Analyst Meeting. 2Q08 Performance. Tuesday 19 August 2008

Transcription

1 Analyst Meeting 2Q08 Performance Tuesday 19 August 2008

2 Agenda 2Q08 Management Highlights Sales Report GRM & Plant Utilization CAPEX Industry Outlooks Financial Performance Appendix 2

3 1H08 Highlight Overview High volatilities in crude prices resulting from US economic slowdown, weaken USD, and tensions on ongoing geopolitical concerns in a number of producing countries, including Nigeria, Iraq, Israeli and Iran on conflict in nuclear issue. Average crude cost is relatively higher from 92 $/bbl in 1Q08 to 117 $/bbl in 2Q08 2Q08 average crude run at 85%, slightly increased resulting from better gas oil spread. Integrated GRM in 2Q08 at 11 $/bbl: Petrochemical GRM 4.1 $/bbl and Refinery GRM 6.9 $/bbl or 1.4 B/Lt. Cost reduction programs continue, 1H08 cost reduced by Baht 640 million or USD 20 million Operation Finance ABS expansion project ($70 million) got approval from BOD and ready to proceed Fitch Ratings (Thailand) affirmed IRPC s National Long-term rating at A-(tha) and National Short-term rating at F2(tha). The Outlook on the ratings remain Stable. Forbes ranked IRPC the 1434 th biggest companies in the world on 2 April st ESOP exercised on 30 June 2008, executed only 0.7% of total shares. 3

4 Sales Report 4

5 1H08 Product Sales Value by Market Export 33% Oil products (~ 73% of sales value) Domestic 67% Export & Reexport 36% Petrochemical products (~ 26% of sales value) Domestic 64% 1H08 sales included Baht 5,196 million or USD 160 million excise tax & all oil funds mill.baht Oil Petrochem. Total mill.usd Oil Petrochem. Total 1H07 73, ,588 = 104,526 OR 1H07 2, = 3,074 1H08 98,590 34, ,546 1H08 3,033 1,075 4, : FX 34 Baht/USD, 1Q08 : FX Baht/USD, 2Q08 : FX Baht/USD 5

6 1H08 Petroleum Product Sales Volume Mogas 9% LPG 2% Fuel Oil 0.2% Others 1% Naphtha 4% Lube 5% Asphalt Wax 8% Mogas 10% LPG 0.5% Fuel Oil 0.2% Others 1% Naphtha 4% Value Lube 6% Asphalt Wax 4% ATB 12% ATB 18% Diesel 53% Diesel 62% 1H08 Volume = 3,942 m Ltrs 1H07 Volume = 4,135 m Ltrs 2Q08 Volume = 1,955 m Ltrs 1Q08 Volume = 1,987 m Ltrs 1H08 Value = Bt 98,590 m 1H07 Value = Bt 73,938 m 2Q08 Value = Bt 54,484 m 1Q08 Value = Bt 44,106 m 6

7 Q2 07 Petrochemical Products Sale 1H08 Petrochemical Product Sales Volume EPS 2% PS 9% Polyol 1% Others 2% EB/SM 0.5% BTX 21% Value EPS 2% PS 10% Polyol 2% Others 0.5% EB/SM 1% BTX 15% PP 32% CD-1 3% ABS 7% HDPE 8% Olefins 14% PP 35% CD-1 3% ABS 9% HDPE 9% Olefins 14% 1H08 = 755,137 M/T 1H07 = 738,606 M/T 1H08 = Bt 34,956 m 1H07 = Bt 30,588 m 2Q08 = 390,186 M/T 1Q08 = 364,951 M/T 2Q08 = Bt 18,499 m 1Q08 = Bt 16,457 m 7

8 GRM & Plant Utilization 8

9 Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q H08 GRM Petchem & others GRM Oil Integrated GRM 2Q08 GRM US$ / bbl

10 Capacity Utilization Refinery Capacity Utilization KBPCD % 85% 2006 Crude run 2007 Crude run 2008 Crude run 2006 % utilization 2007 % utilization 2008 % utilization 90% 89% 89% 89% 83% 87% 91% 93% 100% 88% 85% 85% 82% 85% 83% 88% 90% 87% 86% 90% 85% 81% 84% 80% 82% 83% 84% 79% 70% 38% 68% JAN FEB MAR APR MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC. Y. AVG. 1Q07 2Q07 3Q07 4Q Q08 2Q08 1H08 % Utilization 87% 88% 87% 90% 88% 84% 85% 85% 60% 50% 40% 30% 20% 10% 0% Petrochemical and Lube KTA Nameplate Capacity (LHS) Utilization 2007 (LHS) Utilization 2008 (LHS) %Utilization 2006 (RHS) %Utilization 2007 (RHS) %Utilization 2008 (RHS) Ethylene Propylene Butadiene Benzene Toluene Mixed Xylene SM HDPE PP ABS/AS PS EPS Lube Base Oil Asphalt % Utilization Remark: Utilization 2008 = 1H08 annualized 10

