“One family … fueling the future of Thailand”
Opportunity Day
3Q/2017 results
Opportunity Day 3Q/2017 results One family fueling the future of - - PowerPoint PPT Presentation
Opportunity Day 3Q/2017 results One family fueling the future of Thailand DISCLAIMER The information contained in this presentation is intended solely for your reference. This presentation contains forward - looking statements
“One family … fueling the future of Thailand”
3Q/2017 results
DISCLAIMER
The information contained in this presentation is intended solely for your reference. This presentation contains “forward-looking” statements that relate to future events, which are, by their nature, subject to significant risks and uncertainties. All statements,
strategy, plans, objectives, goals and targets, future developments in the markets where SPRC participates or is seeking to participate and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “will”, “may”, “project”, “estimate”, “anticipate”, “predict”, “seek”, “should” or similar words or expressions, are forward-looking statements. The future events referred to in these forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control, which may cause the actual results, performance or achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which SPRC will operate in the future and are not a guarantee of future performance. Such forward-looking statements speak only as of the date on which they are made. SPRC does not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. The information set out herein is subject to change without notice, its accuracy is not guaranteed, has not been independently verified and it may not contain all material information concerning the Company. SPRC makes no representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one if many possible scenarios and should not be viewed as the most likely or standard scenario. No assurance given that future events will occur
indications of future performance. In no event shall SPRC be responsible or liable for the correctness of any such material or for any damage or lost opportunities resulting from use of this material. SPRC makes no representation whatsoever about the opinion or statements of any analyst or other third party. SPRC does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or use of any such opinion or statement. SPRC’s securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or the securities laws of any state of the United States, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of such act or such laws. This presentation does not constitute an offer to sell or a solicitation of an offer to buy or sell SPRC’s securities in any jurisdiction.
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“We are a highly engaged Family, dedicated to providing sustained superior returns to our shareholders through industry leading safe and reliable operations, producing quality products that exceed customer expectations, in harmony with
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Market overview Highlights Operational review Financial performance 6
Residue Fluidized Catalytic Cracking Unit (RFCCU) 41 KBD
and products quality.
down only RFCCU whereas others continued to operate.
TOTAL DAYS AWAY FROM WORK RATE (‘DAFWR’)
UEDC*
AVAILABILITY
$2.27/bbl
MARKET GRM
* Utilization of Equivalent Distillation Capacity
BOTTOM LINE IMPROVEMENT PROGRAM
Market overview Highlights Operational review Financial performance
OPEX PER BARREL
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Bill Stone, CEO
Market overview Highlights Operational review Financial performance 8
SAFETY
(Injuries per 200,000 man hours)
▪ Last DAFWR over 4 years ago (24 Jun 2013) ▪ Achieved 14.9 million man-hours without days away from work injury PERFORMANCE UPLIFT FROM “BLIP”
US$/bbl
BLIP: Bottom Line Improvement Program
RELIABILITY OPTIMIZATION MARKET GRM
▪ Sustained top quartile YTD performance in availability and utilization among over 90 refineries in the Asia Pacific and India Ocean region ▪ Lower utilization from low RFCCU throughput resulted in low CDU and downstream unit throughput ▪ Lower benefit from opportunity crude as favorable benchmark crude generated more positive on margin ▪ Low seasonal domestic demand ▪ No synergy benefit as economics did not support unequal transfers ▪ High CDU throughput and crude
