OPPORTUNITY DAY 14 May 2019 Financial Performance Agenda - - PowerPoint PPT Presentation

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OPPORTUNITY DAY 14 May 2019 Financial Performance Agenda - - PowerPoint PPT Presentation

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OPPORTUNITY DAY 14 May 2019 Financial Performance Agenda Performance by Business Achievement & Projects Update Key Drivers Increasing crude oil price from Year end led to net stock gain VS low products spread Dubai Crude Oil Price (avg.)

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SLIDE 1

OPPORTUNITY DAY

14 May 2019

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SLIDE 2

Agenda

Financial Performance Performance by Business Achievement & Projects Update

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SLIDE 3

32.05 31.6431.44 31.49 32.15 32.64 33.44 33.20 32.80 32.94 33.14 32.87 31.98 31.47 31.89 30 31 32 33 34 35 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19

66.2 62.7 62.7 68.3 74.4 73.6 73.1 72.5 77.2 79.4 65.6 57.3 59.1 64.6 66.9

45 50 55 60 65 70 75 80 85 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19

Key Drivers

Increasing crude oil price from Year end led to net stock gain VS low products spread

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Dubai Crude Oil Price (avg.) Gross Refining Margin (GRM) Foreign Exchange (avg.) Product to Feed Margin (PTF)

Unit: $/bbl Unit : THB/USD 5.4 5.9 1.9 1Q18 4Q18 1Q19 7.6 7.1 5.7 1Q18 4Q18 1Q19

Unit: $/bbl Unit: $/bbl

YoY  65% QoQ  68% YoY  25% QoQ  20%

31.71 32.09 33.15 32.98 31.78

QoQ  6% YoY  1%

63.9 72.1 74.3 67.4 63.5

QoQ appreciated 4% YoY depreciated 0.2%

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SLIDE 4

Financial Highlight: 1Q19 performance

Better performance as higher net stock gain despite weaken products spread

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60,488 64,233 54,274

QoQ  16% YoY  10%

Overview of Business

Net Sales

(net excise tax)

Dubai (Avg.)

Unit: $/bbl

Net Income

Unit: MB Unit: MB YoY  94% QoQ  109%

EBITDA

Unit: MB

5,389 534 2,355

QoQ  341% YoY  56% Petroleum Petrochemical Utilities and Others

Net Sales

(net excise tax)

EBITDA Net income

1Q19

25% 54% 21% 70% 29% 1%

54,274 MB 2,355 MB 153 MB Market GIM ($/bbl) 14.08 8.68 14.09

Crude run KBD 213 208 200

  • Acct. GIM ($/bbl)

14.42 9.94 6.58 Net Stock G/(L)($/bbl) 0.34 1.26 (7.51)

4Q18

72% 27% 1%

64,233 MB 534 MB (1,627) MB

Operating NI

Net Income

2,566 2,351 (650)

2,752 (1,627)

153

1Q18 4Q18 1Q19

(345%) 384 % 62% (163%) 33% 31%

63.9 67.4 63.5

(311%) 296% 114%

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SLIDE 5

(345%) 384 % 62%

1Q18 4Q18 1Q19 QoQ YoY 1Q18 4Q18 1Q19 Net Sales 60,488 64,233 54,274 (16)% (10)% 99.45 102.02 95.04 Market GIM 8,569 8,879 4,958 (44)% (42)% 14.08 14.09 8.68 Stock Gain/(Loss) 195 (3,809) (122) 97% (162)% 0.32 (6.05) (0.21) LCM (1) (841) 841 200%

  • (0.00) (1.34) 1.47

Oil Hedging Gain/(Loss) 10 (78) 1 101% (92)% 0.02 (0.12) 0.00 Net Stock Gain/(Loss) 204 (4,728) 720 115% 253% 0.33 (7.51) 1.26 Accounting GIM 8,773 4,151 5,678 37% (35)% 14.42 6.58 9.94 OPEX + Selling Exp. (3,762) (4,050) (3,744) 8% 0% (6.19) (6.43) (6.56) Other Incomes 378 432 422 (2)% 12% 0.62 0.69 0.74 EBITDA 5,389 534 2,355 341% (56)% 8.86 0.84 4.12 Depreciation (2,039) (2,105) (2,016) 4% 1% (3.35) (3.34) (3.53) Cost of Finance (472) (818) (387) 53% 18% (0.78) (1.30) (0.68) FX Gain/(Loss) 97 (14) 127 1019% 31% 0.16 (0.02) 0.22 Impairment Gain/(Loss)

