Thai Oil Public Company Limited Q1/19 Opportunity Day Presentation - - PowerPoint PPT Presentation

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Thai Oil Public Company Limited Q1/19

Opportunity Day Presentation 21 May 2019

Time : 13.00 - 14.00 hrs. Venue : Stock Exchange of Thailand, Building B, Room 603

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Disclaimer

The information contained in this presentation is intended solely for your personal reference. Please do not circulate this material. If you are not an intended recipient, you must not read, disclose, copy, retain, distribute or take any action in reliance upon it. Some statements made in this material are forward-looking with relevant assumptions, which are subject to uncertainties, which may cause the actual result/performance to be materially deviated from any future result/performance implied by such forward-looking statements. Please note that the company and management/staff are not capable to control and guarantee if these forward-looking statements will be accurately materialized, they are subject to various risks and uncertainties.

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VISION Empower Human Life through Sustainable Energy and Chemicals MISSION

• To enrich stakeholders’ well-being and deliver sustainable returns

built upon innovation, technology and resilient portfolio with top class management and accountable corporate governance

VALUES

Corporate Vision, Mission and Values

Professionalism Ownership & Commitment Social ResponsibilityIntegrityTeamwork & Collaboration Initiative Vision Focus Excellent Striving

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Corporate Governance

Corporate Governance Policy

The board of directors, management and all staff shall commit to moral principles, equitable treatment to all stakeholders and perform their duties for the company’s interest with dedication, integrity, and transparency.

Anti-Corruption Policy

The Board, the management, and employees must not corrupt or accept corruption of all forms in any circumstances, covering the business of the Company in every country and in every relevant agency. The Company defines guidelines,

• perating measures, and roles and duties of responsible

persons, as well as regularly monitoring and reviewing the implementation of the anti-corruption policy in compliance with changes in businesses, rules, regulations, and relevant laws.

Roles and Responsibilities for Stakeholders

• Truthfully report company’s

situation and future trends to all stakeholders equally on a timely manner.

• Shall not exploit the confidential

information for the benefit of related parties or personal gains.

• Shall not disclose any confidential

information to external parties.

Whistle-Blowing Channels

Should you discover any ethical wrongdoing that is not compliance to CG policies or any activity that could harm the Company’s interest, please inform:

Chairman of the Board or Chairman of the CG Committee or Chairman of the Audit Committee or CEO/President or Company Secretary

Thai Oil Public Company Limited 555/1 Energy Complex Building A 11F, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900

cgcoordinate@thaioilgroup.com

http://www.thaioilgroup.com

+66-0-2797-2999 ext. 7440-7442

+66-0-2797-2973

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Our Achievement in Sustainable Development

6th Consecutive Year as the

Member of DJSI Emerging Markets and high ranked positions.

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Q1/19 KEY HIGHLIGHTS Q1/19 PERFORMANCE ANALYSIS 2H/19 MARKET OUTLOOK Presentation Agenda TOP GROUP BUSINESS OVERVIEW

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TOP GROUP BUSINESS OVERVIEW

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51% 24% 13% 12%

Refinery Aromatics Lube Base Others

Thai Oil Group Business Structure

Net Profit Contribution

(Avg. from 2006 – Q1/19) IRPC 20.0%

• 5 Oil & Chemical Tankers

Capacity : 22,800 DWT

• Crude Tankers: 3VLCCs

Capacity: 881,050 DWT

• 14 crew & utility boats

(120 DWT each)

• 2 Large vessels for crude,

feedstock & product storage and transportation services capacity: 200,000 DWT

• Ship management services

9.2 % Principal power plant of PTT Total Equity Capacity 1,922 MW of electricity 1,582 tons/hour of steam 2,080 Cu.m./hour of Industrial water 12,000 RT of Chilled water

PTT Group 80.0%

100.0% 100.0% 74.0% 100.0% Thaioil (TOP) Thai Lube Base (TLB) Thaioil Power (TP) Global Power Synergy Public Company Limited Thaioil Energy Services (TES) Thaioil Marine (TM) Capacity : 275,000 barrels/day Small Power Producer Program 3-on-1 Combined Cycle Electricity 118 MW Steam 216 tons/hour PTT 26.0% Proceeds the business on various professional of management services 100.0% Thappline (THAP) Multi-product Pipeline Capacity:26,000 m.lts/y 20.0% PTTOR 40.4% Others 50.4% Lube Base Oil Capacity : Base Oil 267,015 tons/annum Bitumen 350,000 tons/annum TDAE 67,520 tons/annum Thaioil Solvent Through TOP Solvent (TS) 100.0% 100.0% Thaioil Ethanol (TET) Solvent manufacturer Capacity : 141,000 tons/annum Thai Paraxylene (TPX) 100.0% 80.5% Solvent distribute in Thailand Sak Chaisidhi (SAKC) Top Solvent Vietnam Solvent distribute in Vietnam Sapthip (SAP) Cassava Based Ethanol Capacity : 200,000 lts/day 50.0% Ubon Bio Ethanol (UBE) 21.3% Cassava/Molasses Based Plant Capacity : 400,000 lts/day PTT Energy Solutions (PTTES) Provides engineering technique consulting services 20.0% PTT 40.0% PTTGC 20.0% BCP 21.3% Others 57.4% Aromatics Capacity: Paraxylene 527,000 tons/annum Mixed Xylene 52,000 tons/annum Benzene 259,000 tons/annum Total 838,000 tons/annum LABIX Company Limited (LABIX) LAB producer and distributor Capacity: 120 KTA COD: 2016 Mitsui 25.0% 75.0% TOP SPP 2 Small Power Producers Total capacity: 239 MW Steam capacity 497 T/H COD 2016 100.0% Sells Electricity/Steam to Group PTT Digital Solutions (PTT Digital) PTT 22.6% Thaioil & TP 29.7% PTTGC 22.7% Thaioil Treasury Center (TTC) 100.0% Increases financial efficiency

• f Thaioil group

Supports execution of social enterprise of PTT group 15.0%

PTT Group 85.0%

Sarn Palung Social Enterprise

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Q1/19 KEY HIGHLIGHTS

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Slightly Soften Aromatics & LAB Margins

(GIM contribution 2.0 $/bbl from 2.2 $/bbl in Q4/18)

Implication Mkt GRM at 3.0 $/bbl

(Q4/18 = 3.9 $/bbl)

2.7 $/bbl inventory gain

(from stock loss (7.5)$/bbl in Q4/18)

Refinery Aromatics & LAB Lube Base Soften Lube Base Contribution

(GIM contribution 0.2 $/bbl from 0.4 $/bbl in Q4/18)

Refinery + Aromatics & LAB + Lube Base

$/BBL

Q4/18 Q1/19

Market GIM

6.5 5.2

Inventory Gains/ (Loss)

(7.4) 2.7

Accounting GIM

(0.9) 7.9

• Soften refinery margins pressured by weak product spread pressured by

weak heating oil demand from mild winter and high gasoline inventory

• worldwide. However, downside was partially offset by lower crude

premium from abundant light crude supply from U.S.

• Rising crude price driven by OPEC & Non-OPEC production cut (1.2 MBD),

and decreasing Iran’s and Venezuela’s oil export due to U.S. sanctions.

• Soften Base Oil spread pressured by additional base oil Gr. 2 & 3

supply mainly from China (1.26 MTA).

• Slightly soften aromatics contribution pressured by increasing supply

as Petro Rabigh (1.3 MTA) and Nghi Son (0.7 MTA) run at full capacity and additional supply from China (0.8 MTA). However, ongoing weak feedstock cost (gasoline & naphtha) helped support margins.

