management’s discussion and analysis (md&a) and operating...
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PTT Public Company Limited 1
Q2/2016
Management’s Discussion and Analysis (MD&A) and operating results for the three-month and
six-month periods ended June 30, 2016
Executive Summary
In the second quarter of 2016 (Q2/2016), net income of PTT and its subsidiaries was Baht 24,879 million,
increasing by Baht 1,210 million or 5.1% from Baht 23,669 million in the first quarter of 2016 (Q1/2016) mainly due
to the gradual declining in feed gas costs in line with crude oil price which had fallen since mid-year 2015.
Therefore, PTT’s performance increased from better performance of Gas Separation Plant (GSP), the decrease
of NGV loss and the improvement in oil business performance from stock gain following the increase of crude
oil price in this quarter. For PTT affiliates, performance of petrochemical and refining business increased due to
the rise in Accounting Gross Refinery Margin (Accounting GRM) as a result from stock gain in line with the rise
in crude oil price since late of Q1/2016, though Market GRM decreased. Meanwhile, the performance of olefins
increased owing to higher product spreads despite PTT group’s unplanned shutdown. Nonetheless,
performance of PTT Exploration and Production Public Company Limited (PTTEP) decreased due to income tax
expenses affected by Thai Baht appreciated against US Dollar which had lower effect compared with Q1/2016.
In addition, the company also recognized an increase in loss on derivatives.
In the first half of 2016 (1H/2016), net income of PTT and its subsidiaries was Baht 48,548 million,
increasing by Baht 2,218 million or 4.8% from Baht 46,330 million in the first half of 2015 (1H/2015) mainly due to
better performance of PTT. On the contrary, the performance of affiliates decreased in almost all business
groups. The drop in refining and olefins mainly from the decline in Accounting GRM and the decrease of
polyethylene price in line with crude oil price, whereas the Product to Feed Margin (P2F) of Aromatics
Petrochemical increased from lower feed cost. The performance of PTTEP decreased in line with declining in
average selling prices following the fallen crude oil price, though, the lower of depreciation and amortization
expenses. The higher appreciation of Thai Baht against US Dollar compared to last year, leading to higher gain
on foreign exchange rates for PTT group in 1H/2016. While, PTT had higher loss on foreign exchange rate in
relation with Japanese Yen outstanding loans caused by Thai Baht depreciated against Japanese Yen.
Unit : Million Baht Q2/2015
(Restated) Q1/2016 Q2/2016
%Inc. (Dec.) 1H/2015 (Restated)
1H/2016 %Inc. (Dec.) YoY QoQ
Sales & services income 536,145 386,940 420,447 (21.6%) 8.7% 1,051,356 807,387 (23.2%) EBITDA 87,376 71,343 82,151 (6.0%) 15.2% 158,118 153,493 (2.9%)
Net income (loss) 23,746 23,669 24,879 4.8% 5.1% 46,330 48,548 4.8%
Earnings per share (Baht/share) 8.19 8.23 8.51 3.9% 3.4% 16.08 16.74 4.1%
Executive Summ
ary
Overall Perform
ance
Non-recurring item
s Segm
entation Perform
ance
Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 2
Q2/2016
Economic Overview in the second quarter of 2016
The world economy in Q2/2016 expanded at a faster pace than in Q1/2016. Primarily supported by
domestic demand, economic growth picked up in advanced economies. Specifically in the US, the overall state
of the labor market remained strong, though worries about a global economic slowdown and volatility in financial
markets had led the Federal Open Market Committee (FOMC) to hold off on interest rate hikes at its July 26-27,
2016 meeting, maintaining policy rates at 0.25-0.5%. As for the euro area, the economic recovery continued on
the back of easy financial conditions, though uncertainty over the outcome of the UK’s EU membership
referendum on June 23, 2016 had somewhat adversely affected private sector confidence. Meanwhile, emerging
market economies and lower income countries started to show signs of stabilization in Q2/2016, amid gradually
rising oil prices and improving economic momentum in China, where effects of the government’s growth stimulus
measures on the housing sector are becoming more pronounced, though overcapacity and growing corporate
debt problems are still of concern. The International Monetary Fund (IMF) in July 2016 revised down its global
growth forecast for 2016 to 3.1%, against a projection in April 2016 of 3.2%.
According to the International Energy Agency (IEA) in June 2016, global oil demand in Q2/2016 averaged
95.5 million barrels per day (MMBD), increasing from 95.2 MMBD in Q1/2016 amid higher Americas, Europe, and
the Middle East demand, and increasing from 94.1 MMBD in Q2/2015. For the whole of 2016, global oil demand
is expected to average 96.1 MMBD, shooting up from 94.7 MMBD in 2015.
Unit: US$/bbl Q2/2015 Q1/2016 Q2/2016 % Inc.(Dec.)
1H/2015 1H/2016 % Inc.(Dec.) YoY QoQ
Average Dubai crude oil price 61.3 30.4 43.2 (29.5%) 42.1% 56.6 36.8 (35.0%)
Dubai oil price in Q2/2016 averaged US$43.2 per barrel, increasing from US$30.4 per barrel in Q1/2015
amid falling shale oil production, terror attacks on oil facilities in Nigeria, and wildfire affecting production in
Canada. However, Dubai oil price in Q2/2016 was lower than in Q2/2015 which averaged US$61.3 per barrel.
Petroleum product prices in the Singapore spot market recorded a rise in Q2/2016 compared with
Q1/2016, following the rise in the Dubai price. Gasoline crack spreads in Q2/2016 averaged US$14.5 per barrel,
a decrease from Q1/2016 amid surplus and more exports from North Asia. Diesel crack spreads averaged
US$10.5 per barrel, an increase from Q1/2016 amid refinery maintenance season. Fuel oil crack spreads
averaged US$-8.9 per barrel, a decrease from previous quarter amid increasing Japanese and Iranian supplies.
Executive Summ
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Overall Perform
ance
Non-recurring item
s Segm
entation Perform
ance
Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 3
Q2/2016
Singapore gross refining margin (GRM) in Q2/2016 averaged US$5.0 per barrel, decreasing from US$7.7
per barrel in Q1/2016 and US$8.0 per barrel in Q2/2015 primarily due to lower gasoline crack spreads and fuel
oil crack spreads.
Petrochemical prices of Olefins in Q2/2016 for both High Density Polyethylene (HDPE) and Polypropylene
(PP) surged from Q1/2016, in parallel with a recovery in crude and naphtha prices, tight supply of Polyethylene
(PE) from unplanned shutdown of PTTGC and Petro Rabigh, and limited cargo offering for Polypropylene (PP).
However, Olefins price in Q2/2016 declined from the same quarter of last year. For Aromatics, the Benzene price
in Q2/2016 increased from Q1/2016 along with rising feedstock price and a peak turnaround period of Benzene
(BZ) plants in Asia. Moreover, arbitrage window for Asian benzene headed to the US has been closed since the
Asian benzene price has remained higher than the US benzene price. Similarly, Paraxylene (PX) price improved
amid high Purified Terephthalic Acid (PTA) demand and a peak turnaround period of PX plants in Asia. However,
the BZ and PX spreads to Naphtha (MOPJ) in Q2/2016 lowered to US$217 per ton and US$394 per ton from
US$230 per ton and US$407 per ton, respectively, in Q1/2016 as a result of a larger increase in feed prices
compared to product prices. However, Aromatics prices in Q2/2016 declined from the same quarter last year.
