“One family … fueling the future of Thailand”
Opportunity Day
2Q/2017 results
Opportunity Day 2Q/2017 results One family fueling the future of - - PowerPoint PPT Presentation
Opportunity Day 2Q/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”
2Q/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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One Family… Fueling the Future of Thailand
“We are a highly engaged Family, dedicated to providing sustained superior returns to our shareholders through safe and reliable operations, producing quality products that exceed customer expectations, in harmony with
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TOTAL DAYS AWAY FROM WORK RATE (‘DAFWR’)
UEDC*
AVAILABILITY
$2.46/bbl $6.85/bbl
MARKET GRM
* Utilization of Equivalent Distillation Capacity
BOTTOM LINE IMPROVEMENT PROGRAM
Market overview Highlights Operational review Financial performance
INTERIM DIVIDEND PAYMENT ON 8 SEP 2017
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Bill Stone, CEO
Market overview Highlights Operational review Financial performance 7
(67) 21 (6) (5) 11 54 70 Normalized EBITDA CDU Maintenance Activity FX (gain)/loss Stock (gain)/loss net NRV (44) 4 (13) (25) 11 153 154 Normalized EBITDA Pit stop FX (gain)/loss Stock (gain)/loss net NRV 209 165 127 42
Market overview Highlights Operational review Financial performance
2Q17 vs 2Q16 6M17 vs 6M16
US$ M
2Q16 2Q17 6M16 6M17
US$ M
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CDU Maintenance Activity
SAFETY
(Injuries per 200,000 man hours) ▪ Last DAFWR over 4 years ago (24 Jun 2013) ▪ Achieved 14.2 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 performance in availability and utilization among over 90 refineries in the Asia Pacific and India Ocean region ▪ Lower utilization from the Crude Distillation Unit (CDU) maintenance activity for 10 days in June for internal inspection and cleaning ▪ Lower crude optimization benefit from favorable benchmark crude ▪ Favorable benchmark crude drove to run more benchmark crude which generated positive margin of 0.31 $/bbl YTD ▪ Increased Gasoline production capability by 5% ▪ Reduced synergy benefit as economics did not support unequal transfers ▪ Stay competitive over Singapore margin thru Bottom Line Improvement margin captured ▪ Lower margins due to weaker product crack spreads OPERATIONAL AVAILABILITY
A strong foundation of personal safety … …exceptional reliability… …and maximizing GRM …driving optimization & cost efficiencies…
US$/bbl
TOTAL DAYS AWAY FROM WORK RATE
Market overview Highlights Operational review Financial performance
0.0 2014 2015 2016 1Q17 2Q17 91.9% 97.8% 97.3% 95.2% 84.7% 2014 2015 2016 1Q17 2Q17
EDC UTILIZATION RATE
99.7% 99.8% 99.7% 99.0% 97.3% 2014 2015 2016 1Q17 2Q17 2.29 2.95 2.69 2.81 3.11 2.46 2014 2015 2016 6M17 1Q17 2Q17 6.15 10.40 6.68 7.98 6.85 3.32 5.63 4.10 4.99 4.63 2014 2015 2016 1Q17 2Q17 SG GRM
Source: Company Data
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1 2 3 4 5 6 7 8 9 10 2010 2012 2014 2016 Q2 Q4 Q2 Q4
OIL MARKET OUTLOOK SINGAPORE GRM
Market overview Highlights Operational review Financial performance
Source: IEA
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Million barrels/day US$/bbl Strong gasoline demand & low crude oil premium Subprime crisis ▪ Typical SPRC GRM is in the range of $5-7/bbl ▪ 2015 SPRC GRM vs. Singapore GRM was aided by very low crude premiums and high domestic product placement
SPRC GRM Singapore FCC GRM
Source: Wood Mackenzie and IHS
2017 2018
▪ Asia is the global demand driver with highest demand growth ▪ Expected CDU growth between year 2017 - 2022 is 300-500 KBD/ year in Asia and ME Million barrels/day ASIA
2015 2016e 2017e
NORTH AMERICA EUROPE LATIN AMERICA AFRICA INCREMENTAL OIL DEMAND
0.39 0.14 0.14 0.29 0.22 0.14
0.15 0.09
0.23 0.10 0.13
0.00 1.22 1.02 0.87
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DUBAI PRICE
43 53 50 2Q16 1Q17 2Q17 US$/bbl
Market overview Highlights Operational review Financial performance
14 15 14 2Q16 1Q17 2Q17 US$/bbl
GASOLINE CRACK
11 11 11 2Q16 1Q17 2Q17 US$/bbl
JET FUEL CRACK DIESEL CRACK
11 12 11 2Q16 1Q17 2Q17 US$/bbl
2Q16 1Q17 2Q17 US$/bbl
FUEL OIL CRACK
DUBAI
+ OPEC and non-OPEC decided to extend the oil output reduction by 1.8 million barrels until the end of Mar’18. GASOLINE + Abu Dhabi National Oil Company (ADNOC) postponed restart of upgrading unit at its Ruwais refinery to 1Q/2018
FUEL OIL + Healthy Singapore bunker demand. + Less supply from more refinery upgrading such as China and Russia cut supply. +Lower fuel oil arbitrage coming to Asia Pacific
KEY HIGHLIGHT
Source: Platts
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126 113
DEMAND GROWTH 2016 (5 mths) – 2017 (5 mths) EXPECTED GROWTH 2017 COMMENTS