crude selection flexibility post CDU pit stop ▪ Higher margins due to strong product crack spreads ▪ Stay competitive over Singapore margin thru Bottom Line Improvement margin captured OPERATIONAL AVAILABILITY
A strong foundation of personal safety … …exceptional reliability… …and maximizing GRM …driving optimization & cost efficiencies…
US$/bbl
TOTAL DAYS AWAY FROM WORK RATE
Market overview Highlights Operational review Financial performance
2014 2015 2016 1Q17 2Q17 3Q17
91.9% 97.8% 97.3% 95.2% 84.7% 94.0%
2014 2015 2016 1Q17 2Q17 3Q17 EDC UTILIZATION RATE
99.7% 99.8% 99.7% 99.0% 97.3% 98.9%
2014 2015 2016 1Q17 2Q17 3Q17
2.29 2.95 2.69 3.11 2.46 2.27 2.62
2014 2015 2016 1Q17 2Q17 3Q17 9M17
6.15 10.40 6.68 7.98 6.85 8.91 3.32 5.63 4.10 4.99 4.63 6.36
2014 2015 2016 1Q17 2Q17 3Q17
SG GRM
Source: Company Data
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OIL MARKET OUTLOOK SINGAPORE GRM
Market overview Highlights Operational review Financial performance
Source: IEA
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Million barrels/day
Source: Wood Mackenzie and IHS
▪ Asia is the global demand driver with highest demand growth ▪ Expected CDU growth between year 2017 - 2022 is 300-500 KBD/ year in Asia and ME Million barrels/day ASIA
2015 2016e 2017e
NORTH AMERICA EUROPE LATIN AMERICA AFRICA INCREMENTAL OIL DEMAND
0.39 0.14 0.14 0.29 0.22 0.14
0.15 0.09 0.23 0.10 0.13
0.00 1.22 1.02 0.87
FSU
1 2 3 4 5 6 7 8 9 10 2010 2012 2014 2016 Q2 Q4 Q2 Q4
US$/bbl Strong gasoline demand & low crude oil premium Subprime crisis ▪ Typical SPRC GRM is in the range of $5-7/bbl ▪ 2015 SPRC GRM vs. Singapore GRM was aided by very low crude premiums and high domestic product placement
SPRC GRM Singapore FCC GRM 2017 2018
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DUBAI PRICE
43 50 50 3Q16 2Q17 3Q17
US$/bbl
Market overview Highlights Operational review Financial performance
12 14 16 3Q16 2Q17 3Q17
US$/bbl
GASOLINE CRACK
11 11 13 3Q16 2Q17 3Q17
US$/bbl
JET FUEL CRACK DIESEL CRACK
11 11 14 3Q16 2Q17 3Q17
US$/bbl
3Q16 2Q17 3Q17
US$/bbl
FUEL OIL CRACK
DUBAI + High demand after refineries back from Hurricane GASOLINE + Refineries shutdowns in U.S. from Hurricane Harvey and in Japan and Mexico DIESEL + Lower supplies due to Hurricane Harvey + GS Caltex had shut a heavy oil upgrading after a fire JET + Robust demand as peak travel season & winter demand FUEL OIL + Peaking demand in summer season for power generation
KEY HIGHLIGHT
Source: Platts
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125 112
DEMAND GROWTH 2016 (8 mths) – 2017 (8 mths) EXPECTED GROWTH 2017 COMMENTS
to replace demand for Auto LPG
FUEL OIL AUTO LPG DIESEL JET
tourism growth and higher demand from airlines
MOGAS
gasoline
393 404 111 114 +2.7% 182 189 +3.8% 40 37 +2.8%
2017 2016
with expected GDP around 3.6%
sector and Bunker fuel
KBD
Source: EPPO
KBD KBD KBD
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Market overview Highlights Operational review Financial performance
CRUDE INTAKE
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*Thailand information during July-August, 2017 ** Include both domestic and Far East crude
1% 2% 23% 34% 34% 28% 19% 65% 66% 70% 59% SPRC 3Q16 SPRC 2Q17 SPRC 3Q17 Industry average 3Q17* Middle East Far East** Others
90% 83% 85% 83% 78% 81% 3% 2% SPRC Competitive Export Industry Average*
Market overview Highlights Operational review Financial performance
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*Thailand information during July-August, 2017 Source: Company data, EPPO
2Q17 3Q17 6% 6% 5% 3% 6% 5% 2% 2% 2% 12% 11% 13% 4% 36% 34% 35% 41% 6% 5% 6% 12% 25% 26% 24% 21% 4% 4% 4% 4% 4% 4% 22% 2% 3% 2% 3Q16 2Q17 3Q17 Country demand 3Q17* PGP LPG Light Naphtha Gasoline Jet Diesel Fuel Oil Asphalt Mix C4 Others
PRODUCT YIELD DOMESTIC SALES
3Q16
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Market overview Highlights Operational review Financial performance
US$/bbl
GROSS REFINERY MARGIN OPEX PER BARREL
Maintain NECC* at quartile 1/2 against Asia Pacific
higher crude intake at 161 KBD in Q3.