Unit: US$ per Ton Q2/2015 Q1/2016 Q2/2016 % Inc.(Dec.)
1H/2015 1H/2016 % Inc.(Dec.) YoY QoQ
HDPE: CFR SEA 1,375 1,103 1,153 (16.1%) 4.5% 1,282 1,128 (12.0%)
PP: CFR SEA 1,343 930 1,082 (19.4%) 16.3% 1,246 1,006 (19.2%)
BZ: FOB Korea 805 574 628 (22.0%) 9.4% 737 601 (18.5%)
PX: CFR Taiwan 935 751 804 (14.0%) 7.1% 881 777 (11.8%)
The Thai economy in Q2/2016 continued to recover, primarily supported by government spending and
continual growth in tourism sector. Domestic consumption started to show signs of improvement following rising
farm income and alleviation of drought stress. However, private investment and export still contracted, on
concerns over global recovery, despite seeing signs of improvements in sectors benefiting from government
policy. The Office of the National Economic and Social Development Board (NESDB) in August 2016 projected
that the Thai economy in 2016 will expand 3.3%, no change from the previous forecast in May 2016.
PTT Public Company Limited 4
Q2/2016
Non-recurring items in the second Quarter of 2016 until present
Summary of non-recurring items for Q2/2016 are as follows:
January 2016 Energy Policy Management Committee (“EPMC”) announced, on January 21, 2016 to float NGV price for private cars on the condition that PTT be responsible for the price differential when the cost exceeds Baht 13.50/kg for 6 months.
March 2016 On March 25, 2016 the tribunal renders the majority award that since PTT’s termination of the commercial contract with RPCG Public Company Limited (“RPC”) is not in accordance with the contract condition and the tribunal rules that PTT make a payment for damages to RPC. However, PTT is respectfully unable to concur with such award and together with the fact that the award is not unanimously rendered. As a result, PTT exercise its legal right by filing a motion with the court requesting the award be abrogated and currently PTT is preparing a petition to be submitted to the court of jurisdiction to withdraw the arbitration's award.
April 2016 The Chief Ombudsman submitted the complaint to the Administrative Court on April 4, 2016, regarding PTT not returning the natural gas pipeline assets in accordance with the judgment of the Supreme Administrative Court which there is no new allegation. However, the Supreme Administrative Court, on February 16, 2015, ordered that PTT had returned all assets completely according to the judgment of the Supreme Administrative Court since 2008.
May 2016 The State Audit Commission (“SAC”) issued a resolution on a matter in which PTT had not delivered the gas pipeline assets in its entirety under the judgment of the Supreme Administrative Court, and alleged a former Minister and officers of the Minister of Finance, a former PTT executive, and a PTT employee unlawfully performed their duties. PTT insisted that PTT had jointly undertaken to separate the assets under the judgment of the Court entirety, and did in no way conceal any information or fact.
Ombudsman alleged Ministry of Finance, Ministry of Energy, PTT and their related 11 persons. On 27 May 2016, PTT has formally received a Court order requested PTT to clarify an issue relation to the separation of the assets of Petroleum Authority of Thailand on parts which are considered as the State property that are required to transfer to Ministry of Finance whether or not PTT have completely complied with the Cabinet Resolution. Currently, the attorney is on process of preparing the testimony.
PTT Global Chemical Public Company Limited (“PTTGC”) had shutdown the Olefins Unit 3 since May 17, 2016 to repair the furnace coils which were damaged from power outage and thermal shock within the coil. After considering the shutdown, the overall
Executive Summ
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Overall Perform
ance
Non-recurring item
s Segm
entation Perform
ance
Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 5
Q2/2016
olefins utilization rate in 2Q/2016 and 3Q/2016 will averaged at 84% and 92% respectively. The unit will be able to operate at its full capacity by August 2016.
June 2016 PTT reviewed five-year investment plan to reflect the operation and current circumstances by reducing investment plan of 2016 from Baht 50,839 million to Baht 43,307 million. The reduction is mainly from the investment projects of natural gas and infrastructure business.
Global Power Synergy Public Company Limited (“GPSC”) commenced small power plant producer (SPP), Nava Nakorn Electricity Generation (“NNEG”) with the installed capacity of 41.74 Megawatts (30% stake in NNEG), which already has achieved commercial operation to supply electricity to Electricity Generating Authority of Thailand (EGAT).
July 2016 NGV selling price to private cars were already sold at prices that reflect actual costs with no ceiling. Currently, NGV sell at 12.53 baht / kg.
PTT Exploration and Production Public Company Limited (“PTTEP”), signed a Production Sharing Contract (PSC) through PTTEP HK Offshore Limited (PTTEP’s subsidiary) with Petroleum National Berhad (PETRONAS) for exploration and production rights of Block SK410B, offshore Sarawak, Malaysia.
IRPC Company Limited (“IRPC”), has commenced the commercial operation of Upstream Project for Hygiene and Value Added Products (UHV) project which generate propylene of 320,000 tons per year. This will be the feedstock in polypropylene expansion unit.
Executive Summ
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Overall Perform
ance
Non-recurring item
s Segm
entation Perform
ance
Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 6
Q2/2016
Overall performance of PTT and its subsidiaries
Financial performance of Q2/2016 compared with Q2/2015 and Q1/2016 as well as 1H/2016 compared with
1H/2015 are summarized as follows:
Unit : Million Baht Q2/2015
(Restated) Q1/2016 Q2/2016
% Inc. (Dec.) 1H/2015 (Restated)
1H/2016 % Inc.
YoY QoQ (Dec.)
