analyst meeting 2q12 - listed...

Petroleum

Petrochemical

Deep Seaport

Industrial Zone

Analyst Meeting 2Q12 30 July 2012

Petrochemical

Industrial Zone

I. 2Q12 Highlights

II. Operation & Financial Performance

III. Industry Outlook

IV. Near-term Phoenix Projects Update

AGENDA

2

I. 2Q12 Highlights




AGENDA

3

4

2Q12 Highlights

6.0

1.1 2.6

2.9

0.8 2.9 1.3

1.8

8.9

3.1

7.2

(5)

-

5

10

15

20

2Q11 1Q12 2Q12

GIM

Power & Utility

Petrochemical

Petroleum

80% 86%

MKT GIM

80%

8.3 4.7

-2.5

4.6

1.8

1.0

1.3

1.8

12.8 7.7

0.2

-5

0

5

10

15

20

2Q11 1Q12 2Q12

A/C GIM

Utilization rate

• Despite deteriorating economic conditions in 2Q12,

projected global economic growth has been

marginally revised downward, with the growth

rate of 3.5% and 3.9% in 2012 and 2013

respectively, and

anticipated better future prospects remain

unchanged.

• Main determinants of global economic prospects are

the effectiveness of policies aimed to stem

Euro-zone debt crisis. and

fiscal as well as monetary stimulus in emerging

countries.

Economic Outlook

Operation Performance

Global GDP Growth

(Percent; quarter over quarter, annualized)

Source: IMF staff estimates.

• In 2Q12, average Dubai price declined by $10/bbl to

$106, due to renewed concerns over Euro-zone

debt problem and deceleration of Chinese

economy.

• Crude utilization in 2Q12 was at 171 KBD, 80% of

total capacity.

• Market GIM rose to 7.2 $/bbl in 2Q12 from 3.1 $/bbl

in 1Q12.

• However, there was net stock loss of 7.0 $/bbl

Strategic Investment

5

2Q12 Highlights

• Fitch Ratings affirmed our national

long-term rating at A-(tha) with a stable

outlook on 19 July 2012.

• 28% progress of Phoenix Projects

• PRP Project: Completed with additional 100 KTA

• Lube Group I Project: Almost completed (98.89%)

with additional TDAE 28 KTA &150-BS 38 KTA

• Bankai: EIA approved

Phoenix

Finance

• Acquired 25% shares of UBE Chemicals (Asia) “UCHA”, a leader in global caprolactam and nylon-6 market

I. 2Q12 Highlights




AGENDA

6

• Net Sales Revenue increased by 11%: - Quantity 13%, Price -2%

• EBITDA before stock G/(L) & LCM decreased by 351 MB.

- Market GIM decreased from 8.88 $/bbl to 7.24$/bbl.

- Gain of 282 MB from recognized MKT price of Platinum.

• Net EBITDA decreased by 5,669 MB from 2Q12 net stock

loss of 2,203 MB and LCM of 1,235 MB vs 2Q11 net stock

gain of 1,880 MB.

• Net profit decreased by 6,397 MB.

- Depreciation and interest expenses increased by 335 MB

due to CHP starting COD in June 11.

- Unrealized FX loss from USD loan increased by 208 MB

due to depreciation of THB.

- Unrealized loss from Thai Oil Share increased by 104

MB: 72.25 ฿/share as of 31 Mar 12 and 57.50 ฿/share

as of 30 Jun 12.

- 196 MB charge from ship rental contract litigation.

2Q12 2Q11 (%) 1H12 1H11 (%)

Net Sales 72,346 64,905 11 146,261 121,450 20

EBITDA before stock G/(L)&LCM 1,640 1,991 (18) 1,192 4,104 (71)

EBITDA (1,798) 3,871 (146) 175 8,748 (98)

Net Profit before stock G/(L)&LCM (622) 457 (236) (2,099) 1,466 (243)

Net Profit (4,060) 2,337 (274) (3,116) 6,110 (151)

Crude Run : MBBL 15.58 15.66 (0.5) 32.36 30.98 4

Sales Volume : MBBL 17.03 14.98 13 33.54 29.09 15

7

2Q12 Financial Highlights

2Q12 vs 2Q11

7

8

2Q12 Market Movement

Data Source : Platt’s

•Dubai price decreased dramatically from 120$/bbl at the end of 1Q12 to 93$/bbl at the

end of 2Q12 due to ongoing debt crisis in Euro-zone and slowdown global economies.