2) Based on refinery intake

2) 3)

3) Aromatic contribution including LAB

1)

4) Based on integrated intake

4)

1) Include Margin and Productivity

Improvement

Q1/19 Key Market Drivers Highlights

Key Highlights

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1,272 4,013 3,835 2,473 (7,211) 381 495 (218) (37) (166) (852) 102 334 (544) 1,327

68% 18% 1%11% 2%

Refinery Aromatic & LAB Lube Base Power Others

Key Achievements Q1/19 TOP Group Net Profit

• Maintain high reliable production

Unit : million THB (MB)

Net Operating Profit Stock gain/(loss) Reversal of Crude NRV /(Crude NRV) & Adjusted to cost

Sustainability & Awards

Q1/19 Q4/18 Refinery 116 % 115 % Aromatic 92 % 94 % Base Oil 89 % 86 %

Q4/18 Q1/18

• Capture high local & Indochina sales

Q1/19 Q4/18 Local 87 % 87 % Indochina 10 % 8 % Other exports 3 % 5 %

Operational Excellence Growth & Profitability Improvement Included Stock G/L

(4,812) MB

Q1/19 Key Achievements

Key Highlights

Q1/19 4,408 MB

F/X Risk management gain/(loss) Others i.e. Hedging gain/(loss) & Non-recurring items

• Sustainability Member for Oil&Gas Industry

for 6th consecutive years of DJSI Emerging Markets

• AGM approved Energy Recovery Unit

(ERU) Carve out (USD 757 M) to GPSC, with

vote 98.6%, to reduce total CAPEX & enhance return after carving out. Q1/19 FY/18

• NACC Integrity Awards 2018, The Office of

the National Anti-Corruption Commission (NACC) 5,608 MB t

• TOP’s rating is upgraded to BBB+ by S&P

after PTT’s SACP is uplifted (May 7). 40% 25% 11% 22% 2%

BBB+ Stable Outlook Baa1 Stable Outlook AA- (tha) Stable Outlook

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Cost Management

Key Highlights

Q1/19 Margin and Productivity Improvement (VS Corporate Plan)

THB 807 mn THB 2,197 mn Margin Improvement

(Hydrocarbon Management : HMR) and Productivity Improvement (Non HMR)

Higher domestic and Indochina sales/ better product premium

*

* Compared with Corp. plan

234 573

* 7%

Q1/19

Unit: million THB

734 1,463 Q4/18

General & Admin , Procurement & warehouse , Operation & Maintenance , Project & Manpower management Others

73 MB 161 MB

Crude Enhancement Energy improvement Plant optimization

34% 7% 1% 21%

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Q1/19 PERFORMANCE ANALYSIS

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200 400 600 800 Mogas Jet/Kero Diesel Total Demand

Q1/18 Q1/19

3.4% 2.2% 1.6% 2.2%

Refining

Refinery: High U-Rate Operation and Robust Domestic & CLMV Sales

97% 94% 97% 98% 98% 97% 98% 113% 108% 115% 115% 116% 113% 116% 70% 90% 110%

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q1/18 Q1/19

Industry utilization rate TOP utilization rate

TOP’s Domestic Sale vs Industry*** Sales breakdown by customers

*** Source: Department of Energy Business, Ministry of Energy

87% 89% 87% 81% 86% 86%

13% 11% 13% 19% 14% 14% Q4/18

TOP Industry Thailand

Export Q1/19 Q4/18 Q1/18 TOP Ind. TOP Ind. TOP Ind. CLMV 10% 4% 8% 10% 9% 4% Others 3% 7% 5% 9% 5% 10%

Domestic Export

50% 7% 1% 34% 8%

Q1/19 Sales Breakdown Export**

TOP/ Domestic Refinery Utilization Rate

Unit: % Utilization Rate

Domestic Oil Demand

* exclude Fuel Oil & LPG demand TOP Industry Thailand

*

Other Domestic Customers

TOP Industry Thailand

Q1/18

** Excludes export sale through PTT

*

Q1/19

Domestic Oil Demand

43% 5%4% 1% 38% 9%

Q4/18 Sales Breakdown Export** Other Domestic Customers

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66 63 63 68 74 74 73 72 77 79 66 57 59 65 67 71 73

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2018 2019

Gross Refinery Margins - GRM

Refining 2018 2019 2018 $/bbl Q1 Q2 Q3 Q4 Q1 Q2TD* FY18 DUBAI (DB) 63.9 72.1 74.3 67.4 63.5 70.4 69.4 ULG95 - DB 13.7 12.1 11.6 4.7 3.7 8.6 10.5 JET - DB 16.1 15.3 14.5 15.6 13.0 11.9 15.4 GO - DB 14.8 14.6 14.4 14.8 12.8 12.3 14.6 HSFO - DB (4.9) (4.4) (2.5) 1.4 0.6 (2.8) (2.6) 2018 2019 $2.7/bbl Q1 Q2 Q3 Q4 Q1 Market GRM 5.7 4.0 5.0 3.9 3.0 Stock G/(L) 0.4 5.0 1.2 (7.5) 2.7 Accounting GRM 6.2 9.0 6.2 (3.6) 5.7

Dubai Crude Price & Key Petroleum Product Spreads

Refinery Utilization

Q1/19 Q4/18 Q1/18 116% 115% 113%

Dubai Price

(US$/bbl)

Q1/19 Market GRM Q1/19 Performance

*Murban OSP over Dubai ($/bbl)

% MB Intake/OSP*

36%/ 1.8 32%/ 2.5 39%/ 3.5

Q1/19: Lower Mkt GRM pressured by Weak Product Spread

+ Rising crude price due to OPEC and Non OPEC production cut + Highest refinery run rate at 116%

2018 FY18 4.7 (0.4) 4.3

• Soften gasoline spread due to

high inventory worldwide + Lower crude premium due to abundant light crude supply from U.S.

• Lower middle distillate margin

as low heating oil demand from mild winter +

*As of 10 May 19

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Aromatic’s Sales (excluding by product) & Product-To-Feed Margin (P2F)

296 315 300 271 267 267 311 481 559 545 515 524 528 543 454 334 320 246 248 199 145 115 118 130 159 91 73 92 76 38 42 (25) (59) (80)

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50 200 350 500 650

2018 2019 2018 $/ton Q1 Q2 Q3 Q4 Q1 Q2TD* FY18 PX**-ULG95 304 268 451 528 508 290 388 BZ**-ULG95 231 126 126 81 18 (48) 141 2018 2019 Q1 Q2 Q3 Q4 Q1

Aromatic P2F -$/ton

110 87 129 151 143

Aromatic P2F -$/bbl

14.5 11.6 16.9 20.2 18.8

GIM contribution***

1.7 1.3 2.0 2.2 2.0

Remark: TOL –ULG95 Q1/19 = 41 $/ton, Q4/18 = 73 $/ton, Q1/18 = 57 $/ton

Aromatics Spreads and Margins

Aromatics Production

Q1/19 Q4/18 Q1/18 92% 94% 90% (Unit : KTon)

Q1/19 Market

*** including LAB contribution since 25 Feb 2016 ** PX price = CFP Taiwan, BZ price = FOB Korea

Q1/19 Performance

126 109 131 134 115 63 59 57 67 60 TL BZ PX

(US$/Ton)

PX-ULG95 BZ-ULG95

2018 2019

• Slightly soften PX spread

pressured by increasing supply after Petro Rabigh (1.3 MTA) and Nghi Son (0.7 MTA) run at full capacity and new supply from China (0.8 MTA)

• Weak BZ spread due to ample

supply in China

Aromatics/LAB

Q1/19: Slightly Soften Aromatics Contribution pressured by Lower PX Spread

+ Weak feedstock cost (gasoline & naphtha) limit downside

2018 FY18 121 15.9 1.8

• Slightly lower utilization rate

due to soften product margins

500 245

*As of 10 May 19

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TLB’s Sales (excluding byproduct) & Product-To-Feed Margin (P2F)

482 510 545 518 469 457 436 425 390 339 364 423 384 325 280 267 270 (58) (51) (58) (75) (81) (44) (43) (40) (39) (48) (9) (1) (48) (49) (22) (13) (10)

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200 400 600 800

Lube Base Oil 2018 2019 2018

$/ton

Q1 Q2 Q3 Q4 Q1 Q2TD* FY18

500SN-HSFO

512 481 417 376 330 270 447

BITUMEN-HSFO

(56) (67) (41) (19) (40) (8) (46) 2018 2019 Q1 Q2 Q3 Q4 Q1

P2F -$/ton

105 97 66 73 59

P2F -$/bbl

16.0 14.8 9.9 11.1 9.0

GIM contribution

0.7 0.7 0.4 0.4 0.2

Base Oil & Bitumen Spreads & Margins

Base oil Production

Q1/19 Q4/18 Q1/18 89% 86% 89%

500SN-HSFO Bitumen-HSFO

(Unit : KTon)

