3Q/14 ANALYST MEETING PRESENTATION

Transcription

1 3Q/14 ANALYST MEETING PRESENTATION Supattanapong Punmeechaow, President & CEO Patiparn Sukorndhaman, EVP-Finance and Accounting Sriwan Eamrungroj, EVP -Marketing, Commercial and Supply St. Regis Hotel, Bangkok November 14, 2014

2 DISCLAIMER This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 2

3 AGENDA 1. MISSION TO BE CONTINUED 2. 3Q/14 OPERATING RESULTS 3. MARKET OUTLOOK 3

4 AGENDA 1. MISSION TO BE CONTINUED 2. 3Q/14 OPERATING RESULTS 3. MARKET OUTLOOK 4

5 MISSION TO BE CONTINUED Delivering a Sustainable Growth and balancing all Stakeholders interests Vision To Be a Leading Chemical Company For Better Living Mission Supattanapong Punmeechaow, President & CEO PTTGC s Top Management Team s Commitment * Effective October 1,

6 SUSTAINABLE GROWTH WITH WORLD CLASS SUCCESS Board of the year Awards 2013 for Distinctive Practices Best Public Company of the Year 2014 Asia Responsible Entrepreneurship Awards A Member of United Nations Global Compact at Advanced Level [UNGC] American Chemical Society Global Top 50 Rank #39 Excellence in SHE Conditions for 16 Consecutives ICIS TOP 100 Awards Rank # 22 2 nd Consecutive years AMCHAM CSR Excellence Recognition 2013 Silver level in Creative partnership ASEAN CG Scorecard 1 of 17 Thai Corporates Forbes Global 2000 Rank #687 in Global 2000 Rank #14 in Diversified Chemicals Thailand s Top Corporate Brand Values 2014 ENVIRONMENT Carbon Footprint for Product Certification from Thailand Greenhouse Gas Organization Award by CDP in Climate Disclosure Leader for 2 Consecutive years & ranked 1 of 7 leading companies The first company in Thailand who received the Carbon Neutral certification 6

7 HIGH STANDARD OPERATIONS & WORK PROCESS YTD Plant Operation (1) as of Sep. 14 Management System Enegy Efficiency 4 th Quartile 3 rd Quartile 2 nd Quartile 1 st Quartile Energy Efficiency and Reliability drop from its normal standard due to the unstable feedstock supply from PTT s GSP #5 technical problem from Lightning Strike since Aug and I4-1 Shutdown in Feb th Quartile 3 rd Quartile 2 nd Quartile 1 st Quartile Reliability Strategic Performance Management Real-time Performance Real-time Dashboard Layout the Infrastructure with Single Enterprise Resource Planning (ERP) Integrated End to End Work Process and will Support Future Business Expansion Refinery Aromatics Olefins Polymers : HDPE, Polymers : LDPE Polymers : LLDPE EO-Based Performance Note: 1) Internal Calculation base on Solomon and Phillip Townsend Methodology 7

8 ON GOING STRATEGIC DIRECTION EXCELLENCE EXECUTION EBITDA Uplift 15-30% ( ) 1 st Quartile Performance ROIC > 14% Listed in Globally Sustainability Index GREEN 1-STEP ADJACENCIES CORE UPLIFT PROJECTS NEW GEOGRAPHIES NEW PRODUCTS Oleochemical Operational Excellence Synergy Excellence Marketing Excellence Debottle necking ASEAN: Pertamina CHINA: Sinochem US: Shale Gas System House Compounding PC, PU, Nylon 6-6 PLA Succinic Acid PLA/PBS Compound 8

9 CORE UPLIFTS: PROJECTS UPDATE COMPLETED PROJECTS UNDER CONSTRUCTION PROJECTS BV Project Butadiene 75 KTA Butene-1 25 KTA SYNERGY Off Gas upgrading at Olefins Delay to 1Q/15 from Target: 4Q/14 91% CONSTRUCTION PROGRESS Pure H2 via New PSA DEBOTTLENECKING & EXPANSION CAPACITY CAPEX (M.USD) CONSTRUCTION PROGRESS Phenol 2 Project Target COD: 3Q/15 Phenol +250 KTA Acetone +155 KTA % DEBOTTLENECKING & EXPANSION TO BE FINALIZED CAPACITY CAPEX (M.USD) TOCGC Plant Improvement Project Target COD: 3Q/15 EOE +90 KTA % PTTPE Cracker Debottlenecking LLDPE Expansion 12% Olefins Increase New LLDPE +300 KTA Aromatics 2 Debottlenecking Project (PX Expansion) Target COD: 4Q/15 PX +115 KTA BZ + 35 KTA OX + 20 KTA % To Start Capturing Benefits in

