Q2/2017 Opportunity Day Presentation Analyst Meeting Presentation Q2/2017 Stock Exchange of Thailand, 22 August 2017
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
Agenda Q2/2017 Financial Results Strategic Direction 3
Agenda Q2/2017 Financial Results Strategic Direction 4
Q2/2017 Performance Refinery Aromatics Olefins & Derivatives U-rate : Declining to 66% from planned U-rate : Slightly dropped to 89% from U-rate : Maintained high u-rate at 103% maintenance shutdown in Jun’17 in Q2/2017 planned shutdown of OLE2/1 and Butadiene unit. 102% 103% 96% 89% 93% 97% 81% 85% 92% 100% 95% 89% 102% 101% 99% 93% 103% 100% 99% 88% 85% 90% 83% 75% 82% 78% 66% 57% 66% 35% Q1/15Q2/15Q3/15Q4/15Q1/16Q2/16Q3/16Q4/16Q1/17Q2/17 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q1/15Q2/15Q3/15Q4/15Q1/16Q2/16Q3/16Q4/16Q1/17Q2/17 Spread : Soft to Stable Spread : Lower product price Spread : Slightly soften - Spread dropped as inventory of both - Decrease in Ethylene price from - Middle distillate spread soften from Benzene and Paraxylene remained lower demand against higher supply. the resume of Refinery in Western high, along with downstream plant - MEG and Butadiene price returned countries but offset by better FO T/A and started operation at the end to normal level spread. of quarter. YoY QoQ YoY QoQ YoY QoQ (Unit: USD/bbl) Q2/2016 Q1/2017 Q2/2017 6M/2016 6M/2017 (Unit: USD/ton) Q2/2016 Q1/2017 Q2/2017 6M/2016 6M/2017 (Unit: USD/ton) Q2/2016 Q1/2017 Q2/2017 6M/2016 6M/2017 % +/(-) % +/(-) % +/(-) % +/(-) % +/(-) % +/(-) Dubai Crude Oil 43.18 53.12 49.77 15% -6% 36.82 51.44 Ethylene (SEA) 1,099 1,090 990 -10% -9% 1,056 1,040 Condensate 394 465 431 9% -7% 348 448 Gasoline-Dubai 14.45 14.78 14.21 -2% -4% 16.63 14.50 HDPE 1,153 1,176 1,133 -2% -4% 1,128 1,154 Paraxylene-Condensate 405 420 383 -5% -9% 410 402 Jet-Dubai 11.15 11.32 10.81 -3% -5% 11.36 11.07 MEG (ACP) 820 1,078 940 15% -13% 776 1,009 Diesel-Dubai 10.51 11.83 11.38 8% -4% 10.07 11.60 Benzene-Condensate 234 458 338 45% -26% 253 398 Butadiene 990 2,545 1,094 11% -57% 927 1,820 Fuel Oil-Dubai -8.76 -3.14 -1.85 79% 41% -6.97 -2.49 P2F Margin 147 321 212 44% -34% 174 269 %EBITDA Margin 24% 35% 27% 3% -8% 22% 31% Market GRM 4.57 6.02 6.11 34% 1% 5.27 6.06 Market P2F % EBITDA Margin Market GRM - P2F decreased QoQ to 212 $/ton - Declined QoQ to 27% from decline in price, - GRM increased QoQ to 6.11 $/bbl due resulted from lower products spread especially MEG, Butadiene, also had planned to better FO spread and higher sales and lower sales volume resulted from shutdown in this quarter. volume. planned shutdown. - 31% EBITDA Margin in 6M/2017 as product - Comparing with 1H/2016, GRM rose to - Benzene spread was sharply increased price in Q1/2017 was up significantly. 6.06 mainly from higher Diesel and FO in 1H/17, drove P2F to 269$/ton in 5 spread. 1H/2017 .