Sales & services income 536,145 386,940 420,447 (21.6%) 8.7% 1,051,356 807,387 (23.2%)
: Exploration & Production 48,258 38,165 38,294 (20.6%) 0.3% 95,890 76,459 (20.3%)
: Natural gas 1/ 138,381 118,285 114,210 (17.5%) (3.4%) 278,603 232,495 (16.5%)
: Oil 134,438 112,762 119,569 (11.1%) 6.0% 268,220 232,330 (13.4%)
: International trading 272,313 150,908 182,284 (33.1%) 20.8% 510,398 333,192 (34.7%)
: Petrochemical & Refining 239,090 176,205 180,585 (24.5%) 2.5% 455,255 356,790 (21.6%)
: Coal 3,184 3,263 3,705 16.4% 13.5% 7,877 6,968 (11.5%)
: Others 1,281 1,119 1,024 (20.1%) (8.5%) 2,368 2,143 (9.5%)
EBITDA 87,376 71,343 82,151 (6.0%) 15.1% 158,118 153,494 (2.9%)
: Exploration & Production 34,277 28,548 27,820 (18.8%) (2.6%) 69,969 56,369 (19.4%)
: Natural gas 13,742 14,562 16,975 23.5% 16.6% 22,945 31,537 37.4%
: Oil 4,525 5,875 6,941 53.4% 18.1% 8,540 12,816 50.1%
: International trading
- Excluding effect of FX 1,077 663 2,237 >100% >100% 1,234 2,900 >100%
- Including effect of FX 1,265 1,548 2,755 >100% 78.0% 2,361 4,303 82.3%
: Petrochemical & Refining 33,520 20,915 27,749 (17.2%) 32.7% 53,875 48,664 (9.7%)
: Coal 496 704 783 57.9% 11.2% 1,958 1,487 (24.1%)
: Others 479 125 (284) >(100%) >(100%) 889 (159) >(100%)
Depreciation and amortization expenses 36,672 31,828 31,925 (12.9%) 0.3% 72,835 63,753 (12.5%)
Operating Income 50,705 39,515 50,225 (0.9%) 27.1% 85,284 89,741 5.2%
: Exploration & Production 10,184 10,045 9,560 (6.1%) (4.8%) 22,107 19,605 (11.3%)
: Natural gas 9,940 10,160 12,466 25.4% 22.7% 15,406 22,626 46.9%
: Oil 3,677 4,995 6,013 63.5% 20.4% 6,927 11,008 58.9%
: International trading
- Excluding effect of FX 1,070 655 2,229 >100% >100% 1,219 2,884 >100%
- Including effect of FX 1,258 1,540 2,747 >100% 78.4% 2,346 4,287 82.7%
: Petrochemical & Refining 26,745 13,508 20,271 (24.2%) 50.1% 40,498 33,779 (16.6%)
: Coal (256) 325 291 >100% (10.5%) 309 616 99.4%
: Others 84 (124) (535) >(100%) >(100%) 107 (659) >(100%)
Share of net income (loss) from investments in joint ventures and associates
2,433 865 839 (65.5%) (3.0%) 4,324 1,704 (60.6%)
Gain (loss) on foreign exchange (3,289) 2,349 (248) (92.5%) >(100%) (1,348) 2,101 >100%
EBIT 50,818 43,431 48,517 (4.5%) 11.7% 95,251 91,948 (3.5%)
Finance costs 7,829 7,235 7,245 (7.5%) 0.1% 15,722 14,480 (7.9%)
Income taxes 8,989 3,798 6,912 (23.1%) 82.0% 12,440 10,710 (13.9%)
Net income (loss) 23,746 23,669 24,879 4.8% 5.1% 46,330 48,548 4.8%
Earnings per share (Baht/share) 8.19 8.23 8.51 3.9% 3.4% 16.08 16.74 4.1%
1/ Including infrastructure business
Executive Summ
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Overall Perform
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Non-recurring item
s Segm
entation Perform
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Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 7
Q2/2016
Second quarter of 2016 compared with First quarter of 2016
In Q2/2016, sales revenue of PTT and its subsidiaries was Baht 420,447 million, increasing by Baht
33,507 million or 8.7% mainly due to the increase in average petroleum and petrochemical product selling prices,
both olefins and aromatics following higher crude oil price, resulting in the rise in sales revenue of almost all
business groups. The improvement of PTT’s GSP performance resulted from a lower feed gas costs in relation to
the time lag effect of the decline in fuel oil price and the increase in product selling prices referring to higher
petrochemical price. The performance of petrochemical and refining business increased mainly from stock gain
following the higher crude oil price from the previous period, even though Market GRM dropped from the
considerable decline in gasoline and fuel oil crack spreads. The rise in performance of olefins caused by the
increase in product selling prices of polyethylene following crude oil price. Meanwhile, the performance of
aromatics decreased following lower in P2F from a soften demand and an increased supply, leading to the
increase in product selling price lower than the feedstock price. The performance of PTTEP also decreased mainly
due to higher unit cost from operating activity and the increase in planned maintenance, even though average
selling prices increased. Hence, earnings before interest, taxes, depreciation and amortization (EBITDA) of PTT
and subsidiaries in Q2/2016 was Baht 82,151 million, increasing by Baht 10,808 million or 15.1%.
. In Q2/2016, the share of net income from investments in joint ventures and associates was Baht 839
million, decreasing by Baht 26 million from Baht 865 million in Q1/2016 mainly due to the decrease in performance
of associates in natural gas business group, while the performance of associates in petrochemical and refining
business group increased primarily from HMC owing to the rise in Polypropylene (PP) price, leading to higher
P2F.
156346
249
241
451226
926
Q1/2016 Q2/2016
Others
Gas
Oil
Petrochemical & Refining
3%
839 865
Share of net income (loss) from investments in joint ventures and associates
Unit: Million Baht
Executive Summ
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Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 8
Q2/2016
In Q2/2016, loss on foreign exchange rate was Baht 248 million, increasing by Baht 2,597 million from
gain of 2,349 million in Q1/2016 mainly from PTT’s Japanese Yen outstanding loans caused by Thai Baht
depreciated against Japanese Yen. Moreover, the effect of Thai Baht appreciation against US Dollar, which has
lower effect compared with Q1/2016, resulted in lower unrealized gain on foreign exchange rate of many
affiliates within PTT Group.
Moreover, loss on derivatives increased by Baht 3,155 million from Baht 916 million in Q1/2016 mainly
resulted from PTTEP’s oil price hedging contracts.
In Q2/2016, corporate income taxes were Baht 6,912 million, increasing by Baht 3,114 million from Baht
3,798 million in Q1/2016, mainly resulted from the effect of Thai Baht appreciation against US Dollar of PTTEP,
which lower affected compared with Q1/2016 and there was the recognition of deferred tax assets from loss carry
forward and the dissolution of its subsidiaries of IRPC in Q1/2016, Moreover, corporate income taxes of PTT also
increased from better performance.
First half of 2016 compared with First half of 2015
Sales revenue of PTT and its subsidiaries in 1H/2016 was Baht 807,387 million, decreasing by Baht
243,969 million or 23.2% mainly due to the drop in average selling prices following a sharply decline in average
Dubai crude oil price by 35.0% compared with prior year, led to the decrease in sales revenue in all businesses,
especially trading business as well as petrochemical and refining business. Hence, EBITDA of PTT and
subsidiaries was Baht 153,494 million, decreasing by Baht 4,624 million or 2.9% compared with 1H/2015, even
though, gas business had improved performance from lower feed cost in relation to the time lag of the decline in
fuel oil price, as well as oil and trading business which had stock gain and sales of domestic condensate.
.
3,438
501
457
491
516
678
(87)
34
1H/2015 1H/2016
Others
Gas
Oil
Petrochemical & Refining1,704
4,324
Unit: Million Baht
Share of net income (loss) from investments in joint ventures and associates
Executive Summ
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Analysis of Financial Position
Economic Outlook
Economic
Overview
60.6%
PTT Public Company Limited 9
Q2/2016
In 1H/2016, the share of net income from investments in joint ventures and associates was Baht 1,704
million, decreasing by Baht 2,620 million or 60.6% from Baht 4,324 million in 1H/2015 mainly from the
recognition of performance of SPRC and BCP amounting to Baht 2,803 million in prior year, while there was no
such recognition in this period (PTT sold its investment in BCP on April 30, 2015 and decreased its
shareholdings in SPRC to 5.4% on December 3, 2015).
Depreciation and amortization expenses decreased by Baht 9,082 million or 12.5% from Baht 72,835
million in 1H/2015 to Baht 63,753 million mainly due to the increase in petroleum reserve and the recognition of
loss on impairment of exploration and production assets of PTTEP in Q3/2015.