  • 250 (8)
  • -
  • 0.40 (0.01)

Investment Gain/(Loss) 170 105 83 (21)% (51)% 0.28 0.17 0.14 Other Expenses 0.2 (6) (5) 20% n.a. 0.00 (0.01) (0.01) Income Tax (391) 435 9 (98)% 102% (0.64) 0.69 0.02 Net Profit 2,752 (1,627) 153 109% (94)% 4.53 (2.58) 0.26 Unit: $/bbl Unit: MB %Change

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Financial Highlight: 1Q19 performance

Petroleum Petrochemical Utilities and Others

Net Sales

(net excise tax)

EBITDA Net income

1Q19

25% 54% 21% 70% 29% 1%

54,274 MB 2,355 MB 153 MB

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SLIDE 6
  • 1,627

132 3,846 873 357 118 306 1,048 720 83 3,554 141 752 781 41 434

  • 650

2,351 153

Operating Net Income: 4Q18 vs 1Q19

According to lower spread & RDCC planned shutdown led to lower operating income

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Uncontrolled Controlled

Operating Income  128% Net Income  109%

(1,627)

153 2,351 (650)

Unit: MB

Net Income 1Q19 (effective Tax rate = 0%) Net Income 4Q18 (effective tax rate = 19%) Volume Decrease Margin Decrease Income Tax Decrease OPEX + Selling Exp. Others (Depre/ FX loan/ Take quity) Stock Loss & Hedging +LCM

  • FX. Effect

Non Operating Items Operating Income 4Q18 Non Operating Items Operating Income 1Q9 Crude Premium Stock Loss & Hedging +LCM Fuel Loss & Internal Used Controllable UHV+ PPE+ PPC Everest + E4E Fuel Loss & Internal Used (Exl. UHV)

(1,627) (650)

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SLIDE 7

125,965 125,147 9,852 9,971 44,291 47,751 2,338 2,806 87,380 87,538 2,609 2,614 50,665 49,877 41,792 45,646 3,066 6,361 6,440 6,439 10,981

  • 1,902
  • 1,268

3,169

3,364

  • 6,888
  • 6,430

8,262 13,327 7,707 14,151

2019 2020 2021 2022 >2022 THB Bond USD Loan THB Loan

ST Loan 18% LT Loan (USD) 10% LT Loan (THB) 55% Bond (THB) 17%

Financial Position

Increased inventory to served higher U-Rate after resuming operation

7 Maturity of Long-term Debt

Debt Profile Statements of Financial Position Cash Flow

Unit : MB Remark: Long-term debt as at 31 Mar 2019 Unit: MB PP&E Other Non-C/A Cash Other Current Liabilities LT Liabilities incl. current port. Shareholders’ Equity

  • Mar. 2019
  • Dec. 2018

Other CA Other Non- Current Liabilities Beginning Cash 1 Jan 2019 Ending Cash 31 Mar 2019 Cash Flow from Operating Unit: MB Cash Flow from Investing Cash Flow from Financing

Net Debt = 57,966 MB

  • Ex. Rate = 31.98 Baht/$

Financial Ratios

< 1.0x

Net D/E CA/CL

182,446 185,675 Interest Rate Currency Float 83% THB 67% Fixed 17% USD 33%

0.56 0.63 0.66

1Q18 4Q18 1Q19

1.02 0.95 0.96

1Q18 4Q18 1Q19

2%

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SLIDE 8

Agenda

Financial Performance Performance by Business Achievement & Projects Update

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SLIDE 9

Petroleum Spread

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  • Higher U-Rate from Europe & M.E.
  • Weaken demand owing to lower shipment

14.8 14.6 14.4 14.8 12.8 1Q18 2Q18 3Q18 4Q18 1Q19

  • Increase volume because of higher light

crude production from U.S.

