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Thai Oil Public Company Limited
Opportunity Day Presentation 21 March 2018
Q4 & FY/2017
Time : 13:00 - 14:00 hrs. Venue : Stock Exchange of Thailand, Building B, Room 603
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Thai Oil Public Company Limited Q4 & FY/2017 Opportunity Day - - PowerPoint PPT Presentation
Thai Oil Public Company Limited Q4 & FY/2017 Opportunity Day - - PowerPoint PPT Presentation
-1- Thai Oil Public Company Limited Q4 & FY/2017 Opportunity Day Presentation 21 March 2018 Time : 13:00 - 14:00 hrs. Venue : Stock Exchange of Thailand, Building B, Room 603 -2- -2- Disclaimer The information contained in this
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VISION
A LEADING FULLY INTEGRATED REFINING & PETROCHEMICAL COMPANY IN ASIA PACIFIC
MISSION
- To be in top quartile on performance and return on investment
- To create a high-performance organization that promotes
teamwork, innovation and trust for sustainability
- To emphasis good Corporate Governance and commit to Corporate
Social Responsibility
VALUES Corporate Vision, Mission and Values
Professionalism Ownership & Commitment Social Responsibility Integrity Teamwork & 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 5th Consecutive Year as the Member
- f DJSI Emerging Markets
5th Consecutive Year of leading positions:
Oil & Gas Refining & Marketing
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Presentation Agenda
TOP GROUP BUSINESS OVERVIEW 2017 KEY FINANCIAL HIGHLIGHTS 2017 PERFORMANCE ANALYSIS 1H-18 MARKET OUTLOOK
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TOP GROUP BUSINESS OVERVIEW
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51% 25% 13% 11%
Thai Oil Group Business Structure
Net Profit Contribution
(Avg. from 2006 – 2017) IRPC 20.0%
- 5 Oil & Chemical Tankers
Capacity : 52,350 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% PTT 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 498 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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Key Milestones: 56 Years, A Long Track Record of Success
2007
- Increased refining capacity to 275 kbd
2008
- The first refinery in Thailand with diesel
production to comply with the sulfur content requirements of Euro IV
- Capacity expansion of Thai Paraxylene with
total aromatics capacity of 900,000 tons p.a.
- Invested in Solvents business in Thailand
and Vietnam 1993
- We expanded our refining capacity to 190 kbd
1994 – 1997
- Increased total refining capacity to 220 kbd
- Initial investment in Thai Paraxylene (“TPX”) and Thai
Lube Base (“TLB”)
- IPT became the first IPP to enter into a PPA with EGAT2
with 700 MW capacity ; separately, Thaioil Power (“TP”) constructed the power generation plant under the SPP with 118 MW capacity
1961 – 1997 Capacity expansion and initial stage of business diversification 2004 – 2011 Listing, expansion and diversification Today A leading integrated refining and petrochemical group in Asia Pacific
- 275 kbd refinery ( approximately 22% of
Thailand’s total refining capacity)
- Nelson index 9.81
- Diversified business through 16 subsidiaries
1961 – 1964
1961
- Incorporated
1964
- Commenced operation
with distillation capacity
- f 35 kbd
- Simple refinery with
Nelson complexity Index ~ 41 1970
- Refining capacity
expanded to 65 kbpd 1989
- Increased refining
capacity to 90 kbpd 2004
- IPO and listed on the SET
- Acquired remaining shares in Thai
Paraxylene and Thai Lube Base which became our wholly-owned subsidiaries 2013-2014
- Established LABIX
- Invested in power biz via
GPSC & TOP SPP
- Completed Emission
Improvement, HVU-2 Debottlenecking & CDU-3 Preheat Train project 2015-2016
- Completed Projects: LABIX &
TOP SPP 2017
- 2017 Revenue 337,388 MB
- 2017 Net profit 24,856 MB
- Completed lorry expansion
project (10 to 15 mml/day)
- Established Thaioil Treasury
center (TTC) 2010
- Established Thaioil
Ethanol
- Production expansion of
TDAE by 50,000 tons per annum 2011
- Manufactured diesel
and ULG in compliance with the sulfur and BZ aromatics content requirements of the Euro IV
- Acquired 1st VLCC
Note 1. Based on our internal estimates using the methodology of the Nelson Complexity Index
- 2. The Electricity Generating Authority of Thailand (“EGAT”) is the national grid
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TOP Group Synergy & Strategic Role in PTT Group Value Chain
NATURAL GAS CRUDE IMPORT
Mixed-Xylene Solvent Toluene Pentane Hexane
SOLVENTS TP & TOP SPP provides electricity and steam to Thai Oil group and sells its remaining power to the national grid AROMATICS & LAB
Lube Base Oil Bitumen TDAE Slack Wax Extract LUBE BASE
REFINERY
LPG Fuel Oil Diesel Gasoline Jet/Kero PLATFORMATE LONG RESIDUE REFINED PETROLEUM POWER
Diversifying to a broad range of downstream products to enjoy higher profit margins and reduce earnings volatility
Thai Oil’s Businesses The majority of refined petroleum products are sold domestically to PTT PTT is our principal domestic customer for
- ur lube base
products
Upstream Intermediate Downstream
Paraxylene Benzene Mixed-Xylene Toluene LAB
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2017 KEY FINANCIAL HIGHLIGHTS
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Stable Aromatics & LAB Margins
(GIM contribution 1.6 $/bbl from 1.7 $/bbl in 2016)
Implication Mkt GRM at 6.7 $/bbl
(2016 = 5.2 $/bbl)
0.9 $/bbl inventory gain
(from stock gain 1.6 $/BBL in 2016)
Refinery Aromatics & LAB Lube Base Improved Lube Base Contribution
(GIM contribution 0.8 $/bbl from 0.7 $/bbl in 2016)
Refinery + Aromatics & LAB + Lube Base
$/BBL
2017 2016
Market GIM
9.1 7.5
Inventory Gains / (Loss)
0.8 1.6
Accounting GIM
9.9 9.1
- Robust refining margins supported by higher middle distillate
spread due to improving regional demand, particularly China, and strong fuel oil spread backed by bunker demand.
- Higher crude price driven by high compliance of OPEC & Non-OPEC
to production cut, and strong global oil demand growth tracking robust global GDP.
- Strong Base Oil spread supported by tightened supply from higher
plant maintenance and unplanned shutdown in Asia.
- Improved Bitumen spread following lower supply as some producers
switch their production from bitumen to fuel oil.
- Stable aromatics contribution as soften PX spread from new
aromatics supply from startup of Reliance Phase II (PX 1.4 and BZ 0.4 MTA) in April was offset by improving BZ spread due to growing downstream demand and unplanned shutdown in U.S.