11 CAPEX 11

12 Future Project Progress As of July 2008 CAPEX Amount (Million USD) Phase I Benefit/year (Million USD/year) % IRR Start Complete Progress Purpose HDPE Compound % 2Q07 1Q09 84% Increase capacity from 17 KTA to 57 KTA ABS Expansion % 2Q07 1Q09 89% Increase capacity from 96 KTA to 117 KTA Power Plant % 2Q07 3Q09 40% CHP 216 MW for internal use, reduce power & steam cost, improve power stability Safety Improvement n/a n/a % Total Phase II ABS Expansion n/a 21% Increase capacity from 117 KTA to 200 KTA New Reg_EURO IV n/a 14% Comply to regulation Petroleum n/a 22% Increase capacity from 215 to 265 kbpd & Improvement improve product slate Propylene Booster n/a 36% Increase capacity by 100 KTA Port Dredging n/a 16% Accommodate 300,000 ton VLCC Total 1, Grand Total 1,

13 Industry Outlooks 13

14 Industry Outlooks Crude Oil Is the recently declining in crude price a Bubble Burst? Very volatile & No more cheap crude oil Geopolitical tension / Supply concerns Higher finding cost for new oil reserve US Dollar fluctuation Growing demands in Asia Refined Products Tagging along crude oil prices Approaching lower season in the third quarter Recently declining of crude prices and government s excise tax cut could boost short term domestic demand Petrochemical Products Close watch on naphtha prices New capacity addition from ME Lower demand from China 14

15 Financial Performance 15

16 Financial Highlights Unit: Million Baht 2Q08 2Q07 %YoY 1Q08 %QoQ 1H08 1H07 %YoY Sales 73,740 55, % 61, % 134, , % Net Sales 71,521 50, % 58, % 129,801 97, % Cost of Goods Sold (63,912) (45,012) 42.0 (55,481) 15.2 (119,392) (87,829) 35.9 Gross Profit 7,609 5, % 2, % 10,408 9, % Gross Margin 10.6% 11.5% 4.8% 8.0% 9.6% Other Revenue SG&A (935) (1,203) -22.3% (782) 19.5% (1,717) (2,087) -17.7% EBITDA 6,919 4, % 2, % 9,054 7, % EBITDA Margin 9.7% 9.4% 3.7% 7.0% 7.8% Depre. & Amort. (820) (765) (817) (1,637) (1,530) EBIT 6,099 4, % 1, % 7,417 6, % Net Interest Expenses (247) (30) (252) (498) (89) Pretax Profit 5,853 3, % 1, % 6,919 5, % Taxes (18) (14) (9) (27) (23) Net Profit before Extra. 5,835 3, % 1, % 6,890 5, % Doubtful Account (7) 173 (10) (16) 57 FX. Gain/(Losses) (474) (149.7) (33.8) Investment Gain (Loss) (257) 510 (367) (624) 960 Asset Gain (Loss) Other Expenses (4) (5) (5) (9) (10) Net Profit 5,126 4, % 1, % 6,753 7, % No. Share (M.) 19,500 19,500 19,500 19,500 19,500 Norm. EPS % % EPS % % BV % 16

17 Balance Sheet: Healthy financial position Cash & S/T Investment Other Assets 127,828 17,642 29,804 48,798 15, ,175 12,673 18,454 21,945 58, ,994 4,714 28,625 24,726 80,628 Unit: Millon Baht Interest Bearing Debt Other Liabilities PP & E 61,388 82,953 62,311 92,777 63,652 95,643 Equities H08 Treasury policy : Net Debt/Equity < 1.0x Net Debt/EBITDA < 2.0x Current Status = 0.25x = 1.32x 17

18 Key Financial Ratios 2Q08 2Q07 1Q08 1H08 1H07 Liquidity & Leverage Ratio (Times) Quick Ratio Total IBD / Equity Net IBD / Equity Liabilities / Equity Net IBD / EBITDA IBD / EBITDA EBITDA / Interest Exp Profitability Ratio Gross Profit Margin 10.6% 11.5% 4.8% 8.0% 9.6% EBITDA Margin 9.7% 9.4% 3.7% 7.0% 7.8% Net Profit Margin 7.2% 9.7% 2.8% 5.2% 7.9% ROE 14.1% 17.3% 6.9% 14.1% 17.3% ROCE 10.9% 15.7% 5.8% 10.9% 15.7% 18