However, the average Dubai price in 2Q12 was 106.4 $/bbl, dropping by 10$/bbl (9%)

when compared to that in 1Q12.

• As a result of declining crude oil price, the spread of petroleum products was narrower.

Diesel spread was 15 $/bbl, decreasing by 6%.

Gasoline spread was 14 $/bbl, decreasing by 2%.

HSFO spread was -1.3 $/bbl, decreasing by 160%.

500 SN spread was 621 $/MT, increasing by 24%, due to higher price of its products.

• Naphtha price movement was in line with crude price. The average price was 893 $/MT,

dropping by 128$/MT (12%). Nevertheless,

Olefins spread was wider rising by 34% on average.

Styrenics spread was wider, rising by 17%: this was because Polymer price was rather stable.

8

-

40

80

120

160

200

Jan-11 Apr-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12

Dubai ULG95 Gasoil Fuel OilDubai

9

Oil Price Movement, Product Crack & GRM

Source: Platts, IRPC Analysis Team

Avg. Dubai

$/BBL

S’pore GRM

Ending Price

100 111 107 106 116 106 97 ▲11 ▼4 ▼1 ▲9

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

12.6 14.3 17.3 9.8

14.3 14.0 12.3 13.5 14.1

ULG95-DB $/BBL

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

18.2 19.5 17.6 17.8 16.4 15.4 17.2 18.8 15.9

Gas Oil-DB $/BBL

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

-9.1 -8.6 -3.2

-0.4 -0.5 -1.3 -1.2

-8.9

-0.9

FO-DB $/BBL

▼10

7.4 8.7 7.9 9.1 7.5 6.6 6.9

• Average Dubai price in 2Q12 was $106/bbl (a $10/bbl

drop), mainly caused by concerns over global

economic problem, particularly ongoing Euro-zone

crisis and slowing growth in China.

• ULG and Diesel spread slightly decreased as a result

of sluggish growth reducing the demand.

• Yet, ULG spread was still relatively high due to

maintenance shutdown in several Asian refineries

and accumulation of US oil reserves.

• HSFO spread worsened relative to last quarter but

was still better than last year due to strong demand

induced by temporary closure of Japanese nuclear

power plants.

109 93 107 101 105 120

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12

3.1 1.7 2.9 2.4 -0.3 0.2

2.4 -0.1

3.0 4.2 4.5

2.6

1.4 2.4

3.6

1.9

6.1 6.0 7.4

5.0

1.1 2.6

6.0

1.8

Market GRM Refined Lube Base$/BBL

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

(97) (84) (95) (70)

(99)

(32) (8)

(90) (65)

Asphalt-FO 180 3.5%S $/Ton

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

629 781 786

632 500

621 651 705 560

500SN-FO 180 3.5%S $/Ton

$/Ton

Lube Base Price Movement

FO 180 3.5%S

-

500

1,000

1,500

2,000

Jan-11 Apr-11 Jul-11 Sep-11 Dec-11 Mar-12 Jun-12

FO 180 3.5%S 150BS 500SN AsphaltLube Base $/Ton

10

• Lube and asphalt spread increased. The driving factor for such increase was refineries’ maintenance shutdown.

• The increased demand for asphalt was also driven by an increase in Chinese’s infrastructure investments.

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

254 196 212 141 147 161 175 225 154

459 495 438 393 261

391 422 477

326

712 691 651 533

408 551

597 701

480

Proplylene-NP

PP-Proplylene

$/Ton

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

317 298 204 171 230 291 250 307 261

135 99 239 269 145 203 240 117 174

451 397 443 440

374 494 490

424 434

HDPE-ETH

ETH-NP

$/Ton

-

500

1,000

1,500

2,000

2,500


Naphtha Ethylene Propylene HDPE PP Olefins $/Ton

PP - Propylene - Naphtha

Naphtha

11

Olefins Price Movement

HDPE - Ethylene - Naphtha

• A rise in Olefins and Polyolefins spread was mainly brought about by a drop in naphtha price.