Q1/19 Performance

Bitumen Specialty Base Oil % Base Oil & Specialty Sales Volume

Q1/19 Market

231 149

440 (US$/Ton) 2018 2019

Q1/19: Soften Contribution as Lower Lube Base Spread

+ Higher utilization rate at 89%

2018 FY18 84 12.8 0.5

− Soften lube spread pressured by new base oil supply group 2,3 from China (1.26 MTA)

61 62 48 60 59 39 39 34 38 36 117 116 80 104 98

21% 18% 21% 14% 13% 14%

Q1/19 Q4/18 Q1/18 Base Oil Specialty *As of 10 May 19

− Soften bitumen spread due to low demand during winter

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Power

Q1/19 Power Sector Performance…Growing Contribution to the Group

Power Business Sector

Equity holding in GPSC ****

SPP

***TOP shareholding 24.29% (8.91% via TOP and 20.79% via TP) GPSC is an associate company of TOP. Equity method is applied to recognize share of profit. (EBITDA calculation excludes profit sharing from GPSC)

SPP (TP+TOP SPP) Equity income from GPSC

(1) 100% of TP and TOP SPP

Performance Highlight

74% 100% + Higher contribution from GPSC’s profit sharing due to consolidating net profit from GLOW (69.11%) since 14 March 2019

368 353 348 299 253 1,387 224 255 218 118 229 816

592 608 566 417 482 2,183 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 FY/18

3) consolidated EBITDA

• f TP and TOP SPP

4) Net profit of 74% TP +

100 % TOP SPP + 24.29% profit sharing from GPSC

Power & Steam Sales EBITDA & Net Profit

Electricity(1) (GWh) Steam(1) (kton)

1,041 1,084 1,129 1,079 1,043 4,333

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 FY/18 EBITDA (THB million) Net Profit (THB million)

3) 4)

13%

622 643 647 632 606 2,544 665 678 683 628 575 2,653

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Integrated Margin & Competitive Cash Cost

Financial

5.2 6.7 4.7 5.7 3.9 3.0 6.8 7.6 4.3 6.2 (3.6) 5.7 2016 2017 2018 Q1/18 Q4/18 Q1/19

1.4 1.2 1.4 1.1 1.9 1.2 0.5 0.4 0.4 0.3 0.4 0.5

1.9 1.6 1.8 1.4 2.3 1.7 2016 2017 2018 Q1/18 Q4/18 Q1/19

Operating Cost Interest Expense

(Unit: US$/bbl)

Group’s Cash Cost

(Unit: US$/bbl)

Market GIM Accounting GIM (Market GIM + Stock G/L)

Market GRM Accounting GRM (Market GRM + Stock G/L)

Gross Integrated Margin

(Unit: US$/bbl)

(excl. one-time non-

• perating item)

(net) 1.8 1.6 1.9 1.5 2.4 1.7 0.5 0.5 0.5 0.4 0.5 0.6

2.3 2.1 2.4 1.9 2.9 2.3 2016 2017 2018 Q1/18 Q4/18 Q1/19

Operating Cost Interest Expense

(Unit: US$/bbl)

(excl. one-time non-

• perating item)

(net)

Higher group cash cost in 2016 mainly from MTA cost in TLB ~198 MB

Gross Refining Margin Refinery’s Cash Cost

5.2 6.7 6.6 7.5 4.6 4.2 5.7 6.1 3.9 (3.5) 3.0 5.7 1.7 1.7 1.6 1.6 1.8 1.8 1.7 1.7 2.2 2.2 2.0 2.0 0.7 0.7 0.8 0.8 0.5 0.5 0.7 0.7 0.4 0.4 0.2 0.2

7.5 9.1 7.5 8.2 6.5 5.2 9.1 9.9 6.6 8.6 (0.9) 7.9 2016 2017 2018 Q1/18 Q4/18 Q1/19 Refinery Aromatics+LAB Lube Base

Higher refinery cash cost in 2018 mainly from MTA CDU-1 cost ~230 MB

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Performance Breakdown

Q1/19: Performance Breakdown by Business Unit

(1) U-rate of 5 Oil & Chemical Tankers (total capacity: 22,800 DWT, acquired 1 LPG vessel in Dec 18 which start operate in Jan 19 onwards) (2) U-rate of TET Q1/19 includes SAPTHIP 97% and UBE 97%, Q4/18 includes SAPTHIP 96% and UBE 98%, Q1/18 includes SAPTHIP 87% and UBE 108% (3) Includes 75% of LAB net profit, Q1/19 = (64) MB, Q4/18 = (106) MB, Q1/18 = 115 MB (4) Apply on an equity accounted basis in the consolidated financial statement. (GPSC has been held by TOP 8.9% and TP 20.8%,TP has been held by TOP 74% & TOP SPP has been held by TOP 100%)

Q1/19 2,968 774 56 44 (2) 16 482 4,408 Q4/18 (6,087) 747 145 (14) (65) 7 417 (4,812) Q1/18 3,747 751 417 38 17 27 592 5,608

116% 92% 89% 123% 95% 97%

115% 94% 86% 104% 95% 97%

Q1/19 Q4/18

Refinery Aromatic Lube Solvents Marine Ethanol Power

Consolidated Net Profit

Utilization/Production (%) & Net Profit (million THB)

(1) (2) (3) (4) (3) (3) (4) (4)

Key Points

• Refinery: continued high run rate to

capture strong demand in domestic and Indochina market

• Aromatic/LAB: stable run rate to

capture ongoing decent margins

• Lube: declined contribution

pressured by new base oil supply from China

• Power: higher contribution mainly

from higher GPSC’s profit sharing

• Solvents: higher contribution due to

higher sale gross margins following rising crude price

• Marine: improved contribution

supported by higher TMS’s utilization and lower operating cost

• Ethanol: higher contribution due to

higher sales volume and profit sharing from UBE

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(Unit : million THB)

Q1/19 Q4/18 QoQ Q1/18 YoY Sales Revenue 91,626 100,150 (8,524) (A) 91,536 90 Hedging Gain / (Loss) (166) (852) 686 (B) 102 (268) EBITDA 6,889 (3,582)

10,471 (C)

7,359

(470)

EBITDA excl. Stock G/(L) & Reversal of NRV/(NRV) 3,102 4,942 (1,840)

(D)

7,087 (3,985) Financial Charges (1,215) (1,078)

(137) (E)

(750)

(465)

FX G/(L) & CCS 652 (233)

885 (F)

1,470

(818)

(Tax Expense)/reversal of income tax (1,000) 1,315 (2,315) (1,209)

209

Net Profit / (Loss) 4,408 (4,812) 9,220 5,608 (1,200) EPS (THB/Share) 2.16 (2.36) 4.52 2.75

(0.59)

Stock G/(L) & Reversal of NRV 3,787 (8,524)

12,311

272

3,515

Net Profit/ (Loss) excl. Stock G/(L) and Reversal of NRV/(NRV) 621 3,712 (3,091) 5,336 (4,715) THB/US$ - average 31.79 32.99 (1.20) 31.71 0.08 THB/US$ - ending 31.98 32.61 (0.63) 31.41 0.57 Effective Tax Rate (%) 18% N/A

N/A

17%

1%

Financial

Q1/19 TOP Group Consolidated P&L

(A) Decrease overall sales volume and

product prices following lower quarterly average crude price

(B) Less commodity hedging loss in

Q1/19

(C) Mainly from stock gain 2.7 $/bbl in

Q1/19 compared with stock loss (7.5) $/bbl in Q4/18

(D) Mainly due to soften Mkt GIM 5.2

$/bbl in Q1/19 from 6.5 $/bbl in Q4/18

(E) Mainly from new bond 1,000 M$ in

Nov’18 to support funding plan for CFP

(F) Mainly from realized gain on AP/AR

& unrealized gain on USD debt from THB appreciated

QoQ analysis

(1) Including net F/X risk management (foreign currency assets and liabilities) gain/ (loss) in Q1/19, Q4/18 and Q1/18 334, (544) and 1,347 MB, respectively (2) In Q1/19, Q4/18 and Q1/18 stock gain/(loss) = 2,473, (7,211) , and 381 MB. And, In Q1/19, the reversal of NRV was recorded at 1,314 MB (consisted of crude NRV 769 MB and product NRV 545 MB), in Q4/18 NRV was recorded at 1,314 MB (consisted of crude NRV 769 MB and product NRV 545 MB), and in Q1/18 NRV was recorded at 110 MB which is wholly crude NRV (1) (2)

