Analyst Meeting | 2Q/2015
34
Analyst Meeting | 2Q/2015 The Synergy Hall, EnCo C : August 17, 2015 2Q/2015 Analyst Meeting Presentation
Transcript of Analyst Meeting | 2Q/2015
Analyst Meeting | 2Q/2015 The Synergy Hall, EnCo C : August 17, 2015
2Q/2015 Analyst Meeting Presentation
DISCLAIMER
This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
2
Agenda
STRATEGIC EXECUTION
2Q/2015 FINANCIAL RESULTS
MARKET OUTLOOK
3
GREEN ROADMAP
MARKETING CHANNEL MANAGEMENT
DIVERSIFY TO SPECIAL CHEMICALS
INTERNATIONAL ARENA
A Step Forward of The Key Jigsaw in PU Chain • HoA with partners for
PO/Polyols project joint development
US PetChem Complex • Incorporation US
entities • All work modules are
progressing
Indonesia PetChem Complex • Partnership strengthen,
more time needed for study
Restructure business to strengthen sales/marketing channel • Increase stake &
control in PTTPM & PTTPL for better
management of polymer sales
2Q/2015 Highlights
ENHANCE EXISTING BUSINESS
Operational Excellence
• Completed synergy projects
• Debottlenecking projects
Map Ta Phut Retrofit
• Feedstock flexibility
• Enhance product yield
• On going study to enhance products value creation
3Q/15 4Q/15 2016 2017 2018 2019 2020 2021
Phenol II
TOCGC Improvement PO/Polyol
US Petrochemical Complex
2015
Short Term Mid Term Long Term
2022
Indonesia Petrochemical Complex
Aromatics II Debott.
HDI Monomer France
mLLDPE
HDI Derivative Thailand
4
BioHub (1st phase)
• In discussion with partners regarding • Land option • Feedstock sourcing and
security • Utilities supply
Recent Development
49% 1%
Solution Creation
PTT Polymer Marketing PTT Polymer Logistic
1% 49%
Solution Creation
92.5% 91.8% 92.5%
6.4% 7.1% 6.9% 0.8% 0.6% 0.3% 0.2% 0.4% 0.2%
2012 2013 2014
PTTGC HMC IRPC Other
Post Restructuring Post Restructuring
Revenue by Supplier
55.1% 50.2% 51.4%
29.2% 28.6% 28.9%
6.1% 7.5% 6.5%
9.5% 13.7% 13.2%
2012 2013 2014
PTTGC PTTPM PPCL Others
Revenue by Customer
More than 90% of revenue comes from PTTGC GPSC IPO
Post IPO Structure
Rational and Impact to PTTGC
49% 1% 50% 49%
1% 50%
22.85%
22.73% 8.91% 20.79%
• Unlock shareholder’s value • Dilution gain in 2Q/2015 of
432 MB from premium of IPO value over book value
• Reduction in shareholding interest in GSPC from 30.31% to 22.73%
To effectively manage marketing and logistic of polymer sales.
Others 24.72%
5
Off Gas Upgrading at Olefins Project Progress : 99.6% Target COD : 4Q/15
Project Detail: Hardware is already completed and in
preparation for hydrocarbon feed in after aromatic 2 return from shutdown
TOCGC Plant Improvement Capacity : EOE +90 KTA CAPEX : 94.2 M$ Progress : 93% Target COD : 3Q/15
Aromatics 2 Debottlenecking Capacity : PX +115 KTA BZ +35 KTA OX +20 KTA CAPEX : 128.8 M$ Progress : 91% Target COD : 4Q/15
Phenol 2 Capacity : Phenol +250 KTA Acetone +155 KTA CAPEX : 345 M$ Progress : 98% Target COD : 4Q/15
Excellence Project Update
*Updated as of June 2015
De
bo
ttle
nec
kin
g &
Exp
ansi
on
Syn
erg
y Ex
celle
nce
Tie-in (ARO1&2)
Tie-in (REF)
2016 4Q/15 2Q/15
Construction Complete
Performance Excellence
2015 Target
(MUSD)
6M/15 Actual
(MUSD)
FY2015 Estimate (MUSD)
Synergy Excellence 149 15 42
Marketing Excellence 86 48 92
Operational Excellence 68 33 75
Total 303 96 208
Synergy Excellence : EBITDA Uplift lower than target due to… o Low crude price vs. target which based on Dubai at 109 USD/bbl o Off gas project delayed
6
Map Ta Phut Retrofit Create feedstock flexibility and lengthen value chain
Benzene
Naphtha
1,320 KTA (Spot volume)
REFINERY
AROMATICS
Ethylene
Propylene
409 KTA
211 KTA
PE / Special PE
EO / EG
PP
Acrylic Acid SAP
SM
Acetone MMA MS
Butadiene
AN
ABS / SAN
PS / Special PS
• Create feedstock flexibility • Lengthen value chain
Timeline : MTP Retrofit Configuration is to be finalized by end of 2015
Potential Product
PTTGC Existing Product
Legends
Compound
Downstream Product Value Creation
Additional olefins volume • Create feedstock
flexibility • Optimize feedstock Technology improvement • Enhance product yield Downstream products value creation • Lengthen value chain
Existing volume to market
7
PTTGROUP Product
Mixed C4
PyGas
Sanyo Chemical Industries
No. 1 Polyols Player in Japan • Toyota Tsusho is a major shareholder of 19.4% • Owns 40% of PU market share in Japan • 30% of employees are researchers and developers • Holds more than 1,000 patents • Manufactures more than 3,000 types of performance
chemical