2) Based on refinery intake
2) 3)
3) Aromatic contribution including LAB
1)
4) Based on integrated intake
4)
1) Include Profitability Improvement
2017 Key Market Drivers Highlights
Key Highlights
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67% 15% 6% 9%3%
Refinery Aromatic & LAB Lube Base Power Others
Key Achievements 2017 TOP Group Net Profit
- Recorded high refinery annual utilization
rate
Unit : million THB (MB)
Net Operating Profit Reversal of NRV/(NRV) & Adjusted to cost
Sustainability & Awards
2017 2016 Refinery 112 % 108 % Aromatic 83 % 81 % Base Oil 88 % 81 % 21,222 MB Q4/17 Q3/17 7,605 MB FY2016
- Capture high local & Indochina sales of
petroleum products
2017 2016 Local 86 % 87 % Indochina 9 % 9 % Other exports 5 % 4 % 2017 2016
Operational Excellence Growth & Profitability Improvement
- Profitability Improvement activities
at 5,505** MB
** Compared with Corp. plan
71% 11% 7% 10%1%
Included Stock G/L
- Best IR Award 2017 listed company with
market cap > 100 Bn THB from SET 6,927 MB
2017 Key Achievements
Key Highlights
6.263 3,330 21,438 15,288 2,259 3,341 3,343 6,138 (897) 865 754 39 (20) (609) (679) (243) FY2017 24,856 MB
- TOP SPP’s Project Finance 8,500 MB
- Establishment of Thaioil Treasury Center
(TTC) to enhance the efficiency of TOP group’s
financial management
Stock gain/(loss) Others i.e. Hedging gain/(loss) & Non-recurring items
- Sustainability Leader for Oil & Gas
Industry for 5th consecutive years & 5th
consecutive years as Member of DJSI Emerging Markets
* MTA 1 month (Q3’16)
*
- Successful COD Lorry Expansion Project
(Mar’17) loading capacity from 10 to 15 mml/day
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Key Highlights
2017 Profitability Improvement (VS Corporate Plan)
FY 2017
FY 2016
THB 5,505 mn
THB 3,629 mn
Unit: million THB
Margin Improvement
(Supply & Marketing / Hydrocarbon Management / )
Higher domestic/ CLMV petroleum sale New crude processing Energy improvement Plant optimization
Cost Management
General & Admin , Procurement & warehouse , Operation & Maintenance , Project & Manpower management LP Upgrading Model , Process Improvement
*
* Compared with Corp. plan
528 4,977 * 527 3,102 37% 13% 10% 12% 11% VLCC freight &
demurrage saving
2%
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2017 PERFORMANCE ANALYSIS
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Refining
Refinery: Recorded High Annual Utilization Rate
91% 88% 89% 95% 89% 90% 98%98% 94% 91% 94% 107% 109%107%110% 111%112% 114% 112% 108% 108% 112% 70% 90% 110%
Q1/16 Q2 Q3 Q4 Q1/17 Q2 Q3 Q4 2015 2016 2017
Industry utilization rate TOP utilization rate
TOP’s Domestic Sale vs Industry** Sales breakdown by customers
** Source: Department of Energy Business, Ministry of Energy
84% 83% 85% 81% 86% 84% 87% 86%
16% 17% 15% 19% 14% 16% 13% 14% Q4/17
TOP Industry Thailand
Q3/17
Export Q3/17 Q4/17 FY/17 FY/16 TOP Ind. TOP Ind. TOP Ind. TOP Ind. CLMV 11% 7% 9% 6% 9% 6% 9% 5% Others 5% 10% 6% 13% 5% 10% 4% 9%
Domestic Export
FY/16
36% 11% 8% 1% 30% 10% 4%
Domestic Jobbers FY/17 Sales Breakdown
Export 14%
36% 11% 8%1% 29% 10% 5%
Domestic Jobbers Q4/17 Sales Breakdown Export 15%
TOP/ Domestic Refinery Utilization Rate
Unit: % Utilization Rate
Domestic Oil Demand
* exclude Fuel Oil & LPG demand
TOP Industry Thailand TOP Industry Thailand
FY/17
TOP Industry Thailand
*
200 400 600 800 Mogas Jet/Kero Diesel Total Demand
2016 2017
2.9% 3.7% 3.4%
KBD
4.4%
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Gross Refinery Margins - GRM
27 29 35 39 44 46 42 44 43 49 44 52 54 54 51 52 51 46 48 50 54 56 61 62
20 40 60 80 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017
Refining
2016 2017 2016 $/bbl Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY17 FY16 DUBAI (DB) 30.4 43.2 43.2 48.3 53.1 49.8 50.5 59.3 53.2 41.3 ULG95 - DB 18.8 14.4 11.6 14.6 14.8 14.2 16.1 14.4 14.9 14.9 JET - DB 11.7 11.1 11.1 12.3 11.3 10.8 13.2 13.3 12.1 11.6 GO - DB 9.6 10.5 11.0 12.0 11.8 11.4 13.9 13.0 12.5 10.8 HSFO - DB (5.2) (8.7) (4.3) (1.7) (3.1) (1.8) (1.3) (3.1) (2.3) (5.0) 2016 2017 2016 $/bbl Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY17 FY16 Market GRM 6.1 4.4 4.3 6.0 6.5 6.1 8.1 6.0 6.7 5.2 Stock G/(L) (1.0) 4.2 (0.6) 3.5 (0.2) (2.2) 2.4 3.6 0.9 1.6 Accounting GRM 5.1 8.6 3.7 9.5 6.3 3.9 10.5 9.6 7.6 6.8
- Lower product spread mainly from
increased supply after resumption from unplanned shutdown in Q3
Dubai Crude Price & Key Petroleum Product Spreads
Refinery Utilization
Q3/17 Q4/17 2017 2016 114% 112% 112% 108%
Dubai Price
(US$/bbl)
Q4/17 Market GRM Q4/17 Performance *Murban OSP over Dubai ($/bbl) % MB Intake/OSP*
41%/ 1.5 40%/ 2.9 42%/ 1.7 46%/ 2.7
+ High Run rate at 112% to capture strong domestic and Indochina market
2016 DB avg. 41.3 $/bbl 2017 DB avg. 53.2 $/bbl Q1TD’18 (16 Mar 18) ULG95-DB = 13.7 $/bbl JET-DB = 16.2 $/bbl GO-DB = 14.6 $/bbl HSFO-DB = (4.7) S/bbl
Q4/17: Soften Mkt GRM pressured by Increased Supply after Resumption from Unplanned Shutdown in U.S. and Higher Crude Premium
2017 FY + Higher DB price due to OPEC and Non OPEC production cut + Stronger Mkt GRM as higher product spread especially middle distillates and fuel oil
- Higher crude premium due to
lower light crude supply after OPEC production cut
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Aromatic’s Sales (excluding by product) & Product-To-Feed Margin (P2F)
290 360 347 339 292 314 377 345 303 266 296 278 292 323 322 268 268 282 274 255 246 254 256 270 121 167 180 177 130 108 193 187 143 100 191 264 347 412 279 233 205 238 201 193 193 186 206 246
- 30
120 270 420 570
2016 2017 2016 $/ton Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY17 FY16 PX**-ULG95 332 315 341 280 312 273 258 260 276 317 BZ**-ULG95 156 138 174 185 346 226 195 213 245 163 2016 2017 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY17 FY16
Aromatic P2F -$/ton
98 99 109 95 126 91 84 93 99 100
Aromatic P2F -$/bbl 12.8
13.0 14.3 12.4 16.4 11.9 11.0 12.2 12.9 13.1
GIM contribution***
1.4 1.7 1.9 1.6 2.1 1.5 1.4 1.5 1.6 1.7
Remark: TOL –ULG95 Q3/17 = 62 $/ton, Q4/17 = 54 $/ton, FY/17 = 77 $/ton
Aromatics Spreads and Margins