continue to replace demand for Auto LPG FUEL OIL AUTO LPG DIESEL JET
tourism growth and higher demand from airlines MOGAS
gasoline
405 413 114 116 +2.3% 180 186 +3.5% 42 37 +1.9%
2017 2016
Diesel with expected GDP around 3.5%
electricity 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 Apr – May, 2017 ** Include both domestic and Far East crude
16% 41% 39% 34% 21% 59% 61% 66% 63% SPRC 2Q16 SPRC 1Q17 SPRC 2Q17 Industry average 2Q17* Middle East Far East* Others
SPRC Competitive Export Industry Average*
Market overview Highlights Operational review Financial performance
Indo-China sale volume
sales at 1.4% and Mix C4 at 1.9% in 2Q17
gasoline production capability to fill domestic gasoline demand
DOMESTIC SALES
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*Thailand information during Apr – May, 2017 Source: Company data, EPPO
2% 6% 6% 4% 4% 6% 2% 2% 2% 13% 10% 11% 4% 36% 35% 34% 43% 7% 6% 5% 12% 25% 25% 26% 20% 4% 4% 4% 4% 5% 4% 22% 2% 3% 3% 2Q16 1Q17 2Q17 Country demand 2Q17* PGP LPG Light Naphtha Gasoline Jet Diesel Fuel Oil Asphalt Mix C4 Others 2Q16 1Q17 2Q17 90% 86% 87% 87% 85% 82% 1% 3%
1 2 3 4 5 6 7 8
PRODUCT YIELD
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Market overview Highlights Operational review Financial performance
US$/bbl
GROSS REFINERY MARGIN OPEX PER BARREL
Maintain NECC* at quartile 1/2 against Asia Pacific
crude intake. However when compared USD amount, 2Q17 decreased to US$ 23.6 M from US$ 24.9 M in 1Q17
* Non Energy Cash Cost: Operating expenses exclude energy cost
market price and lower sale as a consequence of the CDU maintenance activity.
activity.
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9.9 8.9 5.1 5.3 8.0 6.9 2Q16 1Q17 2Q17 Accounting GRM Market GRM
US$/bbl
1.57 1.74 1.99 2Q16 1Q17 2Q17
85 82 17 133 99 2Q16 1Q17 2Q17 6M16 6M17 127 123 42 209 165 2Q16 1Q17 2Q17 6M16 6M17
EBITDA NET INCOME
US$ M US$ M
market price in this quarter and lower sale as a consequence of the CDU maintenance activity.
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Market overview Highlights Operational review Financial performance
US$ M US$ M
ASSET BREAKDOWN LIABILITIES & EQUITY
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Net Debt was US$119M – with long and short term debt of US$125M and Net Debt/Equity ratio of 0.10
1,672.2 1,626.5 1,672.2 1,626.5
1,159.2 1,179.8 116.0 51.6 397.0 395.1 ธ.ค.-16 มิ.ย.-17 Current liabilities Non current liabilities Total Equity 10.0 9.5 1,004.7 969.6 327.1 439.1 324.0 202.5 6.5 5.8 ธ.ค.-16 มิ.ย.-17 Cash and cash equivalents Account receivables Inventories PP&E Other current & non current assets
Market overview Highlights Operational review Financial performance
US$ M
CASH FLOW
2016 CFO CFF CFI FX Adjustment 1H17 CFO:
CFI:
CFF:
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6.5 138.9 (6.3 ) (132.1) ( 1.3 ) 5.7 Loan Repayment (53.3) Dividends (78.8) Profit before tax 122.2
D&A and Non cash items
37.0
Working capital
11.1
Tax & Interest paid
(31.4)
Market overview Highlights Operational review Financial performance
annually
DIVIDEND PAYMENT DIVIDEND POLICY
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Dividend yield based on closing stock price as of the performance period of dividend declaration.
0.26 0.54 0.64 0.46 3.0% 5.6% 5.2% 3.2% 2H15 1H16 2H16 1H17 Dividend per share Dividend Yield
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No one gets hurt Operational excellence Bottom Line Improvement Program Low gearing allows opportunities for growth
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Unit: US$ M 2Q16 1Q17 2Q17 YoY QoQ 6M16 6M17 6M % +/- % +/- % +/- Revenues 1,083.4 1,275.7 1,094.3 1%
18% OPEX (21.4) (24.9) (23.1) 8%
47.8 247.2 417% EBITDA 127.2 123.3 41.8
208.5 165.1
Depreciation & Amortization (20.5) (20.8) (20.7) 1% 0% (41.0) (41.5) 1% Profit for the period 84.7 82.3 17.1
132.7 99.3
EPS (THB per share) 0.69 0.67 0.14
1.09 0.81
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58% 30% 12%
SALES BY REVENUE
53% 38% 9% Others 2Q16 Others 2Q17
SALES BY VOLUME
51% 37% 12% Others 2Q16 Others 55% 28% 17% Others 2Q17
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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 FY2016 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 64% Far East 13% Thailand 23%
0%
SOURCES OF CRUDE IN 2016
88% 12%
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 2014 2015 2016 1Q17 2Q17
Energy Management
with monthly and yearly targets
years
Margin Improvement People Efficiency and Waste Management Oil Loss Control
(IQ) and Asset Optimization Studies (AOS)
meeting
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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