In 1H/2016, there was gain on foreign exchange rate of Baht 2,101 million, increasing by Baht 3,449
million from 1H/2015 mainly resulted from the effect of Thai Baht appreciation against US Dollar. Therefore, many
affiliates within PTT Group had unrealized gain on foreign exchange from foreign currencies debts. Nonetheless,
loss on foreign exchange of PTT increased mainly due to Japanese Yen outstanding loans caused by Thai Baht
depreciated against Japanese Yen.
Furthermore, loss on derivatives in 1H/2016 was Baht 4,987 million, increasing by Baht 3,247 million
compared with 1H/2015 mainly from PTTEP’s oil price hedging derivative contracts and foreign exchange forward
contracts. In addition, in 1H/2015, gain on disposal of investment was Baht 3,096 million primarily from disposal
of investment in BCP (an associate of PTT) and IRPC had revenue from reversal of doubtful account, while there
were no such recognition in 1H/2016.
Corporate income taxes decreased by Baht 1,730 million or 13.9% from Baht 12,440 million in 1H/2015
to Baht 10,710 million in 1H/2016 mainly from the effect of Thai Baht appreciation against US Dollar of PTTEP and
IRPC recognized deferred tax assets from loss carry forward and the dissolution of its subsidiaries. Moreover,
corporate income taxes of PTT also increased from the better performance.
Executive Summ
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Overall Perform
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Non-recurring item
s Segm
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Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 10
Q2/2016
Segmentation performance of PTT and its subsidiaries
The details by segmentation of revenue, EBITDA and operating income of 1H/2016 are as follow;
1. Upstream Petroleum and Natural Gas Business Group
Petroleum Exploration and Production Business: PTT Exploration and Production Public Co., Ltd. (PTTEP)
Q2/2015 Q1/2016 Q2/2016 %Inc. (Dec.)
1H/2015 1H/2016 %Inc. (Dec.) YoY QoQ
Average selling price (US$/BOE) 48.7 35.1 36.6 (24.8%) 4.3% 48.8 35.8 (26.6%) Average sales volume (BOED) 315,450 329,858 320,657 1.7% (2.8%) 315,649 325,257 3.0%
Second quarter of 2016 compared with First quarter of 2016
In Q2/2016, sales revenue of PTTEP was Baht 38,294 million, increasing by Baht 129 million or 0.3% mainly from the increase in average selling prices by 4.3% from US$ 35.1 per barrel of oil equivalent (BOE) in Q1/2016 to US$ 36.6 per BOE in Q2/2016, primarily because of the rise of crude oil price. Nonetheless, the average sales volume decreased by 2.8% from 329,858 barrel of oil equivalent per day (BOED) to 320,657 BOED in Q2/2016 mainly from Montara project. EBITDA and operating income was Baht 27,820 million and Baht 9,560 million, decreasing by Baht 728 million and Baht 485 million respectively mainly from the rise in unit cost by US$ 1.7/BOE (Q1/2016 : 28.6 US$/BOE, Q2/2016 : 30.3 US$/BOE) due to operating activity and the increase in planned maintenance. First half of 2016 compared with First half of 2015
In 1H/2016, sales revenue of PTTEP was Baht 76,459 million, decreasing by Baht 19,431 million or 20.3% from 1H/2015 mainly from the decrease in average selling prices by 26.6% from US$ 48.8 per BOE in 1H/2015 to US$ 35.8 per BOE in 1H/2016, primarily because of the drop of crude oil price. Nonetheless, the
19%
29%
45%
6%1%
20%32%
10%
37%
1%
25%38%
15%22%
0%807,387
* Including coal and others.
Gas Oil & Trading PTTEP Others*
Unit: Million Baht
153,493 89,740
GAS Oil & Trading PTTEP Petro & Refine Others*
Executive Summ
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Analysis of Financial Position
Economic Outlook
Economic
Overview
Operating Income EBITDA Revenue
PTT Public Company Limited 11
Q2/2016
average sales volume increased by 3.0% from 315,649 BOED in 1H/2015 to 325,257 BOED in 1H/2016 mainly from Arthit and Contract 4 projects. EBITDA in 1H/2016 was Baht 56,369 million, decreasing by Baht 13,600 million or 19.4% mainly from lower sales revenue as aforementioned. However, operating expenses decreased from cost reduction policy and efficiency improvement activities under the SAVE to be SAFE program. Operating income in 1H/2016 was Baht 19,605 million, decreasing by Baht 2,502 million or 11.3% in line with a decline in EBITDA as aforementioned. Even though, depreciation, depletion and amortization expenses decreased by Baht 11,098 million as a result of an increase in the petroleum reserve from both domestic and overseas projects and the recognition of impairment of assets from PTTEP Australasia project in Q3/2015. Natural Gas Business Group The details of all product sales volume from GSPs are as follows:
Note: 1/ include Pentane
The details of reference product prices of GSPs are as follows:
Note: 1/ Contract Price (CP) 60:40
2/ South East Asia - Spot Price
3/ MOP Singapore (MOP’S) 4/ On December 15, 2014, NEPC passed a resolution of LPG price restructuring effective from February 2, 2015 onwards, with the
cancellation of LPG Ex-GSP pricing at US$ 333 per ton and setting the calculating method for LPG Pool price which reflects actual
costs of LPG production and supply (GSPs, Refineries and Aromatics plants, Imported) based on weighted average of the volume
from production and supply for the last 3 months
Unit : Ton Q2/2015 Q1/2016 Q2/2016 % Inc.(Dec.)
1H/2015 1H/2016 %Inc. (Dec.) YoY QoQ
LPG 608,443 680,152 661,247 8.7% (2.8%) 1,282,931 1,341,399 4.6%
Ethane 496,448 449,673 447,103 (9.9%) (0.6%) 1,048,028 896,776 (14.4%)
Propane 220,988 186,792 187,004 (15.4%) 0.1% 425,185 373,796 (12.1%)
NGL1/ 176,065 175,624 177,226 0.7% 0.9% 366,038 352,850 (3.6%)
Total 1,501,944 1,492,241 1,472,580 (2.0%) (1.3%) 3,122,182 2,964,821 (5.0%)
Unit : US$ per Ton Q2/2015 Q1/2016 Q2/2016 %Inc.(Dec.) 1H2558 1H/2559
%Inc. (Dec.) YoY QoQ
LPG 1/,4/ 451 321 341 (24.4%) 6.2% 457 331 (27.6%)
Ethylene 2/ 1,386 1,012 1,099 (20.7%) 8.6% 1,206 1,056 (12.4%)
Propylene 2/ 940 649 722 (23.2%) 11.2% 886 685 (22.7%)
HDPE 2/ 1,375 1,103 1,153 (16.1%) 4.5% 1,282 1,128 (12.0%)
PP 2/ 1,343 930 1,082 (19.4%) 16.3% 1,246 1,006 (19.3%)
Naphtha 3/ 505 304 366 (27.5%) 20.3% 475 335 (29.5%)
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PTT Public Company Limited 12
Q2/2016
Second quarter of 2016 compared with First quarter of 2016
In Q2/2016, sales revenue of natural gas business was Baht 114,210 million, decreasing by Baht 4,075
million or 3.4% from Q1/2016 mainly from lower sales revenue of PTT Natural Gas Supply and Trading (GSM),
Natural Gas Transmission (GTM) and Natural Gas Distribution (NGR) business units, as a result of the drop in
average selling prices in all customer groups compared with Q1/2016. However, the average natural gas sales
volume (calculated at heating value of 1,000 BTU per cubic foot) increased by 253 million standard cubic feet per
day (MMSCFD) from 4,628 MMSCFD in Q1/2016 to 4,881 MMSCFD in Q2/2016 or 5.5% because power producer
customers called more gas in summer mainly from IPP, and there were new SPPs started up in Q2/2016.