Trading Company of Toyota motor • Toyota group is a major shareholder of 33% • Rich global network in more than 60 countries • Close relationship with various Japanese OEMs in Auto
and E&E • Global logistic infrastructure
Toyota Tsusho
PU Chain: PO/Polyols
Isocyanate • TDI/HDI
EO
Polyols System House PO Propylene
PU Formulation PU Raw Materials Feedstock
Cumene
1
2
2015 2016
Set up JV company
2019
3Q/16 Construction
COD 2Q/19
Capacity 200 KTA PO
Licensor
Capacity 130 KTA Polyols
Licensor
160 KTA
• MDI
PO
Polyols/ System House
Total CAPEX of approximately 1 billion USD
8
Majority Shareholder
Majority Shareholder
US Petrochemical Complex
World Scale Ethane Cracker • Utilize ethane from shale gas as feedstock • Capacity : 1 MTA Ethylene • Derivatives
• HDPE : 700 KTA • MEG : 500 KTA • EO : 100 KTA
• Location : Dilles Bottom, Ohio • Capex: Approx. US$ 5.7 Billion
Petrochemical Complex - Appoint FA - PTTGC America Corporation - PTTGC America LLC
FEED
Marketing and Logistic
Finance
• Selected and in final stage to sign contract for dual FEED contractors and project management consultant
•3-4 companies showed interest to make capacity reservation and offtake MEG products in total of the plants capacity.
•2-3 companies showed interest to offtake HDPE product
•Co study with Marubeni on US market
•Appointed Mizuho as financial advisor
•Determine key criteria to achieve ECA financing
•Jointly work with 7 Thai banks regarding timeline until financing close
Project Progress
BOD approved FEED Study
Final Inv. Decision
COD 2021
CHECK POINTS
Feedstock • Received letter of intent from 8 ethane suppliers, of which 6 are upstream and 2 are midstream with term tenor of 10-15 years at indicative cap ceiling and floor price
•Total ethane volume of 2.3-3.1 MTA which exceeds required volume of 1.25 MTA
9
9
Dual FEED
1Q15 4Q16 2021
Site, Permitting & State support
•Total area of 3 parcels of land is 505 acres
•Engaging to get land option to use land during FEED study with minimum fee of < 1 mil USD
•Start site preparation and permitting with the support from Ohio State
•Engaging EIA consult and local counsel to prepare all permits
US Petrochemical Complex
Incorporate US Entities
•PTTGC America Corporation as an investment arm and PTTGC America LLC as a project company to study and conduct FEED study
Human Resource
•Sent project team to the US
•Recruited local staff to strengthen the team’s capability i.e. project director
Partner
•Continue to work with Marubeni
•Open to discussion with additional partners who will bring more value to the project
10
1st Group of Project Team to US
US Petrochemical Complex 11
Agenda
STRATEGIC AND EXECUTION
2Q/2015 FINANCIAL RESULTS
MARKET OUTLOOK
12
o Dubai rebounded from average at 51.9 USD/BBL in 1Q/15 to 61.3
USD/BBL in 2Q/15. As a result, PTTGC reported Stock Gain & NRV
totaling to 2,271 M.THB in 2Q/15
o FX Loss amounting to 1,235 M.THB, resulting from depreciation in
THB against USD from 32.70 THB/USD at the end of 1Q/15 to 33.93
THB/USD at the end of 2Q/15
o Slight decline in Mkt GRM and Aromatics P2F, while HDPE price
improved QoQ
o Diesel-Dubai 13.7 USD/BBL -14% YoY -16% QoQ
o FO – Dubai -3.6 USD/BBL +67% YoY -91% QoQ
o PX-Cond 391 USD/Ton +17% YoY +17% QoQ
o BZ-Cond 271 USD/Ton -27% YoY +25% QoQ
o HDPE 1,375 USD/Ton -12% YoY +16% QoQ
o MEG 1,027 USD/Ton -6% YoY +14% QoQ
o Overall utilization rate of major businesses
Average and Ending Dubai Crude Price: USD/BBL
Average and Closing FX : THB/USD
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Business Environment and Operations Recap
105.3 56.6 104.5 106.1 101.5 74.4 51.9 61.3
104.8 109.2
94.6
52.9 53.4 60.2
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Average Price Closing Price
32.56 32.95 32.66 32.45 32.10 32.71 32.65 33.26
32.58 32.60 32.52
33.11
32.70
33.93
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Average FX Closing FX2Q/14 1Q/15 2Q/15
YoY
+ /(-)
QoQ
+ /(-)
Refinery
CDU Utilization (%) 103% 102% 100% -3% -2%
Aromatics
BTX Utilization (%) 89% 88% 85% -4% -2%
Olefins
Utilization (%) 91% 96% 89% -2% -7%
Polymers
Utilization (%) 106% 107% 92% -14% -16%
EO Based
MEG Utilization (%) 99% 108% 106% 8% -2%
Phenol
Phenol Utilization (%) 131% 131% 121% -9% -10%
BPA Utilization (%) 107% 114% 85% -22% -29%
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7% 9% 5% 8% 9% 9% 9% 10% 13% 13% 14% 13% 14% 14% 12% 14%
52% 49% 52% 51% 54% 45% 46% 51%
13% 14% 13% 13% 12% 15% 17% 10% 16% 16% 16% 16% 10% 16% 16% 15%
187 189 185 188 179 186 184 194
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Naphtha+Ref.