• The prices of Polyolefins products also dropped but in a lesser extent.

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12

93 94 111 -22 11

122 93 66

125 83 146

166 51

115 104 83

102 91

123

37

31

138 96

85

$/Ton

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

1,403 1,247 1,219 1,011 1,058 1,081 1,125

1,325 1,069

$/Ton

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

498 434 531 448 428 516 570 466 472

215 242 182 218 220 224 219 229 222

636 577 604 559 543 636 788

607 590

SM-NP

PS-SM

$/Ton

-

500

1,000

1,500

2,000

2,500

3,000


Naphtha PS ABS EPS Styrenics $/Ton

1Q10 3Q10 2Q10 4Q10 1Q11 2Q11 3Q11

12

Styrenics Price Movement

Styrene

Market PTF PS - SM - Naphtha

ABS - Naphtha

• There was an improvement in the styrenics spread.

• Although styrenics product price declined, the price of naphtha dropped faster.

Aromatics

Olefins

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

160 227

334 324 316 261

326

193 289

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

226 151 165

102 161

222

352

189 192

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 MTD 1H11 1H12

81 97 178 192 178

219 266

89

198

-

400

800

1,200

1,600


Naphtha Toluene Benzene Mixed Xylene

Aromatics $/Ton

MX-Naphtha

Toluene - Naphtha

Aromatics Price Movement

$/Ton

Naphtha

Aromatics Price Movement

BZ-Naphtha $/Ton $/Ton

13

• Aromatics spread slightly increased, driven by two

main factors:

(i) sustained demand for polyester

(ii) a drop in the supply resulting from Korean refineries’ maintenance shutdown.

Change Quantity Portfolio Unit Price FX

QoQ 5% 2% 6% 1%

YoY 15% 2% 6% 4%

Sales value : QoQ decreased by 1,569 MB 2%

(from volume 2,491 MB , price -4,060 MB)

Volume : increased by 0.5 MBBL (3%) mainly

from Diesel 0.3 MBBL, Olefins 0.1 MBBL

& Styrenics 0.1 MBBL

Price : decreased by 8.1 $/bbl (6%)

FX : from 31.14 $/THB to 31.43 $/THB

Sales value : YoY increased by 7,441 MB 11%

(from volume 8,760 MB , price -1,319 MB)

Volume : increased by 2.1 MBBL (13%) mainly

from Diesel 1 MBBL, Naphtha 0.6 MBBL

Price : decreased by 7 $/bbl (6%)

FX : from 30.41 $/THB to 31.43 $/THB

64,905 73,915 72,346

2Q11 1Q12 2Q12

Sales Revenue (MB)

14.98 16.51 17.03

2Q11 1Q12 2Q12

Sales Volume (MBBL)

Power & Utilities

Petrochem

Petroleum

Petrochem

Petroleum

79% 77%

78%

19% 21%

20% 1%

1% 1%

88% 87%

87%

12% 13%

13%

Sales Analysis

Revenue Structure

14

Singapore 53%

Malaysia 14%

Laos 7%

Switzerland 6%

Myanmar 5%

Asia 10%

Local 67%

Export 33%

64,905 MB

Australia 1%

Europe 1%

Middle East 2%

America 1%

Africa 0.4%

Singapore 65%

Malaysia 12%

Laos 7%

Local 65%

Export 35%

72,346 MB

Hong Kong 5%

Myanmar 4%

Asia 3%

Middle East 1%

North America 1% Australia

1% Europe 1% Other

1%

2Q12 Revenue from Sales

2Q12 Export to Asia 96% (increased by 7%)

2Q11 Revenue from Sales

Export Destinations

15

47% 49%

42%

43% 41%

43%

10% 10%

15%

10.62 10.53

7.09

2Q11 1Q12 2Q12

45% 46%

36%

38% 37%

39%

17% 17%

25%

41,659 44,494

27,375

2Q11 1Q12 2Q12

QoQ -33%

YoY -33%

QoQ -38%

YoY -34% 57

51

43

2Q11 1Q12 2Q12

Inventory Day (Days)