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Q1/19 TOP Group Consolidated Cash Flow

Financial

Q1/19 Q1/18 Operating Cash Flow 3,891 7,636 Net income & non-cash adj. 6,459 7,157 Change in working capital (2,568) 479 Beginning Cash 34,041 S/T investment 73,221 Investment held as Available for sale 361

107,623

+

+ =

+

Ending

40,218 61,375 380

101,973 6)

Effect of FX changes (425)

+

Changes 6,602 (11,846) 4) 19 5) Operating Cash Flow Financing

(Unit: Million THB) (Unit: Million THB)

Free Cash Flow 11,769 10,551 Q1/19 Q1/18 Investments 7,878 2,915 ST investments 11,309 4,352 Available for sale

• (680)

CAPEX (PP&E) & other (3,431)1) (968)

Financing

(5,186) 7,283 Loans proceeding 2,2532) 10,346 Loans repayment (6,032)3) (1,685) Interest (1,404) (1,377) Dividend (3)

• Investments

6) FCD = 56,708 MB (1,792 MUSD)

1)TOP 2,386 MB, TPX 875MB 2) LABIX 970, SAPTHIP 495, TSTH 590 ,TSV 150, and TMS 5 MB 3) TOP 3,000 , TM 75, LABIX 1,200, TLB 540, TSTH 810, TSV 257, SAPTHIP 150 MB

Ending Cash incl. S/T Investment & AFS

Non-cash transaction : 4) Unrealized loss from FCD 488MB 5) MTM EBIF 19MB in Q1/19

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Cost of Debt TOP Group (Net***) 2.43% TOP Group (Gross) 4.83%

Financial

Q1/19 TOP Group Strong Financial Position & Financial Ratios

103,870 105,845 57,481 64,793 107,262 101,593 126,473 130,939 107,060 102,026 35,080 39,266 0.0 0.0

31-Dec-18 31-Mar-19

(1) Including current portion of Long-Term Debt

Financial Ratios

Net Debt / adj. EBITDA**

Net Debt / Equity Statements of Financial Position

(Unit: million THB) Trade Payable / Others Interest Bearing Debt Equities Current Assets Non-Current Assets Cash & ST investment

31 Dec 18

** Annualized EBITDA (excl stock gain/loss & Reversal of NRV/(NRV))

ROE 8.0 % 7.0 % ROIC 9.2 % 8.3 %

*

* Based on actual performance in the past 12 months

*

272,231

(1)

BBB+ Stable Outlook Baa1 Stable Outlook AA- (tha) Stable Outlook

0.0 0.0

31-Dec-18 31-Mar-19

2) (2) Including investment held as available for sale 31 Dec 18 = 361 MB,

31 Mar 19 = 380 MB

Consolidated Long-Term Debt as at 31 Mar 19 Net Debt 433 million THB (US$ 14 million equivalence)

*** As of 31 Mar 19 Net Debt 433 MB or 14 M$

102,026 million THB (US$ 3,190 million equivalence) Total IBD

*** ***

(4)

(4) Due to yield enhancement

Interest Rate Portion Float 11% Fixed 89% TOP avg.debt life 14.00 Yrs Value (Million) Portion US$ Bond & US$ Loan

(3)

USD 1,991 63% THB Bond THB 20,500 20% THB Loan THB 16,212 17%

(3) Including VND Loan equivalent to USD

268,613

31 Mar 19

As at 29 Mar 19 (31.98 THB/US$)

• 24-
• 24-

2H/19 MARKET OUTLOOK

• Crude Oil
• Petroleum Products
• Aromatics
• Base Oil & Bitumen
• Linear Alkyl Benzene (LAB)

CRUDE OIL

• 26-

Crude Oil

20 40 60 80 100 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

$/BBL

Dubai Price Movement Increasing Oil Supply to Balance Iran and Venezuela Output Loss

Key Highlights in 2H-2019

*Q2TD’19 (as of 10 May): $70.4/BBL

1st OPEC-led Supply Cut Deal Extension Hurricane Harvey & Irma

• Concern of Tighten Supply from Iran and Venezuela amid

Increasing Non-OPEC Production

• Rising U.S. Production to Impact OPEC Production Decision

1 2

OPEC-led Cut Deal Started Supply Outage in Libya U.S.-China Trade War Conflict OPEC-led Cut Deal Extended until the Dec-18 Keystone & Forties Pipeline leakage U.S. Re-imposed Sanctions on Iran Concern Over Supply Loss in Iran High OPEC and Non- OPEC output OPEC & Non-OPEC Pledged to Increase Production Falling Risk Assets as FED raised rates OPEC Cut Steeper than Deal Supply Loss from Iran and Venezuela on U.S. Sanction

• 27-

Crude Oil

1

Concern of Tighten Supply from Iran and Venezuela amid Increasing Non-OPEC Production

C Current OECD Crude Stock at 5-Year Average C

OECD Crude Oil Inventory

2200 2400 2600 2800 3000 3200 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2017 2018 2019 Avg 14-18 MBBL

Source : IEA (Apr’19)

OPEC Cut with Steeper Than Deal in 1H-2019

Source : Reuter’s Poll (Apr’19), OPEC (Apr’19) and TOP’s Estimate

MBD 20 21 22 23 24 25 26 27 28 29 30 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

OPEC-11 Production

*OPEC Target

25.9 MBD

*OPEC-11 excludes Qatar (left OPEC during early Jan’19), Venezuela, Iran, and Libya from production cut deal

A

OPEC Decision in Meeting 25-26 Jun’19

Growing Oil Supply from Non-OPEC in 2H-19

D

Source : IEA (Apr’19)

MBD 50 52 54 56 58 60 62 64 66 68 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19

Non-OPEC Crude Oil Supply

2H-19 (+1.4 MBD YoY)

Lower Iran & Venezuela Supply on U.S. Sanction

B

0.0 0.5 1.0 1.5 2.0 2.5 3.0 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Venezuelan Crude Export Iranian Crude Export MBD

Iranian & Venezuelan Crude Oil Export

U.S. Sanction on Venezuelan Oil

Source : Reuters (Apr’19)

Venezuela (-1.0 MBD YoY)

Aggressive Political Risk

U.S. Financial Sanction

2H-19 Iran (-0.5 MBD YoY)

U.S. Waiver Announcement for 8 Countries U.S. Ending Sanctions Waivers

Oct’18 Baseline for Cut

• 28-

Crude Oil

2

Rising U.S. Production to Impact OPEC Production Decision

C Rising U.S. Pipeline Outflow Capacity in 2H-2019 B Surging U.S. Crude Output on Price Recovery A Balancing Market in Q4 in case of OPEC Cut Run D

Source : IEA (Apr’19), OPEC (Apr’19) and TOP’s Estimate

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19

Gray Oak Cactus II EPIC pipeline MBD

Source : Reuters (Apr’19)

U.S. Crude Oil Pipeline Capacity

2H-19 (+0.6 MBD YoY)

Existing Pipeline

• 1.5
• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 2H-19 Balance: Demand: 101.2 MBD (+1.5 MBD YoY) Supply: 101.4 MBD (+0.0 MBD YoY)

Global Demand/Supply Balance

MBD Surplus Deficit

Case 2 Case 1

Two Possible Cases on OPEC Production Cut

Source : Reuter’s Poll (Apr’19), OPEC (Apr’19) and TOP’s Estimate

20 21 22 23 24 25 26 27 28 29 30 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19

OPEC-11 Production

*OPEC Target

25.9 MBD

Case 1: OPEC Increase Run to Baseline Case 2 : OPEC Increase Run with Production Cut Lower Level than Previous Deal

C

Source : EIA (Apr’19)

