BANGCHAK COR ORPOR ORATION ON PCL. OP OPPOR ORTUNITY DAY - - PowerPoint PPT Presentation

BANGCHAK COR ORPOR ORATION ON PCL. OP OPPOR ORTUNITY DAY Q1/2020

May 29, 2020

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01 01 02

COV OVID – 19 M Mit itig igatio ion Measu sures

TABLE OF OF C CON ONTENT

Performance & B & Busin siness ss Update

03

Ou Outlook f for The Y Year

3

The COV OVID-19 outbreak i is c s causi sing widesp spread i impact a across t ss the globe

CO COVID VID-19 19

Pandemic andemic

World Economic Outlook - Real GDP Growth (%)

2.9 2.3 6.1 0.7 4.8 5.0 4.3 5.9 7.0 2.4

• 3.0
• 5.9

1.2

• 5.2
• 0.6

0.5

• 1.7

0.6 2.7

• 6.7

5.8 4.7 9.2 3.0 7.8 8.2 9.0 7.6 7.0 6.1

• 8.0
• 6.0
• 4.0
• 2.0

0.0 2.0 4.0 6.0 8.0 10.0

2019 2020F 2021F

World ASEAN-5

Source: IMF - WORLD ECONOMIC OUTLOOK - THE GREAT LOCKDOWN, April 2020

4 10 20 30 40 50 60 70 80 90 Jan-18 Jan-18 Feb-18 Mar-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Aug-18 Sep-18 Oct-18 Oct-18 Nov-18 Dec-18 Dec-18 Jan-19 Feb-19 Feb-19 Mar-19 Apr-19 May-19 May-19 Jun-19 Jul-19 Jul-19 Aug-19 Sep-19 Sep-19 Oct-19 Nov-19 Nov-19 Dec-19 Jan-20 Jan-20 Feb-20 Mar-20 Apr-20 Apr-20 May-20

• 6
• 4
• 2

2 4 6 8 10 12 14 Jan-18 Jan-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

DTD DB DB

Crude oil price Singapore VS BCP GRM

Singapore BCP

Crude Oi Oil Price and GRM

$/BBL $/BBL

5

BCP G Group Mitigation Measu sures

We have assessed the situation and prepared operational guidelines to contend with the COVID-19 outbreak CO COVID VID-19 19

Pandemic andemic

Safety M Measu sures Busin siness ss Contin inuit ity Measu sures

BCP group implemented measures and plan to protect our employees and business in this pandemic. The

• ngoing situation has been closely

monitored and systematically handled The company

• Adjusted production & marketing plan
• Lowered expenses & investments
• Carefully managed liquidity
• Set up Innovation Continuity Task

Force committee The company has been supporting both government and the public sectors through various social activities as well as “Bangchak Group Stronger Together”

Corporate Socia ial Resp sponsib sibil ilit ity

• Business Continuity Management [BCM] which encompasses the Epidemic Crisis Management Plan
• Emphasis is put on the safety and health of employees, customers and associates
• Prevent and control the spread of the COVID-19, which is closely monitored

6

Safety Measu sures

BCP group has announced measures to prevent and control the spread of the COVID-19 The ongoing situation has been closely monitored and systematically handled

“ Business Continuity Management [BCM] ”

encompasses the Epidemic Crisis Management Plan

Boost the confidence of customers at service station

• Implement strict measures to prevent

and control the spread of COVID-19

• Utilize technologies to proceed the
• perations smoothly

“Work From Home” policy

Continuously operate

• Adjust its operation hours for

employees working in shifts

• Confine the perimeters of the

control room building

• Strictly manage hygiene at various touch points
• Require the forecourt staff to wear medical

mask and measure body temperature

• Provide alcohol gel

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Financial: Liquidity Management

• Manage working capital to coincide with operations
• Manage debts to be paid on time
• Secure funds, both short term loans and long term

loans as a contingencies for circumstances

• Successfully issued 8,000 MB debenture in May 2020

Reevaluate and adjust OPEX & CAPEX

• Cut, delay, or postpone low priority projects
• Follow the principles of law and must give utmost regard to safety

