Operating Results for Q4 and FY2018 Oppo rt unit y Day 2 2 M a r c h 2 0 1 9 0
Content 1 Q4 and FY2018 Operating Results 2 Market Situation & Outlook 3 Investment Plan 2019 1
1 Q4 and FY2018 Operating Results 2
Domestic Oil and Petrochemical Tanker Business (“Domestic Trading”) R e v e n u e ▪ Contribution by Big Sea (MTHB) U n i t : M T H B Q3/18 Q4/18 FY18 40.3% 1,898.4 Revenue 169.0 159.0 328.0 GP 49.0 49.5 98.5 1,353.2 ▪ Following acquisition of Big Sea, PRM ’ s market share increased from 32.9% in 2017 to 49.3% in 2018 A, 61.2% A, Big Sea, 14.1% Market Market 14.1% 16.4% Share in 578.6 B, Share in 531.9 2018 B, 2017 10.3% PRM, 10.3% 330.0 49.3% C, PRM, D, 7.0% C, 7.0% 32.9% D, 19.3% 19.3% Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 27/84 13/47 26/83 Vessels/ ‘000 DWT ▪ Domestic oil demand continues to grow in 2019, so does marine logistics 85.4% 88.0% 85.0% Utilization Rate Source: www.eppo.go.th 2% Unit: G r o s s P r o f i t U n i t : M T H B 66 ML/Day 64 65 62 60 6% 6% 31 32 30 29 26 20 20 19 18 17 106.2% 427.0 148.1 Diesel Mogas Jet Oil (22.2%) (25.6%) 265.9% 2015 2016 2017 2018P 2019F 106.1 Primary Data (Jan-Nov 2018) (20.0%) ▪ Q4/17 sales and GP dropped from flood in Thailand but opportunity was taken to do ship 207.1 repair and maintenance 29.0 (15.4%) ▪ Revenue and GP declined from Q3/18 because revenue under a one-year affreightment (9.1%) contract with PTT was booked in the first three quarters according services required by PTT Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 while the relating cost of charter-in vessel was equally prorated into 4 quarters. PRM maintains the planned GP under this contract. 3
International Oil and Petrochemical Tanker Business (“International Trading”) R e v e n u e U n i t : M T H B ▪ Q4/18 revenue and GP increased from Q3/18 because one Aframax vessel completed its time-charter contract and converted to SPOT chartering starting Nov 2018 0.7% ▪ Time-charter contract for another vessel continued until May 2019 ▪ In Q4/17, both vessels were on SPOT chartering and the freight market was at bottom 355.6 353.2 ▪ GP for FY18, though still negative, improved from FY17 significantly due to improved 33.6% freight market which is expected to continue in 2019 122.3 1-Year-TC Rate 91.5 83.1 Unit: $USD/Day Type Week6(A) 2020F 2019F 2018 2017 VLCC 34,000 60,000 40,000 25,394 27,524 YTD2017 YTD2018 Q3/2018 Q4/2017 Q4/2018 Aframax 18,500 31,200 22,500 15,543 16,034 2/211 Vessels/ ‘ 000 DWT 2/211 2/211 95.2% 81.0% 71.4% Utilization Rate MR 13,500 22,100 17,400 13,721 13,375 G r o s s P r o f i t U n i t : M T H B 3.5 34,000 Q3/2018 Q4/2017 YTD2017 YTD2018 (2.9%) USD/Day TC rate trend is moving up (20.8) compared to the rate ended (6.4) (28.3) Q4/2018 24,000 (120.9) USD/Day as of 2018. VLCC’s increased (-5.86%) (-30.9%) (-7.8%) (-34.2%) by 33.9%, Aframax’s increased 18,500 by 19.0%. USD/Day 112.4% 82.8% 4 Source: Fearnleys Weekly Report as of 27 Feb 2019
Floating Storage Unit (“FSU”) Business Q4/18 revenue and GP improved from Q3/18 from R e v e n u e U n i t : M T H B ▪ increased demand for low Sulphur FO storage which -16.5% enabled PRM to increase utilization rate from 94.0% to 100% 2,175.3 at the end of Q4/18 1,815.5 Q4/17 revenue and GP was higher than Q4/18 from ▪ -23.2% favorable market and higher demand; i.e. 7 vessels on hired in 2017 VS 5 vessels in 2018 546.3 419.8 377.0 PRM’s ability to reduce number of FSU vessels during weak ▪ market situation and quickly recapture new business Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 opportunity (low Sulphur FO storage) when market recovered towards the end of 2018 contributed to the FY/18 5/1,504 7/2,076 5/1,504 Vessels/ ‘000 DWT 95.0% 87.0% 94.0% Utilization Rate GP of 35.1% which is significantly improved from beginning of the year. G r o s s P r o f i t U n i t : M T H B FSU Market is expected to further improve in 2019 (See ▪ market outlook) -31.1% 925.4 (45.5%) -22.0% 637.3 (35.1%) 190.0 148.1 (34.8%) 108.9 (35.3%) (28.9%) Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 5
