Q4 and FY 2007 Results Analyst Presentation Thaioil Public Company Limited February 18, 2008 1
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Corporate Vision, Mission and Value Corporate Vision, Mission and 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 stakeholder value, and commitment to power generation operations to further solidify 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 2007 Key Highlights 2007 Key Highlights Market Conditions & Financial Performance Market Conditions & Financial Performance Progress of Investment Projects Progress of Investment Projects TOP Group Strategy TOP Group Strategy Conclusion Conclusion 4
2007 Key Highlights 2007 Key Highlights • Year 2007 witnessed a solid performance, supported by healthy margins and group integrated operations. • Group net profit hits a record level of Bt. 19,176 mn, a 9% increase Y-o-Y. Overall • Successful completion of CDU-3 and MX revamp projects as planned. Our capacity increases to 275 kbd, with maximum run upto 300 kbd. • A step-up of cooperation amongst PTT group resulted in further logistic cost savings and better feedstock procurement, especially during CDU-3 S/D Operation & • Operating cost reduction / margin enhancement of US$ 0.30/bbl was achieved through continuous Hydrocarbon Management Review. Business • One MR and two chemical tankers were acquired by Thaioil Marine to better cope with group’s logistic requirement. • Capitalized on strong financial position, our financing costs were further reduced through refinancing and interest rate reduction. • $150 million CCS was unwound to realize cash gain of Bt. 596 mn. Finance • To optimize capital structure, TPX bought back Bt. 2,918 mn. preferred shares from TOP. • Bt. 1.75/share of interim dividend was made in October 2007 vs Bt. 1.5/share in 2006. 5
Financial Highlights Financial Highlights Consolidated EBITDA (Unit: MB) FY/06 FY/07 +18% 24,577 MB 29,030 MB 7% 11% 11% 12% 13% 29,030 52% 24,577 +18% +86% 73% 25% 6,043 3,245 Q4/06 Q4/07 FY06 FY07 Consolidated Net Profit (Unit: MB) FY/06 FY/07 +9% 17,659 MB 19,176 MB Refinery Refinery 46% 73% 19,176 Power& 17,659 +212% Others LB +9% PX Power& 10% 6% LB 31% Others PX 4,621 13% 3% 18% 1,480 Q4/06 Q4/07 FY06 FY07 6 * Percentage was based on total amount before deducting inter-company transaction
Presentation Outline Presentation Outline 2007 Key Highlights 2007 Key Highlights Market Conditions & Financial Performance Market Conditions & Financial Performance Progress of Investment Projects Progress of Investment Projects TOP Group Strategy TOP Group Strategy Conclusion Conclusion 7
Record High Oil Prices and Spreads Record High Oil Prices and Spreads Oil Product & Crude Prices (US$/bbl) • High crude prices were supported by 61.5 68.4 Dubai prolonged conflicts – 57.9 64.8 65.9 57.3 55.4 64.8 70.1 83.2 120 in/with petroleum Jet GO exporting countries 100 ULG95 U.S dollar depreciation – Dubai 80 HSFO Capital flows into – 60 commodities, following 40 concerns over sub-prime & US recession 20 J Q1/06 A Q2 J Q3 O Q4 J Q1/07 A Q2 J Q3 O Q4 • Gasoline price was pressured Oil Product & Crude Prices (US$/bbl) by high inventory & the end of driving season in the US ULG95-DB 11.7 14.5 9.3 18.8 11.7 7.0 12.9 20.9 11.6 12.6 • Price of middle distillates was 35 strengthened significantly due Jet-DB 25 GO-DB to demand from China 15 ULG95-DB following an increase in state- 5 controlled prices, effective as Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 03-01-06 03-04-06 03-07-06 03-10-06 03-01-07 03-04-07 03-07-07 03-10-07 from Nov’ 1st. -5 HSFO-DB -15 -25 8