Jet
Diesel
Fuel Oil
Others
(9.6)
(2.7)
(8.5) (10.7) (8.4)
(5.6) (1.9) (3.6)
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
147.6 146.4 146.5 148.6 148.2 146.6 147.8 145.0
55.9 63.2 52.4 59.4 61.0 52.0 60.3 66.1
203.5 209.6 198.9 208.0 209.2 198.6 208.1 211.1
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Crude Condenstate Residue & Others
16.9 15.0 17.8 16.0 14.4 16.0 16.3 13.7
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
15.6 15.3 17.0 14.3 14.5 17.7 17.1 13.5
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
15.3 17.6 14.6 16.1 13.2 13.4 15.4 19.8
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
14
Refinery Performance 2Q/15 Strong Market GRM with High Stock Gain
ULG
95
- D
B
JET
- D
B
Die
sel -
DB
FO -
DB
Petroleum Products - Dubai Spread (USD/BBL)
+23% YoY +29% QoQ
-6% YoY -21% QoQ
-14% YoY -16% QoQ
+67% YoY -91% QoQ
Gross Refinery Margin (USD/BBL)
Total Intake (KBD)
Sales Volume (KBD)
CDU U-Rate
+3% YoY +5% QoQ
+15% YoY
-2% YoY
-11% YoY
102% 101% 101% 103% 102% 101% 102% 100%
+1% YoY
+1% YoY +1% QoQ
+72% YoY
+3% YoY
4.46 5.68 4.48 4.44 3.83 4.91 5.98
5.40 0.04
0.41
(0.69)
0.73
(2.92) (14.68) (1.50)
2.22 0.49
(0.17)
0.33 0.66
0.70 2.08
(0.31) (0.04)
4.99 5.92 4.12
5.83 1.61
(7.69)
4.17
7.59
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Market GRM Stock Gain/(Loss) Net NRV
Hedging Gain/(Loss) Accounting GRM
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15Market GRM 4.46 5.68 4.48 4.44 3.83 4.91 5.98 5.40 GRM on CDU 5.63 7.62 5.52 5.74 4.81 6.30 7.97 7.27 GRM on CRS 2.81 2.64 2.85 2.76 2.82 2.57 2.58 2.69
14
375 244
380 370 430 320 217 271
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
360 362 386 334 479 401 333 391
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
24 36 18 29 42 13 41 31
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
15
Aromatics Performance 2Q/15 Strong Market P2F with High Stock Gain
Pri
ces
PX
FEC
P -
Co
nd
BZ
Spo
t -
Co
nd
Aromatics Products Prices and Spread (USD/Ton)
+17% YoY +17% QoQ
-27% YoY +25% QoQ Products to Feed Margin (USD/Ton BTX)
BTX U-Rate and Sales Volume (KTons)
BTX U-Rate
+1% YoY +22% QoQ
90% 86% 91% 89% 82% 63% 88% 85%
-6% YoY
Nap
hth
a -
Co
nd
+9% YoY -25% QoQ
+53% YoY
919
493
917 922 872
634
453 533
1,280
855
1,303 1,256 1,350
1,035
785 924 1,295
737
1,297 1,293 1,301
954
670 804
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Condensate Erawan PX FECP BZ Spot Korea
+0% YoY
-35% YoY
12% 8% 12% 12% 9% 11% 2% 13%
26% 29% 25% 28% 33% 35% 28%
30%
38% 40% 38% 37% 36% 33% 45%
36%
24% 23% 24% 23% 22% 21% 25% 21%
1,666 1,573 806 860 822 668 707 866
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
BZ Group
PX Group
Naphtha
Group
Other By-
Products
126 218 166
86 290 164 219 216
16.52
14.00
(7.90)
40.44
(68.54) (398.22) (27.63)
54.93
(0.02)
(0.37)
142
232
158 127
222
(235)
191
271
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Market P2F Stock Gain/(Loss) Net NRV
Hedging Gain/(Loss) Accounting P2F
15
25% 24% 24% 25% 28% 25% 19%
28%
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
57% 55% 60% 54% 55% 58% 56% 54%
31% 37% 27% 35% 40% 36% 37% 38% 12% 8% 13% 11% 4% 6% 7% 8%
1,730 1,924 799 932 965 1,032 991 932
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Ethane Other Gas Naphtha
198 181 245 152 182 246 236 126
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
619 753
620 618 691 802
694 812
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
1,561 1,281 1,554
1,569 1,604 1,448