Petrochem

Petroleum

Crude

112

125

98

114

123

115

227 219

223

128

136

126

2Q11 1Q12 2Q12

Unit Price ($/bbl)

Petrochem

Petroleum

Crude

Total

Inventory Balance

Value (MB)

Volume (MBBL)

16

17

Statements of Financial Position

MB %

Assets 131,848 132,119 (271) (0.2)%

Cash and Mkt. Sec. 4,687 3,994 693 17%

AR 15,376 9,924 5,452 55%

Inventory 30,579 38,810 (8,232) (21)%

PPE & IP 72,861 71,711 1,150 2%

Other asset 8,345 7,679 666 9%

Liabilities & Equity 131,848 132,119 (271) (0.2)%

AP 15,633 17,408 (1,775) (10)%

IBD 37,502 28,531 8,971 31%

Other liabilities 6,728 10,258 (3,530) (34)%

Equity 71,985 75,922 (3,937) (5)%

31-Dec-11Change

30-Jun-12Unit : MB

Inventory

• 21% : Quantity of inventory 14% due to Crude 1.3 Mbbl

& FG 0.56 Mbbl while Prices Slightly .

(Inventory Crude Cost 2Q12 = 98 $/bbl, 4Q11 = 110 $/bbl)

Account payable

• 10% : Crude Oil Price 11 $/bbl (Jun’12=98 $/bbl ,

Dec’11=109 $/bbl) but Crude Oil Purchase Volume in Jun’12

0.16 MBBL vs Volume at the end of 2011

PPE & IP

• Asset Purchase (PRP , ABS6) 3,243 MB • Depreciation (2,049) MB • Losses from Impairment (44) MB

Account Receivable

•55% : Sales volume39% (2Q12=2.5 MT , 4Q11=1.8 MT)

but product prices 2% (Jun’12= 861 $/Ton, Dec’11=876 $/Ton)

Cash and ST investment 1H12

• From Operation (1,779) MB • Investing & S/T investment (4,624) MB • Financing 7,096 MB 693 MB

IBD

•31% : Loan Drawdown 3,700 MB, revolving $ 75 M,

additional Short-term Debt 3,891 MB, Loan Repayment 1,000 MB

17

Debt Portfolio

ST

Loan

14%

LT

Loan

40%

Bond

(USD)

20%

Bond

(THB)

26% ST Loan 5,232

LT Loan 15,045

Bond (USD) 7,585

Bond (THB) 9,640

Total 37,502

Debt (MB)

Net Debt/Equity

Debt Profile

F X.USD/THB = 31.97

Float 49 THB 73

Fixed 51 USD 27

Currency (%) Interest Rate (%)

24,492 32,963 32,271

4,843

7,555 5,232

6,359 4,590 4,687

22,976 35,928 32,816

-

10,000

20,000

30,000

40,000

50,000

0

10,000

20,000

30,000

40,000

50,000

2Q11 1Q12 2Q12

Long term Short term Cash & S/T investment Net Debt

40,518

29,335

37,502

MB

2Q11 1Q12 2Q12

Cost of Debt 5.40% 5.38% 5.37%

Net Debt = 32,816 MB

2Q12 Debt Structure

0.29

0.47 0.46

2Q11 1Q12 2Q12

< 1.0x

“Baa3” Stable outlook

Credit Ratings

“BBB-” Stable outlook

“A- (tha)” Stable outlook

18

I. 2Q12 Highlights




AGENDA

19

Global Oil Demand

Source: IEA oil market report 13 Jun12

• The growth of global oil demand is

forecasted to be 0.82 mb/d in 2012,

contributing to higher oil demand of 89.9

mb/d on average relative to that of 2011.

• Rising oil demand is due to

Resurgent OECD Pacific demand

supported by the demand from

power sector in Japan and

non‐OECD stockpiling.

A rise in seasonal demand

attributed to refinery maintenance

winding down

Global crude runs rising from 74.3 mb/d in 2Q12 to 75.9 mb/d in 3Q12.

20

Global Oil Supply

Source: IEA oil market report 13 Jun12

• Global oil supply rose by 0.2 mb/d to 91.1

mb/d in May.