* Non Energy Cash Cost: Operating expenses exclude energy cost
from US$48/bbl in Jul to US$54/bbl in Sep vs stock loss US$1.8/bbl in 2Q17
quarter
in diesel, gasoline and jet
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US$/bbl 5.2 5.1 9.7 5.6 6.9 8.9
3Q16 2Q17 3Q17
Accounting GRM Market GRM 1.50 1.99 1.77
3Q16 2Q17 3Q17
33 17 84 166 183 3Q16 2Q17 3Q17 9M16 9M17 64 42 125 272 290 3Q16 2Q17 3Q17 9M16 9M17
EBITDA NET INCOME
US$ M US$ M
US$13M in this quarter
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Market overview Highlights Operational review Financial performance
US$ M
CASH FLOW
2016 CFO CFF CFI FX Adjustment 9M17
CFO:
AP of US$63M due to timing of crude payment CFI:
CFF:
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6.5 266.1 (10.6) (218.4 ) ( 1.5 ) 42.1
55 225 41 (55.1) (80.0) (138.4) Profit before tax D&A and Non cash items Working capital Tax & Interest paid Loan Repayment Dividends
Market overview Highlights Operational review Financial performance 21
Dividend yield based on closing stock price as of the performance period of dividend declaration.
DIVIDEND PAYMENT
DIVIDEND POLICY
0.26 1.18 0.46 3.0% 10.8% 6.3%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
0.40 0.60 0.80 1.00 1.20 1.40 2H15 2016 2017* Dividend per share Dividend Yield SETHD
* 2017 SPRC dividend yield is annualized
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No one gets hurt Operational excellence Bottom Line Improvement Program Low gearing allows opportunities for growth
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US$ M US$ M
ASSET BREAKDOWN LIABILITIES & EQUITY
Net Debt was US$56M – with long and short term debt of US$98M and Net Debt/Equity ratio of 0.05
1,672 1,677
1,159 1,204 116 40 397 433 Dec-16 Sep-17 Current liabilities Non current liabilities Total Equity
1,672 1,677
10 9 1,005 954 327 382 324 289 6 42
Dec-16 Sep-17
Cash and cash equivalents Account receivables Inventories PP&E Other current & non current assets
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Unit: US$ M 3Q16 2Q17 3Q17 YoY QoQ 9M16 9M17 9M % +/- % +/- % +/- Revenues 1,112.8 1,094.3 1,269.1 14% 16% 3,128.8 3,639.1 16% OPEX (22.6) (23.6) (26.2) 16% 11% (70.5) (74.7) 6% EBITDA 63.5 41.8 124.5 96% 198% 272.1 289.6 6% Depreciation & Amortization (20.6) (20.7) (20.7) 0% 0% (61.7) (62.2) 1% Profit for the period 33.5 17.1 84.2 152% 393% 166.1 183.5 10% EPS (THB per share) 0.27 0.14 0.65 141% 364% 1.36 1.46 7%
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56% 33% 11%
SALES BY REVENUE
58% 31% 11%
Others 3Q16 Others 3Q17
SALES BY VOLUME
55% 29% 16%
Others 3Q16 Others
53% 31% 16%
Others 3Q17
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Low gearing means we are financially resilient and able to gear up to seize growth
STRONG BALANCE SHEET
One of world’s leading oil and gas groups with over a century
Chevron connection brings bargaining power, crude supply,
to proprietary technology and systems
CHEVRON RELATIONSHIP STRATEGIC LOCATION
Location in Map Ta Phut ensures low logistics costs with access to dedicated deep water jetty and an SPM for VLCCs. Puts us close to several important customers.
TECHNICAL CONFIGURATION
Our refinery configuration enables us to buy cheaper crudes and turn them into higher value products, including a higher gasoline yield than our competitors.
