tupras december 2009
DESCRIPTION
Tupras December 2009 Investor Relations PresentationTRANSCRIPT
Investor Presentation
December 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
4
Refinery Sector Outlook
Disposals
• Petroplus Antwerp, bought by Vitol
• Eni - Linovo, seekingbuyer
• Shell Europe, possibleEssar 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
• Valero - Delaware
5
Crude Prices & Exchange Rate
43.6 43.146.5
50.3
57.5
68.664.6
72.8
67.5
72.8
40
45
50
55
60
65
70
75
80
85
Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Jul 09 Aug 09 Sep 09 Oct 09
Crude Prices $ /bblDaily Monthly
1.60
1.661.71
1.601.56 1.55
1.521.49 1.49 1.47
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
Jan 09 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09
Turkish Lira / Dollar Daily Monthly
6
Product Ratios
0.90
1.00
1.10
1.20
1.30
1.40
1.50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Gasoline
2007
2008
2009
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.
1.00
1.10
1.20
1.30
1.40
1.50
1.60
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Diesel
2007
2008
2009
0.50
0.60
0.70
0.80
0.90
1.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Fuel Oil
2007 2008 2009
7
Turkish Sector Outlook
Diesel
• Decline in demand from road transportation
• Dieselisation continues –ULSD demand is growing
Jet
• Global demandto 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
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mil
lio
ns M
3
2007 2008 2009
10
0
5
10
15
20
25
30
35
40
93 95 '00 '08 '15 2020
LPG 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)
-2.5
0.8
-4.9
1.7
-2.5
1.3
-5.8
2.7
-2.7
2.3
-6.7
1.5
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
LPG Gasoline Diesel Fuel oil
2006 2007 2008
(Million Ton)
(Export)
(Import)
11
12
Vehicle Parc Comparison (per 1000 People)
Passenger Cars, 2006
776
561 540508
245 237
8826
0
100
200
300
400
500
600
700
800
900
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
Purpose1 0
Total 184 192
1313
14
TÜPRAŞ Assets
Baku
Ceyhan
Black Sea
Marmara
Mersin
Ankara
İstanbul
Kırıkkale5.0 mt
NC: 6.32
Batman1,1 mt
NC:1.83
Kirkuk
Sh
ipp
ing
Ditaş
79.98% Share
165 kDWT Crude Tanker
10.5 kDWT, 2 New Product Tankers
Re
tail
ing
Opet
40% Share
1,339 Retail Sites
1,161 kM3 Storage
Trading, Lubricants & Bunkering activities
İzmit11.0 mt
NC: 7.78
İzmir
11.0 mt
NC: 7.66
Total Refining Capacity: 28.1 Million Tons
Current Nelson Complexity(NC): 7.25
14
15
Opet
-14.6
47.6
13.317.6
51.4
28.5
43.1
70.4
51.8
-20
0
20
40
60
80
1st Q 2nd Q 3rd Q
Financials*, mn TL
Net Profit Operating Profit Gross Profit
• Results
– EBITDA $191 Million
• Network
– Opet: 795, Sunpet: 544,
– Total 1,339
• Terminal Capacity
– 1,161,042m3.
11.5
13.5
14.9
16.517.3
12.8
14.615.2
16.1 16.3
8
10
12
14
16
18
2005 2006 2007 2008 2009 - 9M
% Market Share Development
Gasoline
Diesel
* Tüpraş’s 40% share
16
36.5
65.6
249.1
784
43.7
Koç Energy Group Storage Capacities
Aygaz Opet Tüpraş
Unmatched Logistics Strength
1,161,000 M3150,000 M3 5,100,000 M3 100% Coverage
of Turkey
16
(1000 M3)
17
0.00.4 0.4
2006 2007 2008
0.50.9
1.7
2006 2007 2008
0.1 0.51.1
2006 2007 2008
2.1 2.1 2.1
2007 2008 2009P
Russia
Kazakhstan
Iran
S. Arabia
Italy
Libya
Domestic
Azerbaijan
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
2006 2007 2008
17
Crude Suppliers of TÜPRAŞ (million ton)
%30
%48
6.7
9.1
6.6
2006 2007 2008
0.1
2007 2008
UK
00.2
0.5
2006 2007 2008
IraqSyria
18
3.79
1.56
6.37
1.87
5.38
3.75
6.72
1.59
0
1
2
3
4
5
6
7
8
2006 3rd Q 2007 3rd Q 2008 3rd Q 2009 3rd Q
Tüpraş Net Margin Med Complex
• Lower blackproducts, optimised for highvalue products
Yields
• ASRFO, HVGO, Naphtha
Semi FinishedProducts
• Less Exports
Domestic Focus
Net Refining Margins
18
19
Production Volumes
5.51
6.22
6.18
6.07
5.15
6.25
6.47
4.85
3.29
4.19
4.44
0 1 2 3 4 5 6 7
1Q
2Q
3Q
4Q
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)
2.6
1.1
2.3
0.2
2.2
0.9
2.7
0.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Gasoline Middle Dist.