Aromatics Production
Q3/17 Q4/17 2017 2016 81% 82% 83% 81% (Unit : KTon)
Q4/17 Market
*** including LAB contribution since 25 Feb 2016 ** PX price = CFP Taiwan, BZ price = FOB Korea
Q4/17 Performance
176 435 57 447 176
72
104 113 108 110 122 103 108 113 43 44 35 54 45 45 43 43 20 17 11 8 25 17 16 13 TL BZ PX
+ Optimized Aromatics run (Aromatics V.S. gasoline margins)
(US$/Ton)
PX-ULG95 BZ-ULG95
2016 2017
Q1TD’18 (16 Mar 18) PX-ULG95 = 310 $/ton BZ-ULG95 = 240 $/ton
Aromatics/LAB
Q4/17: Improved Contribution supported by strong downstream demand
2017 FY Stable Aromatics contribution following growing downstream demand but offset by additional supply, particularly from India + Improved PX spread from strong downstream i.e. polyester, PTA demand, as well as improved BZ spread from lower supply due to technical issues in U.S. plants and strong downstream product i.e. SM demand
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TLB’s Sales (excluding byproduct) & Product-To-Feed Margin (P2F)
453 426 403 388 399 441 453 448 428 384 378 338 370 445 539 538 558 571 560 529 495 471 441 461 38 (20) (39) (34) (49)(60) (51) (62) (70) (74) (65) (103) (32) (11) 4 (41) (44) (30) (29) (20) (38) (33) (55) (46)
- 200
200 400 600 800
Lube Base Oil
2016 2017 2016
$/ton
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY17 FY16
500SN-HSFO
427 409 443 367 451 556 528 458 528 412
BITUMEN- HSFO
(7) (48) (61) (80) (13) (38) (29) (45) (29) (49) 2016 2017 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY17 FY16
P2F -$/ton
126 121 106 77 116 118 113 102 112 107
P2F -$/bbl
19.2 18.4 16.1 11.7 17.6 17.9 17.1 15.5 17.0 16.2
GIM contribution
0.9 0.9 0.6 0.5 0.9 0.9 0.8 0.7 0.8 0.7
63 57 41 54 60 58 60 57 37 35 28 40 47 45 43 36 97 97 81 113 110 109 101 104
Base Oil & Bitumen Spreads & Margins
Base oil Production
Q3/17 Q4/17 2017 2016 88% 88% 88% 81%
500SN-HSFO Bitumen-HSFO
(Unit : KTon)
Q4/17 Performance
Bitumen Specialty Base Oil
22% 21% 21% 22% 16% 13% 14% 14%
Q3/17 Q4/17 FY/17 FY/16 Base Oil Specialty % Base Oil & Specialty Sales Volume
215 141 388
Q4/17 Market
235 154 424
(US$/Ton)
2016 2017
Q1TD’18 (16 Mar 18) 500SN-HSFO = 514 $/ton BIT-HSFO = (54) $/ton
− Soften lube spread due to increased lube supply after resumption from maintenance
Q4/17: Slightly Lower Contribution Pressured by Lower Demand and Increased Lube Supply after Resumption from Maintenance
2017 FY + Higher P2F due to tightened supply + Stable utilization rate at 88% − Lower bitumen spread as weak regional demand especially China and Indonesia
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Power
Q4/17 Power Sector Performance…Growing Contribution to the Group
628 614 643 619 2,055 2,504
Q1/17 Q2/17 Q3/17 Q4/17 FY/16 FY/17
Equity holding in GPSC ****
SPP
711 707 739 674 2,388 2,832
Q1/17 Q2/17 Q3/17 Q4/17 FY/16 FY/17
407 382 416 365 1,305 1,570 179 202 216 174 656 771
586 584 632 539 1,961 2,341
Q1/17 Q2/17 Q3/17 Q4/17 FY/16 FY/17
(3) consolidated EBITDA
- f TP and TOP SPP
(4) Net profit of 74% TP
+ 100 % TOP SPP + 24.29% profit sharing from GPSC
+ Robust contribution from TOP SPP full year run and increasing equity income and dividend from GPSC
19%
Power Business Sector
Power & Steam Sales EBITDA & Net Profit
Electricity(1) (GWh) Steam(1) (kton)
1,054 1,073 1,076 1,030 3,686 4,233
Q1/17 Q2/17 Q3/17 Q4/17 FY/16 FY/17
EBITDA (THB million) Net Profit (THB million)
***TOP shareholding 24.29% (8.91% via TOP and 20.79% via TP) GPSC is an associate company of TOP. Equity method is applied to recognize share of profit. (EBITDA calculation excludes profit sharing from GPSC)
SPP (TP+TOP SPP) Equity income from GPSC
(1) 100% of TP and TOP SPP
(2)
(2) TOP SPP COD 1st block in Apr 16 and 2nd
block in Jun 16
Performance Highlight
(3) (4)
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Integrated Margin & Competitive Cash Cost
Financial
5.7 7.8 5.2 6.7 6.0 1.2 5.9 6.8 7.6 9.6 2014 2015 2016 2017 Q4/17
1.5 1.3 1.4 1.3 1.9 0.8 0.6 0.5 0.4 0.3
2.3 1.9 1.9 1.7 2.2 2014 2015 2016 2017 Q4/17
Operating Cost Interest Expense
(Unit: US$/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) *
*Including MTA cost in MTA period since mid Jun-late July 2014 for 46 days (TOP MTA cost in 2014 = 436 MB or 0.14 $/bbl) (excl. one-time non-
- perating item)
(net)
5.4 1.1 7.6 5.8 5.2 6.7 6.6 7.5 6.0 9.5 0.1 0.1 0.6 0.6 1.7 1.7 1.6 1.6 1.5 1.5 0.7 0.7 0.9 0.9 0.7 0.7 0.8 0.8 0.7 0.7
6.2 9.1 7.5 9.1 8.3 1.9 7.2 9.1 9.9 11.8 2014 2015 2016 2017 Q4/17 Refinery Aromatics+LAB Lube Base
1.8 1.5 1.8 1.6 2.4 0.7 0.6 0.5 0.5 0.4
2.6 2.1 2.3 2.1 2.8 2014 2015 2016 2017 Q4/17
Operating Cost Interest Expense
(Unit: US$/bbl)
*Including MTA cost in MTA period since mid Jun-late July 2014 for 46 days ( TOP group MTA cost in 2014 = 609 MB or 0.20 $/bbl) (excl. one-time non-
- perating item)
(net)
Higher group cash cost in 2016 mainly from MTA cost in TLB ~198 MB or ~ 0.1 $/bbl
*
Gross Refining Margin Refinery’s Cash Cost
SLIDE 22
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Performance Breakdown
2017: Performance Breakdown by Business Unit
(1) U-rate of 5 Oil & Chemical Tankers (total capacity: 52,350 DWT) (2) U-rate of TET Q1/17 includes MCE 1-month U-rate at 124%, SAPTHIP 102% and UBE 100% , Q2/17 includes SAPTHIP 93% and UBE 83%, Q3/17 includes SAPTHIP 99% and UBE 107%, Q4/17 includes SAPTHIP 111% and UBE 103%, and FY/17 includes MCE 1-month U-rate at 124%, SAPTHIP 101% and UBE 98% (3) Includes 75% of LAB net profit Q1/17 = 118 MB, Q2/17 = (1) MB, Q3/17 = 12 MB, Q4/17 = (9) MB and FY/17 = 120 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%)
Q1/17 4,492 1,213 489 148 1 120 586 7,075 734 6,341 Q2/17 1,316 555 523 25 15 40 584 3,250 (2,205) 5,455 Q3/17 5,940 473 435 52 (8) 51 632 7,605 1,362 6,243 Q4/17 5,866 490 365 84 (538) 52 539 6,927 4,206 2,721 2017 17,614 2,730 1,812 309 (530) 263 2,341 24,856 4,097 20,759
112% 83% 88% 123% 96% 99%
108% 81% 81% 109% 92% 90%
2017 2016
Refinery Aromatic Lube Solvents Marine Ethanol Power
Consol
Utilization/Production (%) & Net Profit (million THB)