1,188 1,375
1,569 1,278
1,560 1,578 1,601 1,431 1,181
1,375
1,622
1,296
1,639 1,605 1,601 1,440
1,192 1,401
1,137
965 1,182 1,093
1,143 1,035
903 1,027 943
529
935 951 913
647 494 563
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
HDPE (FILM) SEA LLDPE CFR SEA LDPE CFR SE AsiaMEG ACP Naphtha MOPJ
16
Olefins and Derivatives Performance Improved HDPE price bring back EBITDA margin
Pri
ces
MEG
AC
P –
0.6
5Et
hyl
ene
HD
PE
- N
aph
tha
Olefins Derivatives Prices and Spread (USD/Ton)
-17% YoY -47% QoQ
+31% YoY +17% QoQ
Adjusted EBITDA Margin
U-Rate (%)
GAS : NAPHTHA Intake %
HDPE Price -12% YoY +16% QoQ
Sales Volume (KTons)
KTons
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
HDPE (FILM) SEA 1,561 1,281 1,554 1,569 1,604 1,448 1,188 1,375
LLDPE CFR SEA 1,569 1,278 1,560 1,578 1,601 1,431 1,181 1,375
LDPE CFR SE Asia 1,622 1,296 1,639 1,605 1,601 1,440 1,192 1,401
MEG ACP 1,137 965 1,182 1,093 1,143 1,035 903 1,027
Naphtha MOPJ 943 529 935 951 913 647 494 563
HDPE Price -18% YoY
+22% YoY
-9% YoY
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Olefins 84% 92% 77% 91% 94% 101% 96% 89%
HDPE 100% 103% 93% 107% 114% 115% 109% 97%
LLDPE 105% 86% 99% 112% 84% 105% 110% 61%
LDPE 104% 109% 115% 93% 104% 106% 99% 119%
Total PE 102% 100% 99% 106% 104% 111% 107% 92%
MEG 82% 107% 65% 99% 112% 104% 108% 106%
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Olefins 302 368 134 168 182 224 196 173
HDPE 420 414 202 218 210 243 219 195
LLDPE 203 177 98 105 85 120 108 69
LDPE 164 159 72 92 75 83 80 80
Total PE 788 750 373 415 369 446 407 344
MEG 166 210 71 95 110 107 102 108
16
16% 23%
33% 32%
2Q/14 2Q/15
1,569
1,375
229 228
25%
28%
I-4
I-4
I-1 & PTTPE I-1 & PTTPE
Ethane Flow (Tons/Hour)
HDPE Price (USD/Ton)
Olefins & Derivatives EBITDA Margin
Naphtha Cracker Margin
RISE
OPEX SAVINGS (5% saving
from budget in 2Q/15)
EBITDA margin
28% (+3% YoY)
Olefins & Derivatives EBITDA margin rose to 28% supported by naphtha cracker 17
205
405
214 197 302 360
454 355
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
145 207
126 164
291 282 240
175
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
18
Phenol and BPA Performance Lower Margin from Soften Product Spread and Sales Volume
Pri
ces
BP
A-P
he
no
l P
he
no
l-B
Z
Phenol/ BPA Prices and Spread (USD/Ton) U-Rate and Sales Volume (KTons)
Sales Volume (KTons)
Adjusted EBITDA Margin
+0% YoY -12% QoQ
+7% YoY -27% QoQ
+80% YoY -22% QoQ
+23% YoY 1,295
737
1,297 1,293 1,301
954 670
804
1,440
944
1,424 1,456 1,592
1,235
909 979
1,645
1,349
1,638 1,653
1,894
1,595 1,364 1,334
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Benzene Phenol BPA
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Phenol (CMP) 1,440 944 1,424 1,456 1,592 1,235 909 979
BPA (CMP) 1,645 1,349 1,638 1,653 1,894 1,595 1,364 1,334
Benzene 1,295 737 1,297 1,293 1,301 954 670 804
+43% YoY
+97% YoY
U-Rate 6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Phenol 104% 126% 78% 131% 132% 132% 131% 121%
BPA 88% 100% 70% 107% 104% 116% 114% 85%
59% 54% 60% 58% 52% 60% 59% 48%
41% 46% 40% 42% 48% 40% 41% 52%
114 140 48 66 73 70 74 66
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Phenol
BPA
6%
13%
4% 7%
16% 13%
19%
7%
6M/14 6M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
18
0
100
200
300
400
500
600
700
800
900
1,000
1,100
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Jan
-15
$/Ton
P2FM-PH P2FM-BPA
Phenol and BPA Soon getting on up trend after hitting the bottom