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CUSTOMERS(1) DISTRIBUTION(1) REFINERY CRUDE SUPPLY
(1) Based on 9M17 sales volume
REFINERY Capacity: 165 KBD Single point mooring system 265,000 DWT Power Generation Facilities 41 MW
VLCC
Up to 265,000 DWT
PANAMAX
Up to 80,000 DWT Marine terminal CRUDE Capacity: 4.9 M barrels PRODUCT Capacity: 4.0 M barrels PIPELINE TRUCK ▪ Pipeline connects Map Ta Phut, Sriracha, & Bangkok ▪ Connections to petrochemical customers ▪ Supply to north and north east of Thailand, and Indochina export market VESSEL ▪ Dispatch to both domestic and export markets at Main Pier ▪ LPG Pier DOMESTIC EXPORT
Middle East 66% Far East 33% Others 1% SOURCES OF CRUDE FOR 9M/17
83% 17%
PRE-IPO
KEY MILESTONES OPERATIONAL INITIATIVES
SPRC founded by Chevron holding 64% and PTT holding 36%
1992
Oil refinery completed construction and commenced production (US$ 1.7 billion invested) SPRC entered into an
with Rayong Refinery
formed Alliance Refining Co. (ARC) COD with designed capacity of
1996 1999 130 KBD
Capacity increase through improvements and upgrades Installation of Mercury Removal Unit Installation of Jet Merox Unit
2008 2009
Converted into a public limited company
2012
Clean Fuels Project for Euro IV fuels production Completed 5 year maintenance turnaround for entire refinery
2014
Major refinery upgrade
Recovery Project & Air Pre-heater project Listed on Stock Exchange of Thailand on Dec, 8th, 2015
2015
Continuous improvement through “Bottom Line Improvement Program” (BLIP)
Others
165 KBD
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CRUDE OIL NATURAL GAS REFINERY POWER AND STEAM PRODUCTS SPM S MARINE TERMINAL 1 2 3 4 5 LPG JET GASOLINE DIESEL FUEL OIL ASPHALT HVGO PROPYLENE OTHERS 7 6 8
FEEDSTOCK TECHNICAL & OPERATING OFFTAKE
SPRC BUSINESS KEY AGREEMENTS
New Feedstock Supply Agreement(1) Single Point Mooring System Operating Agreement Natural Gas Sales Contract for Cogeneration and Natural Gas Sales Contract for Petroleum Product Manufacturing Process 1 2 3 Marine Services Transportation Agreement Technical Services Agreement and License Agreement 4 5 Amended Offtake Agreement(1) Propylene Sale Agreement Intermediate Products Exchange Agreement 6 7 8 COUNTERPARTIES COUNTERPARTIES COUNTERPARTIES
(1) Effective upon the first day of trading of SPRC’s shares on the SET
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SPRC Crude Capacity 165 KBD
Naphtha Hydrotreating Unit (NHTU) 19 KBD Crude Distillation Unit (CDU) 165 KBD Vacuum Distillation Unit (VDU) 63 KBD Continuous Catalytic Regeneration Reformer (CCR) 17 KBD Residue Fluidized Catalytic Cracking Unit (RFCCU) 41 KBD Heavy Vacuum Gas Oil Hydrotreating Unit (HVGO HTU) 35 KBD
Whole Cat Naphtha Hydrotreating
(WCN) 23 KBD Jet Merox Unit (JMU) 20 KBD Diesel Hydrotreating Unit (DHTU) 66 KBD Benzene Saturation Unit (BSU) 15 KBD
LPG
Chemical Naphtha
Mogas PGP Jet Diesel Fuel Oil Asphalt
2.29 2.95 2.69 3.11 2.46 2.27 2014 2015 2016 1Q17 2Q17 3Q17
Energy Management
monthly and yearly targets
years
Margin Improvement People Efficiency and Waste Management Oil Loss Control
(IQ) and Asset Optimization Studies (AOS)
Crude benefit over Benchmark crudes US$0.55-0.80/bbl Product yield and placement optimization US$0.20-0.90/bbl Process plant
US$0.60-0.80/bbl Cracker feed synergy US$0.10-0.40/bbl
BLIP
US$/bbl
Despite a challenging margin environment, SPRC continues to drive incremental margin improvement through BLIP
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INCREASING REFINERY UTILIZATION INCREASING REFINERY UTILIZATION
▪ Overall process utilization has increased over the years ▪ Clean Fuels Project added about 75 EDC in 2012, small increase in 2014 Event ▪ Better reliability leads to higher utilization and steadier operations post 2014 Event ▪ Fully utilizing all of the Process units maximizes profitability ▪ Utilization of key upgrading units is most critical – CDU, RFCCU and PLF account for 62% of EDC 2 1 4 E v e n t
CRUDE PRICE RANGE
▪ Crude prices determined by the market ▪ Effective management of crude sourcing allows for better margins ▪ Flexibility in managing product yield, allows for higher value products ▪ Crude prices impact refineries significantly when the transients are quick and tend to be short term
ILLUSTRATIVE ONLY GASOLINE YIELD DIESEL YIELD JET YIELD FUEL OIL YIELD
PRODUCT PRICE
DIESEL CRACK JET CRACK FUEL OIL CRACK Crude discount GASOLINE CRACK Crude premium
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