Kaset Thai International Sugar Corporation PCL 22 August 2016 Page - PowerPoint PPT Presentation

Kaset Thai International Sugar Corporation PCL 22 August 2016 Page 1 of 26

Agenda  H1-2016 Operating Results  Projects in Progress  Sugar & Bio Industrial Trends Page 2 of 26

H1-2016 Operating Results Page 3 of 26

Summary of Operating Results - 1 Total Revenues Total Expenses Net Profit Unit: Baht million Unit: Baht million Unit: Baht million Other Income Financial Costs Net Profit Sales & Services Revenues Selling & Admin. Expenses Cost of Sales & Services 9,272 272 8,697 697 1,000 8,611 611 8,335 335 61 61 198 198 61 61 174 174 8,000 8,000 1,674 1,607 500 9,211 211 4,000 4,000 664 664 8,637 637 6,739 739 6,553 553 143 143 0 0 0 H1-2 H1-2015 H1-2 H1-2016 H1-2015 H1-2 H1-2016 H1-2 H1-2015 H1-2 H1-2 H1-2016  Total revenues decreased due to lower revenue from sugar  Total expenses were lower than last year  Net profit was lower than last year Page 4 of 26

Summary of Operating Results - 2 Sales & Service Revenues Gross Profit & Margin Unit: Baht million GP - Sugar GPM - Sugar 4.0% 4.5% GP - Bio GPM - Bio 9.1% Sugar 2,472 472 60% 54.1 .1% Paper Pulp 2,083 083 8.6% 50% 2,000 797 797 H1-2015 Ethanol 1,309 309 40% 39.9 .9% Electricity 30% 1,000 Others 73.7% 19.4 .4% 17.1 .1% 20% 1,163 163 1,286 286 0 10% 3.7% H1-2015 1-2015 H1-20 H1-2016 16 5.0% 9.9% Sugar Paper Pulp 4.5% Ethanol H1-2016 Electricity Others 76.9% Page 5 of 26

Sugar Revenue Sugar Revenue Sugar Sales Volume (‘000 Ton) & Price (Baht) Unit: Baht million Sugar - Domestic Domestic Sales Volume Domestic Selling Price * Sugar - International International Sales Volume International Selling Price 6,792 792 454 454 6,640 640 448 448 Molasses 19,7 ,767 19,6 ,659 144 17 Compensation from 19,000 388 388 400 358 358 Cane and Sugar Fund 6,000 3,584 584 300 300 3,626 626 299 299 14,000 200 3,000 12,0 12 ,072 11,9 ,984 2,634 634 2,680 680 148 148 155 155 0 9,000 0 H1-2015 1-2015 H1-2016 1-2016 H1-20 1-2015 15 H1-20 1-2016 16 Molasses Sales Volume (‘000 Ton) & Price (Baht) Production 2014/15 2015/16 Molasses Sales Volume Molasses Selling Price Thailand Cane 106.0 94.0 MMT 5,000 Sugar 113.0 97.8 MBg 150 4,237 237 4,031 031 4,000 Molasses 4.6 4.3 MMT 100 KTIS Cane 9.8 7.5 MMT 3,000 Sugar 9.9 7.2 MBg 50 91 91 89 89 Molasses 0.5 0.4 MMT 0 2,000 H1-2015 1-2015 H1-2016 1-2016 Source: Office of the Cane and Sugar Board Note: * white & refined sugar selling price only Page 6 of 26

Pulp Revenue Pulp Revenue Sales Volume (ton) & Selling Price (Baht) Pulp - Domestic Domestic Sales Volume Domestic Selling Price Unit: Baht million Pulp - International International Sales Volume International Selling Price 792 792 800 24,4 ,408 30,000 24,000 27,201 201 22,2 ,287 16,600 600 21,5 ,575 20,000 22,000 391 391 606 606 400 20,000 11,663 663 19,5 ,555 285 285 10,000 18,000 9,512 512 186 186 107 107 4,937 937 0 0 16,000 H1-2 H1-2015 H1-20 H1 -2016 H1-2015 H1-2 H1-2016 H1-2  Pulp revenue decreased due to sales volume decreased  Domestic and international selling prices were better than last year Page 7 of 26

Ethanol Revenue Ethanol Revenue Sales Volume (‘000 Liter) & Selling Price (Baht) Ethanol - Domestic Domestic Sales Volume Domestic Selling Price Unit: Baht million Ethanol - International International Sales Volume International Selling Price 38,488 488 854 854 842 842 40,000 30 33,379 379 800 25.2 .22 25 22.1 .18 20,000 400 20 0 0 15 H1 H1-20 -2015 H1-2016 H1-2 H1-2015 H1-2 H1-2016 H1-2  Ethanol revenue increased due to sales volume increased Page 8 of 26