• 1.0

0.0 1.0 2.0 3.0 4.0 5.0 6.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0

Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19

YoY Growth [RHS] Production (LHS) Forecast

U.S. Crude Oil Production

MBD MBD

2H-19 (+1.1 MBD YoY)

MBD

*OPEC-11 excludes Qatar (left OPEC during early Jan’19), Venezuela, Iran, and Libya from production cut deal

Oct’18 Baseline for Cut

• 29-

Crude Oil

Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19

Note: Update as of 10 May 19

• AVG. 2016: 2.65
• AVG. 2017: 1.72

Murban OSP Premium over Dubai 1H-19: Steady low OSP on ample supply

(-) High US production/export (-) Steady low Saudi OSP to secure market share (-) New ADNOC competitive grade (-) Weak light/middle distillate crack (+) OPEC production cuts (+) Venezuela’s crude sanction Y2019 Q1 : 1.77 Q2 : 2.10 (Act. Apr)

2H-19: Higher OSP on stronger product crack, preparing for IMO

(+) Stronger middle distillate crack and ahead of new IMO (+) End of Iranian waiving sanction (from 2 May) (+) OPEC to control production (-) More US exports on new pipeline capacity

• AVG. 2015: 1.61
• AVG. 2018: 3.15

Stronger Murban OSP in 2H-19 (vs 1H-19), Supported by Stronger Light /Middle Distillate Crack before IMO

PETROLEUM PRODUCTS

• 31-

Improving Middle Distillate Cracks from Firm Seasonal and Bunker Demand for IMO 2020

7.7 5.0 5.2 6.7 6.1 6.4 6.4 8.2 7.2 7.1 7 6.1 6.1 4.2 5.9 3.2 3.7

Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2-18 Q3-18 Q4-18 Y2018 Q1-19 Q2TD- 19*

Key Highlights in 2H-2019 Singapore Cracking GRM ($/BBL)

Gasoline Cracks Supported by Peak Driving Season in Q3, Then Eased by Additional Supply in Q4

1

Improving Refining Margins from Rising Middle Distillate Crack Outweighing Weak Gasoline Market

($/BBL)

Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2TD- 19*

ULG95- DB 13.6 12.2 11.5 4.9 10.6 3.7 8.6 JET-DB 16.0 15.3 14.5 15.7 15.4 13.0 11.9 GO-DB 14.7 14.6 14.3 15.0 14.7 12.8 12.3 HSFO- DB (4.9) (4.5) (2.5) 1.3 (2.6) (0.1) (2.8)

2

Refinery Remarks: *Q2TD-19 as of 10 May 19

Demand Growth Outpacing Supply Addition

3

• 32-

Expectation of Higher Chinese Export Quotas D Declining Stock to 5-year Average Level A

1

Refinery

Strong U.S. Demand during Summer

Gasoline Cracks Supported by Peak Driving Season in Q3, Then Eased by Additional Supply in Q4

Source : Reuters (May’19)

Additional Supply Pressured the Market C

Source : FGE Energy (Apr’19)

B

200 220 240 260 280 300 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5yr-range 2018 2019 avg 14-18

Global Gasoline Inventory

MBBL

U.S. Gasoline Demand

Source : EIA STEO (May’19)

MBD

2H-19: 9.3 MBD (+0.1 MBD vs 1H-19)

8.2 8.6 9.0 9.4 9.8 10.2 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 KBD

Chinese Gasoline Export

100 200 300 400 500

Jan-18 Jul-18 Jan-19 Jul-19 AVG 2018: 298 KBD

Global Gasoline Supply

Source : Energy Aspects (Apr’19), TOP Estimates

MBD

2H-19 : 25.8 MBD (+0.5 MBD vs 1H-19)

23 24 25 26 27 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

Hengli (400 KBD) in Jun

LE 1H-19: 284 KBD LE 2H-19: 333 KBD

Jizan (400 KBD) in Nov

• 33-

Middle Distillate Stock at 5-year Average Level Firm Seasonal Demand with IMO 2020 Supportive Chance of Colder Winter than Previous Year A

Improving Middle Distillate Cracks from Firm Seasonal and Bunker Demand for IMO 2020

2

Refinery

B Steady-to-Lower Exports from China C Global Middle Distillate Demand

MBD Source : FGE Energy (Apr’19), Energy Aspects (Apr’19)

33 34 35 36 37 38 39 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

2H-19: 37.4 MBD (+1.2 MBD vs 1H-19)

Percent of La Niña Development

37% 7% 56%

Neutral La Niña El Niño

2H’19

20% 0% 80%

2H’18

Source: National Oceanic and Atmospheric, NOAA (Apr’19)

MMBL

Source : Reuters (May’19)

100 150 200 250 300 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5yr-range 2018 2019 avg 14-18

Global Middle Distillate Inventory D

Source : FGE Energy (Apr’19)

KBD

Chinese Middle Distillate Export

200 400 600 800 1000 1200

Jan-18 Jul-18 Jan-19 Jul-19 AVG 2018: 695 KBD LE 1H-19: 835 KBD LE 2H-19: 710 KBD

• 34-

Refinery

Note: Adjusted capacity based on start-up period (effective additional capacity)

Asia Pacific and Middle East Effective CDU Addition VS Additional Demand

Source : FACTs Semi Annual Reports, Fall 2018, Reuters (Oct’18) and TOP’s estimate

3

Demand Growth Outpacing Supply Addition

3150 517 1386 1431 875 458 562 5 762 775 970 721 770 632 295 595

70 75 80 85 90 95 100

• 500

500 1500 2500 3500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

KBD AP & ME Demand Growth Middle East China Other AP Japan India Vietnam Teapot Thailand Net Addition Operating Rate [RHS] Refinery Country Start-up CDU (KBD) Rapid Malaysia Q2’19  Q3’19 300 Hengli China Q3’19  Q2’19 400 Jizan Saudi Arabia Q4’19 400 Rongsheng China Q3’20 400

Operating Rate, %

YoY Y2016(B) Y2017(B) Y2018(B) 1Q2019(B)

VS 1Q2018

Y2019F

VS 2018

Mogas (A) +9.8% +3.7% +3.3% +3.4% Steady growth due to low oil price Jet/Kero +6.8% +4.4% +5.4% +2.2% Softer growth due to weaker tourism and limited airport capacity Diesel (A) +3.1% +2.9% +1.5% +1.6% Steady growth following economic expansion Total +5.4% +3.4% +2.6% +2.2% GDP +3.2%(C) +4.0%(C) +4.1%(C) +3.4%(D) +3.8%(D)

Domestic

Thailand Oil Demand Growth

Thailand Oil Demand Growth

Remarks: (A) Mogas and Diesel includes Ethanol and Biodiesel, respectively

(B) DOEB (C) NESDB (D) BOT’s Estimation (Apr’19)

AROMATICS

• 37-

($/TON)

Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2TD-19*

PX- ULG95 304 268 447 529 387 508 290 BZ- ULG95 231 126 127 81 141 18

• 48

Key Highlights in 2H-2019 Aromatics Market

Weaker PX Market on Concerns of New Capacity in China Weak BZ Market due to Concerns

• f New Capacity amid High Stock

in China

1 2

332315341 280317 313273258260276 304268 447 529 387 508 290

Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2-18 Q3-18 Q4-18 Y2018 Q1-19 Q2TD-19*

PX CFR Taiwan-ULG95 ($/TON)

156138174185163 343 225195212245 231 126127 81 141 18

• 48

Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2-18 Q3-18 Q4-18 Y2018 Q1-19 Q2TD-19*

BZ FOB Korea-ULG95 ($/TON)

Pressured PX and BZ Markets due to Concerns of New Capacity in China

Remarks: *Q2TD-19 as of 10 May 2019 Aromatics

• 38-

0.9 0.9 1.5 2.1 1.8 3.6

2 4 6

Q1-19 Q2-19 Q3-19 Q4-19 1H-19 2H-19

Effective Cap. from Prev. Yr Heng Li 1 Sinopec Hainan 2 Zhejiang PC 1 Heng Li 2 Sinochem Hongrun Uncertainty Total

Aromatics

Weaker PX market on Concerns of New Capacity in China

Source: WM Chemicals (Feb’19) and TOP’s Estimate

1

Expect PTA Opt. Rate in 2H-19 to be Higher than 2017-18

Higher Capacity Addition to Pressure in 2H-19

A C D

Lower PX Maintenance in 2H-19 to Pressure Market

B

Lower Opt. Rate from Lower Demand Growth than Cap. Add.