Stock G/(L) & Reversal of NRV/(NRV) & Adjusted to cost Consol Excl Stock G/(L) & Reversal of NRV/(NRV) & Adjusted to cost
Key Points
- Refinery: higher utilization to capture decent
margin and strong demand (local + Indochina)
- Aromatic/LAB: despite stable margins, net
profit contribution declined due to end of loss-carry forward tax benefit
- Lube: higher contribution from improved lube
and bitumen spread due to supply tightness
- Power: higher contribution from TOP SPP &
GPSC
- Solvents: higher utilization but lower net profit
as higher competition depressed margins
- Marine: declined contribution due to slow down
in E&P business and loss from asset impairment
- Ethanol: higher utilization and contribution
supported by higher ethanol price whereas lower cost
(1) (2) (3) (4) (3) (3) (4) (4) (3) (3) (4) (4)
SLIDE 23
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THB/US$ - average
33.11 33.54
(0.43)
THB/US$ - ending
32.85 33.53
(0.68)
Effective Tax Rate (%)
20% 18%
2%
35.57
(2.46)
36.00
(3.15)
12%
7%
34.10 35.46
(1.36)
32.85 36.00
(3.15)
18% 10%
8%
Financial
2017 TOP Group Consolidated P&L
2017 2016
YoY+/(-)
Q4/16
YoY+/(-)
(million THB) Q4/17 Q3/17
QoQ+/(-)
Stock G/(L)&Reversal of NRV/(NRV) & Adjusted product stock to cost 4,206 1,362
2,844
Net Profit/ (Loss) excl. Stock G/(L) and Reversal of NRV/(NRV) & Adjusted product stock to cost 2,721 6,243
(3,522)
Sales Revenue 89,443 80,296
9,147
Hedging Gain / (Loss) (63) (20)
(43)
EBITDA 10,810 10,983
(173)
EBITDA excl. Stock G/(L) & Reversal of NRV/(NRV) & Adjusted product stock to cost 6,604 9,621
1,832
Financial Charges (797) (812)
15
FX G/(L) & CCS 677 705
(28)
(Tax Expense)/reversal of income tax (1,711) (1,729)
18
Net Profit / (Loss) 6,927 7,605
(678)
EPS (THB/Share) 3.40 3.73
(0.33)
3,042
1,164
2,760
(39)
77,104
12,339
(330)
267
10,085
725
7,043
(439)
(911)
114
(870)
1,547
(794)
(917)
5,802
1,125
2.84
0.56
A Mainly from
- verall sale
volume and product price increased
B Mainly from loss in
inventory hedge
C Mainly from higher
Mkt GIM 9.1 $/bbl from 7.5 $/bbl
D Realized gain on
AP/AR & unrealized gain on USD debt from THB appreciated in 2017 4,097 6,177
(2,080)
20,759 15,045
5,714
337,388 274,739
62,649 A)
(133) (243)
110 B)
36,925 32,675
4,250 C)
32,828 26,498
6,330
(3,285) (3,461)
176
3,182 446
2,736 D)
(5,529) (2,295)
(3,234)
24,856 21,222
3,634
12.18 10.40
1.78
YoY analysis
SLIDE 24
- 24-
- 24-
2017 TOP Group Consolidated Cash Flow
Financial
FY/17 FY/16 Operating Cash Flow 34,417 23,182 Net income & non-cash adj. 38,568 32,832 Change in working capital (4,151) (9,650) Beginning cash 31,121 S/T investment 29,654 Available for sale 244 61,019
+
+ =
+
Ending 15,623 52,318 3,103 71,045 5) Effect of FCD (596)
+
Change (14,901) 22,664 4) 2,859
Operating Cash Flow Financing
(Unit: Million THB) (Unit: Million THB)
Free Cash Flow
4,325 4,830 FY/17 FY/16 Investments (30,092) (18,352) ST investments (23,423) (12,057) Available for sale (2,865) (28) CAPEX (PP&E) & other (3,804) 1) (6,267) Financing (19,226) (9,397) Loans proceeding 3,681 2) 4,091 Loans repayment (10,088) 3) (3,051) Interest (3,364) (3,443) Dividend (9,455) (6,994)
Investments
1)TOP 3,257MB, SAPTHIP 121MB, SAKC 61MB 2) LABIX 3,145MB, SAPTHIP 400MB 3) TOP 4,932MB, LABIX 4,063MB, SAKC 240MB SAPTHIP 516MB, TM 166 MB 4) non-cash transaction :
- adj. FX gain from fixed deposit 499MB
AP as at 31Dec’16 233MB, other 27MB 5) FCD = 16,120MB (497MUSD)
SLIDE 25
- 25-
- 25-
Financial
2017 TOP Group Strong Financial Position & Financial Ratios
102,000 102,561 101,897 54,956 47,527 58,270 60,775 57,963 67,941 111,597 115,837 127,148 75,434 67,643 65,499 30,700 24,572 35,461
0.2 0.1 n/a
31-Dec-15 31-Dec-16 31-Dec-17
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 LT Debt Equities Current Assets Non-Current Assets Cash & ST investment
217,731
31 Dec 16 30 Jun 17
** Annualized EBITDA (excl stock gain/loss & Reversal of NRV/(NRV))
ROE 20.3% 16.8% 20.8 % ROIC 18.8% 15.8% 20.2 %
* * Based on actual performance in the past 12 months *
208,051
1)
BBB Stable Outlook Baa1 Stable Outlook AA- (tha) Stable Outlook
0.7 0.6
31-Dec-15 31-Dec-16 31-Dec-17
n/a
2) 2) Including available for sale 31 Dec 16 = 244 MB, 30 Jun 17 = 2,941 MB,
31 Dec 17 = 2,859 MB
Consolidated Long-Term Debt as at 31 Dec 17 65,499 million THB (US$ 1,994 million equivalence) Total Long-Term Debt Net Cash 228,108
31 Dec 17
1,474 million THB (US$ 45 million equivalence) Cost of Debt TOP Group (Net) 3.46% TOP Group (Gross) 4.79% Interest Rate Portion Float 10% Fixed 90% TOP avg.debt life 10.8 Yrs Value (Million) Portion US$ Bond & US$ Loan USD 1,094 55% THB Bond THB 23,500 36% THB Loan THB 6,080 9%
As at 31 Dec 17 (32.85 THB/US$)
*** ***
*** Net cash 1,474 MB or 45 M$
SLIDE 26
- 26-
- 26-
7.82 9.19 8.13 9.40 0.11 5.91 4.39 7.28 6.04 4.57
- 2.03
5.97 10.40 12.18
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
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
Dividend Payout
25% 40% 45% 48% n.a. 43% 45% 45% 45% 50% n.a. 45% 43% 43%
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%
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 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
2017 Dividend Payment
R Based on restated financial statement (year 2013 – 2014)
**
** Dividend payout before restated = 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 2.00 2.75 1.00 1.50 1.40 2.00 2.20 1.50 0.60 1.80 3.00 3.75 1.80 3.50
*** To be approved by AGM on April 11, 2018
SLIDE 27
- 27-
- 27-
1H-18 MARKET OUTLOOK
- Crude Oil
- Petroleum Products
- Aromatics
- Base Oil & Bitumen
- Linear Alkyl Benzene (LAB)
SLIDE 28
- 28-
- 28-
CRUDE OIL
SLIDE 29
- 29-
- 29-
20 40 60 80 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
$/BBL
Dubai Price Movement
BREXIT Canada wildfire & Nigerian
- utages
Keystone & Forties pipeline
- utage
10 consecutive weeks decline
- f U.S. Crude
Stocks
Crude Oil
Sustaining Crude Prices with Downward Trend amid Surging U.S. Supply
Key Highlights in 1H-18
*Q1TD’18 (as of 16 Mar ): $ 63.4/BBL
1st OPEC-led supply cut deal extension Hurricane Harvey & Irma Political crisis in Iraq
- Oil Market Turning to Surplus in 1H-18 Pressured by Massive U.S.