19 Appendix 19

20 Tight Markets: Crude prices skyrocket Price :$/BBL Dubai 2008 S pore GRM 2008 Dubai 2007 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec GRM : $/BBL Dubai 2006 S pore GRM Crude Price Analysis Crude prices driven by: Supply concerns Geopolitical tension Higher finding cost Weakening US Dollar Growing demands in Asia Crude Price Outlooks No more cheap crude Volatile markets Jul-Aug 08 crude price soften by: Ending of high seasons Subsidy cut in Asian countries US economic slowdown $/BBL Q07 2Q07 3Q07 4Q Q08 Apr-08 May-08 Jun-08 2Q08 Jul-08 Dubai Brent WTI S'pore GRM

21 Paradox: Gas oil spread record high VS FO record low Unit = USD / BBL ULG 95 Gas Oil 0.5%S Fuel Oil 180cst Q Q Dec07 Jan08 ULG 95 -Dubai Gas Oil - Dubai Fuel Oil - Dubai Q Q Dec07 Jan08 Feb08-18 Feb08 Mar Apr Mar08 Apr May May Jun08-30 Jun Jul Jul08 Price & Spread Analysis Gas oil Price & Spread: Record High, driven by soaring crude prices and supply shortage due to plant shutdown coupled with growing demand in China plus extra demand for Olympic Games Restoration after disastrous earthquake The dilemma Fuel Oil Price & Spread: Strong Price but deep dampen negative spread Shrink spread resulting from lower demand caused by: High price Switching of Fuel Oil to gas oil in China effort to reduce pollution for Olympic Games In the long run, refineries keep upgrading, fuel oil might come to scarcity, consequently, fuel oil price could be driven up Source: Platt 21

22 Petrochemical: Price inflated from costs. Unit = USD / Ton 2,300 Naphtha Ethylene Propylene HDPE PP 2,100 2,058 1,976 1,900 1,700 1,500 1,300 1, ,670 1,650 1,572 1,548 1,576 1,593 1, ,665 1,331 1,508 1,229 1,475 1,513 1,536 1,556 1, ,398 1,326 1,237 1,240 1,275 1,273 1,160 1,179 1,120 1,049 1, ,764 1,780 1,618 1,485 1,163 1, Q08 2Q08 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Ethylene - Naptha HDPE - Naptha PP - Propylene Q08 2Q08 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Source: ICIS Price & Spread Analysis Naphtha: marked its new high on 4 July 08 at 1,255 $/ ton following soaring crude price. This high cost brought down production volume of many olefins producers Ethylene: price soaring but moderate spread, a sequel to high naphtha cost coupled with supply shortage as some olefins plants become uneconomical and shutdown. Propylene: price soaring driven by tight supply due to production cutback and maintenance shutdown, also the start-up of a polypropylene plant in China take some propylene out of the markets. Polymers: price soaring but moderate spread due to high monomer cost. New capacity expansion in 2H08 primarily from ME could put pressure on product spreads. 22

23 Styrenics: Weak demand Unit: USD / Ton 2,300 2,100 1,900 1,700 1,500 1,300 1, , ,782 1,764 1,773 1,810 1,821 1,866 1,868 1, ,531 1,665 1,794 1,820 1,519 1,569 1,583 1,512 1,639 1,473 1,514 1,605 1,648 1,478 1,500 1,519 1,635 1, ,477 1,553 1,459 1,457 1,447 1,402 1,401 1,446 1,356 1,358 1,277 1,204 1,163 1,174 1,049 1, Naphtha Styrene ABS PS EPS 704 2,126 2, Q08 2Q08 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul ABS - SM PS - SM PS - Naphtha Q08 2Q08 Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul Price & Spread Analysis Styrene Monomer: Bearish Weak demand Pressure from some players to liquidate supplies for cash. Operation rate has been reduced but the market is still sloppy. Supply from JCP expected to arrive in September PS: Sluggish Weak demand Threat of oversupply by the influx of JCP s products ABS: Moderate High ACN, Butadiene cost but producers could benefit from depressed SM market Source: ICIS 23

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25 Thank you Investor Relations Contact : ir@irpc.co.th Tel , Fax presentation is available at Click Presentations This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation. The information contained herein does not purport to be all-inclusive or to contain all of the Information that may be material to the recipient s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC. Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto. 24

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