57 90 CA 97 • In 2018, the interest bearing debt is 61% on fixed rate 85 IBD 98 and 39% is float rate. THB debt is a major portion of PPE 245 57% of our debt profile, while 43% is in USD, mainly 220 Share 303 280 Holder’s from US Bond. Equity Non CA 80 75 Cash Flow • 2018 CAPEX still based our core investment from ongoing projects, including ORP, PO (GCO) ,Polyols THB Bn 28 (GCP). 54 27 • The repayment profile is around 10 billion THB per 55 54 year on average but 2021 will increase from THB bond retirement (4-yr, 3.05%), as well as 2022 will increase from USD bond maturity. Beginning Cash + Operating Cash CAPEX Financing Ending Cash + • The average loan life is ~3.43 years with average cost of S/T Investment Flow S/T Investment long term debt ~3.85%. Note : Private Fund and In house management around 6,800MB 9
Agenda 2018 Financial Result 01 2018 Key Achievement 02 10
2018 Key achievement Another record year of net profit of 40,069 Million bath DPS • Full year benefit from realizing JV … … … … … … … performance from asset injection deal, which closed in July 2017. • Enhance performance from surging in Phenol, Acrylonitrile and PP chain. 2018 Maintain high operating rate in all major units Achievement REF 102% ARO 93% OLE 101% POL 100% (103% in 2017) (80% in 2017 ) (96% in 2017 ) (113% in 2017) Execution of downstream integration • Acquisition of PTA 970KTA and PET 147KTA • JV in PA9T and HSBC business • Acquisition of Rotomolding Compound 61KTA Achieved sale target in CLMV Achieved polymer Achieved polymer sale volume through JV in 11 sale volume > 250KT Myanmar ~3KT in the past year
Strengthen production home base Efficiency enhancement • Achieved MAX target of 10,800MB • Kick off digitalization module • Establish GC Treasury Center for fx management and USD fund raising • Production flexibility of LLDPE/HDPE in 1H19 Market Strategy & Intelligence • Establish Customer Solution Center to support marketing strategy to grow as a Sustainable partner with customer Growth Expand market portfolio in high growth region • Joint venture in Myanmar with strategic partner • Establish sale office in Myanmar and Vietnam • Establish logistic business in Vietnam Sustainable development 3Rs Concept (Reduce / Reuse / Recycle) Fashion Items Bio- 12 packaging
Long term strategic execution Strategic investment through the value chain • Constructing new 1.1MTA of new capacity • Project progress • ORP ~32% (COD 2H20) • Propylene oxide ~36% (COD 2H20) • Polyols ~41% (COD 2H20) • KRR COD 2022 • Considering investment opportunity through Joint venture, Green field and M&A International strategic Opportunity to strengthen Future opportunity investment investment base in green business • Opportunity in bio complex in • Explore opportunity in • Explore opportunity in EEC and Thailand international strategic alignment with policy investment in the region that • Balance portfolio and align with can support existing value • Resource preparation for global trend i.e. potential chain or new market investment roadmap i.e. GC Estate investment in recycle plant, COD for land preparation opportunity in both green field and M&A of ME II in Q1 ’ 19 13
Thank You 1 Thitipong Jurapornsiridee VP-Corporate Finance & IR Thitipong.j@pttgcgroup.com +662-265-8574 2 Jittasak Soonthornpan IR Manager Jittasak.s@pttgcgroup.com +662-265-8172 3 Nattchanon Chawinsittangkul IR Analyst Nattchanon.c@pttgcgroup.com +662-265-8364 4 Pantaree Nantanakom IR Analyst Pantaree.n@pttgcgroup.com +662-140-8714 5 Jinthip Prakobwit IR Analyst Jinthip.p@pttgcgroup.com +662-265-8361 6 Preeyapa Asarangchai IR Analyst Preeyapa.a@pttgcgroup.com +662-265-8213 7 Pavena Thongpan Coordinator zPavena.T@pttgcgroup.com +662-265-8421 14
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