- Oil Production
- Supply Cut Deal to be a Double-edged Sword for OPEC
1 2
Output cuts extended to end of 2018 OPEC-Led cut deal achieved OPEC and Non- OPEC agreed to cut 1.8 MBD oil output Robust demand and lower U.S. output from winter storm
SLIDE 30
- 30-
- 30-
Surging Non-OPEC Supply Led by U.S. Production
1
Oil Market Turning to Surplus in 1H-18 Pressured by Massive U.S. Oil Production
Crude Oil
Sources: EIA (Feb’18), IEA (Jan’18)
Rising U.S. Production to Above 10 MBD
A C
Supply to Outpace Demand in 1H-18
D U.S. Crude Oil Production
- 1.5
- 0.5
0.5 1.5 2.5 7.0 8.0 9.0 10.0 11.0 Jan-16 Jan-17 Jan-18 Production [LHS]
MBD MBD
Sources: IEA (Jan’18) and TOP’s Estimate YoY Growth [RHS]
- 1.0
0.0 1.0 2.0 3.0 Q3'17 Q4'17 Q1'18 Q2'18
Africa Asia EU N.America LatAm FSU Others Net Growth
Non-OPEC Supply Growth (YoY)
MBD
Source: IEA (Jan’18)
Higher Price Heightens Shale Oil Production
B
MBD, YoY
- 0.4
0.0 0.4 0.8 1.2 $40 $45 $50 $55 $60
2018 Annual Shale Oil Growth vs. WTI Price
Sources: Bank of America (Oct’17)
World Oil Supply in 1H-18 vs. 2H-17
94 95 96 97 98 99
2H-17 Supply U.S. Other Non- OPEC OPEC-12 1H-18 Supply 1H-18 Demand
98.34 98.41 0.16 0.75 0.08 97.91 Unit : MBD
SLIDE 31
- 31-
- 31-
OECD Oil Stocks Approaching 5-yr Average
2
Supply Cut Deal to be a Double-edged Sword for OPEC
Winter Storm Generates Unexpected Demand C
Crude Oil
Sources: OPEC (Jan’18) and IEA (Jan’18)
High Compliance from both Producers A B
2,500 2,600 2,700 2,800 2,900 3,000 3,100 3,200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
5yr-range 2017 2017F (Nov'17) 5-yr Average
20 40 60 80 100 120 140 160 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 OPEC Cut Non-OPEC Cut
Global Demand Growth by Region (YoY) Compliance Rates of Output Cut
% MBD
OECD Oil Inventories
MBBL 1.21 1.27 0.97
- 0.5
0.0 0.5 1.0 1.5 N.Am LatAm ME Africa Asia EU Total Q4-17 Q1-18 Q2-18
Sooner market rebalancing than previously anticipated OPEC and its allies will review the market condition on 22 June’18
Target Level
Sources: IEA (Jan’18) and TOP’s Estimate* Source: IEA (Jan’18)
SLIDE 32
- 32-
- 32-
PETROLEUM PRODUCTS
SLIDE 33
- 33-
- 33-
8.5 7.9 6.1 8.0 7.6 7.7 5.0 5.2 6.7 6.2 6.5 6.4 8.2 7.2 7.1 7.1
Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1TD- 18*
Key Highlights in 1H-18 Singapore Cracking GRM ($/BBL)
Firm Gasoline Margin Due to Healthy Demand Despite Higher Chinese Exports
1
Steady Middle Distillate Cracks from Robust Demand and Limited Saudi Arabian Supply
Firm Petroleum Product Market from Robust Demand Growth and Limited Supply
($/BBL)
2016 Q1-17 Q2-17 Q3-17 Q4-17 2017 Q1TD- 18*
ULG95- DB 14.8 14.7 14.2 16.1 14.4 14.9 13.7 JET-DB 11.6 11.3 10.8 13.1 13.3 12.1 16.2 GO-DB 10.8 11.8 11.3 13.8 13.0 12.5 14.6 HSFO- DB (5.0) (3.2) (1.8) (1.4) (3.0) (2.3) (4.7)
2
Refinery Remarks: *Q1TD-18 as of 16 Mar 18
Lower-than-expected Supply Addition from the Delay Start-up of Nghi Son and Jeddah’s Closure
3
SLIDE 34
- 34-
- 34-
Steady U.S. Demand Despite Higher Crude Price B Tighter Market on Firm Demand & Refinery MTA A
1
Refinery
MBD
Asia Pacific Gasoline Demand
MBD KBD
Source : FGE Energy (Jan’18)
Source : FGE Energy (Jan’18)
Firm Gasoline Margin Due to Healthy Demand Despite Higher Chinese Exports
6.4 6.6 6.8 7.0 7.2 7.4 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
1H-18: 7.1 MBD (+0.23 MBD YoY)
Asia Pacific Gasoline Balance
Source : JBC (Jan’18)
MBD
U.S. Gasoline Demand
- 0.2
0.0 0.2 0.4 0.6 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
Improved demand & tight supply during MTA
High China’s Exports on Refinery Start-up in Q4’17
1H-18: 9.2 MBD (+0 MBD YoY)
Source : EIA (Feb’18)
Chinese Gasoline Export
100 200 300 400
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18
1H-18 : 260.9 KBD (+33.2 KBD YoY)
AVG 2016: 225 KBD AVG 2017: 246 KBD
C
8.2 8.6 9.0 9.4 9.8 10.2 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
SLIDE 35
- 35-
- 35-
Lower Surplus in H1-18 During Refinery MTA Period B Rising Asia Demand from Recovered Economy
Steady Middle Distillate Cracks from Robust Demand and Limited Saudi Arabian Supply
2
Refinery
A High China’s Exports on Refinery Start-up in Q4’17 D Asia Pacific Gasoil Demand
Sources : JODI (Jan’18), Reuters (Jan’18)
Lower Saudi Arabian Exports Due to Maintenance C
KBD 200 400 600 800 Jul-16 Jan-17 Jul-17 Jan-18
Q1’18 : Satorp (400 KBD) & Samref (400 KBD) MTA Q4’16 :Yasref (400 KBD) & Ras Tanura (550 KBD) MTA
Saudi Arabia’s Net Gasoil Export
Sources : Reuters (Jan’18), EIA (Feb’18)
KBD
Source : FGE Energy (Jan’18)
Chinese Gasoil Export
100 200 300 400 500 600
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18
1H-18 : 349.1 KBD (+20.7 KBD YoY)
MBD
Source : FGE Energy (Jan’18)
Asia Pacific Gasoil Balance
0.0 0.5 1.0 1.5 2.0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
AVG 2016: 313 KBD AVG 2017: 352 KBD
MBD 8.0 8.5 9.0 9.5 10.0 10.5 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
1H-18: 9.3 MBD (+0.21 MBD YoY)
SLIDE 36
- 36-
- 36-
Refinery
Note: Adjusted capacity based on start-up period (effective additional capacity)
Asia Pacific and Middle East Effective CDU Addition VS Additional Demand
Sources: FACTs Semi Annual Reports, Fall 2017, Reuters (Nov’17) , IEA Medium Term Outlook (Mar’17) and TOP’s estimate
3
Lower-than-expected Supply Addition from the Start-up Delay in Nghi Son and Jeddah’s Closure
3150 517 1386 1431 875 454 562 5 474 565 1207 897 880 493 311
- 64
- 500
500 1500 2500 3500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 KBD Middle East China Other AP Japan India Vietnam Teapot Net Addition AP & ME Demand Growth
Demand growth > New Capacity Addition
SLIDE 37
- 37-
- 37-
Year on Year Average 2015-2016(B) Y2016(B) Y2017(B) Y2018F(C) Mogas (A) +11.5% +9.8% +3.7% +3.1% Jet/Kero +8.2% +6.8% +4.4% +2.5% Diesel (A) +3.5% +3.1% +2.9% +1.9% Total +6.3% +5.4% +3.4% +2.3% GDP +3.1% +3.2% +3.9%(D) +3.9%(E)
