Investor Presentation
November 2009
2
Summary of Current Environment & Performance
•Local demand down in line with expectations•Rural Diesel demand worst hit – highest correlation with GDP
Demand
•Optimisation in production•Continued use of semi-products•Opportunity Crudes
Crude Processed
•Lower Volumes•Optimising Upgrade Units•White Product Yield Increase
Production
•Focused on domestic market•Decrease in Exports
Sales
•Benchmark margins:•Oversupply & reduced demand, •Poor Crude Differentials•Big Tüpraş Margin premium• better yields•lower exports
Margins
•Increased Size of units•Final negotiations with short listed constructors •Financial packages under discussion
Coker Update
3
Petroleum Industry
Company Overview
Investments & Environment
Key Financials
4
Refinery Sector Outlook
Disposals• Petroplus Antwerp,
bought by Vitol• Eni - Linovo,
seeking buyer• Shell Europe,
possible Essar deal
• Grangemouth, Petrochina talks
• Tulsa, Sunoco & Sinclair
Mothballed• Sunoco - Eagle
Point • Petroplus –
Teeside• Western Refining
- Bloomfield
Closures• Nippon plans
600.000 bpd closures
• Total Normandy, capacity reduction
5
Crude Prices & Exchange Rate
Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Jul 09 Aug 09 Sep 09 Oct 0940455055606570758085
43.6 43.146.5
50.3
57.5
68.664.6
72.8
67.5
72.8
Crude Prices $ /bblDaily Monthly
Jan 09 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 091.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.601.66
1.71
1.601.56 1.55
1.521.49 1.49 1.47
Turkish Lira / Dollar Daily Monthly
6
Product Ratios
Jan
Jan
Feb Mar
Mar Apr
May
May Ju
n Jul
JulAug Sep Oct Oct
0.90
1.00
1.10
1.20
1.30
1.40
1.50 Gasoline200720082009
Margin weakness is fundamentally driven by middle distillates.
Gasoline ratios have been weak but above last year’s terrible lows.
Fuel oil prices have been strong. Lack of heavy crudes means lower
production. Has led to higher utilisation of
hydroskimming refineries.
Jan
Jan
Feb Mar
Mar Apr
May
May Ju
n Jul
JulAug Sep Oct Oct
1.00
1.10
1.20
1.30
1.40
1.50
1.60 Diesel200720082009
Jan
Jan
Feb Mar
Mar Apr
May
May Ju
n Jul
JulAug Sep Oct Oct
0.500.550.600.650.700.750.800.850.900.951.00
Fuel Oil2007 2008 2009
7
Turkish Sector Outlook
Diesel• Decline in
demand from road transportation
• Dieselisation continues – ULSD demand is growing
Jet• Global
demand to be hit by reduction in discretionary flying
• Turkish Airlines passenger numbers up, jet sales at record levels
Gasoline• Other factors
more important than economy
• LPG substitution continues more slowly
Fuel Oil• Trailing price
of natural gas boosted sales in first quarter, but is depressing sales currently
8
Turkish Consumption 000*M3 (January – September)
2008 2009
Gasoline 2,063 2,017 -2.23%
High Octane Gasoline 245 232 -5.12%
Total Gasoline 2,307 2,249 -2.54%
Rural Diesel 10,019 8,982 -10.35%
10 ppm Diesel 2,549 2,916 14.40%
Total Diesel 12,568 11,899 -5.33%
Home Heating Oil (Ton) 259 214 -17.42%
High Sulphur Fuel Oil (Ton) 1,761 1,357 -22.98%
Black Products 2,020 1,570 -22.27%
9
Turkish Monthly Diesel Consumption
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0.0
200,000.0
400,000.0
600,000.0
800,000.0
1,000,000.0
1,200,000.0
1,400,000.0
1,600,000.0
1,800,000.0
2007 2008 2009
10
93 95 '00 '08 '15 2020
0
5
10
15
20
25
30
35
40LPG Naphtha Gasoline Jet Gas Oil / Diesel
Fuel Oil Asphalt Others
~3% Decline in total white product consumption expected in 2009
10
Turkish Oil Products Demand Projection (Million Ton)
11
Turkey’s Import / Export Balance (Net)
