Q1/2008 Results Analyst Presentation May 14, 2008 Thai Oil Public Company Limited 1 Disclaimer Disclaimer The information contained in this presentation is intended solely for your personal reference. Please do not circulate this material. If you are not an intended recipient, you must not read, disclose, copy, retain, distribute or take any action in reliance upon it. 2
Corporate Vision, Mission & Value Corporate Vision, Mission & 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 growth refining and petrochemical companies in the region recognized for our sustainable growth, optimum • To enhance the competitive advantage of our power generation operations to further solidify stakeholder value, and commitment to the core refining business environmental and social well-being. • To create a high-performance organization that promotes teamwork, innovation and trust CORPORATE 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 Q1/2008 Key Highlights Market Conditions & Financial Performance Progress of Investment Projects Business Outlook 4
Q1/08 Key Highlights Q1/08 Key Highlights • GRM registered at 6.8 US$/bbl, reflecting rising crude price as well as temporarily high VLCC freight during Dec 07 – Jan 08. Overall • Benefits of strong middle distillate products can be fully capitalized in Q2. • Integrated Margin registered at $ 7.3 US$/bbl. Due to TPX shutdown for expansion tie-in from 14 Jan, the group reported a net profit of Bt. 3.8 bln. • TOP operated at optimum levels with refinery intake of 276 kbd, bringing integrated intake to 288 kbd. On the back drop of high product spreads, TOP run at 285 kbd in March 2008. Operation & Business • Successful completion of TPX expansion project. Total aromatics complex capacity increases from 420 to 900 KMTA as from May 2008. • Construction of MCE project (Sugarcane based Ethanol) progressed as plan (>50%). Expected COD by end 2008. • 2007 dividend payment of Baht 4.50/share was made, equivalent to 48% Finance of payout ratio 5 Financial Highlights Financial Highlights Consolidated EBITDA (Unit: MB) Q1/07 Q4/07 Q1/08 Δ YoY -31% 8,372 MB 6,043 MB 5,805 MB Δ QoQ -4% 8% 4% 8% 5% 9% 9% 2% 6% 8,372 18% 6,043 5,805 65% 86% 80% Q1/08 Q1/07 Q4/07 Q1/08 Consolidated Net Profit (Unit: MB) -35% Δ YoY Q1/07 Q4/07 Q1/08 5,943 MB 4,621 MB 3,874 MB Δ QoQ -16% 2% 5% 3% 4% 5% 3% 8% 5,943 8% 4,621 23% 3,874 64% 92% 83% Q1/07 Q4/07 Q1/08 Q1/08 6
Presentation Outline Presentation Outline Q1/2008 Key Highlights Market Conditions & Financial Performance Progress of Investment Projects Business Outlook 7 Oil Product/Crude Prices & Spreads Oil Product/Crude Prices & Spreads Oil Product & Crude Prices • High crude prices supported by (US$/bbl) 68.4 Dubai Low crude stock in early-Q1 – 55.4 64.8 70.1 83.2 91.4 Jet 150 Capital inflows into – GO commodity to hedge against ULG95 120 Dubai USD weakness HSFO • Refineries cut run in early-Q1 due 90 to high freight cost/negative hydro skimming margins 60 • Robust demand in developing 30 countries due to subsidized retail 03-Jan-07 Q1/07 14-Feb-07 30- M ar-07 Q2 15- M ay-07 27-Jun-07 08-Aug-07 Q3 20-Sep-07 01-N ov-07 Q4 14-D ec-07 01-Feb-08 Q1/08 18- M ar-08 30-Apr-08 price Product - Dubai Spreads • Strong Chinese GO imports amid (US$/bbl) 16.7 lower domestic supply as a result GO-DB of capped retail price 14.6 16.5 16.4 19.4 23.0 Jet-DB 35 • Middle distillate inventory in mid- GO-DB Q1 and late winter pushed 25 distillate spread to record high 15 ULG95-DB • High absolute FO price encouraged 5 to move away to cheaper coal and Q1/07 Q2 Q3 Q4 Q1/08 -5 NG for power generation, pressuring FO crack to record low -15 HSFO-DB -25 8
