Q2 & 1H/08 Results Analyst Presentation August 14, 2008 Thai Oil Public Company Limited
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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 refining and petrochemical companies in the region demand growth 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 Q2/08 & 1H/08 Highlights Performance Analysis Business Outlook 4
Q2/08 Key Highlights • TOP group reported a record net profit for Q2/08 of Bt 10,546 million, allowing 1H/08 net profit to achieve Bt 14,420 million. • Expansion benefit, inventory gain and strong middle distillate spreads Overall were key attributing factors to the foregoing favorable performance. • Group’s integrated margins were US$ 12/bbl (Bt 2.5/litre) and US$ 8.9/bbl (Bt 1.9/litre) for Q2/08 and 1H/08, respectively. • In Q2/08, TOP operated at an optimal 105% utilization with refinery intake of 288 kbd, bringing the integrated intake to 301 kbd. • Following the successful completion of TPX expansion, aromatic capacity Operation increases from 420 KMTA to 900 KMTA , with full benefits to be captured & Business as from Q3/08. • TOP continues to enhance integration amongst group to maximize margins & reduce costs. This was reaffirmed by ASEAN Energy Award 2008 we received for Best Practice in Energy Management. • Notwithstanding volatile financial market, TOP successfully launched a Finance 5-years THB Bond worth Bt 3 billion at an attractive pricing. A cross currency swap was entered to convert into $ 93.5 million, USD exposure. 5
Thaioil Receives The Best ASEAN Energy Awards 2008 • This achievement is a result of the Company’s vision and commitment to energy saving gained through corporate culture, campaigns, and training. • Energy saving measures have been continuously and strictly implemented to achieve the highest energy efficiency • Initiative “Online Cleaning” which resulted in energy consumption reduced significantly and saving cost of Baht 238.5 million in the period of 2005 – 2007. 6
Financial Highlights Integrated Intakes Integrated Margins (Unit: KBD) (Unit: $/bbl) 18% 15% 15% 8% 301 294 256 255 Q2/07 Q2/08 1H/07 1H/08 Q2/08 1H/08 Q2/08 1H/08 Consolidated Net Profit Net Profit Breakdown* 15% (Unit: MB) 1H/07 1H/08 59% 12,562 MB 14,420 MB 14,420 12,562 10,546 6,619 7%3% 4%3% 6% 20% 87% Q2/08 1H/08 Q2/07 Q2/08 1H/07 1H/08 70% EPS 3.24 5.17 6.16 7.07 (THB/Share) *Percentage was before deducting inter-company transaction. 7
Presentation Outline Q2/08 & 1H/08 Highlights Performance Analysis Business Outlook 8
Oil Price Movement Crude Prices (US$/bbl) 68.4 104.1 160 Dubai 55 65 70 83 91 117 Tapis Dubai 120 128 97 80 86 40 Q1/07 Q2 Q3 Q4 Q1/08 Q2 03-Jan-07 14-Feb-07 28-Mar-07 10-May-07 21-Jun-07 02-Aug-07 13-Sep-07 25-Oct-07 06-Dec-07 23-Jan-08 07-Mar-08 21-Apr-08 4 Jun 08 16 Jul 08 Extraordinary rise in oil prices (DB + 50% in 6 months, peaking at $141/BBL) • Continued strong demand from emerging economies • Lower supply from non-OPEC producers • Geopolitical disturbances • Booming commodity trades as hedges against USD depreciation & inflation • Speculation 9
Gross Refinery Margins Spreads vs. Dubai (US$/bbl) TOP’s Crude Mix & Product Yield Product-DB Spreads (US$/bbl) 30.3 16.7 4% 4% -29.2 * F/E LPG 16% 15% GO-DB 14.6 16.5 16.4 19.4 23.0 37.6 45 20% 13.4 Local 17% 35 ULG 24% 30.2 25 Jet-DB 12% GO-DB 15 Jet ULG95-DB M/E 81% 5 30.3 45% 41% Diesel -5 HSFO-DB -15 -21.2 FO 11% -25 10% Q1/07 Q2 Q3 Q4 Q1/08 Q2 Thailand’s 1H/08 -35 Oil Demand * LPG Market Price Spreads vs. Dubai Spreads (US$/bbl) TOP’s Market GRM* (US$/bbl) 9.6 1H/07 1H/08 7.9 7.1 7.1 6.3 TP-DB 8.8 11.9 4.7 4.5 3.9 ULG 95-DB 16.9 13.4 Jet-DB 16.7 30.2 GO-DB 15.6 30.3 Q2 Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/07 1H/08 FO-DB -10.5 -21.2 10 * which excluded stock gain and loss