LPG Gasoline Diesel Fuel oil-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
-2.5
0.8
-4.9
1.7
-2.5
1.3
-5.8
2.7
-2.7
2.3
-6.7
1.5
2006 2007 2008
(Million Ton)
(Export)
(Import)
11
12
Vehicle Parc Comparison (per 1000 People)
Passenger Cars, 2006
USA
Canad
a
Japa
nEU15
Russia
S.Kor
ea
Turke
y
China
0
100
200
300
400
500
600
700
800
900
776
561 540508
245 237
8826
Turkey By Vehicle Type
2007 2008
P. Cars 92 95
Motorcycles 28 31
LGV 27 29
Tractors 19 19
Truck 10 10
Minibus 5 5
Bus/Coach 3 3
Special Purpose
1 0
Total 184 192
13
Petroleum Industry
Company Overview
Investments & Environment
Key Financials
13
14
TÜPRAŞ Assets
Baku
Ceyhan
Black Sea
Marmara
Mersin
Ankara
İstanbul
Kırıkkale5.0 mtNC: 6.32
Batman1,1 mtNC:1.83
Kirkuk
Shipping
Ditaş79.98% Share165 kDWT Crude Tanker10.5 kDWT, 2 New Product Tankers
Retailin
g
Opet40% Share1,340 Retail Sites1,161 kM3 StorageTrading, Lubricants & Bunkering activities
İzmit11.0 mtNC: 7.78
İzmir 11.0 mt NC: 7.66
Total Refining Capacity: 28.1 Million TonsCurrent Nelson Complexity(NC): 7.25
14
15
Opet
1st Q 2nd Q 3rd Q-20
020406080
-14.6
47.6
13.317.6
51.4
28.543.1
70.4
51.8
Financials*, mn TL
Net Profit Operating ProfitGross Profit
• Results– EBITDA $191 Million
• Network– Opet: 795, Sunpet: 544, – Total 1,339
• Terminal Capacity– 1,161,042m3.
2005 2006 2007 2008 2009 - 9M8
10
12
14
16
18
11.5
13.5
14.9
16.517.3
12.8
14.615.2
16.1 16.3
% Market Share Development
GasolineDiesel
* Tüpraş’s 40% share
16
36.5
65.6
249.1
784
43.7
Koç Energy Group Storage Capacities
Aygaz
Opet
Tüpraş
Unmatched
Logistics Strength1,161,000 M3150,000 M3 5,100,000 M3 100% Coverage
of Turkey
16
(1000 M3)
17
2006 2007 20080.0
0.4 0.4
2006 2007 2008
0.5 0.91.7
2006 2007 2008
0.10.5
1.1
2007 2008 2009P
2.1 2.1 2.1
Russia
Kazakhstan
Iran
S. Arabia
Italy
Libya
Domestic
Azerbaijan
2006 2007 2008
4.5
0.1
2006 2007 2008
8.9 8.97.5
2006 2007 2008
3.5 3.3 3.4
2006 2007 2008
0.1 0.1
17
Crude Suppliers of TÜPRAŞ (million ton)
%30
%48
2006 2007 2008
6.7
9.1
6.6
2007 2008
0.1
UK
2006 2007 20080.0
0.20.5
IraqSyria
18
2006 3rd Q 2007 3rd Q 2008 3rd Q 2009 3rd Q0
1
2
3
4
5
6
7
8
3.79
1.56
6.37
1.87
5.38
3.75
6.72
1.59
Tüpraş Net Margin Med Complex
Yields
• Lower black products, optimised for high value products
Semi Finished Products
• ASRFO, HVGO, Naphtha
Domestic Focus
• Less Exports
Net Refining Margins
18
19
Production Volumes
1Q
2Q
3Q
4Q
0 1 2 3 4 5 6 7
5.51
6.22
6.18
6.07
5.15
6.25
6.47
4.85
3.29
4.19
4.44
Quarterly Volumes (Million Tons)
2009 2008 2007
20
24.1%
42.8%
7.3%
25.9%
Gasoline24.0%
Naphtha0.0%
Jet12.2%
1000 ppm Gas Oil14.6%
ULSD15.9%
Other3.3%
LPG4.0%
Fuel Oil13.4%
Asphalt12.5%
OtherWhite
BlackProducts
Gasoline18.5%
Naphtha2.8%
Jet12.6%
1000 ppm Gas Oil18.1%
ULSD10.4%
Other3.0%
LPG3.4%
Fuel Oil21.8%
Asphalt9.4%
21.3%
41.0%
6.4%
31.3%
9M Products Yields
Middle Distillate
LightDistillate
BlackProducts
White Product 73.2%Production : 11.9 mn ton
2008 2009
Other White
White Product 68.2 %Production : 17.9 mn ton
LightDistillate
MiddleDistillate
21
Domestic Sales, Ton*000
9M 2008 9M 2009 Product 3Q 2008 3Q 2009
711 655 (56) LPG 243 244 2
427 83 (344) Naphtha 142 0 (142)
1,500 1,514 14 Gasoline 602 594 (8)
1,811 2,015 204 Jet Fuel 703 804 101
4,816 3,782 (1,035) Diesel 1,760 1,355 (405)
1,589 1,756 167 Diesel 50/10 ppm 629 688 59
8,216 7,553 (663) Middle Distillate 3,092 2,847 (245)
2,300 2,085 (215) Fuel Oil 711 480 (231)
1,678 1,474 (204) Asphalt 990 793 (197)
393 417 24 Other 107 183 76
15,224 13,780 (1,444) Total 5,885 5,141 (744)
22
Full Year (Million Tons)
Gasoline Middle Dist.