OP OPEX

≈20%

20%

CAPEX

≈20

20%

Innova vation Continuity Task sk Force

• Develop the incumbent business or devise ways to

implement new businesses

• Find alternate sources of earnings and keep pace

New Normal

“Postponement must not hinder the core business”

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Refinery 24% Marketing 5% BCPG 66% Bio-based Products 5% Others 0.4%

CAPEX Plan

22,8 ,800 MB

MB

Busi siness ss Continuity Measu sures

Adjusted production & marketing plan

8

Corporate Social R Resp sponsi sibility

Bangchak’s mission under the “Bangchak Group Stronger Together” circumscribing all stakeholders

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01 01 02

COV OVID – 19 M Mit itig igatio ion Measu sures

TABLE OF OF C CON ONTENT

Performance & B & Busin siness ss Update

03

Ou Outlook f for The Y Year

BCP Group PERFORMANCE

4,773 5,608 2,463 1,732

• 4,661

2016 2017 2018 2019 Q1/2020

Net Profit (MB) Accounting EBITDA (MB)

(Consolidated)

EPS

(THB/Share)

3.47 4.07 1.79 1.18

• 3.49

Net Profit(loss) attributable to the owners of the parent

11,363 13,421 10,201 8,709

• 2,546

2016 2017 2018 2019 Q1/2020

Refinery, Marketing and Natural Resources business were severely affected from weakened cracks spread and lower

• il demand due to unexpected collapse of OPEC+ alliance

and the COVID-19 pandemic

10

11

(2,590) (1,227) (90) 81 510

770

(2,546)

BCP Group EBITDA Q1/20 (By Business Unit)

• Average crude run at 104.3 KBD (87% utilization rate)
• Operating GRM declined to 2.87 $/BBL from weakened

cracks spread, lower oil demand and inventory loss

• Reduced crude run in March to 94 KBD

Refinery

• Marketing sales volumes slightly declined 6% YoY
• Market share at to 15.7% (Jan to Mar 2020)
• First time Inventory gain/loss allocation

Marketing

Bio-Based Products

• Government advocacy campaigns, efficient

raw material management and production process pushed EBITDA +162% YoY

Power Plant

• BCPG fully acquired Nam-San 3B in

Laos (45 MW) in Feb 2020

• Total electricity sales increase +48%

YoY from investment in hydropower and wind project Natural Resources

• OKEA solid production performance at ~19.1 kboe/d
• Realize share of loss from OKEA at 1,199 MB due to

FX loss and Impairment

• Nido assets impairment of 1,366 MB

Other

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101 111 102 113 104

2016 2017 2018TAM 2019 1Q2020 84% 93% 85% 94% 87% Utilization Rate Crude Run (KBD)

Production Profile

TAM = Turnaround Maintenance Period

Refinery B Busi siness ss

Facing a challenging time as oil price collapsed and COVID-19 has hammered global oil demand

5.99 6.38 7.10 5.41 2.87 0.08 0.25 (0.27) 0.11 0.26 0.45 0.60 (1.23) (0.98) (9.29) 2016 2017 2018 2019 Q1/20 Operating GRM Hedging Inventory Gain/Loss

LPG Gasoline Jet Diesel Fuel Oil UCO

11% 8% 4% 6% 51% 52% 13% 12% 18% 19% 2% 3% 2019 Q1/2020

Product Yield

16% 11% 0.2% 50% 60% 34% 29% 2019 Q1/2020

Source of Crude FE Domestic 6.53 7.23 5.61 4.55 (6.16)

GRM Performance

Estimated 2020 100 KBD

TAM TAM

Maximize high value product Diversify Crude Sourcing ME Other

• Operating GRM was weakened as the crack spread is continue to

decline and recorded Inventory loss of 2,774 MB (Including NRV)

• BCPT recorded larger gross profit from the increase in trading

transaction by 16% YoY, especially, the Low Sulphur Fuel Oil product which demand increased from the IMO measure