Improved Oil Demand for 2007 Improved Oil Demand for 2007 Domestic Oil Demand / Refinery Intake Domestic Oil Demand by Product 1,400 100% 91% 91% 87% 89% FY/05 86% 323 87% 334 316 77% 1,200 FY/06 80% 1,000 FY/07 60% 140 110 117 800 120 117 143 104 128 600 40% 126 118 125 103 107 400 84 102 738 724 730 724 733 695 704 93 77 20% 73 72 200 0 0% Q4/06 Q1/07 Q2 Q3 Q4 FY/06 FY/07 LPG Gasoline Jet/Kero Diesel FO Domestic Demand/Sales Net Export Petrochem & Others Utilization Rate TOP’s Domestic & Export Sales Source: DOEB, Ministry of Energy. 10% 12% 14% 18% 10% 2007 Export Sales 14% 42% Breakdown Domestic 88% 86% 82% Domestic Jobbers 8% 4% Export = 12% FY/05 FY/06 FY/07 9
Robust Gross Refinery Margins Robust Gross Refinery Margins TOP’s Crude Mix & Oil Product Yield Oil Prices / Spreads - MOPS (US$/bbl) ULG 95 Jet Diesel Fuel Oil TP DB TP F/E - DB - DB - DB - DB 3% 6% 7% Light (F/E) (M/E) - DB 16% 18% LPG 16% Local Q4/06 63.3 57.3 6.2 7.0 17.8 13.1 -14.5 22% 26% Q4/07 93.4 83.2 10.2 12.6 22.7 19.4 -10.6 17% Δ YoY +30.1 +26.1 +4.0 +5.6 +4.9 +6.3 +3.9 ULG FY/06 69.9 61.5 8.4 11.7 19.1 15.3 -13.1 19% 12% M/E 19% FY/07 72.7 68.4 4.3 14.5 23.5 21.7 -5.9 Middle Δ YoY +2.8 +6.9 +4.1 +2.8 +4.4 +6.4 +7.2 Jet 81% 82% TOP’s Accounting GRM (US$/bbl) 45% 42% 38% Diesel 11.67 10.56 10.56 8.97 8.28 Heavy 6.00 4.81 4.84 FO 11% 10% 10% 2.84 0.73 2006 2007 Thailand’s Oil Demand Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 FY06 FY07 Market GRM Stock Gain/(Loss) 10
Soften PX and LB Margins Soften PX and LB Margins PX, MX and ULG 95 Spot Prices / Margins (US$/Ton) PX-ULG 95 420 529 • PX prices softened during Q4/07 from lower demand as 1,600 402 404 733 575 542 473 395 268 a result of lower PTA plants 1,400 PX operations and shutdown of 1,200 MX MEG plants in Saudi Arabia. 1,000 800 • PX margin in Q4/07 was ULG95 600 pressured by higher ULG 400 price / feedstock cost. Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 500 SN & HSFO Spot Prices / Margins (US$/Ton) 505 579 500SN-HSFO 1,200 480 525 623 687 637 538 466 380 • 500 SN - HSFO spread in 1,000 500SN Q4/07 was further reduced 800 as a result of: 600 – soften regional demand 400 HSFO – higher feedstock costs 200 0 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 11
Robust Integrated Margins Robust Integrated Margins -21 % 733 (US$/Ton) 575 542 529 473 404 402 395 420 268 PX - ULG 95 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 FY06 FY07 11.67 10.56 10.56 +85 % 8.28 8.97 (US$/bbl) 4.81 6.00 4.84 2.84 Crude GRM 0.73 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 FY06 FY07 -13 % (US$/Ton) 687 623 637 579 525 538 505 480 466 380 LB - HSFO Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 FY06 FY07 Integrated Margin 1) (US$/bbl) 12.64 12.32 11.34 10.8 10.52 • Despite continually softening PX and LB 1.15 +38 % 0.87 0.64 1.48 1.40 7.67 0.10 1.15 0.86 7.03 7.61 1.25 margins, TOP Group’s integrated margin 1.85 6.51 0.71 1.03 0.67 1.28 1.12 3.95 1.75 1.98 stood at $10.52/bbl, 38% higher Y-o-Y. 2.69 1.22 2.04 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4 FY06 FY07 12 1) calculated from integrated intake
Performance Breakdown by Company Performance Breakdown by Company Refinery PX Lube Base Plant Plant Ship Utilization Production Production Availability Utilization Utilization 104 96 96 92 91 91 91 88 87 86 82 74 FY/06 FY/07 GRM PX-ULG95 500SN-HSFO FY/06 4.84 529 579 8.97 FY/07 420 505 Net Profit Breakdown 14,083 FY/06 8,456 5,666 FY/07 3,401 2,412 1,574 1,130 318 627 262 30 13 • CDU3 S/D • MX S/D • Feeds cost • TOP S/D • Insurance claim • High GRM • Margin drop • Tax 30% • Cost of FO • Maintenance • FX • FX • Tax 30% 13
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