  • Higher export volume from China

13.7 12.1 11.6 4.7 3.7 1Q18 2Q18 3Q18 4Q18 1Q19 (4.9) (4.4) (2.5) 1.4 0.6 1Q18 2Q18 3Q18 4Q18 1Q19 500SN – FO 180 3.5%S Spread 150 BS – FO 180 3.5%S Spread Asphalt – FO 180 3.5%S Spread $/bbl $/bbl $/bbl

Lube Base Spread Refinery Spread

Gas Oil - Dubai ULG 95 - Dubai HSFO - Dubai

(55)

(68) (41) (20) (40) 1Q18 2Q18 3Q18 4Q18 1Q19 588 544 471 471 482 1Q18 2Q18 3Q18 4Q18 1Q19 513 481 417 375 330 1Q18 2Q18 3Q18 4Q18 1Q19 QoQ  21%

  • Softening demand for heating after end of

winter

  • Higher export volume from China
  • Soften demand after

accelerating road construction in 4Q18 QoQ  14% QoQ  57% QoQ  12% QoQ  2% QoQ  100% QoQ QoQ QoQ QoQ QoQ $/TON $/TON $/TON

  • Higher supply from addition

capacity in China

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SLIDE 10

0.4 0.5 0.4 8.6 8.9 8.4 2.4 2.6 2.0 0.7 0.9 1.0 0.6 0.6 0.5 1.8 1.7 1.8 14.6 15.3 14.1 1Q18 4Q18 1Q19

Lube LPG & Other Naphtha & Reformate Gasoline Diesel & Jet Oil Fuel Oil

15.1 15.4 14.2 1.8 1.7 1.8 16.9 17.2 16.0 1Q18 4Q18 1Q19

Lube Base Refinery

213 208 200 3.4 3.2 2.0 3.4 4.4 0.8 1.9 1.6 1.1 5.4 5.9 1.9 1Q18 4Q18 1Q19 Lube Base Refinery 1Q18 4Q18 1Q19

Petroleum Group

Low products spread & RDCC planned shutdown led to lower GRM

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Crude Intake GRM Sales Volume & Revenue Production

67% 69% 66% 33% 31% 34% 1Q18 4Q18 1Q19 Sweet Crude Sour Crude 99% 97% 93% % U-Rate

Premium over Dubai ($/bbl)

64% 66% 64% 13% 12% 19% 9% 8% 6% 14% 14% 11% Others Domestic Far East Middle East Crude Run (KBD) 4,645 4,981 4,437

37,556 40,924 33,337

Refinery 42,201 45,905 37,773 YoY  5% QoQ  7% YoY  10% QoQ  18% Revenue Petroleum Lube Base Crude intake (Mbbl) Unit : $/bbl Unit : Mbbl Unit : Mbbl 19.2 19.1 18.0 Sales Volume Unit : MB YoY  6% QoQ  4% YoY  3% QoQ  8% YoY  65% QoQ  68% 99% 97% 93% % Utilization 87% 84% 84% Lube Base 105% 110% 70% RDCC

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SLIDE 11

998 945 898 807 788 1Q18 2Q18 3Q18 4Q18 1Q19 1,428 1,379 1,248 1,032 1,000 1Q18 2Q18 3Q18 4Q18 1Q19

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Petrochemical Spread

137 115 121 119 93 1Q18 2Q18 3Q18 4Q18 1Q19

659 581 550 306 409 367 427 267 389 262

1,026 1,008 817 695 671 1Q18 2Q18 3Q18 4Q18 1Q19

Ethylene-NP HDPE-Ethylene

182 164 217 219 154 1Q18 2Q18 3Q18 4Q18 1Q19

406 362 361 369 320 287 298 256 272 291

693 660 617 641 611 1Q18 2Q18 3Q18 4Q18 1Q19

Propylene-NP PP-Propylene

HDPE-Ethylene –Naphtha Spread PP-Propylene –Naphtha Spread MX – Naphtha Spread Toluene – Naphtha Spread PS –Naphtha Spread ABS –Naphtha Spread

Olefins Styrenics Aromatics

  • Product price was pressured by new

capacity QoQ  3% QoQ  5% QoQ  22% QoQ  2% QoQ  3% QoQ  30% + Higher demand after Chinese New Year + Cost push from ACN prices

  • Sharply increased Naphtha price

following crude oil price

  • Weaken demand from trade war

(U.S. VS China)

  • Increase new capacity in region

QoQ QoQ QoQ QoQ QoQ

  • Soften gasoline demand
  • Higher supply after new

Petrochemical complex start up in China QoQ $/TON $/TON $/TON $/TON $/TON $/TON

  • Higher supply after new

Petrochemical complex start up in China + Higher demand for electrical appliances

  • Sharply increased Naphtha price

following crude oil price

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104 103 107 10 5 78 88 50 79 76 68 194 215 186 465 488 411 1Q18 4Q18 1Q19