Electricity Revenue Electricity Revenue Electricity Supplied (MWH) & Selling Price (Baht) Electricity Revenue Electricity Supplied Selling Price Unit: Baht million 150,000 3.50 3.40 3.38 3.30 400 3.20 3.10 100,000 3.10 3.00 435 435 416 416 2.90 200 50,000 2.80 2.70 123,07 075 140,22 220 2.60 0 0 2.50 H1-20 1-2015 15 H1-20 1-2016 16 H1-2015 1-2015 H1-20 H1-2016 16  Electricity Revenue increased in line with higher supplied volume, specifically from KTBP and TEP Page 9 of 26

Projects in Progress Page 10 of 26

Projects in Progress  Liquid sucrose (400 MT/day) & Super refined sugar (500 MT/day)  Two Biomass power plants (2 x 50MW) Page 11 of 26

Sugar & Bio Industry Trends Page 12 of 26

Positive Factors for Sugar Price  World Supply / Demand for 2015/16 and 2016/17 are expected to be deficit.  Most of the sugar producing countries in northern hemisphere has been largely effected by the severe droughts and damage accumulated in 2016 crop.  With steady consumption growth, ASEAN region continue to be in deficit, which leads to competitive advantages of Thai sugar.  Thai regulation of the profit sharing system allows the sustainable earning for both farmers and millers, where those in other countries suffer from the low world sugar price.  AFTA give better access and competitiveness to ASEAN countries. Page 13 of 26

Negative Factors for Sugar Price  Many talks and discussions of FTA in many countries can change market environment drastically.  Import policies of Indonesia and China have been uncertain and much slower than previous years, leading to less import.  Wet weather in 2015 and dryness in 2016 has improved productivities and cane quality in Brazil.  Low oil price has been pressuring ethanol demand and price, which would make sugar mill to make more sugar than ethanol.  Deregulation in EU sugar industry will encourage refined sugar exports from late 2016. Page 14 of 26

World Sugar Price Source: Reuters Page 15 of 26

Production Surplus/Deficit World Sugar Supply / Demand Balance Source: LMC Page 16 of 26

Brazilian Real / USD v.s. ICE No.11 R$/US$ Exchange Rate vs. ICE No.11 20.50 4.1000 19.00 3.8000 17.50 3.5000 Exchange Rate ( R$/US$ ) Sugar price ( cent/lb ) 16.00 3.2000 14.50 2.9000 13.00 2.6000 11.50 2.3000 10.00 2.0000 8/4/2014 2/4/2015 8/4/2015 2/4/2016 8/4/2016 ICE No.11 R$/US$ Source: Reuters Page 17 of 26

Eucalyptus Pulp & Bagasse Pulp Price Comparison (2013 – 2016) 850 Eucal Euc alyptus ptus ( (CIF CIF) Baga Bagasse ( e (CF CFR) R) 750 650 550 450 Source: RISI Page 18 of 26

Ethanol Consumption Development Million Liter Per Day June’16 (MLPD) *EtOH cons. = 3.46 MLPD 3.65 65 3.55 5 3.48 48 3.46 46 3.50 3.44 44 3.35 35 3.31 1 3.5 3.30 0 3.27 7 3.28 8 3.23 3 3.19 9 3.17 7 3.16 6 3.17 7 2016 3.12 2 3.15 5 3.42 2 2015 3.19 9 3.11 1 3.09 9 3.05 5 2.98 2.89 9 2.85 5 2014 2.84 4 2.75 5 2.5 2.65 5 2.62 2 2.57 7 2.56 6 2.50 0 2.46 6 2.40 2.36 6 2.34 4 2.35 5 2.33 3 2.25 5 2013 2.11 1 1.95 5 1.5 Jan Ja Feb Fe Mar Apr May Jun Ju Jul Ju Aug Sep Oct Oct Nov Nov Dec Dec Ethanol Consumption Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (MLPD) 2013 1.95 2.11 2.25 2.34 2.33 2.35 2.40 2.50 2.36 2.46 2.57 2.62 2014 2.56 2.65 2.75 2.89 2.85 2.84 2.98 3.09 3.05 3.11 3.19 3.42 2015 3.12 3.16 3.15 3.30 3.17 3.19 3.28 3.23 3.17 3.27 3.31 3.55 2016 3.35 3.48 3.44 3.65 3.50 3.46 Note: * Ethanol consumption is calculated from minimum blending ratio Page 19 of 26

KTIS R&D #1 KTIS has signed MOU to enhance research and development capabilities in cane and sugar business with 4 leading universities  Kasetsart University Page 20 of 26

KTIS R&D #2  King Mongkut's University of Technology Thonburi Page 21 of 26

KTIS R&D #3  Chiang Mai University Page 22 of 26

KTIS R&D #4  Naresuan University Page 23 of 26

KTIS ขับเคลื่อนโครงการประชารัฐ “ขุดเจาะบ่อบาดาล” Page 24 of 26

MOU โครงการประชารัฐ “เปลี่ยนนาข้าวเป็นไร่อ้อย” Page 25 of 26