10 CORE UPLIFTS: BENEFITS UPDATE Excellence Programs (MUSD) 2014 Target 9M/14 Actual Est Target Synergy Excellence -Heavy Gas (Offgas) -Pure H2 via PSA -C3/C4 Stream -3 Streams (Heavy Gasoline, LCB, CB) -Heavy Aromatics Marketing Excellence (MUSD) -Customer Portfolio Management -Product Development -Pricing Excellence Operational Excellence -Total 47 projects in Energy Saving Projects -7 Plant Reliability Projects -6 Cost Reduction/Optimization Projects Total * Debottleneck EBITDA uplift includes 1Q/14 BV project starts up 3Q/15 TOCGC Plant Improvement Project 4Q/15 PX Expansion starts up Not Including PTTPE Cracker Debottlenecking and LLDPE Expansion 10

11 1-STEP ADJACENCIES: NEW GEOGRAPHIES Pride of Indonesia 2014 Basic Engineering Design Expected Project Timeline FID Construction COD New Cracker + Downstream Petrochemical Pertamina Refinery Unit VI Balongan PTTGC will mainly focus on Petrochemical while PTT joined bidding for Refineries Expansion Potential Partners Existing Balongan Refinery (125 KBD) Expansion Refinery LPG, (938 KTA) Naphtha (1,796 KTA) New World Scale Naphtha Based Cracker New Downstream Petrochemical Continues to Increase Polymer Sales in Indonesia via ITT according to targets Customers 11

12 1-STEP ADJACENCIES: NEW PRODUCTS Completing the Jigsaw of PU Chain 1 PU Building Blocks Isocyanate TDI HDI MDI 2 System House Formulation & End-use PU Foam (67%) CASE (33%) 1 Vencorex Transformation TDI conversion to world-scale HDI monomer Global technology center New HDI derivatives plant in Thailand Capacity: 12 KTA Investment: EUR 40 million Expected IRR > 15% Target Commissioning by 3Q/15 Overall Progress at 26% as of Sep 14 Propylene Oxide (PO) Ethylene Oxide (EO) Polyols -Polyether Polyols Isocyanate is a key building block. Broad and diverse end-use applications 2 PO-Polyols & System House Shortlisting of Technology and Potential Partner Under Feasibility Studies To Finalize Potential Partner by

13 MITIGATING THE RISKS Decline of Crude Oil Price Corporate Risk Management System Risk Mgmt Process Risk Criteria Risk Audit Monitor & Review Risk Assessment Risk Management Customer Value /Portfolio Mgmt. Marketing Excellence Product Development Pricing Excellence Commercial and Financial Risk Management Crude/Products Hedging Inventory Hedging FX Hedging Decline Crude Oil Price Capital Project Mgmt. Utility Management Operational Excellence Turnaround Excellence Optimization Synergy Supply Chain Mgmt. Reliability & Asset Integrity Inventory Mgmt. Stress Test Close Monitoring Reviewing 13

14 MITIGATING THE RISKS Energy Reform Corporate Risk Management System Risk Mgmt Process Risk Criteria Risk Audit Monitor & Review Risk Assessment Risk Management Increase Public Understanding Alternative Feedstock to fulfill Plant Flexibility Studies of Feedstock from US Shale Gas LPG (Price Increase from Energy Reform) Plant Optimization (Fully Flexible Feedstock Intake) Studies of Logistics Facilities Stress Test Close Monitoring Reviewing 14