Phenol and BPA Market P2F Margin
Historical Market P2F Margin
Note: Phenol Market P2F: Phenol – 0.878 Benzene - 0.474 Propylene +0.616 Acetone BPA Market P2F: BPA – 0.853 Phenol – 0.273 Acetone
2Q/14 1Q/15 2Q/15
Business Unit :
Refinery 4 6 5
Aromatics -2 13 9
Olefins and Derivative
25 19 28
Green 4 6 1
HVS 1 12 6
Average 8 12 12 20
Overview of Business Unit’s Performance
2Q/15 Revenue and Adjusted EBITDA Structure
111,169 MB 13,784 MB
% Adjusted EBITDA Margin
(Unit: MB) 2Q/14R 1Q/15 2Q/15 YoY
% + /(-) QoQ
% + /(-)
Sales Revenue 147,288 99,251 111,169 -25% 12%
EBITDA 10,288 10,473 16,055 56% 53%
EBITDA Margin (%) 7% 11% 14% 107% 37%
Net Profit 6,173 5,631 8,974 45% 59%
EPS (Baht/Share) 1.37 1.25 1.99 45% 59%
Adjusted EBITDA* 11,340 11,606 13,784 22% 19%
Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (Inventory gain/(loss) and NRV) and provision for business restructuring
47%
18%
26%
3% 6%
Sales Revenue
20%
13%
60%
3% 4%
Adjusted EBITDA
20
21
2Q/15 Income Statements Consolidated
***
Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (excludes Inventory gain/(loss) and NRV) and provision for business restructuring
** Restated 2Q/2014 Income Statements from the implementation of new accounting standards (Pack 5) *** Restated 1Q/2015 Income Statements to reflect share purchase of PTTPM on the basis of business combination under common control
2Q/2014** 1Q/2015*** 2Q/2015 YoY QoQ
MB % MB % MB % MB % MB %
1 Sales Revenue 147,288 100 99,251 100 111,169 100 (36,119) -25% 11,918 12%
2 Feedstock Cost (123,278) (84) (75,721) (76) (86,168) (78) (37,110) -30% 10,447 14%
3 Product to Feed Margin 24,010 16 23,530 24 25,001 22 991 4% 1,471 6%
4 Variable Cost (7,287) (5) (6,809) (7) (6,131) (6) (1,156) -16% (678) -10%
5 Fixed Cost (4,370) (3) (3,514) (4) (4,003) (4) (367) -8% 489 14%
6 Stock Gain/(Loss) & NRV 1,187 1 (1,133) (1) 2,271 2 1,084 91% 3,404 300%
7 Gain/(Loss) Commodity Hedging 407 0 (188) (0) (72) (0) (479) -118% 116 62%
8 Other Income 1,022 1 926 1 1,373 1 351 34% 447 48%
9 SG&A (2,442) (2) (2,339) (2) (2,384) (2) (58) -2% 45 2%
10 Provision for business restructuring (2,239) (2) 0 0 0 0 (2,239) -100% 0 N/A
11 EBITDA 10,288 7 10,473 11 16,055 14 5,767 56% 5,582 53%
12 Depreciation & Amortization (4,052) (3) (3,979) (4) (4,062) (4) 10 0% 83 2%
13 EBIT 6,236 4 6,494 7 11,993 11 5,757 92% 5,499 85%
14 Finance Cost (1,088) (1) (1,076) (1) (993) (1) (95) -9% (83) -8%
15 FX Gain/(Loss) 73 0 525 1 (1,235) (1) (1,308) -1792% (1,760) -335%
16 Shares of profit/(loss) from
investments 164 0 256 0 104 0 (60) -37% (152) -59%
17 Income Tax Expense (563) (0) (499) (1) (932) (1) 369 66% 433 87%
18 Net Profit 4,822 3 5,700 6 8,937 8 4,115 85% 3,237 57%
Profit/(loss) attributable to:
19 Owners of the Company 6,173 4 5,631 6 8,974 8 2,801 45% 3,343 59%
20 Non-controlling interests (1,351) (1) 69 0 (37) (0) 1,314 97% (106) -154%
21 Adjusted EBITDA* 11,340 8 11,606 12 13,784 12 2,444 22% 2,178 19%
21
22
Strong Financial Position
Maturity of Financial Debt* as at Jun 30, 2015
Interest Rate Currencies
57% Fixed 60% THB
43% Float 40% USD&Others
Loan Type
• Cost of long term debts ~ 4.29% (Include W/H Tax)
• Average loan life after refinancing - 5.32 Years
Treasury policy Net IBD to EBITDA ratio of ≤ 2.4x Net IBD to Equity ratio of ≤ 0.7x
THB Bn
* After Refinance
Key Financial Ratios
Statements of Financial Position
As of Dec 31, 2014 As of Jun 30, 2015
THB 380 Bn THB 395Bn
Cash +ST Investment
CA
Non CA
PPE
Liab.