Sales revenue of PTT’s GSP increased from higher product selling prices in line with global petrochemical
product reference prices. Nonetheless, the sales volume of all products from GSPs (including NGL derived from
Dew Point Control units) dropped from 1,492,241 tons in Q1/2016 to 1,472,580 tons in Q2/2016 or 1.3% mainly
from LPG. This resulted from GPS 6 major turnaround for 26 days (15 May – 9 Jun) in Q2/2016 and Ethane
separation plant (ESP) major turnaround for 23 days (1-23 Mar) in Q1/2016.
EBITDA of natural gas business in Q2/2016 was Baht 16,975 million, increasing by Baht 2,413 million or
16.6% mainly from the decrease of feed gas costs and the increase in fuel oil price as well as petrochemical
prices following crude oil price. As a result, gross profit of PTT’s natural gas business increased especially GSPs
which had higher sales margin of LPG and NGL selling to petrochemical business. Also, industrial customers and
NGV had less losses. Therefore, operating income in Q2/2016 was Baht 12,466 million, increasing by 22.7% in
line with the rise in EBITDA.
The overall performance of infrastructure business, consisting of GPSC, ENCO and PTTES, decreased
compared with Q1/2016, mainly resulted from dividend received from Ratchaburi Power Company Limited (RPCL)
of GPSC in Q1/2016. Nevertheless, there was an increase in sales revenue as a result of the rise in sales volume
of electricity from both Sriracha Power Plant (IPP) and Small Power Producer (SPP).
First half of 2016 compared with First half of 2015
In 1H/2016, sales revenue of natural gas business was Baht 232,495 million, decreasing by Baht 46,108
million or 16.5% from 1H/2015 mainly from lower sales revenue of PTT GSM, GTM and NGR business units, as a
result of the drop in average selling prices in all customer groups, especially selling prices for industrial customers,
following the decrease in reference fuel oil price, compared with the same period of last year. Moreover, the
average natural gas sales volume (calculated at heating value of 1,000 BTU per cubic foot) decreased 100
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PTT Public Company Limited 13
Q2/2016
MMSCFD or 2.1% from 4,855 MMSCFD in 1H/2015 to 4,755 MMSCFD in 1H/2016 mainly due to lower demand
from EGAT.
In addition, sales revenue of PTT’s GSP decreased in line with the drop in product selling prices in
relation to the global petrochemical product reference prices in 1H/2016. Moreover, the sales volume of all
products decreased from 3,122,182 tons in 1H/2015 to 2,964,821 tons in 1H/2016 or 5.0% mainly from the drop
in sales volume of Ethane and Propane, as a result of PTT’s ESP and GSP 6 major turnaround in Q1/2016 and
Q2/2016, respectively, and planned shutdown of PTTGC’s Olefins and Polymer plants in Q1/2016, and unplanned
shutdown of Olefins 3 in Q2/2016.
EBITDA of Natural Gas Business in 1H/2016 was Baht 31,537 million, increased by Baht 8,592 million or
37.4%. The main reason was from the decrease of feed gas costs which decreased more than the drop in selling
prices. Therefore, gross profit of PTT’s natural gas business increased mainly from GSPs. Furthermore, industrial
customers and NGV losses decreased from the drop in Pool Gas cost despite NGV selling prices decline to Baht
12.55 per kilogram (as of 16 Jun – 15 Jul 2016) for private cars and Baht 10.00 per kilogram for taxi and public
cars. Operating income in 1H/2016 was Baht 22,626 million, increasing by 46.9% in line with the rise in EBITDA.
In 1H/2016, infrastructure business had better performance mainly from GPSC which had the increase
in sales volume of electricity from Small Power Producer (SPP) and revenue from the power plant of IRPC Clean
Power (IRPC-CP) Phase-1 has started its commercial operation since November 2015 and fully operated in
1H/2016. Also, there were the reduction in average natural gas price brought to the decrease in cost of raw
materials, as well as dividend received from Ratchaburi Power Company Limited (RPCL).
2. Downstream Petroleum Business Group
Oil Business Group
Second quarter of 2016 compared with First quarter of 2016
In Q2/2016, sales revenue of oil business was Baht 119,569 million, increasing by Baht 6,807 million or
6.0% mainly from the increase in product selling prices following the rise in average Dubai crude oil price from
US$ 30.4 per barrel in Q1/2016 to US$ 43.2 per barrel in Q2/2016 despite average sales volume in this quarter
decreased by 119 million liters or 1.8% from 6,677 million liters or equivalent to 461,509 barrels per day in Q1/2016
Unit : million liter Q2/2015 Q1/2016 Q2/2016 %Inc.(Dec.)
1H/2015 1H/2016 %Inc.
YoY QoQ (Dec.) Average sales volume 6,214 6,677 6,558 5.5% (1.8%) 12,600 13,235 5.0%
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PTT Public Company Limited 14
Q2/2016
to 6,558 million liters or equivalent to 453,298 barrels per day in Q2/2016, primarily caused by the decrease in
sales volume of LPG and aviation fuel.
EBITDA in Q2/2016 was Baht 6,941 million, increasing from Q1/2016 by Baht 1,066 million or 18.1%,
mainly from the increase in contribution margins almost all petroleum products, especially gasoline and diesel
as a result of stock gain increased compared with previous quarter. Therefore, operating income in Q2/2016
was Baht 6,013 million, increasing from the prior quarter by Baht 1,018 million as a result of the increase in
EBITDA as aforementioned.
First half of 2016 compared with First half of 2015
Sales revenue of oil business in 1H/2016 was Baht 232,330 million, decreasing by Baht 35,890 million
or 13.4% which resulted from the drop in crude oil price. The average Dubai crude oil price decreased from US$
56.6 per barrel in 1H/2015 to US$ 36.8 per barrel in 1H/2016. Whereas, sales volume increased by 635 million
liters or 5.0% from 12,600 million liters or equivalent to 437,880 barrels per day in 1H/2015 to 13,235 million liters
or equivalent to 457,403 barrels per day in 1H/2016, mainly from the increase in gasoline, diesel and aviation fuel
following the decline in product prices in line with crude oil price.
EBITDA in 1H/2016 was Baht 12,816 million, increasing by Baht 4,276 million or 50.1% due to the rise in margins of gasoline and diesel as a result of stock gain increased compared with prior year. Consequently, operating income in 1H/2016 was Baht 11,008 million, increasing by Baht 4,081 million, in line with the increase in EBITDA as aforementioned.
International Trading Business Group
Second quarter of 2016 compared with First quarter of 2016
Sales revenue of international trading business in Q2/2016 was Baht 182,284 million, increasing by
Baht 31,376 million or 20.8% from Q1/2016 mainly from the rise in global crude oil price. While, sales volume in
this quarter decreased by 1,381 million liters or 7.4% from 18,549 million liters or equivalent to 1,282,096 barrels
per day in Q1/2016 to 17,168 million liters or equivalent to 1,186,657 barrels per day in Q2/2016, mainly due to
the rise in sales volume of crude oil and imported condensate from Out – In trading resulted from the planned
shutdown of PTT group refineries and the drop in sales volume of petroleum products and crude oil overseas from
the Out – Out trading along with Asia refinery turnaround in this period.