15 AGENDA 1. MISSION TO BE CONTINUED 2. 3Q/14 OPERATING RESULTS 3. MARKET OUTLOOK 15

16 BUSINESS ENVIRONMENT AND OPERATIONS RECAP Outperform Olefins & Derivatives Business Beat Declining Crude Oil USD/BBL Average Dubai Crude Price Surplus crude and weak demand pressured Dubai crude to decline from average at USD/BBL in 2Q/14 to average USD/BBL in 3Q/14. As a result, PTTGC reported Stock Loss & NRV totaling 2,841 M.THB for the quarter FX Gain amounting to 381 M.THB, resulting from slight appreciation in THB against USD from end 2Q/14 at THB/USD to end 3Q/14 at THB/USD. HDPE price remained strong with Improving Aromatics M/14 1Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 3Q/14 Average and Closing FX : THB/USD* Average FX Closing FX Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14 3Q/14 Diesel-Dubai 14.4 USD/BBL -17% YoY -10% QoQ FO Dubai -8.4 USD/BBL +21% YoY +21% QoQ PX-Cond 479 USD/Ton -6% YoY +43% QoQ BZ-Cond 430 USD/Ton +31% YoY +16% QoQ HDPE 1,604 USD/Ton +8% YoY +2% QoQ MEG 1,143 USD/Ton 0% YoY +5% QoQ Overall utilization rate of major businesses 3Q/13 2Q/14 3Q/14 9M/13 9M/14 Refinery CDU Utilization (%) Aromatics BTX Utilization (%) Olefins Utilization (%) Polymers Utilization (%) EO Based MEG Utilization (%) Green ME Utilization (%) FA Utilization (%) Phenol Phenol Utilization (%) *Source: BOT Selling Rate 16

17 REFINERY PERFORMANCE Lower Crude Price in 3Q/14 Contribute to stock loss (2.00) (4.00) (6.00) (8.00) (10.00) ULG 95 - DB JET - DB Petroleum Product Spread (USD/BBL) % YoY -18% QoQ % YoY + 1% QoQ Total Intake (KBD) CDU U-Rate 87% 102% 101% 63% 98% 103% 101% 103% 102% Crude Condenstate Residue & Others % YoY +1% QoQ Diesel - DB FO - DB Naphtha + Ref. Jet Diesel Fuel Oil Others (7.3) (9.2) (7.4) (3.7) Sales Volume (KBD) (10.7) (10.5) (8.5) (10.7) (8.4) -17% YoY -10% QoQ +21% YoY +21% QoQ % 14% 14% 16% 12% 15% 16% 16% 10% 11% 13% 11% 10% 12% 12% 15% 13% 13% 52% 52% 51% 54% 52% 49% 52% 51% 54% 14% 13% 15% 13% 15% 13% 14% 13% 14% 8% 7% 9% 5% 9% 8% 5% 8% 9% +2% YoY -5% QoQ (1.00) (3.00) 5.06 Market GRM Gross Refinery Margin (USD/BBL) Hedging Gain/(Loss) (0.96) (0.91) (2.45) Stock Gain/(Loss) Net NRV Accounting GRM (0.69) (2.92) Market GRM GRM on CDU GRM on CRS Note: In 2Q/13, Refinery had Planned Turnaround of 38 days 17

18 AROMATICS PERFORMANCE Improved PX and BZ spread Aromatics Products Prices and Spread (USD/Ton) BTX U-Rate and Sales Volume (KTons) Prices PX FECP - Cond BZ Spot - Cond ,489 Condensate Erawan PX FECP BZ Spot Korea 1,307 1,303 1, ,618 1,409 1,440 1,440 1,379 1,303 1,350 1,286 1,283 1,258 1,256 1,297 1,301 1, % YoY +16% QoQ 430-6% YoY +43% QoQ 479 BTX U-Rate (30) (80) BZ Group PX Group Naphtha Group Other By-Products Market P2F 89% 84% 92% 84% 91% 93% 91% 89% 83% 43% 43% 43% 42% Products to Feed Margin (USD/Ton BTX) -6% YoY -4% QoQ 2,510 2, % 23% 22% 26% 22% 24% 24% 23% 22% 43% 43% 43% 43% 42% 28% 28% 26% 26% 31% 30% 25% 28% 33% 6% 6% 8% 5% 4% 3% 7% 6% 4% Stock Gain/(Loss) Net NRV Hedging Gain/(Loss) Accounting P2F (0.26) (10.18) (1.45) (7.90) (45.97) (68.54) (0.81) (0.02) (100) (200) (300) (400) 18