IBD
Share Holder’s Equity
1.40 1.47
1.97
1.59 1.28
0.31 0.30 0.30 0.23 0.21
30 Jun 14 30 Sep 14 31 Dec 14 31 Mar 15 30 Jun 15
Net IBD/EBITDA NET IBD/Equity
13.09% 12.16%
6.86% 6.40% 7.57%
9.02% 8.37%
5.05% 4.92% 6.10%
30 Jun 14 30 Sep 14 31 Dec 14 31 Mar 15 30 Jun 15
ROE ROA
2.7 4.0
15.8 10.8 9.0
15.9 10.9
36.1
0.8 3.7
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
PTTGC PPCL Others
22
6.09 9.74
15.55 14.43
8.09 12.21 10.85
36.09
0.80 0.87
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
PTTGC PPCL Others Total
23
CAPEX to Support Growth
193 226 251 252
228 242 251
175 32
38 24
325
280 262
47 36
19
36 58
66
6 1
26
39 7
738
614 616
389
263 248 251
545
387 365
138
36 6 1
2013A 2014A 2015 2016 2017 2018 2019
Green1-stepCore upliftPhenolAnnual MaintenanceTotalTotal Growth Project
Approved CAPEX Plan 2015 -2019*
Unit: USD mn
Uncommitted 5 Years Investment CAPEX
$1 Bn secured from USD Bond issued in Sep’12
Green
5%
64%
1-Step Adjacencies
31%
Core Uplift
$ 4.5 Bn
$ 2.5 Bn Cash Flow
From Operation
$ 2 Bn Debt
Financing
*FX = 30 THB/USD
23
24
Agenda
STRATEGIC AND EXECUTION
2Q/2015 FINANCIAL RESULTS
MARKET OUTLOOK
24
CRUDE OIL : HIGH VOLATILITY
FACTORS TO WATCH CRUDE PRICE IS HIGHLY VOLATILE
• Iran’s crude export after sanction lifting • More surplus and high crude inventory level
globally • U.S. crude export prohibition lifting
• China’s economic recovery from Yuan devaluation • Delay of U.S. interest rate hike • Hurricane season in U.S. and severe winter • Geopolitics that may cause supply disruption
-
+
45.6
55.4
54.7
58.5
63.6 61.8
56.2
50.3 52.7 54.6
56.7 58.0
40
45
50
55
60
65
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
USD/BBL
PRISM forecasted Dubai price rebound in Q4 from seasonal demand and non-OPEC production slowdown (not including Yuan devaluation effect)
Source: PRISM, July 15
VOLATILITY FROM DEMAND/SUPPLY
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
90
91
92
93
94
95
96
97
98
20
14
1Q
15
2Q
15
3Q
15
4Q
15
Demand Supply
Surplus
• IEA forecast oil demand growth 1.6 mbpd this year
• But supply is still over demand − OPEC keeps
high output − Shale oil
producers compete by cost reduction
mbpd mbpd
VOLATILITY FROM GLOBAL ECONOMY
• China’s economic slowdown Manufacturing PMI below 50 since March 15 Export shrinks 8.3% in July Yuan devaluation for stimulating export
• Investors sell off crude net long position
5-May 10-Aug
No. of Contracts
288,727 147,184
Brent Price 66.12 47.53
25
FACTORS TO WATCH GASOLINE OUTPERFORMS DIESEL THIS YEAR
GASOLINE CONSUMPTION GROWS HIGH
• New Indian Paradip (capacity 300 kbd) start-up in Sep
• More product export from U.S. refiners due to low domestic crude price
• Low oil prices stimulate demand • Severe winter season • Refinery cut run e.g. Sinopec to start cut run from
Oct
+
GASOLINE AND DIESEL SPREADS CHANGE ROUND
• Low oil prices boost more gasoline demand than diesel
• New refineries are designed for diesel production
• Asian refineries run high rate for gasoline with more diesel surplus -1,195 -1,309
10 257
598
-1,200
LPG Naphtha Gasoline Jet/Kero Diesel Fuel Oil0
5
10
15
20
25
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
8.6 9.6 8.8 7.8 9.0 7.4 4.6 6.1
17.1 15.7
16.1 13.8 14.5 12.9 8.9 8.6
9.6 10.6
11.8 12.6
11.8 15.0
19.2 17.0
20.2 22.2
19.8 20.9
16.6 15.2
14.1 13.9
-1.5 -0.9 -3.1 -3.7
-2.1
-4.8
-7.4 -7.8 -7.2 -7.1 -6.8 -6.6
-8
-4
0
4
8
12
16
20
24
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
USD/BBL
Diesel – Dubai
ULG95 – Dubai
Fuel Oil – Dubai
Source: PRISM, July 15
Diesel – Dubai
ULG95 – Dubai