Unit : million liter Q2/2015 Q1/2016 Q2/2016 %Inc.(Dec.)
1H/2015 1H/2016 %Inc
YoY QoQ (Dec.) Average sales volume 20,248 18,549 17,168 (15.2%) (7.4%) 41,314 35,717 (13.5%)
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PTT Public Company Limited 15
Q2/2016
EBITDA, which adjusted the effect of foreign exchange, in Q2/2016 was Baht 2,755 million, increasing
by Baht 1,207 million mainly from the rise in domestic condensate margins due to the increase in price. Operating
income, which adjusted the effect of foreign exchange, in this quarter was Baht 2,747 million.
First half of 2016 compared with First half of 2015
Sales revenue of international trading business was Baht 333,192 million in 1H/2016, decreasing by
Baht 177,206 million or 34.7% which resulted from the reduction in product selling prices in accordance with
global oil market prices. Moreover, the sales volume in this period decreased by Baht 5,597 million liters or 13.5%
from 41,314 million liters or equivalent to 1,435,722 barrels per day in 1H/2015 to 35,717 million liters or equivalent
to 1,234,376 barrels per day mainly due to the decline in sales volume of crude oil and condensate from Out – In
trading and Out – Out trading due to the refinery planned shutdown.
EBITDA, which adjusted the effect of foreign exchange, in 1H/2016 was Baht 4,303 million, increasing
by Baht 1,942 million. Operating income, which adjusted the effect of foreign exchange, in 1H/2016 was Baht
4,287 million, increasing by Baht 1,941 million from prior year mainly from the rise in domestic condensate margins
following the decrease in average selling prices slower than the drop in cost.
Petrochemical and Refining Business Group
Unit : US$ per ton Q2/2015 Q1/2016 Q2/2016 %Inc. (Dec.)
1H/2015 1H/2016 %Inc. (Dec.) YoY QoQ
HDPE 1,375 1,103 1,153 (16.1%) 4.5% 1,282 1,128 (12.0%) PP 1,343 930 1,082 (19.4%) 16.3% 1,246 1,006 (19.3%) BZ - Cond 271 272 234 (13.7%) (14.0%) 244 253 3.7% PX - Cond 391 415 405 3.6% (2.4%) 362 410 13.3%
Unit : US$ per ton Q2/2015 Q1/2016 Q2/2016 %Inc. (Dec.)
1H/2015 1H/2016 %Inc. (Dec.) YoY QoQ
Market GRM 5.81 4.92 3.33 (42.7%) (32.3%) 6.38 4.21 (34.0%) Inventory gain (loss) 2.45 (0.97) 3.74 (52.7%) >100% (0.18) 1.14 >100% Accounting GRM 8.17 3.59 6.53 (20.1%) 81.9% 6.65 4.90 (26.3%) Refinery Utilization rate (%) 99.4% 97.2% 83.8% (15.7%) (13.8%) 98.5% 90.5% (8.1%)
Note: GRM is calculated from refineries of TOP, IRPC, and PTTGC.
Second quarter of 2016 compared with First quarter of 2016
In Q2/2016, sales revenue of petrochemical and refining business was Baht 180,585 million, increasing
by Baht 4,380 million or 2.5% mainly from the increase in average petroleum and petrochemical product prices
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PTT Public Company Limited 16
Q2/2016
following the rise in crude oil price as a result of the tightening supply, the wildfire in Canada, and the prolonged
unrest in Nigeria.
The refinery utilization rate in Q2/2016 was 83.8%, decreasing by 13.8% from Q1/2016 mainly from
planned shutdown of PTTGC’s refinery plants for two months. The refinery maintenance affected the drop in
aromatics utilization rate of PTT Group because the refinery unable to send reformate to feed aromatics’ business
and refinery could not receive condensate residual from aromatics, resulted in the reduction of utilization. For
Olefins utilization rate increased even if PTTGC unplanned shutdown of the Olefins 3.
EBITDA in Q2/2016 was Baht 27,749 million, increasing by Baht 6,834 million from Q1/2016, and
Operating income was Baht 20,271 million, increasing by Baht 6,763 million, mainly due to
Refinery performance surged mainly due to the increase in PTT group’s stock gain by US$ 4.71
per barrel (Q1/2016 : (0.97) US$/BBL, Q2/2016 : 3.74 US$/BBL) following the rise in crude oil
price, whereas Market GRM decreased as a result of the lower petroleum product crack
spreads, especially fuel oil and gasoline from the increase in oversupply and the lower demand.
Meanwhile, diesel spreads slightly increased due to higher demand.
Aromatics Petrochemical performance slightly decline from market P2F due to the lower product
spreads in almost all products following the increase in condensate price which is the main
feedstock, even though there was the recognition of stock gain in this period from higher
condensate price following crude oil price.
Olefins Petrochemicals performance increased for both PTTGC and IRPC due to higher product
prices following the rise in crude oil price, where HDPE price increased, and the spread of PP
and Naphtha increased by 14% owing to the tightening supply from plants shutdown in this
region.
Share of net income from investments in joint ventures and associates of petrochemical and refining
business increased by Baht 190 million from Q1/2016 mainly from HMC performance due to the rise in PP price,
while PTTAC performance decreased from higher feed stock cost, planned shutdown in this period and the lower
gain on foreign exchange of outstanding loans.
First half of 2016 compared with First half of 2015
In 1H/2016, sales revenue of petrochemical and refining business was Baht 356,790 million, decreasing
by Baht 98,465 million or 21.6% mainly from the reduction in average petroleum and petrochemical product prices
following the sharply drop in crude oil price.
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PTT Public Company Limited 17
Q2/2016
Sales volume of petrochemical increased following the improved in Aromatics utilization rate, while the
Olefins utilization rate decreased from planned and unplanned shutdown of PTTGC’s olefins plant. The refinery
decreased from the drop in utilization rate by 8.1% as a result of PTTGC’s planned shutdown as aforementioned.
EBITDA in 1H/2016 was Baht 48,664 million, decreasing by Baht 5,211 million from 1H/2015, and
Operating income was Baht 33,779 million, decreasing by Baht 6,719 million, mainly due to
Refinery performance decreased from market GRM due to the decline in almost all petroleum
product spreads although PTT Group refineries had higher stock gain by 1.32 US$/BBL. As a
result, the Accounting GRM decreased.
Aromatics Petrochemical performance improved due to higher P2F, both PX and BZ, compared
with the same period of last year which had oversupply. Moreover, 1H2016, fuel used and loss
decreased following the reduction in feed cost.
Olefins Petrochemicals performance decreased mainly from the fall in PTTGC’s sale volume
following utilization rate of Olefins plant, which had planned shutdown in the previous quarter
and emergency shutdown from power outage in this quarter. In addition, PE prices decreased
in line with crude oil price.
Share of net income from investments in joint ventures and associates of petrochemical and refining
business decreased by Baht 2,937 million from 1H/2015 mainly from the performance of SPRC and BCP
amounting to Baht 2,803 million which PTT sold its investment in BCP on April 30, 2015 and decreased its
shareholding in SPRC to 5.41% on December 3, 2015.