19 OLEFINS AND DERIVATIVES PERFORMANCE Continuing Strong HDPE Price Prices MEG ACP 0.65Ethylene HDPE - Naphtha 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, Olefins Derivatives Prices and Spread (USD/Ton) HDPE (FILM) SEA LLDPE CFR SEA LDPE CFR SE Asia MEG ACP Naphtha MOPJ 1,615 1,664 1,569 1,639 1,605 1,601 1,491 1,459 1,580 1,444 1,578 1,601 1,490 1,549 1,560 1,576 1,536 1,554 1,569 1,604 1,477 1,466 1,482 1,433 HDPE Price 1,471 1,489 1,443 +8% YoY +2% QoQ 1,282 1,199 1,139 1,173 1,208 1,143 1,182 1,093 1, HDPE (FILM) SEA 1,471 1,576 1,482 1,443 1,489 1,536 1,554 1,569 1,604 LLDPE CFR SEA 1,466 1,580 1,477 1,433 1,490 1,549 1,560 1,578 1,601 LDPE CFR SE Asia 1,491 1,615 1,459 1,444 1,569 1,664 1,639 1,605 1,601 MEG ACP 1,199 1,139 1,282 1,173 1,143 1,208 1,182 1,093 1,143 Naphtha MOPJ % YoY +12% QoQ -36% YoY +20% QoQ 182 U-Rate (%) Olefins 88% 87% 97% 93% 75% 93% 77% 91% 94% HDPE 104% 105% 109% 96% 106% 113% 93% 107% 114% LLDPE 99% 98% 113% 72% 113% 114% 99% 112% 84% LDPE 68% 104% 101% 99% 5% 101% 115% 93% 104% Total PE 95% 103% 109% 89% 88% 111% 99% 106% 104% MEG 96% 92% 97% 100% 92% 86% 65% 99% 112% Sales Volume (KTons) Olefins HDPE LLDPE LDPE Total PE 1,079 1, MEG GAS : NAPHTHA Intake % Ethane Other Gas Naphtha 57% 57% 55% 54% 65% 53% 61% 54% 56% Adjusted EBITDA Margin KTons 2,740 2,669 1, % 9% 12% 10% 4% 12% 14% 11% 4% 34% 34% 33% 36% 31% 35% 25% 35% 40% 28% 26% 30% 28% 26% 24% 24% 25% 28% 19

20 PHENOL AND BPA PERFORMANCE Improved Margin from Lower Surplus Phenol/ BPA Prices and Spread (USD/Ton) U-Rate and Sales Volume (KTons) Prices ,880 1,743 1,728 1,719 1,490 1,523 1,426 1,402 Benzene Phenol BPA 1,894 1,630 1,605 1,653 1,638 1,592 1,352 1,387 1,424 1,456 1,379 1,307 1,297 1,286 1,258 1,283 1,297 1,293 1,301 U-Rate Phenol 125% 114% 126% 127% 124% 130% 78% 131% 132% BPA 99% 94% 64% 116% 116% 104% 70% 107% 104% Sales Volume (KTons) +6% YoY +11% QoQ Phenol 46% 44% 60% 45% 35% 46% 40% 42% 48% Phenol (CMP) 1,426 1,490 1,523 1,402 1,352 1,387 1,424 1,456 1,592 BPA (CMP) 1,743 1,728 1,880 1,719 1,630 1,605 1,638 1,653 1,894 Benzene 1,307 1,297 1,379 1,286 1,258 1,283 1,297 1,293 1,301 BPA 54% 56% 65% 55% 54% 60% 58% 52% 40% BPA-Phenol Phenol-BZ % YoY +78% QoQ % YoY +54% QoQ 302 Adjusted EBITDA Margin 16% 10% 7% 3% 4% 5% 4% 4% 1% 20

21 OVERVIEW OF BUSINESS UNITS PERFORMANCE Margin Supported by Stable Gas Flow Despite Weak Crude Q/14 Revenue and Adjusted EBITDA Structure Olefins and Derivatives Performance Sales Revenue Adjusted EBITDA 6% 6% 0% 3% 1% 13% 6% HDPE Price ($/Ton) % 45% 145,820 MB 15,702 MB 61% 19% 16% Olefins Utilization Rate (%) Ethane Flow (Ton/Hr) Adjusted EBITDA Margins % Adj. EBITDA Margin 3Q/13 2Q/14 3Q/14 Business Unit : Refinery Aromatics 8 (2) 9 Olefins and Derivative Green HVS Average EBITDA Margin (%) EBITDA (M.THB) ,574 8,719 9,545 7,611 1Q/13 3Q/13 2Q/14 3Q/14 Oct-14 21