Polyolefin Olefin Polystyrenic Styrenic Aromatic

2.7 2.6 1.5 5.0 4.5 4.2 7.6 7.1 5.7 1Q18 4Q18 1Q19 Olefins Aromatics & Styrenics

Petrochemical Group

PTF declined as low products spread

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Production PTF Sales Volume and Revenue

183 176 181 272 278 282 455 454 463 1Q18 4Q18 1Q19 Olefins & Polyolefins Aromatics & Styrenics QoQ  2% QoQ  11% Revenue (MB)

1Q18 4Q18 1Q19

YoY  2% YoY  11% 17,558 17,475 15,629 10,589 10,815 9,987 6,969 6,660 5,642 Petrochem Olefins Aromaitcs & Styrenics Unit : KMT

 1Q19 : Petrochemical revenue was Bt 16 bn

  • QoQ : 11% decrease from 13% price decrease vs 2% vol. increase
  • YoY : 11% decrease from 13% price decrease vs 2% vol. increase

 1Q19 Market PTF was $5.7/bbl:

  • QoQ : $1.4/bbl decrease as lower products spread
  • YoY : $2.0/bbl decrease as lower products spread

Crude intake (Mbbl) Unit : $/bbl Unit : KMT Sales Volume Unit : MB YoY  12% QoQ  16% YoY  25% QoQ  20% 91% 98% 89% % Utilization 87% 95% 83% Polyolefins 96% 101% 97% Olefins 100% 104% 82%

% Utilization

86% 98% 69%

Polystyrenics

107% 113% 57%

Styrenics

108% 106% 107%

Aromatics 19.2 19.1 18.0

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451 507 534 220 284 277 58 62 61 729 853 872

1Q61 4Q18 1Q19

Other Steam Electricity

Power & Utility

Higher power & utility revenue due to higher sales volume to E-GAT

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Utilization Rate GIM Revenue

QoQ  2% YoY  20%

 1Q19 U-Rate of Electricity was 67%;  13% QoQ,  11% YoY 1Q19 U-Rate of Steam was 59%;  24% QoQ,  19% YoY

  • QoQ & YoY : decrease owing to RDCC ,Polyolefins and Polystyrenics

plants’ maintenance shutdown during 1Q19  1Q19 : Power & Utility revenue was 872 MB

  • QoQ : 2% increase mainly from electricity sales vol. increase
  • YoY : 20% increase mainly from higher electricity sales vol.

1.09 1.08 1.10 1Q18 4Q18 1Q19 Power & Utility Unit : $/bbl

Unit : MB

79% 80% 67% 1Q18 4Q18 1Q19 Electricity 78% 83% 59% 1Q18 4Q18 1Q19 Steam YoY  1% QoQ  2% YoY  19% QoQ  24% YoY  11% QoQ  13%

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SLIDE 14

2.7 2.6 1.5 5.0 4.5 4.2 7.6 7.1 5.7 Aromatics&Styrenics Olefins 14.1 14.1 8.7 0.3 (7.4) 1.3 0.02 (0.1) 14.4 6.6 9.9 Market GIM Stk G/(L) & LCM Hedging 5.4 5.9 1.9 7.6 7.1 5.7 1.1 1.1 1.1 14.1 14.1 8.7 Petroleum Petrochem Power & Utility 3.4 4.4 0.8 1.9 1.6 1.1 5.4 5.9 1.9 1Q18 4Q18 1Q19 Refinery Lube Base 3,260 3,732 1,084 4,645 4,469 3,247 664 678 627 8,569 8,879 4,958 1Q18 4Q18 1Q19 8,569 8,879 4,958 194 (4,650) 719 10 (78) 1 8,773 4,151 5,678 1Q18 4Q18 1Q19

Market GIM

Unit: $/bbl

Accounting GIM

Unit: $/bbl Unit: MB

Market GIM by business

Unit: $/bbl Petrochemical Petroleum Unit: MB

Gross Integrated Margin (GIM)