Fuel Oil Other0.0
0.5
1.0
1.5
2.0
2.5
3.02.6
1.1
2.3
0.2
2.2
0.9
2.7
0.6
20072008
9 Month (KTons)
Gasoline Middle Dist.
Fuel Oil Other0
500
1,000
1,500
2,000
2,500
3,000
1,863
720
2,073
152
1,452
151
802
15
20082009
Export Volumes
23
9M Trading Activities
• Finished Products– Gasoil imports up 20%– LPG & Jet imported to make up
shortfall
HVGO + LCGO
ASR F.Oil Naphtha+ Other
0
200,000
400,000
600,000
800,000
1,000,000
109,162
861,501
149,965
Intermediate Imports, Ton*000
2008 2009
LPG Diesel LSFO F.Oil Jet0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
38,606
1,857,105
301,408134,106
2,233,053
400,781
29,755
565,426
Product Imports, Ton*000
2008 2009
• Intermediates– HVGO & ASRFO were imported
to keep the hydrocrackers running full capacity.
– Naphtha imported to produce gasoline
24
Total Sales By Customers- 9 Months 2009
Petrol
Retailer
s59.0%
LPG
Dist.
4.0%
Petkim0.5%
Export14.9%
Others9.1%
Asphalt9.1%
Military3.4%
Sales by Customer Group
POAŞ34.2%
Shell19.6%
OPET14.9%
BP10.5%
Others (45)20.7%
Sales to Petrol Retailers
Total Sales : 16,2 million ton First 4 Distributors’ Share 79.2 %
25
Petroleum Industry
Company Overview
Investments & Environment
Key Financials
25
26
Investments
50
1989-2005 2006-2007 2008 2006-2013-200
400
1,000
1,600
2,200
2,800
3,400
1,600
45292
544
350
176303
2,6561,950
628395
3,200
Master PlanNew & OtherSeries3
Million USD
26
Gasoline Improvement Storage Capacity +1.1mn ton Residium Upgrading OEP & others
27
Company Strategy
Co
mmercial
•Increased Product Trade•>50% Increase in 9M 2009
•Sea and Rail Logistics•2 New Product Tankers
•Wagon loading / unloading
Inve
stme
nt
•Euro V Completed•Terminal Capacity•Reduce Black Product
Op
erational
•Energy Efficiency•Losses•Integrity and Reliability•Health , Safety and Environment•2007-2008 Saving $162 Million
28
Changes
• Scale• Capacity of project increased by
30%• Will utilise residuals from other
refineries• Timing
• Completion expected end of 2013• Financing more by Export Credit
Agency• Budget
• $1.5-$2 Billion, • Costs may be 30% less
The Fundamentals
• Fuel Oil / Diesel Spreads• $200 spreads are temporary• Fuel oil prices will decrease with
more heavy crude• Diesel / Jet prices will improve
with recovery• LSFO req. for Bunkering
• Product Mix• Turkey will still be very short of
diesel and long on fuel oil
Coker Update
29
RUP Product Yields
Raw Materials• Atm. Dip: 1,008• Fuel Oil: 2,603• Asphalt: 646
• Total Black: 4,237• MTBE: 138
• Natural Gas: 464
Finished Products• LPG: 203
• Gasoline: 772• Diesel: 2,548
• Total White: 3,523• Petrocoke: 807• Sulphur: 127• Total: 4,457
30
Financial Summary
31
Petroleum Industry
Company Overview
Investments & Environment
Key Financials
31
32
Financial Highlights (mn $)
2005 2006 2007 2008 9M 2008
9M 2009
0
500
1000
1500
769 712
1081 1116
1286.39
566.214000000001
EBITDA