22 INCOME STATEMENT 3Q/14 3Q/2013 2Q/2014 3Q/2014 YoY QoQ MB % MB % MB % MB % MB % 1 Sales Revenue 141, , , ,426 3 (6,581) (4) 2 Feedstock Cost (116,522) (82) (126,966) (83) (117,045) (80) (9,921) (8) 3 Product to Feed Margin 24, , , , , Variable Cost (6,211) (4) (7,601) (5) (7,042) (5) (559) (7) 5 Fixed Cost (4,028) (3) (4,904) (3) (4,337) (3) (567) (12) 6 Stock Gain/(Loss) & NRV 3, ,180 1 (2,841) (2) (6,609) (175) (4,021) (341) 7 Gain/(Loss) Commodity Hedging (135) (24) Other Income 1, , ,113 1 (122) (10) (136) (11) 9 SG&A (3,808) (3) (3,056) (2) (3,232) (2) (576) (15) Extraordinary Item 11 Provision for Business Restructuring** 0 0 (2,239) (1) , EBITDA 16, , ,861 9 (3,527) (22) 2, Depreciation & Amortization (4,149) (3) (4,415) (3) (4,308) (3) (107) (2) 14 EBIT 12, , ,553 6 (3,686) (30) 2, Finance Cost (1,144) (1) (1,097) (1) (1,095) (1) (49) (4) (2) (0) 16 FX Gain/(Loss) (738) (1) , Shares of profit/(loss) from investments (54) (0) (50) (17) 18 Income Tax Expense (708) (1) (599) (0) (521) (0) (187) (26) (78) (13) 19 Net Profit 9, , ,558 5 (2,037) (21) 2, Profit/(loss) attributable to: 21 Owners of the Company 9, , ,591 5 (2,019) (21) 1, Non-controlling interests (15) (0) (1,360) *** (1) (33) *** (0) (18) (120) 1, Adjusted EBITDA * 12, , , , , Note: * Adjusted EBITDA = EBITDA Stock Gain/(Loss) &NRV Provision for Business Restructuring of Vencorex ** Vencorex business restructuring provision at 100% share *** Vencorex business restructuring provision portion of 49% for non-controlling interests or Baht 1,097 million 22

23 INCOME STATEMENT 9M/14 9M/2013 9M/2014 YoY MB % MB % MB % 1 Sales Revenue 394, , , Feedstock Cost (316,462) (80) (365,162) (82) 48, Product to Feed Margin 78, , , Variable Cost (19,203) (5) (22,059) (5) 2, Fixed Cost (12,207) (3) (13,874) (3) 1, Stock Gain/(Loss) & NRV 1,703 0 (2,236) (1) (3,939) (231) 7 Gain/(Loss) Commodity Hedging 1, ,030 0 (97) (9) 8 Other Income 3, ,680 1 (241) (6) 9 SG&A (9,197) (2) (9,392) (2) Extraordinary Item Provision for Business Restructuring** 0 0 (2,239) (1) (2,239) (100) 12 EBITDA 44, ,335 8 (9,938) (22) 13 Depreciation & Amortization (12,289) (3) (12,925) (3) EBIT 31, ,410 5 (10,574) (33) 15 Finance Cost (3,379) (1) (3,333) (1) (46) (1) 16 FX Gain/(Loss) (1,479) (0) 1, , Shares of profit/(loss) from investments (93) (0) Income Tax Expense (1,419) (0) (1,493) (0) Net Profit 25, ,409 4 (7,205) (28) 20 Profit/(loss) attributable to: 21 Owners of the Company 25, ,971 4 (5,885) (23) 22 Non-controlling interests (243) (0) (1,563) *** (0) *** (1,320) (544) 23 Adjusted EBITDA * 42, ,810 9 (3,760) (9) Note: * Adjusted EBITDA = EBITDA Stock Gain/(Loss) &NRV Provision for Business Restructuring of Vencorex ** Vencorex business restructuring provision at 100% share *** Vencorex business restructuring provision portion of 49% for non-controlling interests or Baht 1,097 million 23