REFINERY : GRM TENDS TO STAY LOW IN 2H15
USD/BBL
UNIT : KBD
170 302
56 103 -20
Naphtha Gasoline Jet/Kero Diesel Fuel Oil
UNIT : KBD
-
Singapore GRM
Gasoline becomes more balanced
26
PX margin will slightly improve from H1 due to
• No more new capacity until next year
• Margin is supported by incident and technical problems
• Dragon Aromatics explosion in April (PX 1.6 MTPA)
• Jurong Aromatics remain S/D (PX 800 KTPA)
• India’s Jamnagar delayed S/U (PX 2.3 MTPA)
• Seasonal demand in Q4 before New Year
• Strong gasoline price
FACTORS TO WATCH
PX MARGIN WILL SLIGHTLY IMPROVE
+
BZ margin will improve from H1 due to
• China continues import for downstream
• Arbitrage to USGC opens in H2
BZ MARGIN IMPROVES FROM U.S./CHINA IMPORT
351 323 324
371 374 371 373 362 379
391 374
359
181
127
220
279
201
241
271
238 254 259
242 229
0
50
100
150
200
250
300
350
400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
USD/MT
Source: PRISM, July 15
AROMATICS : MARGIN SLIGHTLY IMPROVES IN 2H15
AROMATICS MARGINS IMPROVE FROM H1
PX – MOPJ
BZ – MOPJ
• Strong gasoline demand in China may limit feedstock to aromatics
• Results of China’s Yuan devaluation
• More benzene supply from naphtha crackers -
200
150
100
50
0
USD/MT 1H15 2H15
PX-MOPJ 353 373
BZ-MOPJ 210 249
2015 2014
KT
CHINA’S BENZENE IMPORT
27
1,129 1,157
1,278 1,358 1,395 1,373
1,329 1,255 1,235
1,292 1,272 1,252
702
630
750
810
819 806
827
790 755 795 760 723
0
200
400
600
800
1,000
1,200
1,400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
FACTORS TO WATCH PE PRICE & SPREAD STAY HIGH IN H2
HIGH CRACKER T/A IN H2 SUPPORTS PE MARGIN
• Results of China’s Yuan devaluation • Iran’s PE export after sanction lifting
• Competitiveness of polypropylene (PP) -
+
• China’s import PE almost 5 MT in H1 (record high) • China tends to import more in H2 for manufacturing
season
SEASONAL DEMAND IN H2 SUPPORTS PE MARGIN
POLYETHYLENE : PRICE AND MARGIN STAY HIGH IN H2
0.32
1.19 1.22 1.28 0.76
0.75
0.0
0.5
1.0
1.5
2.0
2.5
Q1 Q2 Q3 Q4
Unplanned
Scheduled
2015 ASIAN CRACKER CAPACITY OUTAGE Source : IHS
HD
LD
LL
ASIA 83.5%
EU 13.8%
1.0
1.5
2.0
2.5
3.0
Q1 Q2 Q3 Q4
CHINA’S POLYETHYLENE IMPORT
2015
Average 2011-14
2011 (Before Sanction) Export 1.5 MT
2014 (During Sanction) Export 2.0 MT
Asia 81.1% 98.0%
EU 18.3% 0.3%
FSU 0.3% 1.7%
Africa 0.3% 0.0%
Million Tons Million Tons
Unplanned S/D boosted ethylene price higher than HDPE
Scheduled S/D in H2 will support PE margin
USD/MT 1H15 2H15
HDPE SEA 1,291 1,273
HDPE-MOPJ 763 775
USD/MT
Source: PRISM, July 15
HDPE CRS SEA
HDPE – MOPJ
28
262
136
276
397
494
725
649
428
424 426 400
374 324
289
442 438
346 345 361 340 322 299 281 269
0
100
200
300
400
500
600
700
800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
FACTORS TO WATCH SPREADS TEND TO BE SOFTENED IN 2H15
PROPYLENE PRESSURED BY NEW CAPACITY
• More tires consumption from increasing light vehicle sales in U.S. and China and more driven mileage from low oil price
• Uneconomical BD on-purpose units run low rate • Delayed start-up of new projects
• More supply from naphtha crackers
• Falling natural rubber price from peak in June
-
BUTADIENE ALSO PRESSURED BY NEW CAPACITY
PROPYLENE/BUTADIENE : SPREADS TEND TO BE SOFTENED
USD/MT
BD – MOPJ
PY – MOPJ
0.84 2.25
1.62 1.20
(0.39)
(1.14)
(0.42) (0.34)
0.00.51.01.52.02.5
1Q15 2Q15 3Q15 4Q15
281
95 160
(49)
(167)
(48) (80)
0
100
200
300
1Q15 2Q15 3Q15 4Q15
Million Tons Thousand Tons
New Cap S/U
T/A
New Cap S/U T/A
• Propylene gained benefits from cracker and on-purpose unit turnaround season and unplanned outage