Rev - Offshore Floating Storage and Offshore Exploration Service (“Offshore”) Business R e v e n u e U n i t : M T H B 2 floating storage and off-loading vessels (FSO) were on hired ▪ throughout 2018. -1.7% 480.1 Navathani, the accommodation work barge (AWB) was in ▪ 471.8 services for customers totaling 200 days in 2018 higher than 2017 7.6% by 34 days in line customer’s offshore activities. However, its 141.5 daily chartering rate dropped by 26% causing FY/18 revenue to 102.0 94.8 be lower than FY/17 YTD2017 YTD2018 Q3/2018 Q4/2017 Q4/2018 Improvement in 2018 GP was attributable to lower operating ▪ cost mainly depreciation from extended useful life of AWB 2/192 2/192 2/192 FSO/ ‘000 DWT 100.0% 100.0% 100.0% FSO Utilization Rate 1/300 1/300 1/300 AWB/Capacity (PAX) The AWB was rehired for rate December 2018 until October 2019 ▪ 100.0% 0.0% 12.6% AWB Utilization Rate at improved daily rate G r o s s P r o f i t U n i t : M T H B The government and PTTEP have entered in a Production ▪ Sharing Agreement under a concession for PTTEP to carry out 35.8% natural gas production and exploration at Erawan and Bongkot 111.0 fields in February 2019. This will lead to potential requirement for (23.5%) offshore support service for PRM. 81.7 (17.0%) Under final discussion with strategic partners for Anchor ▪ 44.1 13.9% Handling Tugs service and crew boat marketing and ship (31.2%) 11.3 12.9 management to support expected increase in offshore (12.0%) (12.7%) exploration and products activities. Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 6
Ship Management (“SM”) Business R e v e n u e U n i t : M T H B PRM provides ship management services for 27 vessels of ▪ which 22 are own vessels and 5 are third party vessels: 0.9% 2 VLCC vessels o 358.2 1 Aframax vessel 355.0 o -25.8% 2 container vessels o 120.0 89.7 89.1 Lower revenue and GP in Q4/18 VS Q4/17 was due to ▪ scrapping of one third party vessel under ship management since Q1/17 Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 No. of 3 rd Party Vessels 5 6 5 Despite lower GP in Q4/18 due to one-time adjustment of ▪ labor expenses, GP for FY2018 is still higher than FY2017 by G r o s s P r o f i t U n i t : M T H B 20.6% 20.6% 124.1 (34.6%) 102.9 (29.0%) -12.3% 32.3 31.5 (36.0%) (26.1%) 27.6 (31.0%) Q3/2018 Q4/2017 Q4/2018 YTD2017 YTD2018 7
Consolidated Financial Position As of As of 31 Dec 2018 31 Dec 2017 1,688.2 MTHB reduction in cash and 1,286.1 ▪ 1,546.8 1,470.2 cash equivalent at the end of 2018 549.7 54.1 2,974.3 41.8 was due mainly to 1,400 MTHB 2,243.5 payment for the first 70% of Big Sea’s 2,920.0 498.2 shares and 407.7 MTHB payment for 2 domestic tanker vessels Goodwill relating to acquisition of Big 8,978.9 ▪ Sea amounting to 1,022.2 MTHB was 7,206.2 6,970.4 6,246.7 included in the non-current assets as at 31 December 2018 The net reduction in loan in amount of ▪ Baht 687.9 million in 2018 came from 10,678.7 10,678.7 10,814.8 10,814.8 additional borrowing of Baht 750.6 Current Ratio 2.36:1 1.19:1 million and loan payments of Baht 1,427.5 million D/E Ratio 0.71:1 0.55:1 Current Liabilities Cash & Cash Equivalents Other Non Current Liabilities Other Current Assets L/T Loan Non Current Assets Shareholders’ Equity 8
Consolidated P/L Statement Increase in share of profit from ▪ Unit: MTHB Q3/2018 Q4/2017 Q4/2018 FY2017 FY2018 associated companies in 2018 came 1 Sales 1,195.8 1,079.7 1,159.2 4,501.0 4,479.7 from full year operation of Bongkot Marine Service Co., Ltd. compared to 300.1 199.4 252.3 1,131.2 1,111.2 2 Gross Profit 6-month in 2017 41.0 13.3 52.2 55.0 150.3 3 Share of P/L fr Assoc. Increase in other incomes was mainly ▪ 4 Other incomes 54.9 23.1 15.5 39.7 92.5 due to the gain on the disposal of one VLCC vessel by 44.4 MTHB in Q3/2018 5 Net FX Gain/(Loss) 1.0 10.9 2.7 97.7 8.2 (106.6) (98.5) (98.0) (345.1) (389.7) Decrease in financing cost in 2018 was 6 SG&A ▪ due mainly to lower borrowing from (45.7) (45.3) (40.5) (217.4) (167.8) 7 Financial cost loan repayment totaling Baht 688 million 8 Income Tax (15.1) 2.6 (18.8) (2.0) (58.3) 229.6 105.4 165.4 759.1 746.4 9 Net Profit FX rate at the end of 2016 was Baht ▪ 36.0025/USD1 and Baht strengthened 10 EBITDA 419.0 317.4 350.5 1,636.5 1,474.4 to Baht 32.8293/USD1 at the end of 2017 resulting in FX gain in 2017 of Baht 25.1% 18.5% 21.8% 25.1% 24.8% 11 Gross Profit Margin(%) 97.7 million base of USD loan outstanding of USD 15.2 million 12 FX rate (Baht/USD) 32.6228 32.8293 32.7054 32.8293 32.7054 USD Loan as at 31 December 2018 ▪ 37 25 36 25 36 13 No. of Vessels amounted to USD 9.9 million 1,991.7 2,527.3 1,990.1 2,527.3 1,990.1 14 Capacity (‘000 DWT) 9
2 Market Situation & Outlook 10
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