To Counter The Crisis

• Reduced production rate since March due to lower demand
• Split TAM: plant#2 in Mar to Apr 2020 & the rest in 2021

13 13

0.79 0.77 0.78 0.75 0.79

3,609 3,820 4,020 4,297 1,020 2,180 2,196 1,925 1,921 405

2016 2017 2018 2019 Q1/2020

Retail Industrial

Marketing Sales Volume (ML)

Marketin ing Busin siness ss - Fuel consu sumptio ion declin ined due to t the im impact of COV OVID-19 19 pandemic ic

Net Marketing Margin (THB/Litre)

• Sales volume drastically declined from COVID-19 outbreak
• Industrial sales: drop in Diesel and Jet (Jet decreased in March and zero

sales since April)

• Retail sales volume decreased 6% in March and 20% in April
• Inventory Loss of THB 591 million (including NRV)
• Non-oil business, BCR is still developing, expanding and focusing on store management

led BCR to hit 27% YoY increase in revenue and 79% YoY increase in EBITDA

15.1% 15.4% 15.6% 15.9% 15.7% 2016 2017 2018 2019 Q1/2020

Source: DOEB *AVG Major Oil : PTT, ESSO, SHELL, CALTEX

479 510 496 498 453 464 452 446 431 407 2016 2017 2018 2019 3M/20

Thruput pers Station (K.Litres/SS/Mo)

BCP Standard type

AVG Major oil (excl. BCP)

Historical Market Share (Retail Channel)

5,789 6,016 5,945 6,218 1,426

SOLAR ENERGY WIND ENERGY GEOTHERMAL ENERGY

BCPG G has a t s a total capacit ity of 842 842 MWppa

• Ope

Operating capacity y 452 452 MWppa

• Deve

veloping 390 MWppa

Data as of February 2020

Thailand

Operating : Solar 142 MWppa : Wind 9 MWppa Developing: Solar 15.5 MWppa

Indonesia

Operating : 158 MWppa Developing : 24 MWppa

The Philippines

Operating : 14 MWppa Developing : 6 MWppa

Laos

Operating: Hydro 114 MWppa Developing: Wind 270 MWppa

Japan

Operating: 15 MWppa Developing: 75 MWppa

HYDROPOWER

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125 130 139 150 152 20 30 15 15 15 158 158 158 158 14 14 14 14 69 114 145 332 326 406 452 2016 2017 2018 2019 Q1/20

Operating Capacity (MW PPA)

Solar Wind Solar Geothermal Wind Hydro

2,559 3,088 3,569 2,964 770 2016 2017 2018 2019 1Q/2020

EBITDA Performance (MB) Operating capacity rose 39%YoY from the acquisition

• f Hydropower plant Namsan 3A and 3B in Laos

Performance remains resilient

Power P Plant Busi siness ss

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Bio-Base sed Products B s Busi siness ss

• Better performance despite lower demand
• B100 price adjusted upward significantly by government’s measures
• Able to sell Ethanol for production of alcohol gel & disinfectant product

215 249 281 328 69 11 55 149 189 40 2016 2017 2018 2019 1Q20 Biodiesel Ethanol

326 529 692 1,000 510

2016 2017 2018 2019 1Q/2020

EBITDA Performance (MB)

Performance improved with p posi sitive prospe spects

Bio-Based Products Sales Volume (ML)

BIODIESEL (Operates by BBF)

Capacity 1,000,000 L/D

ETHANOL (Operates by BBE & KGI)

Capacity 600,000 L/D

Resulted in Net Loss 785 MNOK but positive EBITDA at 312 MNOK

• Revenue decrease due to lower volumes and realized prices
• Recorded loss from non-cash items
• Impairment of 634 MNOK largely related to adverse market

developments during the quarter

• Unrealized FX losses on foreign currency loans of 518 MNOK

BCPR holds 46.5 % in OKEA ASA

As of February 2020

Lower performance due to share of loss 1,199 MB from OKEA and asset impairments

Production Volume - Net to OKEA (kboe/d)