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PTT Public Company Limited 18
Q2/2016
Coal Business
Q2/2015 Q1/2015 Q2/2016 %Inc. (Dec.)
6M/2015 6M/2016 %Inc.
YoY QoQ (Dec.) Newcastle index price (US$ per ton) 59.6 50.5 51.6 (13.4%) 2.2% 62.7 51 (18.7%) Average selling price (US$ per ton) 55.0 44.6 41.8 (24.0%) (6.3%) 55.8 43.1 (22.8%) Sales volume (million ton) 1.7 2.1 2.6 52.9% 23.8% 4.2 4.6 9.5%
Second quarter of 2016 compared with First quarter of 2016
In Q2/2016 sales revenue of coal business was Baht 3,705 million, increasing by Baht 442 million or
13.5% mainly due to the rise in sales volume in Q2/2016 by 0.5 million tons or 23.8% from 2.1 million tons in
Q1/2016, mainly from Jembayan, as a result of the desire to reduce coal inventories because the quality of coal
will decrease if stored for long time. However, average selling price in Q2/2016 decreased by US$ 2.8 per ton
from US$ 44.6 per ton to US$ 41.8 per ton.
EBITDA in Q2/2016 was Baht 783 million, increasing by Baht 79 million or 11.2% mainly caused by the
rise in sales volume as aforementioned, accompanied by lower drilling costs from the higher discount received
by the contractor.
Operating income in Q2/2016 was Baht 291 million, decreasing by Baht 34 million or 10.5% due to the
rise in depreciation and amortization expenses following the higher sales volume.
First half of 2016 compared with First half of 2015
In 1H/2016, sales revenue of coal business was Baht 6,968 million, decreasing by Baht 909 million or
11.5% mainly due to the drop in average selling price by US$ 12.7 per ton or 22.8%. However, sales volume
increased by 9.5% from the desire to reduce coal inventories as aforementioned.
EBITDA in 1H/2016 was Baht 1,487 million, decreasing by Baht 471 million or 24.1% mainly caused by
the drop in average selling price as aforementioned, despite sales volume increased.
However, operating income in 1H/2016 was Baht 616 million, increasing by Baht 307 million or 99.4%
compared with 1H/2015 as a result of the drop in depreciation and amortization expenses following the decrease
in coal mining assets from recognition of impairment losses in 2015.
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PTT Public Company Limited 19
Q2/2016
The analysis of PTT and its subsidiaries’ consolidated financial position as of June 30, 2016
compared with December 31, 2015
Assets
As of June 30, 2016, total assets of PTT and its subsidiaries were Baht 2,152,472 million, decreasing
by Baht 21,524 million or 1% compared with December 31, 2015. The decrease was mainly from the net effect of
the followings:
: A decrease of Baht 10,364 million or 1.5% in current assets was mainly from the followings: - An increase of Baht 9,307 million in cash and cash equivalents and current investments. - A decrease of Baht 17,347 million in accounts receivable mainly from the decrease in sales volume
and selling prices compared with the year ended 2015.
: An increase of Baht 2,182 million or 2.8% in long-term investments was mainly from the share of profit
from investments in joint ventures and associates and the increase in investments of associates of infrastructure
business.
: A decrease of Baht 12,281 million or 1.1% in property, plant and equipment was mainly from
depreciation expenses even though there was additional assets of PTT Group during the period, for instance, the
Nakornsawan and the Nakornratchasima onshore gas pipeline projects of PTT, assets under construction of the
Phenol II and LLDE Expansion projects of PTTGC, the Upstream Project for Hygiene and Value Add Products
(UHV), the Polypropylene Expansion project (PPE) and the Polypropylene Compound and Specialties project
(PPC) of IRPC, and the LNG terminal Phase II project of PTTLNG.
298,275 297,214
1,118,677 1,106,396
77,342 79,524
679,702 669,338
1,087,687 1,123,750
192,708 187,593
632,834 612,467
260,767 228,662
2,152,472
1% 1%
2,152,4722,173,9962,173,996
Total Assets Total Liabilities & Equity Unit: Million Baht
Executive Summ
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Current assets
Long-term loans (including current portion)
Non-current liabilities
Other current liabilities
Equity
Available-for-sale investments, Investments in joint ventures,
associates, and Other long-term investments
Other non-current assets
Property, plant and equipment
31 Dec 2015 30 Jun 2016 31 Dec 2015 30 Jun 2016
PTT Public Company Limited 20
Q2/2016
Liabilities
As of June 30, 2016, PTT and its subsidiaries had total liabilities of Baht 1,028,722 million, decreasing
by Baht 57,587 million or 5.3% from the year ended 2015, mainly from the net effect of the followings:
: A decrease of Baht 32,105 million or 12.3% in other current liabilities mainly from the payment of
accounts payable and income tax payable.
: A decrease of Baht 20,367 million or 3.2% in long-term loans (including the current portion) mainly
from the repayment of long-term loans and the repurchase of debentures.
: A decrease of Baht 5,116 million or 2.7% in non-current liabilities mainly from deferred tax liabilities
and derivative liabilities following the appreciation of Thai Baht.
Equity
As of June 30, 2016, PTT and its subsidiaries had total shareholders’ equity of Baht 1,123,750 million,
increasing by Baht 36,063 million or 3.3% from the year ended 2015, mainly due to performance in 1H/2016 of
PTT and its subsidiaries which was Baht 48,548 million and dividends paid amounting to Baht 11,424 million.
Executive Summ
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PTT Public Company Limited 21
Q2/2016
Liquidity
For the six-month period ended June 30, 2016, PTT and its subsidiaries had net decrease in cash and cash equivalents amounting to Baht 41,192 million, and cash and cash equivalents at the beginning of the period was Baht 239,978 million. As a result, cash and cash equivalents at the end of the period was Baht 198,786 million. Details of cash flow by activities are as follows:
Unit: Million Baht
Net cash provided by operating activities 130,433
Net cash used in investing activities (107,256)
Net cash used in financing activities (59,297)
Effects of exchange rates on cash and cash equivalents (167)
Currency translation differences (4,905)
Net increase in cash and cash equivalents during the period (41,192)
Cash and cash equivalents at the beginning of the period 239,978
Cash and cash equivalents at the end of the period 198,786
Net cash provided by operating activities of Baht 130,433 million was derived from Baht 48,548 million
of net profit attributable to owners of the parent, adjusted by net profit to net cash provided (used in) by operating
activities. The increase in net cash flow from operating activities mainly resulted from Baht 63,753 million of
depreciation and amortization expenses, Baht 14,480 million of finance costs, Baht 10,710 million of income taxes
expenses, as well as, the decrease in net operating assets of Baht 8,268 million and income taxes paid was Baht
23,209 million.
Net cash used in investing activities was Baht 107,256 million mainly resulted from the followings:
: The cash outflow of investments in property, plant and equipment, intangible assets, and mining
properties amounting to Baht 58,938 million, mainly due to the additional investments of PTTEP in petroleum
exploration and production assets mainly from the investments in Arthit, Zawtika, and S1 projects. Additionally,
PTT invested in projects, principally are the Nakornsawan and the Nakornratchasima onshore gas pipeline
projects. Furthermore, there were investments in Phenol II project and LLDPE Expansion project of PTTGC, UHV,
PPE and PPC projects of IRPC, as well as the production of linear alkylbenzene project (LAB) and New Small
Power Plants Project (SPPs) of TOP.