11 12 13 14 24 27 10 10 11 11 20 21 5 10 15 20 25 30

Q1-19 Q2-19 Q3-19 Q4-19 1H-19 2H-19 PX Capacity PX Demand

AP/ME PX Effective Capacity vs Demand

Mil TON

• Cap. Add. : +11.8%
• Dem. Growth : +3.7%

D

High Supply in 2H-19 to Pressure the Market

Note: the number may not sum to total due to rounding

Fuhaichuang 1 0.8MTA in Jan

AP/ME Effective PX Capacity Addition

Fuhaichuang 2 0.8MTA in Apr

Mil TON

Hainan 0.8MTA Zhejiang 0.8MTA Heng Li 1 2.25MTA Hongrun 0.8MTA Heng Li 2 2.25MTA

Chinese PTA Operating Rate

50 60 70 80 90 100 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 2018 2017 2019 Percentage 69 274 394 280 199 142

72 107 188 119 51

200 400 600

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

Japan China Taiwan South Korea Malaysia Singapore Thailand Vietnam India Total 2018

K TON

Asian PX Plant Turnaround in 2019

Operating Rate 2019: 83.2%

• 39-

0.4 0.3 0.5 0.6 0.8 1.1

1 2 3

Q1-19 Q2-19 Q3-19 Q4-19 1H-19 2H-19

Effective Cap. from Prev. Yr Heng Li 1 Sinopec Hainan 2 Zhejiang PC 1 Heng Li 2 Sinochem Hongrun Uncertainty Total Hongrun 0.2MTA

Aromatics Weak BZ Market due to Concerns of New Capacity

amid High Stock in China

2

SM Capacity Addition to Support BZ Demand in 2H-19

A C

0.07 0.07 0.09 0.27 0.14 0.36 0.0 0.2 0.4 0.6 0.8

Q1-19 Q2-19 Q3-19 Q4-19 1H-19 2H-19 Effective Capacity from 2018 2019 Effective Capacity Mil TON

Zhejiang 1.2MTA In Nov

High BZ Stock in East China to Pressure Import Interest

138 69 93 178 231

50 100 150 200 250

Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 BZ Stock in East China 2015 Average 2016 Average 2017 Average 2018 Average 2019 Average

KTON

BZ Stock in East China Higher Capacity Addition in 2H-19 High Supply to Pressure Sentiment in the Market

10 10 11 11 21 22 8 8 9 8 16 17 5 10 15 20 25

Q1-19 Q2-19 Q3-19 Q4-19 1H-19 2H-19

BZ Capacity BZ Demand

AP/ME BZ Effective Capacity vs Demand

Mil TON

• Cap. Add. : +4.6%
• Dem. Growth : +4.9%

Note: the number may not sum to total due to rounding

B D

Fuhaichuang 1 0.12MTA in Jan

AP/ME Effective BZ Capacity Addition

Fuhaichuang 2 0.12MTA in Apr

Mil TON

Hainan 0.16MTA Zhejiang 0.65KTA Heng Li 1 0.65MTA Heng Li 2 0.65MTA

Source: WM Chemicals (Feb’19), IHS (Feb’19) and TOP’s Estimate

AP/ME SM Capacity Addition

Citic Guoan Chemical 200KTA In Jul Operating Rate 2019: 81.5%

BASE OIL & BITUMEN

• 41-

($/TON) Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2TD- 19*

500SN- HSFO 512 482 417 376 447 330 270

Higher Supply on New Supply Addition and Lower Plant Maintenance Slow Demand during Rainy Season

Base Oil & Bitumen

Key Highlights in 2H-2019

AP Base Oil Effective Capacity Addition

427409443 367412 451 556528458498 512482417376447 330270 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2-18 Q3-18 Q4-18 Y2018 Q1-19 Q2TD-19*

Soft Base Oil Market on High Supply in Asia

1 500SN – HSFO ($/TON)

Remarks: *Q2TD-19 as of 10 May 19

1 2 AP Plant Maintenance

0.4 0.2 0.0 0.3 0.9 1.4

• 0.5

0.0 0.5 1.0 1.5 1H-17 2H-17 1H-18 2H-18 1H-19 2H-19 Mil TON

Group 3 Group 2 Group 1 Net Capacity

1.2 0.9 0.9 0.6 0.7 0.3 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1H-17 2H-17 1H-18 2H-18 1H-19 2H-19 Mil TON

Group 3 Group 2 Group 1 Net Capacity

2

Source: Argus (May’19)and TOP’s Estimate

• 42-

Base Oil & Bitumen

($/TON)

Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2TD- 19*

Bitumen- HSFO

• 56
• 67
• 41
• 19
• 46
• 40
• 8
• 7
• 48
• 61
• 80
• 49
• 13
• 38
• 29
• 45
• 31
• 56
• 67
• 41
• 19
• 46
• 40
• 8

Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2-18 Q3-18 Q4-18 Y2018 Q1-19 Q2TD-19*

Bitumen-HSFO ($/TON)

Key Highlights in 2H-2019

Slow demand during 2H-19

1 Slow Demand during Rainy Season in Asia Improved Bitumen Demand in Thailand from Higher Infrastructure Budget in 2019 1

Soft Bitumen Market on Slow Demand in Asia

Higher Bitumen Demand in 2019

2

Remarks: *Q2TD-19 as of 10 May 19

2

Source: Petrosil (Apr’19), Bureau of maintenance (Mar’19)

89 88 82 74 104 20 40 60 80 100 120 1H-17 2H-17 1H-18 2H-18 1H-19

Bitumen Domestic Sales

Kton/month EEC: 5 Highways (35,000 Mil Baht) Bangyai- Karnchanaburi (55,620 Mil Baht) 100 200 300 1H-17 2H-17 1H-18 2H-18 1H-19 Kton/month

Import Bitumen Volume

Indonesia India Vietnam

Linear Alkyl Benzene (LAB)

• 44-

30 40 50 60 70

Q1 Q2 Q3 Q4

LAB

Soft Demand in 2H-2019 due to Monsoon Season and Lower AP/ME LAB Plants Maintenance

Key Highlights in 2H-2019

LAB Market

Source: ICIS Publication (2016-2019), India Customs (Jan-19), TOP’s Estimate

LAB Spread* ($/TON)

($/TON) Q1-18 Q2-18 Q3-18 Q4-18 2018 Q1-19 Q2TD- 19*

LAB Spread

529 566 562 640 574 615 620

635627619 543606 539603 534522550 529566562 640574 615620

Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1-18 Q2-18 Q3-18 Q4-18 Y2018 Q1-19 Q2TD-19**

**Q2TD-19 as of 10 May 19

Remarks: *Estimated indicator

Soft Demand in Q3 as Rainy Season Pressure Detergent Demand Lower AP/ME LAB Plants Maintenance

1 2

2018 India LAB Import Volume

K TON

50 100 150 200 250 1H 2018 2H 2018 1H 2019 2H 2019 Saudi Arabia Egypt Taiwan South Korea Japan India China

KTA AP/ME Effective Maintenance/Closure***

***Temporary

CONCLUSION

• 46-

Conclusion

2H-2019 Market Outlook Conclusion

(vs. 1H-2019)

Crude Oil Refinery Lube Base LAB Aromatics

Improving Refining Margins Supported by Strong Middle Distillate Demand Outpacing Weak Gasoline Market Increasing Oil Supply to Balance Iran and Venezuela Output Loss Soft LAB Market Pressured by Monsoon Season and Lower Maintenance Level Pressured PX and BZ Markets due to Concerns of New Capacity in China Soft Base Oil Market on High Supply Addition in Asia Soft Bitumen Market on Slow Demand

• 47-
• 47-

Thank You

Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976

• 48-
• 48-

APPENDIX

• Strategic Investment Plan
• 2018 Dividend Payment
• Optimized & Flexible Operations…Superior