Oil Demand for Q1/2008 Oil Demand for Q1/2008 Domestic Oil Demand / Refinery Intake Domestic Oil Demand (KBD) (KBD) 338 323 1,400 91% 91% 100% 91% 316 89% FY/06 86% 87% 1,200 77% FY/07 80% 1,000 Q1/08 160 60% 800 110 140 117 120 117 104 124 128 118 125 600 126 40% 91 103 102 84 73 400 77 738 730 740 733 724 724 704 65 20% 200 0 0% LPG Gasoline Jet/Kero Diesel FO Q1/07 Q2 Q3 Q4 Q1/08 Q1/08 FY/06 FY/07 Domestic Demand/Sales Net Export TOP’s Domestic & Export Sales Petrochem & Others Utilization Rate Source: DOEB, Ministry of Energy. 12% 18% 13% 22% 9% Q1/2008 Export 4% Sales Domestic 44% 88% Breakdown 82% 78% 9% Domestic Jobbers 6% 16% Q1/08 FY/06 FY/07 Q1/08 Export = 22% 9 Gross Refinery Margins Gross Refinery Margins TOP’s Crude Mix & Oil Product Yield TOP’s Accounting GRM (US$/bbl) Product-DB Spreads (US$/bbl) (US$/bbl) 11.67 F/E 0% 1% 7% 6% -14.4 -17.4 10.56 16% LPG 18% 16% 8.28 Local 8.97 23% 22% 14.5 13.7 6.00 6.76 17% ULG 4.84 19% 18.5 22.8 12% 25% Jet M/E 82% 83% Q1/08 45% Q1/07 Q2 Q3 Q4 Q1/08 FY06 FY07 42% 16.7 23.0 37% Diesel Market GRM Stock Gain/(Loss) 10% 10% FO -14.4 9% -17.8 Q1/08 Thailand’s 2007 Oil Demand M/E Freight Rate Q1/08 GRM (US$/bbl) Freight Freight 11.36 (US$/bbl) (World Scale) 6 320 7.31 240 4 160 2.06 2 80 0 0 Jan-07 Q1/07 A pr-07 Q2 Jul -07 Q3 O ct-07 Q4 Jan-08 Q1/08 Jan'08 Feb'08 Mar'08 10
PX and LB Margins PX and LB Margins PX, MX and ULG 95 Spot Prices / Margins (US$/Ton) • The SABIC MEG was back to 420 PX-ULG 95 operation in late Q1, relieving 542 473 395 268 257 feedstock cost for polyester 1,400 PX and hence resuming 1,200 BZ downstream operation and MX 1,000 adding more demand TL 800 • Margin is still poor due to high ULG95 600 feedstock cost and high MX 400 supply from TPX Q1/07 Q2 Q3 Q4 Q1/08 ม . ค .-07 เม . ย .-07 ก . ค .-07 ต . ค .-07 ม . ค .-08 500 SN & HSFO Spot Prices / Margins (US$/Ton) 505 500SN-HSFO • 500 SN - HSFO spread in 1,200 637 538 466 380 434 Q1/08 gradually spiked up as 1,000 500SN a result of: 800 – Tight supply availability 600 of lube base as refiners 400 HSFO maximized gasoil 200 production 0 Q1/07 Q2 Q3 Q4 Q1/08 ม . ค .- 07 เม . ย .- 07 ก . ค .- 07 ต . ค .- 07 ม . ค .- 08 11 Integrated Margins Integrated Margins (US$/Ton) 542 473 420 395 268 257 PX - ULG 95 Q1/07 Q2 Q3 Q4 Q1/08 Q1/08 FY07 (US$/bbl) 11.67 10.56 8.28 8.97 6.76 6.00 Crude GRM Q1/07 Q2 Q3 Q4 Q1/08 FY07 Q1/08 (US$/Ton) 637 538 505 466 434 380 LB - HSFO Q1/07 Q2 Q3 Q4 Q1/08 Q1/08 FY07 Integrated Margin 1) (US$/bbl) MX S/D 12.32 10.80 11.34 • TOP Group’s integrated margin decreased to 10.52 0.87 PX S/D 0.64 1.40 1.15 0.10 0.86 7.67 7.28 7.28 US$/bbl (-33% YoY or -36% QoQ), 1.25 1.85 0.52 0.71 1.28 0.30 mainly affected by higher VLCC freight cost by 2 US$/bbl in Jan-Feb Q1/08 Q1/07 Q2 Q3 Q4 Q1/08 FY07 1) calculated from integrated intake 12
Performance Breakdown Breakdown by by Company Company Performance Refinery PX Lube Base Plant Plant Ship Utilization Production Production Availability Utilization Utilization 106 100 100 100 99 99 98 94 95 95 91 90 87 86 Q1/07 74 71 70 * 57 Q4/07 Q1/08 5,943 * Only MX Production 257 GRM PX-ULG95 500SN-HSFO 490 4,621 139 3,874 1,370 97 Q1/07 8.3 542 637 210 124 IPT/TP/TM 314 140 Q4/07 11.7 268 380 TLB 4,261 3,826 Q1/08 6.8 257 434 3,210 TPX TOP Q1/2008 Net Profit Breakdown Q1/07 Q4/07 Q1/08 Net Profit 3,210 314 140 335 53 (14) Δ YoY -16% -77% -71% -1% -33% -450% Δ QoQ -25% +153%* +44% +54% +51% -40% * Increase MX sales volume following MX expansion completed since Dec 2007 13 Consolidated Financial Performance Consolidated Financial Performance * (US$/bbl) Q1/07 Q4/07 Q1/08 % YoY % QoQ TOP’s GRM 8.28 11.67 6.76 -18% -42% Integrated Margin 10.80 11.34 7.28 -33% -36% (MB) Sales Revenue 64,428 61,241 96,314 +49% +57% EBITDA 8,372 6,043 5,805 -31% -4% Financial Charges (471) (342) (389) -17% +14% FX G/L & CCS 854 339 1,122 +31% +231% Tax Expense (1,530) (1,482) (1,154) -25% -22% Net Profit 5,943 4,621 3,874 -35% -16% TOP 3,826 4,261 3,210 -16% -25% Subsidiaries 2,117 360 664 -69% +84% EPS (THB/Share) 2.91 2.26 1.90 -35% -16% THB/US$ - ending 35.14 33.89 31.62 -10% -7% Effective Tax Rate (%) 20% 25% 23% +15% -8% * Restated P&L regarding to the change of accounting policy 14
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