Maintain a high production above 19,000 boepd in the first quarter

8.6 9.2 9.7 8.8 8.9 10.49 10.50 8.14 7.84 9.81 19.5 20.0 18.1 17.0 19.1 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20

Source: OKEA

Gjoa Draugen

Natural R Reso sources s Busi siness ss

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01 01 02

COV OVID – 19 M Mit itig igatio ion Measu sures

TABLE OF OF C CON ONTENT

Performance & B & Busin siness ss Update

03

Ou Outlook f for The Y Year

17 17

Refinery Business - Some revisions was implemented on main activities

101 111 102 113

2016 2017 2018 2019 2020

TAM TAM

• Est. 100 KBD

Crude Run (KBD)

Closely monitor the market and reduce production to be in line with market demand

How are we responding now?

• Oil prices are falling due to oversupply, along with rapid

decline in demand both domestically and internationally

• Dramatic drops in the crack spreads
• TAM postponed to 2021, partially fixed plant#2 in March

to April 2020

What we are facing now?

• CCR installation will be completed in October 2020
• HCU debottlenecking is tied in with TAM in 2021

3E project will be completed in 2021

3E Project: Increase Competitiveness

2020 Estimated benefit ~300 MB

Maximize Value from current assets

18 18

Marketing Network - Launch marketing campaigns t s to b boost st sa sales

1 2 4 9 17 42 54 35 35 35 33 34 33 35 34 31 31 21 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20

• No. of Service Stations

with Diesel B10

1,045 Sites

• Promoting B10 as Diesel primary grade and E20 - available at the

service stations countrywide

B10 & E20 Sales Volume (ML)

Non Oil Business

• BCR hosted the “You Stay Home, We Delivery for You”

campaign during the periods advocating people to stay home to curb the COVID-19 outbreak

• Inthanin expansion by Focusing more on Inthanin The

Grocer

+160 stores

• Enhance Loyalty Program by issuing promotions exclusively

for members, including collaborations between business alliances E20 B10

Service Stations Outlets

1,204 Sites as of Q1/20

(Revised expansion plan)

60 54 stations

Network Expansion

Some investments may be delayed

19 19

BCP G Group Busi siness ss Update

Continue growing with promising outlook

• Full year recognition of Nam San 3A

(Hydropower plant 69 MW) & Lomligor (Wind power plant 9MW)

• Chiangmai University (Solar rooftop 12 MW)

COD in 2020

• JP: Komagane COD in 2021 (Solar power

plant 25 MW)

• New acquisitions and expansion in CLMV

and other APAC countries to balance portfolio risk

Managing the business during the market turmoil

• Move Draugen turnaround from Q3 to Q2
• ~20% OPEX cut and defer most of

exploration expenses and preserve cash

• Exploring Quick-win M&A by

Opportunistically “Buy Low” under this Averse Situation where financially unstable sellers will struggle

Additional Production Capacity

BIODIESEL BUSINESS

Ayudhaya

27,000 Ton/Y

Pure Glycerin (COD Q4/2020)

ETHANOL BUSINESS

Khonkaen

+200,000 L/D (COD Q3/2021)

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Q&A Q&A

ir@bangchak.co.th

• Tel. +66 2335 8663 / 8518 / 4370

www.bangchak.co.th

THANK YOU OU

Disclaimer er The information contained herein is being furnished on a confidential basis for discussion purposes only and only for the use of the recipient, and may be subject to completion or amendment through the delivery of additional documentation. Except as otherwise provided herein, this document does not constitute an offer to sell or purchase any security or engage in any transaction. The information contained herein has been obtained from sources that Bangchak Corporation Public Company Limited (“BCP”) considers to be reliable; however, BCP makes no representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information contained herein. Any projections, valuations and statistical analyses contained herein have been provided to assist the recipient in the evaluation of the matters described herein; such projections, valuations and analyses may be based on subjective assessments and assumptions and may utilize one among alternative methodologies that produce differing results; accordingly, such projections, valuations and statistical analyses are not to be viewed as facts and should not be relied upon as an accurate representation of future events. The recipient should make an independent evaluation and judgment with respect to the matters contained herein.