Fuel Oil Other
2007
2008
9 Month (KTons)
1,863
720
2,073
152
1,452
151
802
150
500
1,000
1,500
2,000
2,500
3,000
Gasoline Middle Dist.
Fuel Oil Other
2008
2009
Export Volumes
23
9M Trading Activities
• Finished Products
– Gasoil imports up 20%
– LPG & Jet imported to make up shortfall
109
862
150
0
200
400
600
800
1,000
HVGO + LCGO
ASR F.Oil Naphtha+ Other
Intermediate Imports, Ton*000
2008 2009
39
1,857
301134
2,233
401
30
565
0
500
1,000
1,500
2,000
2,500
LPG Diesel LSFO F.Oil Jet
Product Imports, Ton*000
2008 2009
• Intermediates
– HVGO & ASRFO were imported to keep the hydrocrackers running full capacity.
– Naphtha imported to producegasoline
24
Total Sales By Customers- 9 Months 2009
Petrol Retailers59.0%
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 %
2525
26
Investments
50
1,600
45292
544
350
176
303
2,656
1,950
628395
3,200
-200
400
1,000
1,600
2,200
2,800
3,400
1989-2005 2006-2007 2008 2006-2013
Million USD
Master Plan
New & Other
26
Gasoline Improvement
Storage Capacity +1.1mn ton
Residium Upgrading
OEP & others
27
Company Strategy
Co
mm
erc
ial • Increased
Product Trade
• >50% Increase in 9M 2009
• Sea and Rail Logistics
• 2 New Product Tankers
• Wagon loading / unloading
Inv
es
tme
nt • Euro V
Completed
• Terminal Capacity
• Reduce Black Product
Op
era
tio
nal • Energy
Efficiency
• Losses
• Integrity and Reliability
• Health , Safety and Environment
• 2007-2008 Saving $162 Million
28
Coker Update
Prime Contractor will be
Tecnicas Reunidas
Has a wealth of experience in the
sector
Has worked on previous projects for
Tüpraş
Budget
Project expected to cost between
$1.8 - $2.0 Billion
Less than previously expected
Project is not turnkey
FinancingNegotiations
underwayCompletion
2010
ProcurementMajor
EquipmentStarts 2010
Construction
FollowingdetailedDesign
To start byend of 2010
Commissioning
Followingmechanicalcompletion
2013
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
Results
NPV > $1 Billion IRR 28% Payback < 4 Years
Revenue/EBITDA
Additional Revenue > $1.0 Billion Additional EBITDA > $500 Million
Costs
Raw Material & Semi products $465 Million Op. Costs: $52 Million
Investment $Million
Total Investment $2.0 Billion Financial Loans 65-75%
Assumptions
Interest Rate 6.0% Crude Oil $60
Financial Summary
3131
32
Financial Highlights (mn $)
769 712
1081 11161286
566
0
500
1000
1500
2005 2006 2007 2008 9M 20089M 2009
EBITDA
508 575
998
333
932
392
0
200
400
600
800
1000
1200
2005 2006 2007 2008 9M 20089M 2009
Net Income
-421
259
-229
215 199
-617-800
-600
-400
-200
0
200
400
2005 2006 2007 2008 9M 20089M 2009
Net Debt/(Cash)
0.220.25
0.34
0.12
0.37
0.23
0
0.1
0.2
0.3
0.4
2005 2006 2007 2008 9M 20089M 2009
Return on Average Equity
33
Profitability Indicators , January-September
2008 2009Difference
Amount (%)
Dtd.Brent Price, ($/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 7Income/Loss from other
operations17 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 $
ConsolidatedAssets
ConsolidatedLiabilities
Financial Loans: 321
Short TermLoans: 274
Payables: 1,925
Stock : 1,343
Recievables:82
Cash: 968
-128
Sole Tüpraş -90 Million $
36
Ratings & Corporate Governance
Fitch Rating Comparison
03 December
2009
FOREIGN
CURRENCY LOCAL CURRENCY
Long-term Long-term National
SOVEREIGN BB+ (Pos) BB+ (Stab) -
TÜPRAŞ BBB- (Stab) BBB-(Stab) AAA (tur) (Stab)
Petkim BB- (Stab) BB-(Stab) AA- (tur) (Stab)
P. Ofisi BB- (Stab) BB-(Stab) AA- (tur) (Pos)
Hürriyet B (Neg) B (Neg) AA- (tur) (Neg)
Çalık Holding B- (Neg) B-(Neg) BBB (tur) (Neg)
Vestel B (Stab) B (Stab) -
Turkcell BBB- (Stab) BBB-(Stab) -
Corporate Governance Rating
67.31
96.02
89.76
83.06
83.41
0% 50% 100%
Board
Stakeholders
Transparency
Shareholders
Overall
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
37
38
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.
38