Domestic
Remarks:
(A) Mogas and Diesel includes Ethanol and Biodiesel, respectively (B) DOEB Statistics (C) PTT’s Estimation (Jul-17) (D) BOT’s Estimate as of Jan-18 (E) BOT’s Estimate (BOT Monetary Report as of Dec-17)
Thailand Oil Demand Growth
Thailand Oil Demand Growth Thailand oil demand growth at 2.3% YoY in 2018
SLIDE 38
- 38-
- 38-
AROMATICS
SLIDE 39
- 39-
- 39-
($/TON)
2016 Q1-17 Q2-17 Q3-17 Q4-17 2017 Q1TD-18*
PX- ULG95 317 313 273 258 260 276 310 BZ- ULG95 163 343 225 195 212 245 240
Key Highlights in 1H-18 Aromatics Market
Firm PX Market supported by Summer Demand and New PTA Plants Stable BZ Market on Firm Chinese Import Interest amid Slightly Lower Demand Growth
1 2
255246233 288 256 332315341 280 317 313 273258260276 310 Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1TD-18*
PX CFR Taiwan-ULG95 ($/TON)
98 115 74 101 97 156138 174185163 343 225195212 245 240 Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1TD-18*
BZ FOB Korea-ULG95 ($/TON)
PX and BZ Market Still Supported by Firm Market Fundamentals
Remarks: *Q1TD-18 as of 16 Mar 2018 Aromatics
SLIDE 40
- 40-
- 40-
0.7 1.2 0.9 0.9 1.8 1.8 1.2 0.7 1.7 1.4 1.9 3.1 85% 88% 50% 60% 70% 80% 90% 100% 1 2 3 4
1H-17 2H-17 1H-18 2H-18 2017 2018 PX Capacity Addition PX Demand Growth Operating Rate (RHS) Mil TON Operating Rate
11.8 12.6 14.2 15.5 5 10 15 20
2015 2016 2017 2018
Aromatics Firm PX Market supported by Summer Demand and
New PTA Plants
High PTA Plants to Support PX Consumption in 2018 Firm Polyester Demand to Support Market
A B C
Source: PCI WoodMac (Nov’17), TOP’s Estimate
AP/ME Effective PX Capacity vs Demand Addition
1
1.2 4.5 0.6 0.7 2.6 1.9 0.0 1.0 2.0 3.0 4.0 5.0
1H-17 2H-17 1H-18 2H-18 2017 2018 Effective Capacity from Previous Year Effective Capacity Mil TON PTA
Nghi Son (0.8Mil TON) PetroRabigh (1.34Mil TON) Tongkun 2 (2.5Mil TON) JBF (1.2Mil TON)
Chinese PX Import Volume Remains in Uptrend
D
90% 94% 94% 10% 6%
0% 20% 40% 60% 80% 100% 2017 2018
Chinese PX Consumption by Source
AP/ME Effective PTA Capacity Addition
Dropping Recyclate* to Support PX Consumption in China
26.2 27.9 5 10 15 20 25 30
2017 2018 Mil TON
*Recyclate: PX from Recycle material such as PET and fiber
Mil TON
SLIDE 41
- 41-
- 41-
Aromatics
Slightly Higher SM Capacity Addition in 2018 Slightly Lower BZ Addition in 2018 to Support Market
A B
China Continued to be a Biggest BZ Importer, Replacing U.S.
C D
Source: IHS (Jan’18), TOP’s Estimate
Stable BZ Market on Firm Chinese Import Interest amid Slightly Lower Demand Growth
2
0.64 0.69 0.4 0.2 0.3 0.4 0.0 0.2 0.4 0.6 0.8 1.0
1H-17 2H-17 1H-18 2H-18 2017 2018 Effective Capacity from Previous Year 2018 Effective Capacity Mil TON SM
Anhui Haoyuan Chemical 260KTON
1.1 1.5 1.9 2.4 2.0 1.6 1.2 1.6 1 2 3
2015 2016 2017 2018 Chinese Net Trade U.S. Net Trade Mil TON
SM Plant Outage in Q1-17
0.7 0.6 0.5 0.5 1.3 1.0 0.6 0.6 0.5 0.6 1.2 1.1 77% 77% 0% 20% 40% 60% 80% 100% 1 2
1H-17 2H-17 1H-18 2H-18 2017 2018 BZ Capacity Addition BZ Demand Growth Operating Rate (RHS) Mil TON Operating Rate
AP/ME Effective BZ Capacity vs Demand Addition
Qingdao 500KTON
AP/ME Effective SM Capacity Addition
1.0 0.5 0.4 0.4 1.5 0.8 0.8 0.3 0.2 0.3 1.1 0.5 1 2
1H-17 2H-17 1H-18 2H-18 2017 2018 BZ Maintenance SM&Phenol Maintenance (BZ Equivalent) Mil TON
Asian BZ, SM and Phenol Plant Maintenance
BZ Capacity Loss Remained Higher than Downstream
C
SLIDE 42
- 42-
- 42-
BASE OIL & BITUMEN
SLIDE 43
- 43-
- 43-
0.3 0.2 0.2 0.0 0.7 2.1 0.0 0.5 1.0 1.5 2.0 2.5 1Q-18 2Q-18 3Q-18 4Q-18 2018 2017 Mil TON Group 1 Group 2 Group 3 Net Capacity
($/TON) 2016 Q1-17 Q2-17 Q3-17 Q4-17 2017 Q1TD- 18*
500SN
- HSFO
412 451 556 528 458 498 514
New Base Oil Gr.2 Plant Startup Causing Higher Supply Availability High Asia Pacific Plant Maintenance in Q1-18 Firm Demand during Summer Season
Base Oil & Bitumen
Key Highlights in 1H-2018
AP Base Oil Nameplate Capacity Addition AP Plant Maintenance (Effective Capacity)
369399 506450431 427409443 367412 451 556528458498 514 Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1TD-18*
Softer Base Oil Market due to Higher Plant Addition
B A 500SN – HSFO ($/TON)
Remarks: *Q1TD-18 as of 16 Mar 18
Sources: Argus Jan’18, Kline Sep’17 and TOP’s Estimate
1 2 Global Base Oil Capacity and Demand C
0.5 1.2 0.2 1.8
- 1.0
0.0 1.0 2.0 2015 2016 2017 2018 Mil TON Group 1 Group 2 Group 3 Net Capacity
56.1 56.2 57.4 58.9 33.8 34.0 34.2 34.4
60% 60% 60% 58% 0% 20% 40% 60% 80% 100% 20 40 60 80 2015 2016 2017 2018 Base Oil Capacity Base Oil Demand Operating Rate (RHS) Mil TON Y2018 Capacity Growth: 2.4% Demand Growth: 0.6%
3
Operating rate
SLIDE 44
- 44-
- 44-
Base Oil & Bitumen
($/TON)
2016 Q1-17 Q2-17 Q3-17 Q4-17 2017 Q1TD- 18*
Bitumen
- HSFO
(49) (13) (38) (29) (45) (31) (54)
Stable Bitumen Market on Firm Demand
23 20 82 98 56
- 7 -48
- 61
- 80
- 49
- 13
- 38
- 29
- 45
- 31
- 54
Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1TD-18*
Bitumen-HSFO ($/TON)
Key Highlights in 1H-2018
Higher Import Demand from China and India Rising of Thai Infrastructure Budget A C
Sources: Bitumart (Jan’18), Argus (Jan’18) and Thai Bureau of The Budget (2017-2018)
Firm Chinese and Indian Bitumen Market for Development of Transportation System Limited Bitumen Supply from Some Refinery Maintenances 1 2
Remarks: *Q1TD-18 as of 16 Mar 18
7.9 8.2 7.6 8.0
0.0 2.0 4.0 6.0 8.0 10.0 2015 2016 2017 2018F
Import Volume of Major Asian Players
China India Indonesia Vietnam Net Capacity Mil TON
Some Plant Maintenances Limit Supply in Asia B
50 100 Jan Feb Mar Apr May Jun
AP Bitumen Plant Maintenance in 1H-2018
KTON/Month
Fire in Taiwan (shut for 4 months) Maintenance in Malaysia and S.Korea (shut for 2 months)
50 100 150 200 2015 2016 2017 2018
Thai Infrastructure Budget
Highways dept. Rural Roads dept.