Performance

• CDU Addition VS Additional Demand – AP &

ME

• World GRM / Inventories
• Thailand petroleum demand by products

• 49-
• Use only for KM Session-
• 49-

Strategic Investment Plan Approved by Board of Directors

CAPE PEX X Plan an (Unit nit US$ $ million lion)

Notes: Excluding approximately 40 M$/year for annual maintenance Updated as of April 2019

Proje

• ject

ct

2019 2019 2020 2020 2021 2021 2022 2022 2023 2023

Reliability, Efficiency and Flexibility Improvement

46 17 2

Infrastructure Improvement

• Jetty 7&8 / Improvement

78 5

• Office Relocation & New Crude Tank

30 16

• Site office preparation for fire water & fire water improvement

23 12

• New Bangphra Raw Water Line

4 15 8

Other Investments ( i.e. Digital Transformation, Benzene derivatives-LAB license fee )

28 30 2

Total l Ongoi

• ing

ng CAPEX EX

209 209 95 95 12 12

CFP project *

1,280 1,788 875 624 (606)

Total l CAPEX EX (inclu luding ding CFP)

1,489 1,883 887 887 624 624 (606)

Planne nned d capit ital al inves estm tment ent

* CAPEX of CFP Project including the disposal of asset to transfer ownership in the Energy Recovery Unit (ERU) which is a part of the CFP Project

CAPEX

• 50-
• 50-

7.82 9.19 8.66 9.40 0.11 5.91 4.39 7.28 6.04 4.57

• 2.03

5.97 10.40 12.18 4.97

FY/04 FY/05 FY/06 FY/07 FY/08 FY/09 FY/10 FY/11 FY/12 FY/13 FY/14 FY/15 FY/16 FY/17 FY/18

Annual DPS (Baht/share)

1.80 3.50 3.50 4.50 2.75 2.55 2.00 3.30 2.70 2.30 1.16 2.70 4.50 5.25 2.65

Dividend Payout

23% 38% 40% 48% n.a. 43% 45% 45% 45% 50% n.a. 45% 43% 43% 53%

Dividend Yield*

4.0% 5.6% 5.6% 6.2% 5.2% 7.1% 4.0% 4.7% 4.2% 3.6% 2.3% 5.0% 6.7% 6.2% 3.1%

Avg TOP price

44.7 63.0 62.7 72.7 53.3 35.9 49.9 69.8 65.1 64.6 50.4 53.5 66.7 84.2 86.9 Dividend Policy : Not less than 25% of consolidated net profit after deducting reserves, subject to cash flow and investment plan

Unit : THB/Share

EPSR 1H dividend

* Based on average TOP share price in each year

2H dividend Year Dividend

2018 Dividend Payment

R Based on restated financial statement

**

** Dividend payout before restated ; 2004 = 25% , 2006 = 43%, 2013 = 45%

Financial

1.50 1.75 1.75 1.05 0.60 1.30 0.50 0.80 0.56 0.90 1.50 1.50 1.50 2.00 2.75 1.00 1.50 1.40 2.00 2.20 1.50 0.60 1.80 3.00 3.75 1.15 1.80 3.50

** **

• 51-
• 51-

Thai Oil is able to diversify its type of crude intake and product outputs to maximize demand and margin

Optimized & Flexible Operations…Superior Performance

27% 17% 7% 17% 28% 29% 28% 28% 45% 54% 65% 55% Oman Dubai Murban Arab Light

Short Residue Waxy Gasoline/Distillates

Sources of Crude

• Flexibility in crude intake allows diversification of crude types to source cheaper crude
• Flexibility in product outputs by maximizing middle distillates (jet and diesel) by

adjusting production mode to capture domestic demand and price premium

• Maximize Platformate production to capture higher margin on aromatics
• Minimize fuel oil output to avoid lower margin products

Product

• utput

Domestic demand for petroleum products**

**Source: Energy Policy and Planning Office, Ministry of Energy Thailand

% S = 0.78 API = 39.4 % S = 1.43 API = 32.0 % S = 2.52 API = 31.2 Crude Assays based on TOP configuration*

*** Including Nigeria, Russia and others

% S = 1.97 API = 32.8

*Crude yield as per assay in Spiral as of Feb 2016

75% 5% 7% 13% 5% 7% 32% 25% 15% 12% 4% 4% 43% 12% 20% 21%

Middle East Q1/19

SAUDI ARAMCO MOPS Jet Kerosene FOB SG MOPS Gasoil 0.05% Sulfur FOB SG MOPS ULG 95 FOB SG

Others LPG PLATFORMATE GASOLINE JET DIESEL FUEL OIL Q1/19

***

LONG RESIDUE

MOPS Fuel Oil 180 CST 3.5% Sulfur FOB SG

Reference Price

Crude

Local Far East

• 52-
• 52-

Asia Pacific and Middle East Refinery Addition

Refinery

Sources: FGE Energy Semi Annual Reports, Fall 2018, Reuters (Oct’18) and TOP’s estimate

Note: Adjusted capacity based on start-up period (effective additional capacity)

Start-up period) Country Nameplate (KBD) Company

Q1-18 Iran 120 Bandar Abbas - PGSOC/1 (Phase 2) Vietnam 186 Nghi Son Q3-18 China 100 Petrochina Huabei Q4-18 India 36 Bharat - Bina Iran 120 Bandar Abbas - PGSOC/1 (Phase 3) South Korea 82.8 Hyundai Oilbank – Daesan Q1-19 China 70 CNOOC/Local Zhonghai Dongying Iraq 66 North Refining Company – Baiji Q2-19 Malaysia 300 Petronas Pengerang (RAPID) Q4-19 China (Jul’19 > Jun’19) 400 Hengli Petrochemical Dalian Saudi Arabia 400 Jizan China 60 Sinochem Quanzhou – Fujian Iraq 66 North Refining Company – Basra Kuwait 171 KPC - Mina Al-Ahmadi Closures Q2-18 China

• 75

Local refineries Q4-19 China

• 100

Local refineries Kuwait

• 112

KPC - Mina Al-Ahmadi

458 562 5 762 775 970

• 1000

1000 2000 2015 2016 2017 2018 2019 2020 KBD

AP & ME Demand Growth Middle East China Other AP Japan India Vietnam Teapot Net Addition (Dec’18 > Dec’19) (Aug’18 > Oct’18) (Oct’19 > Nov’19) (May’19 > Aug’19) (Dec’18 > Dec’19)

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Asian Margin Vs. US-EU margin

World GRM

12 13 14 15 16 17 18 19 1 5 9 13 17 21 25 29 33 37 41 45 49

U.S. Crude Refinery Input

5yr-range 2019 2018 avg 14-18

MBD Source : EIA

8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

EU 16 Crude Refinery Input

5yr-range 2019 2018 avg 14-18

MBD Source : EurOil

2.2 2.7 3.2 3.7 1 5 9 13 17 21 25 29 33 37 41 45 49

Japan Crude Refinery Input

5yr-range 2019 2018 avg 14-18

MBD Source : METI

Total Capacity: 3.5 MBD 84.78% 65.71% 90.69% Total Capacity: 18.6 MBD Total Capacity: 15.8 MBD

• 8
• 6
• 4
• 2

2 4 6 8 10 12 14

Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 $/BBL

SINGAPORE GRM

SING CRACK SING HYDRO

• 10

10 20 30 40

Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19

$/BBL

EU - US Margins

BRENT CRACK BRENT HYDRO WTI CRACK

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250 300 350 400 450 500 550 600 1 5 9 13 17 21 25 29 33 37 41 45 49

U.S. Crude Stocks (excl. SPR)

5yr-range 2019 2018 avg 14-18

MBBL Source : EIA

Global Crude Oil Inventories

Inventories

10 20 30 40 50 60 70 80 1 5 9 13 17 21 25 29 33 37 41 45 49

Crude Oil, Cushing, Oklahoma

5yr-range 2019 2018 avg 14-18

MBBL Source : EIA 60 65 70 75 80 85 90 95 100 105 1 5 9 13 17 21 25 29 33 37 41 45 49

Japan, Crude Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : METI 430 440 450 460 470 480 490 500 510 1 2 3 4 5 6 7 8 9 10 11 12