• Almost 3 MTPA of new capacity will start up in Asia, worsening oversupply situation
• Low propane price will bring propylene price down
• Butadiene also gained benefits from cracker turnaround season as well as unplanned outage
• High natural rubber price in 2Q15
• Butadiene also has more new capacity, mainly from on-purpose units (BDH) which require very higher margin
New Cap S/U
T/A
USD/MT 1H15 2H15
PY-MOPJ 363 312
BD-MOPJ 395 450
Natural Rubber Price = 244 Yen/Kg (1 Jun)
+
= 194 Yen/Kg (14 Aug) Source: PRISM, July 15
29
419 460
327
29
(219)
(357) (347)
(245)
0
100
200
300
400
500
1Q15 2Q15 3Q15 4Q15
147
189
65 50
98
60
125
164
137
116
150
206
0
20
40
60
80
100
120
140
160
180
200
220
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
FACTORS TO WATCH MEG MARGIN TO BE IMPROVED IN 4Q15
MARGIN WILL IMPROVE FROM T/A AND DEMAND
• China’s stock building
• Results of China’s Yuan devaluation
• Polyester seasonal production in Q4
• Delayed start-up of new projects
• Polyester-grade coal-based MEG
-
+
LOW INVENTORY IN CHINA WILL SUPPORT MARGIN
MEG : MARGIN TENDS TO IMPROVE IN 4Q15
USD/MT
MEG margin was over $200/MT during low inventory in 2013
DA
YS
Producers
Shore Tanks
Thousand Tons
• MEG price stayed above USD 900/MT but margin was squeezed by high ethylene price
• Heavy turnarounds in Asia and Middle East as well as seasonal demand support MEG margin in 2H15
New Cap S/U T/A
USD/MT 1H15 2H15
MEG Margin 102 150
Ethylene 1,224 1,059
End Users
2013 2014 2015
China’s polyester production increases in Q4
Source: PRISM, July 15
30
83
200 200 221
(55)
(202) (160)
(16)
0
50
100
150
200
250
1Q15 2Q15 3Q15 4Q15
FACTORS TO WATCH
Thousand Tons
• Phenol margin was quite high from delayed plant start-ups and turnaround season
• New capacity will pressure margin
• Some phenol producers will cut run due to low margin
New Cap S/U T/A
Source: PRISM, July 15
363
446
382 347 347
260
179
122
171 196 202 213
393
315 330
279 270
162
230 232 229 258
275 278
0
100
200
300
400
500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
USD/MT
BPA Margin
Phenol Margin
• Operational Excellence e.g. reliability, energy efficiency, product quality
• Marketing Excellence e.g. portfolio management, pricing excellence
• Producers cut run due to low margin
+
MITIGATION MEASURES DURING DOWNTURN
PHENOL AND BPA MARGINS TO BE SOFTER IN H2
PHENOL/BPA : ENTERING INTO DOWN CYCLE
13
43
63 83 (48)
(57) (70)
(6)
0153045607590
1Q15 2Q15 3Q15 4Q15
Thousand Tons
• BPA margin was quite high from delayed plant start-ups and turnaround season
• New capacity will pressure margin
New Cap S/U
T/A
PHENOL : NEW CAPACITY PRESSURES MARGIN BIS-PHENOL A : ALSO PRESSURED BY NEW CAPCITY
USD/MT 1H15 2H15
Phenol Margin 292 250
BPA Margin 358 181
31
For further information & enquiries, please contact our Investor Relations Team at [email protected]
Thank You
32
32
1 Thitipong Jurapornsiridee VP-Corporate Finance & IR [email protected] +662-265-8574
2 Puvadol Vasudhara IR Manager [email protected] +662-140-8712
3 Prang Chudasring IR Analyst [email protected] +662-265-8327
4 Supika Charudhanes IR Analyst [email protected] +662-265-8533
5 Chutima Jarikasem IR Coordinator [email protected] +662-140-8713
33
Agenda
APPENDIX
33
2015 Shutdown Plan 34
1Q/15 2Q/15 3Q/15 4Q/15
Refinery
I
II
PTTPE
I-1
I-4/1
I-4/2
Butadiene
I-1
BPE I
BPE II
LDPE
LLDPE
TOCGC
Phenol
BPA
Aromatics
Olefins
HDPE
Phenol
19 Sept - 7 Oct (19)
11-25 Oct (15)
9-4 Nov (16)
26 Jun-19 Aug (55)
28 Jul -9 Oct (74)
6-30 Apr (25)
29 Mar-13 Apr (16)
27 Mar-16 Apr (21)
12-28 Jun (17)
11 May-15 Jun (35)
6-23 May (18)
14-20 May (7)
27 Jun-29 Jul (33)