• OPEC crude in 2H12 was around 1 mb/d

higher than 1H12 level,30.9 mb/d.

• However, an upcoming reduction in oil supply

is expected due to seasonal North Sea

maintenance forecasted to reduce output by

260 kb/d in 3Q12, and built in hurricane

outages for the United States and Mexico

21

Global Product Demand

• The global demand for petroleum product is

expected to be stronger in the second half of

2012, because of

Considerably lower commercial distillate

stocks in Europe and the US combined are

expected

Gas oil demand contributed from Saudi

Arabia due to Ramadan

Expectation of high usage of oil in electric

power generation in Japan at least until Q1

2013

22

PE Outlook

• HDPE growth is expected to grow at above GDP.

• HDPE can compete with PVC for applications in the pipe grade.

• China will remain a huge importer despite increased its internal supply.

23

PP Outlook

• Strong demand growth rates come from

developing country.

• NE Asia, which includes China, has

become the largest PP market, with an

enviable growth rate 6%

• The Indian grew at an outstanding rate

close to 10%

• Southeast Asia has an outstanding

strength as it is manufacturer and export

hub of the world.

• PP can be used in various applications

up from luxury to commodity.

• Low cost / Light weight PP supports city

car production and development of bio-

plastic based on PP of Japanese car

maker. 24

ABS and PS Outlook

• PS demand will come from the product

downsizing and down-gauging.

• New applications like XPS (extruded

polystyrene) may flourish as building

construction recovers.

• World ABS market continues to grow

ahead of GDP, at the rate ~5% per year

over the next 5 years.

• The fastest growing ABS sectors are

mainly from appliances, electronics &

electrical and automotive market.

25

I. 2Q12 Highlights




AGENDA

26

TIME

PRP Project: 100% Completion

COST

(Propylene Booster)

Timeline for 1. EHIA approval : Sep 11 2. DIW approval : Aug 12 3. MC completion : June 12 4. Commissioning : July 12 5. COD : September 2012

Status Approved • In progress • In progress • In progress • In progress

Achievement

SCOPE

• New Propylene plant with increasing capacity 100 KTA. by Metathesis technology

2,000,000 Man Hours without

Loss Time Injury (LTI)

Within Budget

27

Pre-Phoenix Projects: PRP Progress

# 8 Petroleum

quality improvement to clean fuel and green

growth development

Project Description: Upgrading Gasoline to be EURO IV spec.

Capacity Expansion: None.

CAPEX : 49 M$ / Benefits: 13 M$/yr

GHU Plant construction

Gasoline Euro IV (GHU)

Diesel Euro IV: 1Q13 (on schedule) EIA approval since Sept 11

During construction process

Pipeline installation permission

DOH & CHERNGNERN SDAO: APPROVED

MD / RID / IEAT : In Progress

Benefit from swap in 2Q12: 6.31 M$

PTTGC Multi-Product Pipeline

Euro IV Diesel IRPC

Gasoline Euro IV (GHU):

Started Up : 10 Feb 12

Operation with approx 80-90 % Capacity

Benefit in 2Q12 : 4.44 M$ GHU Plant

GHU Project: 100% Completion

Multi-pipeline for upgrading HSD Project: 60.4% Progress

28

Phoenix Projects: EURO IV Project Progress

25%

50%

75%

100%

0% # 7 Lube group 1

specialty product

EBIT 33 M$/yr CAPEX: 31 M$

TDAE

50,000 TPA TDAE

22,000 TPA

150-BS

82,000 TPA

Project Description: High Value Added Lube specialty product, TDAE & Bright Stock

Capacity Expansion: TDAE 28 KTA and 150-BS 38 KTA increasing.

Benefits: 33 M$/yr

150-BS

120,000 TPA

Timeline for

1. MC Completion: Jun 12

2. Commissioning : July 12

3. COD : Aug 12

Status •In Progress

•In Progress

•On Plan

Project Progress : 98.89 %

29

Phoenix Projects: Lube Group I Project Progress

30

Q&A

31

Thank You

Investor Relations Contact: [email protected]

Tel. 02-649-7380, Fax. 02-649-7379

Presentation is available at

www.irpc.co.th

Click “Presentations”

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analyst meeting 2q12 - listed...

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