Better A/C GIM driven by higher of net Stock gain though falling mkt GIM

14 YoY  38% QoQ  38% YoY  31% QoQ  50%

Accounting GIM

 1Q19 Acct GIM was $9.9/bbl

  • QoQ:  $3.4/bbl due to $8.8/bbl higher stock gain VS $5.4/bbl lower

market GIM

  • YoY:  $4.5/bbl due to $5.4/bbl lower market GIM VS $0.9/bbl higher

stock gain Market GIM  1Q19 Market GIM was $8.7/bbl,

  • QoQ & YoY :  $5.4/bbl due to the lower products spread & the planned

shutdown of RDCC plant VS lower crude premium

YoY  42% QoQ  44% YoY  35% QoQ  37%

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Agenda

Financial Performance Performance by Business Achievement & Projects Update

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16

Awards and Achievement in 1Q19

IRPC’s Achievement

NACC Integrity Awards 2018 By The National Anti-Corruption Commission

“IRPC Provided Safety Traffic Cones” in raising awareness and enhancing road safety to Royal Thai Army House Center Safety traffic cones which is an innovative plastic Green ABS with mixture of natural rubber

Social Contribution

“Signing Ceremony”

Signed a memorandum of understanding (MOU) for Carbon Footprint for Organization Development Project for Industry Phase 8 together with The Federation of Thai Industries by Thailand Greenhouse Gas Management Organization (The Carbon Footprint for Organization : CFO)

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SLIDE 17

Power of Growth

Floating Solar Power Project with Electricity 12.5 MW

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Description Project Objective :

  • To produce electricity 12.5 MW
  • Floating Support material from own HDPE
  • BOI Privilege

Timeline

Award EPC BOD Approval Engineering Procurement and Construction 1Q19

2019 2020

2Q19 2Q20 COD

G

Area : Reservoir in Industrial Park Usage : Internal use at PP Plant CAPEX : ~ 550 MB IRR : ~ 17%

1Q20 MC

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SLIDE 18

1Q19 Actual

Everest+E4E Project Highlight

1Q19: Everest+E4E contributed 21% of plan

Key Area

Everest

Everest Everest

Unit : MB of EBIT

2019 (Plan) 2018 Actual

Operations Area Commercial Area Integrated Supply Chain Procurement Area Corporate Area - HR Corporate Area – Non HR

$

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Total Everest

Total Everest + E4E

4,276 892 4,441 1,821 425 2,455 1,444 544 1,822 31 14

  • 397

65 406 1

  • 7,970

1,940 9,124 1,397 463 2,085

9,367 2,403 11,209 Everest Forever (E4E) 21% of Plan

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SLIDE 19

19

Project Update : Catalyst Cooler

Phase I COD in May 19

Project Objective :

  • Crude selection  more heavy crude
  • More electricity & steam

CAPEX : ~ 1,320 MB IRR : ~ 35% Benefit :  GIM: 0.3$/bbl Project Progress

as of April. 2019

: 94 % of Target Construction Progress

  • Complete run performance guarantee

process on 27 April 2019.(Phase I)

  • Progress : Install Generator 4 MW.
  • COD : May 2019 (Phase I-Catalyst Cooler)
  • COD : Jun 2019 (Phase II-Generator)

Catalyst Cooler

Demin

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SLIDE 20

IRPC 4.0 : €KON$

Online monitoring economics platform

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Economics visualized real-time in the control room Management reports on performance against targets Globally accessible web platform for all IRPC

Objectives:

  • Margin improvement through real-time

understanding of economic implications

  • Optimized trade-off decisions across operational

parameters and closer tracking of targets

Benefit : ~ 30 M$/year Timeline : May 2018 – May 2019

 1st Wave: Basic Refinery ~ 5 months (11 Units)  2nd Wave: Basic Petrochemical & Specialist ~ 4 months (13 Units) 

3rd Wave: Derivative Petrochemical ~ 4 months (13 Units)

A tool optimizes key economics through refinery & petrochemical operations

D

 Improve LP model by using AI to maximize yields  Inventory optimization  Minimize products giveaways

Potential additional initiatives Key Features

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SLIDE 21

21

E4E : Initiatives project

Capture more benefit thru LSFO project

 Project Progress : 74%  CAPEX : ~3MUSD (modify pipeline)  Production : ~ 40-60 mn liters per month  Margin improved : ~ 0.45$/bbl or ~40 MUSD per year  MC : End of May 19  COD : 3Q19  Targeted Year : Y2020 & Y2021

Price Assumption to Study IMO effect.

Low Sulfur Fuel Oil Project

ADU VDU RDCC Hyvahl

in UHV

DCC SEU/ PDU DAU/ ABU Asphalt Extract VR Asphaltene LCO + DO LCO ETP PGO LS-FO LCO Sell

G

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SLIDE 22

Thank You

This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the Information that may be material to the recipient’s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto.

Investor Relations Contact: ir@irpc.co.th

  • Tel. +662-765-7380, Fax. +662-765-7379