EU 16 Crude and Feedstock Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EurOil

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180 200 220 240 260 280 1 5 9 13 17 21 25 29 33 37 41 45 49

U.S. Gasoline Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EIA

Global Gasoline Inventories

Inventories

80 100 120 140 1 2 3 4 5 6 7 8 9 10 11 12

EU 16 Gasoline Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EurOil 10 20 1 5 9 13 17 21 25 29 33 37 41 45 49

Singapore Gasoline Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : IE Singapore 5 10 15 1 5 9 13 17 21 25 29 33 37 41 45 49

Japan, Gasoline Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : METI

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80 100 120 140 160 180 1 5 9 13 17 21 25 29 33 37 41 45 49

U.S. Diesel Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EIA

Global Middle Distillate Inventories

Inventories

10 20 1 5 9 13 17 21 25 29 33 37 41 45 49

Singapore Middle Distillate Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : IE Singapore 300 350 400 450 500 1 2 3 4 5 6 7 8 9 10 11 12

EU 16 Diesel Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EurOil 5 10 15 20 1 5 9 13 17 21 25 29 33 37 41 45 49

Japan, Middle Distillate Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : METI

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Global Fuel Oil Inventories

Inventories

20 30 40 50 1 5 9 13 17 21 25 29 33 37 41 45 49

U.S. Residual Fuel Oil Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EIA 10 20 30 40 1 5 9 13 17 21 25 29 33 37 41 45 49

Singapore Residual Fuel Oil Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : IE Singapore 5 10 15 20 1 5 9 13 17 21 25 29 33 37 41 45 49

Japan, Residual Fuel Oil Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : METI 50 60 70 80 90 1 2 3 4 5 6 7 8 9 10 11 12

EU 16 Residual Fuel Oil Stocks

5yr-range 2019 2018 avg 14-18

MBBL Source : EurOil

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China’s Refined Product Exports

China Export

100 200 300 400 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

China’s Gasoline Exports

2016 2017 2018 2019

KBD Source : China Custom 100 200 300 400 500 600 700 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

China’s Gasoil Exports

2016 2017 2018 2019

KBD Source : China Custom 100 200 300 400 500 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

China’s Jet/Kero Exports

2016 2017 2018 2019

KBD Source : China Custom

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LPG Demand by Sector LPG Demand Highlight

• In 1Q2019, LPG demand expanded 1.8% YoY on

the back of 14.2% YoY higher demand from petrochemical sector, as a result of higher substitute feedstock price. However, LPG demand was pressured by 2.9% YoY, 2.1% YoY and 1.6% lower consumption in cooking sector, industrial sector and automobile sector, respectively.

Outlook for 2019

• LPG demand is expected to contract 1.1% YoY as

consumption in transport sector is expected to decline at 10.0% YoY due to fuel switching. Despite gasoline price being relatively high, LPG station in Thailand is decreasing hence limiting access to fuelling station for LPG vehicle users. Moreover, the registered number of pure LPG vehicle in Thailand during 2010-2017 fell at a rate of 11.2% per year, which means LPG vehicle has become significantly less popular among automobile users over time.

Thailand LPG Demand

Remark : LPG demand includes Petrochemical consumption

Source: EPPO, DOEB (As of May 2019)

Thailand petroleum demand by products

17.30 18.79 18.28 12 14 16 18 20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2016 2017 2018 KT/Day 100 200 300 400 500 600 700 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov 2018 2019 Cooking Industry Automobile Petrochemical KT/MTH

Domestic LPG Demand

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Domestic Gasoline/Gasohol Demand

Gasoline/Gasohol Demand by Grade GASOLINE/Gasohol Demand Highlight

• In 1Q2019, Mogas demand rose by 3.4% YoY to

an average 31.9 ML/day. Although, the retail price

• f Mogas is higher, Mogas demand was still

supported by consumer preference for using personal cars rather than public transit. Moreover, Mogas demand is also supported by fuel switching from LPG.

• The level of domestic ethanol demand, in

1Q2019, rose significantly by 5.7% YoY from 4.07 mml/day to 4.30 mml/day following the rising of Mogas demand. Additionally, this was also because

• f higher demand in GSH95, E20, and E85 which

increased by 8.1% YoY, 13.6% YoY, and 13.9% YoY, respectively, backed up by increasing in the number of new E20 vehicle, higher E20 gas station, and attractive GSH95-E20 and E20-E85 price gap.

Outlook for 2019

• Mogas consumption is predicted to grow by 3.4%

YoY supported by expectation of growing of new passengers cars from return

• f

private

• consumption. However, the demand growth is

limited by higher oil price.

Thailand Gasoline/Gasohol Demand

Thailand petroleum demand by products

31.19 32.17 32.29 22 24 26 28 30 32 34 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2016 2017 2018 MML/Day 5 10 15 20 25 30 35 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov 2018 2019 ULG95 GSH 91 (E10) GSH 95 (E10) GSH E20 GSH E85 MML/Day

Source: DOEB (As of May 2019)

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Domestic Jet Demand

JET-A1 demand and # of flights JET Demand Highlight

• In

1Q2019, Jet consumption increased moderately by 2.2% YoY tapering off from last year as tourism sector encountered a slowdown in growth following slower global economy. Overall tourist numbers still remained constant at 0.3% YoY while Chinese tourist numbers faced a drop of 2.1% YoY.

Outlook for 2019

• Jet demand growth is expected to grow by 2.5%

YoY as a result of tourist number growth, especially from ASEAN. However, the global economic slowdown has turned China’s GDP growth from hot to lukewarm which leads to its citizen being more cautious about their expenses. Such economic activity results in less traveling activity which is damaging to Thailand as one of the main destinations for Chinese to spend their vacation.

Thailand JET Demand

Source: DOEB, AOT, Department of Tourism (As of May 2019)

Thailand petroleum demand by products

12 14 16 18 20 22 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2016 2017 2018 MML/Day 350 400 450 500 550 600 650 700 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep 2015 2016 2017 2018 2019 # of Flights (LHS) JP 1 Demand (RHS) MML/MTH Flights

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Domestic Gasoil and NGV Demand

NGV Demand Diesel Demand Highlight

• In 1Q2019, Diesel demand rose by 1.6% YoY as a

result of the growth of Thai economy, backed up by 9.5% higher commercial car sales and stable agricultural production activity. However, due to the global economic slowdown, manufacturing production turned to contraction at 1.0% YoY.

Outlook for 2019

• Diesel demand is expected to expand by 1.7% YoY

supported by economic activity. Moreover, NOAA (National Oceanic and Atmospheric Administation) predicts less rainfalls as El Nino is more likely to

• ccur than La Nina.

NGV Demand Highlight

• In 1Q2019, NGV demand fell significantly by 11.9%
• YoY. The major pressuring factor was the

unforgettable hike in retail price. Furthermore, gasoline price dropped significantly in the latter year, making gasoline more popular among consumers.

Thailand Gasoil Demand

Thailand petroleum demand by products

52 54 56 58 60 62 64 66 68 70 72 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2016 2017 2018 MML/Day 5 6 7 8 9 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2016 2017 2018 KT/Day

Source: DOEB (As of May 2019)

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Domestic Fuel Oil Demand

Thailand Fuel Oil Demand by Sector Fuel Oil Demand Highlight

• In 1Q2019, Fuel Oil consumption fell by 4.6%

YoY, as a result of 78.6% YoY slump in demand for power generation. Moreover, the demand for industrial purpose declined by 13.6% YoY as pollution concern became in the spotlight earlier this year. However, bunker demand remained expandable at 2.6% YoY following import and export activities, although the growth has receded from last year’s outstanding performance due to the lack of special demand from abroad.

Outlook for 2019

• Fuel oil demand is expected to increase by 0.6%

YoY, supported by transportation demand from economic activity. However, demand growth will continue to be limited by weak consumption for industrial and electricity purposes.

Thailand Fuel Oil Demand

Source: DOEB (As of May 2019)

Thailand petroleum demand by products

2 4 6 8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2016 2017 2018 MML/Day 1 2 3 4 5 6 7 8 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov 2017 2018 Transportation Industry Electricity Others MML/Day

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Thank You

Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976