6%YoY Growth
Billion Baht
SLIDE 45
- 45-
- 45-
Linear Alkyl Benzene (LAB)
SLIDE 46
- 46-
- 46-
LAB
Stable LAB Market due to Higher Demand amid Lower Plant Maintenance
Key Highlights in 1H-18
Seasonal Summer Demand Lower Plant Maintenance
LAB Market
Source: ICIS Publication (2015-2017),Mitsui, TOP’s Estimate
LAB Spread** ($/TON)
1 2
($/TON) 2016 Q1-17 Q2-17 Q3-17 Q4-17 2017 Q1TD-18* LAB Spread
606 539 603 534 522 550 528
654666675627656 635627619543606 539603534522550 528 Q1-15 Q2-15 Q3-15 Q4-15 Y2015 Q1-16 Q2-16 Q3-16 Q4-16 Y2016 Q1-17 Q2-17 Q3-17 Q4-17 Y2017 Q1TD-18*
Remarks: *Q1TD-18 as of 16 Mar 18
**Estimated indicator KTA AP/ME Effective Maintenance/Closure* 50 100 150 200 250
1H-17 2H-17 1H-18 2H-18 2017 2018
Thailand Japan Indonesia Taiwan Iraq South korea India China
*Temporary
SLIDE 47
- 47-
- 47-
CONCLUSION
SLIDE 48
- 48-
- 48-
Conclusion
1H-18 Market Outlook Conclusion
(vs. 2H-17)
Crude Oil Refinery Lube Base LAB Aromatics
Firm Petroleum Product Market from Robust Demand Growth and Limited Supply Sustaining Crude Prices with Downward Trend amid Surging U.S. Supply Softer Base Oil Market due to Higher Additional Capacity Stable Bitumen Market on Firm Demand Stable LAB Market due to Higher Demand amid Lower Plant Maintenance Stable-to-Firm Aromatics on Demand Growth and Downstream Plant Addition
SLIDE 49
- 49-
- 49-
Thank You
Any queries, please contact: at email: ir@thaioilgroup.com Tel: 662-797-2999 / 662-797-2961 Fax: 662-797-2976
SLIDE 50
- 50-
- 50-
APPENDIX
- Strategic Investment Plan
- Optimized & Flexible Operations…Superior
Performance
- CDU Addition VS Additional Demand – AP & ME
- World GRM / Inventories
- Thailand petroleum demand by products
SLIDE 51
- 51-
- 51-
Plann anned ed capital apital investm vestment nt
Strategic Investment Plan Approved by Board of Directors
CAPE PEX X Plan an (Unit nit US$ $ million llion)
Notes: Excluding approximately 40 M$/year for annual maintenance
$315m 5m
Updated as of January 2018
Project ect
2017 2017 2018 2018 2019 2019 Reliability, Efficiency and Flexibility Improvement 40 26 6 Benzene Derivatives – LAB 1 2 5 Power – 2 SPPs 2 Infrastructure Improvement
- Lorry Expansion
7 2
- Jetty 7&8 / Improvement
13 72 46
- Office Relocation & New Crude Tank
38 88 10
- Site office preparation for fire water & fire water improvement
40 3 Other Investments ( i.e. solvent distribution in North Vietnam ) 3 15 Total al 104 104 245 245 70 70
Updated CAPEX plan
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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
74% 8% 8% 10% 5% 7% 34% 22% 16% 12% 4% 4% 43% 12% 20% 21%
Middle East FY/17
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 FY/17
***
LONG RESIDUE
MOPS Fuel Oil 180 CST 3.5% Sulfur FOB SG
Reference Price
Crude
Local Far East
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Asia Pacific and Middle East Refinery Addition
Refinery
Sources: FGE Energy Semi Annual Reports, Fall 2017, Reuters (Feb’18) , IEA Medium Term Outlook (Mar’17) and TOP’s estimate
Note: Adjusted capacity based on start-up period (effective additional capacity)
(Mar’18 > Apr’17)
Start-up period) Country Nameplate (KBD) Company
Q3-17 India 42 HPCL Bhatinda China 260
CNPC/SA Anning
China 200
CNOOC Huizhou
India 120 BPCL - Kochi Q4-17 Taiwan 47 CPC Talin Q1-18 China 100 Local Zhuhai Huafeng Q2-18 China 100 Petrochina Huabei Iran 120 Bandar Abbas - PGSOC/1 India 36.1 Bharat - Bina Q3-18 Vietnam 200 Nghi Son Kuwait 171 KPC - Mina Abdullah Q4-18 China 120 CNOOC/Local Ningbo Daxie Closures Q2-17 Kuwait
- 186
KPC - Shuaiba Q4-17 China
- 100
Local refineries Saudi Arabia
- 84
Jeddah Q1-18 Japan
- 160
JX group and Cosmo Oil Q3-18 Kuwait
- 112
KPC - Mina Al-Ahmadi (Oct’16 > Jul’17) (Feb’17 > Sep’17) (Feb’18 > Aug’18) (May’16 > Sep’17) (Aug’17 > May’18) (Mar’18 > Jun’18) (Dec’17 > Mar’18)
454 562 5 474 565 1207
- 1000
1000 2000 2015 2016 2017 2018 2019 2020 KBD Teapot India Japan Other AP China ME Close Middle East Net Addition AP & ME Demand Growth
(Apr’22 > Nov’17)
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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 2017 2018 avg 13-17
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 2017 2018 avg 13-17
MBD Source : EurOil
2.5 2.7 2.9 3.1 3.3 3.5 3.7 3.9 1 5 9 13 17 21 25 29 33 37 41 45 49
Japan Crude Refinery Input
5yr-range 2017 2018 avg 13-17
MBD Source : METI
Total Capacity: 3.5 MBD 90.43% 69.68% 95.71% Total Capacity: 18.1 MBD Total Capacity: 15.8 MBD
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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 2018 2017 avg 13-16
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 2018 2017 avg 13-17
MBBL Source : EIA 60 70 80 90 100 110 120 1 5 9 13 17 21 25 29 33 37 41 45 49
Japan, Crude Stocks
min 5yr-range 2018 2017 avg 13-17
MBBL Source : METI 420 430 440 450 460 470 480 490 500 510 1 2 3 4 5 6 7 8 9 10 11 12
EU 16 Crude and Feedstock Stocks
5yr-range 2018 2017 avg 13-17
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 2018 2017 avg 12-16
MBBL Source : EIA
Global Gasoline Inventories
Inventories
5 10 15 20 1 5 9 13 17 21 25 29 33 37 41 45 49
Japan, Gasoline Stocks
5yr-range 2018 2017 avg 12-16
MBBL Source : METI 80 100 120 140 1 2 3 4 5 6 7 8 9 10 11 12
EU 16 Gasoline Stocks
5yr-range 2018 2017 avg 12-16
MBBL Source : EurOil 10 20 1 5 9 13 17 21 25 29 33 37 41 45 49
Singapore Gasoline Stocks
5yr-range 2018 2017 avg 12-16
MBBL Source : IE Singapore
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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 2018 2017 avg 13-17
MBBL Source : EIA
Global Middle Distillate Inventories
Inventories
5 10 15 20 1 5 9 13 17 21 25 29 33 37 41 45 49
Japan, Middle Distillate Stocks
5yr-range 2018 2017 avg 12-16
MBBL Source : METI 300 350 400 450 500 1 2 3 4 5 6 7 8 9 10 11 12
EU 16 Diesel Stocks
5yr-range 2018 2017 avg 13-17
MBBL Source : EurOil 10 20 1 5 9 13 17 21 25 29 33 37 41 45 49
Singapore Middle Distillate Stocks
5yr-range 2018 2017 avg 13-17
MBBL Source : IE Singapore
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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 2018 2017 avg 13-17
MBBL Source : EIA
Global Fuel Oil Inventories
Inventories