: The cash outflow from current investments amounting to Baht 50,499 million, mainly from fixed
deposits of PTT, PTTEP and TOP.
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PTT Public Company Limited 22
Q2/2016
Net cash used by financing activities was Baht 59,297 million, mainly from the followings:
: The long-term loans repayment of Baht 39,342 million were principally from the repayment of loans
and the repurchase of debentures of PTTGC, PTT and PTTEP amounting to Baht 36,000 million.
: Cash paid for finance costs amounting to Baht 16,129 million, mainly from PTT, PTTEP, PTTGC and
TOP.
: A decrease of Baht 3,957 million in bank overdrafts and short-term loans from financial institutions,
mainly from PTTT.
: Cash received from loans totaling to Baht 22,469 million, mainly was derived from PTTGC, IRPC, and
TOP.
Executive Summ
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PTT Public Company Limited 23
Q2/2016
Financial ratios and earnings per share of PTT and its subsidiaries
Financial Ratio Unit 1H/2015 1H/2016
Profitability Ratios Gross profit margin % 11.78% 15.11% Net profit margin % 6.38% 8.27% Solvency Ratios Interest coverage Time 9.38 9.53 Earnings per share Earnings per share Baht/share 16.08 16.74
Financial Ratio Unit Dec 31, 2015 Jun 30, 2016
Liquidity Ratios Current ratio Time 2.16 2.17 Quick ratio Time 1.55 1.56 Solvency Ratios Debt to Equity Time 0.61 0.57
Note:
Current ratio = Current assets divided by Current liabilities
Quick ratio = (Cash and cash equivalent + Current investments + Accounts receivable) divided by Current Liabilities
Gross profit margin = Gross profit divided by Sales and service income
Net profit margin = Net profit divided by Sales and service income
Debt to equity = Interest bearing debt divided by Total shareholder’s equity
Interest coverage = (Net cash flow from operating activities +Taxes paid from operating activities) divided by Interest paid from financing activities
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PTT Public Company Limited 24
Q2/2016
Economic Outlook in 2016
Global economic growth is expected to slow down in the third quarter of 2016 (Q3/2016) as the effects
of the UK’s vote to leave the EU (Brexit vote) are felt in advanced economies – especially in the UK and the euro
area where reduced private sector confidence and heightened market volatility may prove damaging to growth,
though weaker currencies should provide some support to exports. Subsequently, central banks of various
countries announced to stand ready to support the stability of markets. As for the US, growth is expected to
remain modest on the back of resilient domestic demand, though a potentially stronger dollar post Brexit vote
could hurt exports. Meanwhile, emerging market economies and lower income countries are expected to maintain
a roughly steady growth rate in Q3/2016 amid relatively stable oil prices, post-Brexit vote financial market volatility
and China’s economic expansion hitting the government’s growth target of 6.5-7%.
According to the IEA’s estimates in June 2016, global oil demand is expected to grow by 1.4 MMBD to
average 96.1 MMBD in 2016, with emerging market economies and lower-income countries being the key driver.
Meanwhile, oil demand in the advanced economies is expected to remain unchanged from the previous year. As
for global oil supply, oversupply condition is expected to decline following the reduction in Non-OPEC production.
However, increased production in Iran, Iraq, and Libya should help keep oil prices in the US$35-40 per barrel
range which would help boost petroleum product demand
Singapore GRM in Singapore in 2016 is expected to average US$5-6 per barrel.
The Olefins price in Q3/2016 is expected to trend higher amid tight supply, with HDPE price expected at
US$ 1,159 per ton and PP price at US$ 1,083 per ton. Meanwhile, Aromatics price is expected to trend lower with
PX price forecasted at US$ 796 per ton following lower polyester demand in China, and BZ price forecasted at
US$ 616 per ton amid new capacities and lower demand of Styrene Monomer (SM) and Phenol during plants
turnarounds period.
The Thai economy in Q3/2016 is expected to expand at a slightly slower pace amid contracting exports
as a result of global economic slowdown. Government spending, however, is expected to remain a key driver of
economic growth, especially those large-scale public infrastructure investment projects which are expected to
take clearer shape and help partially crowd in private investment. In the meantime, tourism sector is likely to
continue its expansion. Risk factors that need to be monitored include an increase in financial market and
exchange rate volatility as a consequence of Brexit vote, and the outcome of Thailand’s constitutional referendum.
Executive Summ
ary
Overall Perform
ance
Non-recurring item
s Segm
entation Perform
ance
Analysis of Financial Position
Economic Outlook
Economic
Overview
PTT Public Company Limited 25
Q2/2016
Appendix
Natural Gas Business consists of PTT natural gas business unit, PTT Natural Gas Distribution Co., Ltd. (PTTNGD), PTT LNG Co., Ltd (PTTLNG), and PTT FLNG Limited, which is a joint venture of PTT International (Singapore) Pte. Ltd. (a subsidiary of PTTER) with 50% shareholding interest and a joint venture of PTTEP FLNG Holding Company
Limited (a subsidiary of PTTEP) with 50% shareholding interest. PTT FLNG is currently under business dissolution.
Oil Business consists of PTT oil business unit, PTT (Cambodia) Co., Ltd. (PTTCL), PTT Tank Terminal Co., Ltd. (PTT TANK), PTT Retail Business Co., Ltd. (PTTRB), consolidating Thai Lube Blending Company Limited (TLBC)
due to the 100% TLBC’s shareholding acquisition by PTTRB and PTT, and PTT Oil Myanmar Co., Ltd. (PTTOM).
International Trading Business consists of PTT international business unit and PTT International Trading Pte Ltd
(PTTT).
Petrochemical and Refinery Business consists of PTT Global Chemical Public Company Limited (PTTGC), PTT Polymer Marketing Co., Ltd. (PTTPM), PTT Polymer Logistics Co., Ltd. (PTTPL), PTT Maintenance and Engineering Co., Ltd. (PTTME) and PTT PMMA Co., Ltd. (PTTPMMA), Thai Oil Public Company Limited (TOP), IRPC Public
Company Limited (IRPC), and Thai Oil Power Co., Ltd. (TP).
Coal Business consists of Sakari Resources Ltd. (SAR), Straits (Brunei) Pte Ltd (Straits (Brunei)), and Yoxford Holdings (95.26% shareholding in SAR and 100% shareholdings in the others, held by PTT Mining Limited
(PTTML), a 100% shareholding subsidiary of PTT Energy Resources Company Limited (PTTER)).
Infrastructure Business consists of Global Power Synergy Public Company Limited (GPSC), PTT Energy Solution
Co., Ltd. (PTTES) and Energy Complex Co., Ltd. (EnCo).
Other Business consists of Business Services Alliance Co., Ltd. (BSA), PTT Green Energy Pte. Ltd. (PTTGE), PTT Energy Resources Company Limited (PTTER), and PTT Regional Treasury Center Pte. Ltd. (PTTRTC) and PTT
ICT Solution Co., Ltd. (PTTICT).
Earnings per share is calculated by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares which are held by third parties during the periods.