Overview of Business Unit’s Performance YoY QoQ YoY (Unit: Million Baht) Q2/2016 Q1/2017 Q2/2017 6M/2016 6M/2017 % +/(-) % +/(-) % +/(-) Sales Revenue 65,543 107,149 100,772 54% -6% 146,307 207,920 42% EBITDA 10,119 18,616 11,640 15% -37% 19,634 30,256 54% EBITDA Margin (%) 15% 17% 12% -25% -34% 13% 15% 8% Net Profit 4,924 13,182 6,603 34% -50% 9,632 19,785 105% EPS (Baht/Share) 1.10 2.96 1.48 34% -50% 2.16 4.44 105% Adjusted EBITDA* 7,938 18,108 12,744 61% -30% 17,727 30,852 74% Adjusted EBITDA Margin (%) 12% 17% 13% 1% -4% 12% 15% 3% Note: * Adjusted EBITDA refers EBITDA excluding impact of oil stock value Q2/2016 Q2/2017 % Adj. EBITDA Margin Q2/2016 Q1/2017 Q2/2017 6M/2016 6M/2017 Sales revenue Business Unit : 3 6 6 6 6 Refinery 7 22 11 10 17 Aromatics 24 35 27 22 31 Olefins and Derivative 10 7 5 9 6 Green Q2/2016 Q2/2017 Adjusted EBITDA (1) 6 5 (2) 6 HVS 12 17 13 12 15 Average Adjusted EBITDA increased by 61% YoY but dropped 30% QoQ, from planned shutdown of Aromatics 2 and Olefins business, along with soften product spread in this quarter. 6
Performance Q2/2016 VS Q2/2017 Stock Gain & Unit : Baht MB Project MAX NRV&Commodity Hedge Q2/17 = 581 Q2/17 = (1,089) Q2/16 = N/A Q2/16 = 2,181 FX Q2/17 = 275 Q2/16 = 102 Operating Profit from BAU Q2/16 Q2/17 • Overall operating profit in Q2/17 was higher than Q2/16, mainly from higher sales volume from Refinery business as it was shut in Q2/16 for T/A period, supported with better product price and spread especially MEG and Benzene as a result of better demand from Polyester and Styrene Monomer respectively. • Stock Gain(Loss)&NRV& Commodity Hedge in Q2/17 was loss of 1,089 MB since Dubai decreased whereas Q2/16 was gain of 2,181 MB . • FX Gain(loss) in Q2/17 was gain of 275 MB against FX gain in Q2/16 of 101 MB due to baht appreciation in Q2/17 was higher than Q2/16 7
Performance Q1/2017 VS Q2/2017 Unit : Baht MB Project MAX Q2/17 = 581 Q1/17 = 652 Operating Profit from BAU Stock Gain & FX NRV&Commodity Q2/17 = 275 Hedge Q1/17 = 1,529 Q2/17 = (1,089) Q1/17 = 519 Q1/17 Q2/17 • Overall operating profit in Q2/17 was lower than Q1/17, mainly from decreasing in product price and spread especially Ethylene and Butadiene, along with lower sales volume from planned shutdown of Aromatics 2, Olefins 2/1 and Butadiene unit. • Stock Gain(Loss)& NRV & Commodity Hedge in Q2/17 was loss of 1,089 MB since Dubai decreased to 49.8 $/bbl while Q1/17 was gain of 519 MB as Dubai price in that quarter was higher. • FX Gain(loss) in Q2/17 was gain of 275 MB whereas FX gain in Q1/17 was higher at 1,528 MB due to baht appreciation in Q2/17 lower than Q1/17. 8
Performance 1H/2016 VS 1H/2017 Unit : Baht MB Stock Gain & Project MAX NRV&Commodity Hedge 1H/17 = 1,233 1H/17 = (570) 1H/16 =N/A 1H/16 = 1,950 1,233 Other FX 1H/17 = 1,804 1H/16 = 734 Operating Profit from BAU 1H/16 1H/17 • Overall operating profit in 1H/17 was higher than 1H/16, mainly from an increase in sales volume of polymer and refinery, improved from last year’s turnaround. • Stock Gain(Loss) & NRV & Commodity Hedge in 1H/17 was loss of 570 MB since Dubai decreased while 1H/16 was gain of 1,950 MB • FX Gain(loss) in 1H/17 was gain of 1,804 MB against FX gain in 1H/16 of 734 MB due to baht appreciation in 1H/17 more than in H1/16. 9 • refinery, improved from last year’s turnaround. • • H1’17
Agenda Q2/2017 Financial Results Strategic Direction 10
Recent Developments Specialty Chemical : PA-9T & HSBC Issuing 10,000 M.Baht Bond June 7 th , 2017 PTTGC is to issue up to Kuraray – Sumitomo 10,000 MB bond with Corp – PTTGC signed coupon rate of 3.05%. key term JVA for The purpose is to production and sales of refinance debt and to finance future investment engineering plastic, High Heat Resistant Signed SHA for investing in Myanmar Polyamide-9T and thermo plastic HSBC in Aug 17 th , 2017 The Thailand. purpose of the joint venture is to produce and MoU for Advanced 3D Printing sale of plastic bag in June 20 th , 2017 Republic of the Union of PTTGC signed MoU with Myanmar Nanyang Technological MAX Benefit Realization University (NTU) to Co-develop advanced 3D Continuing realize benefit by 581 MB in Q2/17 printing materials and and by 1,233 MB in 1H/17. applications for auto industry. 11
Asset Injection Asset injection’s transaction has completed in July 3 rd with final transaction value of 25,061 MB. Potential Integration • Fill the missing link and lengthen value chain to capture margin of existing feedstock • Utilize excess steam volume from new asset within PTTGC facilities • Share best practice of technical know-how on PDH unit. 12 *Note : Include Shareholder Loan 9,189 MB
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