2005 2006 2007 2008 9M 2008
9M 2009
0
200
400
600
800
1000
1200
508575
998
333
932.38
391.611
Net Income
2005 2006 2007 2008 9M 2008
9M 2009
-800
-600
-400
-200
0
200
400
-421
259
-229
215 199
-617
Net Debt/(Cash)
2005 2006 2007 2008 9M 2008 9M 20090
0.1
0.2
0.3
0.4
0.220.25
0.34
0.12
0.366
0.231
Return on Average Equity
33
Profitability Indicators , January-September
2008 2009Difference
Amount
(%)
Dtd.Brent Price, ($/bbl) 111.02 57.15 -53.87 -48.5
Brent vs Tüpraş Crude Cost, ($/bbl) 5.30 1.91 -3.39 -64.0
Processed Crude API 32.24 32.29 0.05 0.2
White Product Yield, (%) 68.20 73.20 5.0 7.3
Med. Complex Margin,($/bbl) 5.57 2.15 -3.42 -61.4
Tüpraş Net Margin,($/bbl) 4.88 2.09 -2.79 -57%
Operating Profit, (mn. $) 1,189 474 -715 -60.1
EBITDA (mn. $) 1,286 566 -720 -56.0
*EBITDA (mn. $) CCS 1,105 484 -621 -56.2
**Opet Operating Profit -40% (mn. $) 86.29 62.44 -23.85 -27.6
**Opet EBITDA -40% (mn. $) 102.41 76.21 -26.2 -25.6
*CCS – Current Cost of Sales, ** 40% representing Tüpraş’s share
34
Income Statement
9 M 9 M% Diff. Million USD
3Q 3Q % Diff. 2009 2008 2009 2008
9.438 20.122 -53 Net Sales 4.406 7.814 -44
760 1.549 -51 Gross Profit 317 508 -38
-318 -390 -18 Operating Expenses -129 -135 -4
32 30 7 Income/Loss from other operations 17 11 58
474 1.189 -60 Operating Profit 204 384 -47
131 240 -45 Financial Income 63 90 -30
-114 -256 -55 Finance Expenses -34 -34 0
490 1.173 -58 Profit Before Tax & Minorities 232 440 -47
392 932 -58 Net Profit 184 347 -47
35
FX Risk Exposure (30 September 2009 )
Million $
Consolidated Assets
Consolidated Liabilities
Financial Loans: 321
Short Term Loans: 274
Payables: 1,925
Stock : 1,343
Recievables:82
Cash: 968
-128
Sole Tüpraş -90 Million $
36
Ratings & Corporate Governance
Fitch Rating Comparison
FOREIGN CURRENCY LOCAL CURRENCY
Long-term Long-term National
SOVEREIGN BB- (Pos) BB (Stab) -
TÜPRAŞ BB (Pos) BBB-(Stab) AAA (tur) (Stab)
Petkim BB (Stab) BB-(Stab) AA- (tur) (Stab)
P. Ofisi BB (Stab) BB-(Stab) AA- (tur) (Stab)
Hürriyet BB- (Neg) BB- (Neg) AA- (tur) (Neg)
Çalık Holding B (Neg) B-(Neg) BBB (tur) (Neg)
Vestel B (Stab) B (Stab) -
Turkcell BB (Pos) BBB-(Stab) -
Corporate Governance Rating
Board
Stakeholders
Transparency
Shareholders
Overall
0% 20%
40%
60%
80%
100%
67.31
96.02
89.76
83.06
83.41
Rating by Saha Ratings
36
37
Thank you…
The Investor Relations section of our company website has a wealth of constantly updated information of interest to investors.
www.tupras.com.tr
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Disclaimer
This presentation contains forward-looking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the expectations reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially.
Neither Tüpraş nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from use of this presentation.
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