Oil Demand for Q2/2008 Domestic Oil Demand / Refinery Intake Domestic Oil Demand (KBD) (KBD) 333 326 313 1,400 100% 91% 91% 91% 91% 90% 1H/07 88% 86% 1,200 77% 2H/07 80% 1H/08 1,000 3% 60% 160 18% 158 800 110 140 155 120 115 104 131 129 125 123 127 600 12% 111 40% 86 86 82 74 72 400 743 65 738 724 726 731 738 718 704 20% 200 0 0% LPG Gasoline Jet/Kero Diesel FO Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/071H/08 Net Export Domestic Demand/Sales TOP’s Domestic & Export Sales Utilization Rate Source: DOEB, Ministry of Energy. Refinery Intake 234 216 282 (KBD) 13% 12% 18% 18% 1H/2008 11% Export Sales Domestic 4% 45% 88% 82% 82% Breakdown 9% Domestic Jobbers 5% 13% 1H/08 FY/06 FY/07 1H/08 Export = 18% 11
Aromatics Business Aromatic Spot Prices & Margins (US$/Ton) PX-ULG 95 542 473 395 268 257 317 PX 1,600 • In Q2/08, spread of PX&MX MX 1,400 over ULG 95 were widen BZ due to unplanned outage 1,200 TL from TPPI plant in 1,000 ULG95 Indonesia. 800 600 • However, downstream 400 demand was reduced Q1/07 Q2 Q3 Q4 Q1/08 Q2 significantly as PTA could TPX’s Product Sales & P2F not pass on historical high (Kton/Quarter) PX price to customers. 13 28 TL BZ 47 • TPX’s P2F improved QoQ 12 14 MX following expansion 5 102 PX completed in May. 88 81 82 78 68 13 Q1/07 Q2 Q3 Q4 Q1/08 Q2 Q2 133 123 121 107 50 93 (US$/Ton) Product to Feed 17.4 16.0 15.9 14.3 6.6 12.1 (US$/bbl) 12
Lube Base Business Base Oil & Bitumen Spot Prices & Margins (US$/Ton) (US$/Ton) 637 538 466 380 434 535 500SN-HSFO 1,400 500SN 1,200 • P2F improve QoQ 1,000 ($88/ton to $153/ton) & 800 YoY ($94/ton to HSFO 600 $153/ton). Bitumen 400 • Base oil price improved 200 due to tight supply as a 0 result of lower run of Q1/07 Q2 Q3 Q4 Q1/08 Q2 base oil plants due to TLB’s Product Sales & P2F insufficient feedstock (Kton/Quarter) and switch to produce more gasoil rather than 75 67 72 base oil. 53 55 52 TDAE/Extract /Slack Wax 124 117 96 102 Bitumen • High by-product price 92 89 (extracts), but dragged Base Oil 70 71 68 67 68 65 by low bitumen price. Q2 Q1/07 Q2 Q3 Q4 Q1/08 Q2 105 94 79 69 88 153 (US$/Ton) Product to Feed 15.9 14.2 12.1 10.5 13.4 23.2 (US$/bbl) 13
TOP Group’s Integrated Margins 17.4 16.0 (US$/bbl) 16.7 15.9 14.3 12.1 9.5 6.6 Product to Feed Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/07 1H/08 9.6 (US$/bbl) 7.9 7.1 7.1 6.3 4.7 4.5 3.9 Market Crude GRM* Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/07 1H/08 (US$/bbl) 23.2 15.9 18.3 15.1 14.2 12.1 13.4 10.5 Product to Feed Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/07 1H/08 * which excluded stock gain and loss Integrated Margin * (US$/bbl) 12.0 10.4 1.0 9.7 9.1 0.9 8.9 • TOP Group’s integrated margin increased to 1.8 1.0 2.0 0.8 1.1 2.0 1.4 5.7 12.0 US$/bbl (+ 15% YoY or + 65% QoQ), 2.0 5.7 5.0 0.5 0.7 0.6 0.9 9.2 1.4 0.1 due mainly to historical high middle distillate 7.6 6.7 6.8 5.9 4.3 4.3 3.6 spread and lube base oil price. Q1/07 Q2 Q3 Q4 Q1/08 Q2 1H/071H/08 14 * Calculated from integrated intake and reflected market GRM which excluded stock gain / loss
Performance Breakdown by Company - Q2/08 Refinery Aromatic Lube Base Plant Plant Ship Utilization Production Production Availability Utilization Utilization (KBD) (Kton/Day) (Kton/Day) 105% 104% 99% 109% Q2/07 87% 89% 94% 80% 92% 91% 97% Q2/08 244 288 0.78 51% 2.13 0.71 1.12 GRM P2F P2F (US$/bbl) (US$/ton) (US$/ton) Q2/07 7.93 123 94 Q2/08 9.58 93 153 Q2/2008 Net Profit Breakdown (Unit: MB) Net Profit 9,528 475 493 (24) 60 23 Δ YoY +87% -60% +45% +85% -31% +92% Δ QoQ +197% +51% +252% -107% +13% +264% 15
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