5 10 15 20 1 5 9 13 17 21 25 29 33 37 41 45 49
Japan, Residual Fuel Oil Stocks
5yr-range 2018 2017 avg 13-17
MBBL Source : METI 60 70 80 90 100 1 2 3 4 5 6 7 8 9 10 11 12
EU 16 Residual Fuel Oil Stocks
5yr-range 2018 2017 avg 12-16
MBBL Source : EurOil 10 20 30 40 1 5 9 13 17 21 25 29 33 37 41 45 49
Singapore Residual Fuel Oil Stocks
5yr-range 2018 2017 avg 13-17
MBBL Source : IE Singapore
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China’s Refined Product Exports
China Export
50 100 150 200 250 300 350 400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
China’s Gasoline Exports
2015 2016 2017 2018
KBD Source : China Custom 100 200 300 400 500 600 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
China’s Gasoil Exports
2015 2016 2017 2018
KBD Source : China Custom 50 100 150 200 250 300 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
China’s Fuel Oil Exports
2015 2016 2017 2018
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
2015 2016 2017 2018
KBD Source : China Custom
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Domestic LPG Demand
LPG Demand by Sector LPG Demand Highlight
- In 2017, LPG demand increased slightly by
0.9%YoY on account of 6.9%YoY higher demand from petrochemical sector, as a result of PTTGC major shutdown in May16-Jun16. Moreover, LPG demand was also supported by 2.2%YoY, and 6.7%YoY higher demand of cooking sector, and industrial sector, respectively. However, LPG demand in automobile sector fell by 9.8%YoY, according to low level of oil price.
Outlook for 2018
- LPG demand is expected to dropped by 1.7% YoY
pressured by the expectation of more fuel switching from LPG to Mogas, due to low oil price.
- However, the slowdown of LPG demand was
expected to be limited by higher usage in industry sector as a result of persistent low level of LPG price.
Thailand LPG Demand
Remark : LPG demand includes Petrochemical and own used consumption
Source: EPPO, DOEB (As of February 2018)
Thailand petroleum demand by products
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Domestic Gasoline/Gasohol Demand
Gasoline/Gasohol Demand by Grade GASOLINE/Gasohol Demand Highlight
- In 2017, Mogas demand rose moderately by
3.7%YoY to an average 30.0 ML/day. Although, the retail price of Mogas is higher, Mogas demand was still supported by consumers’ intimation that using their personal cars in their routine. Moreover, Mogas demand is also supported by better Private consumption, according to 23.7%YoY higher passenger car sale in this year.
- The level of domestic ethanol demand, in 2017,
rose significantly by 7.3%YoY from 3.67 mml/day to 3.94 mml/day following the rising of Mogas
- demand. Additionally, this was also because of
higher demand in GSH-95, E20, and E85 which increased by 9.9%YoY, 8.9%YoY, and 18.5%YoY, respectively, backed by increasing in the number of new E20 vehicle, E20 gas station, wider GSH95-E20, and E20-E85 price gap.
Outlook for 2018
- Mogas consumption is predicted to grow by 3.1%
YoY supported by expectation of growing of new passengers cars from return
- f
private
- consumption. However, the demand is limited by
high growth level in 2017 and higher oil price.
Thailand Gasoline/Gasohol Demand
Source: DOEB (As of February 2018)
Thailand petroleum demand by products
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Domestic Jet Demand
JET-A1 demand and # of flights JET Demand Highlight
- In
2017, Jet consumption increased significantly by 4.4% over the corresponding period last year mainly owning to booming tourism industry, leading to 5.4%YoY higher aircraft
- movement. The expansion in tourism sector was a
result of increasing number of Chinese, Indian and European tourists, pushing the number of flight movements higher both international and domestic aircrafts. However, Jet demand was pressured by new domestic excise tax which implemented since Feb-17.
Outlook for 2018
- Jet demand growth is expected to grow by
2.5%YoY as a result of rapid tourist number growth, especially from China and ASEAN. Furthermore, the demand is also supported by the return of European and Russian tourists. However, the demand growth is limited by high level of utilization rate of SBA and DMK airports.
Thailand JET-A1 Demand
Source: DOEB, AOT, Department of Tourism (As of February 2018)
Thailand petroleum demand by products
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Domestic Gasoil and NGV Demand
NGV Demand Diesel Demand Highlight
- In 2017, Diesel demand rose moderately by
2.9% YoY as a result of Thai economic recovery. However, Diesel demand was still pressured by flooding situation in Southern part of Thailand which lower agricultural activity and goods
- transportation. Meanwhile, in 2016, Diesel demand
in Southern part of Thailand took approximately 12.5% of total Diesel demand in Thailand.
Outlook for 2018
- Diesel demand in 2017 is expected to expand by
1.9% YoY supported by Thailand economic improvement.
NGV Demand Highlight
- In 2017, NGV demand fell significantly by 9.1%YoY.
This was mainly because of consumers’ intimation that still prefer to consume oil. Moreover, the low
- il price level in 2017 has pressed the fuel
switching from old cars, whereas the new cars which is available for NGV was lower recently.
Thailand Gasoil Demand
Source: DOEB (As of February 2018)
Thailand petroleum demand by products
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Domestic Fuel Oil Demand
Thailand Fuel Oil Demand by Sector Fuel Oil Demand Highlight
- In 2017, Fuel Oil consumption fell sharply by
6.6%YoY, as a result of sharply falling by 55.0%YoY
- f electricity sector demand which pressured by
fewer day of Myanmar gas field maintenance Furthermore, the demand in industrial sector also decreased by 14.1%YoY, as a result of higher price
- f fuel oil, comparing to other fuel. However, the
demand in transportation sector rose by 10.0%YoY from improving Thailand export activity.
Outlook for 2018
- Fuel oil demand is expected to increase by
1.1%YoY, as a result of higher transportation demand from better export activity.
Thailand Fuel Oil Demand
Source: DOEB (As of February 2018)
Thailand petroleum demand by products
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