24 STRONG FINANCIAL POSITION Statements of Financial Position Loan Type Cash +ST Investment CA THB 433 Bn THB 426 Bn Liab. IBD THB 116 Bn Interest Rate Currencies 61 % Fixed 50 % THB 39 % Float 50 % USD & Others PPE Non CA Share Holder s Equity Cost of long term debts ~ 4.54% (Include W/H Tax) Average loan life after refinancing Years As of Dec. 31, 2013 As of Sep. 30, 2014 Maturity of Financial Debt* as at Sep. 30, 2014 Key Financial Ratios THB Bn Net IBD/EBITDA NET IBD/Equity ROE ROA Dec Mar Jun Sep % 15% 10% 5% 14.44% 12.51% 11.51% 11.52% 9.42% 7.97% 8.64% 7.95% 31 Dec Mar Jun Sep. 14 Treasury policy Net IBD to Equity ratio of 0.7x Net IBD to EBITDA ratio of 2.4x * After Refinance 24

25 AGENDA 1. MISSION TO BE CONTINUED 2. 3Q/14 OPERATING RESULTS 3. MARKET OUTLOOK 25

26 CRUDE OIL: Booming Shale Oil Adversely Affects Global Oil Prices This Year USD/BBL Severe Winter Climate Conflict in Ukraine and Crimea Iraq Crisis IEA Cut Oil Demand Growth Slow Euro/China s Economy Iran s Sanction Lift Refinery Maintenance Resumed Libya Supply U.S. Oil Production Hit 30- Year Highest at 8.7 MBD Strong USD Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Saudi Arabia Cut Official Selling Price Shale oil output continues growing by technology advance Saudi Arabia fights for market share Libya/Iran increase output Euro/China s economy slow down Stronger USD Ebola outbreak USD/BBL JP Morgan, Goldman Sachs* USD/BBL OPEC cuts production JBC, Barclays, BNP, BoA, Citi, Standard Chartered, Morgan Stanley* Lower oil prices stimulate economic and spur oil demand Supply disruption from geopolitics * Reuters Poll on October 30,

27 U.S. SHALE OIL AND GAS: Why Shale Oil Come out This Much? MORE ADVANCED TECHNOLOFY MORE WET GAS FOUND MORE FUNDING FROM FINANCIAL INSTUTUTION MBD MORE PRODUCT EXPORT MBD LESS CRUDE IMPORT, ESPECIALLY LIGHT U.S. NET OIL PRODUCT EXPORT West African Crudes 27

28 REFINING BUSINESS: Fierce Competition with U.S. and M.E. Refiners 2015 Global Capacity Addition Outpaces Demand Growth Asia Has More Surplus Gasoil to Export in 2015 UNIT: KBD Net Capacity Addition Demand Growth REFINING CAPACITY GROWTH VS. DEMAND GROWTH 1, ,921 1, Major Addition (KBD) Yanbu (Saudi) +400 IOC (India) +300 Petrobas (Brazil) +230 CNOOC (China) +140 NOCL (India) +125 PetroChina +100 Ruwais (UAE) +417 (Shift from 2016) 2015 Major Shutdown (KBD) BP (Australia) -102 Source: IEA, JBC (Oct 14) UNIT: KBD Import from U.S./M.E. Import from M.E./West Export to M.E./Africa Export to Europe/M.E. Export to Europe/Africa LPG Naphtha Gasoline Jet/Kero Gasoil Fuel Oil -1,195-1, PRODUCT BALANCE IN ASIA 2015 Import from the West -1,176 Source: JBC (Nov 14) 2015 Margin Tends to be Softer than 2014 Factors to be Watched USD/BBL Diesel - Dubai Gasoiline - Dubai Fuel Oil - Dubai Source: PRISM, Oct PRODUCT SPREAD VS. DUBAI CRUDE (YTD) 2015 (F) U.S. refineries run high operating rate and export products to Europe Narrower clean/dirty product spread Euro/China s economy slow down European refineries permanently shut down or lower operating rates New refining capacity start-ups delay from plan 28

29 AROMATICS BUSINESS: Paraxylene Still in Down Cycle but Backed by Vigorous Benzene and Cyclohexane More Paraxylene Capacity to Come in 2015 Lighter Feedstock Reduces Benzene Supply Growth in 2015 MT Capacity Addition Operating Rate Demand from PTA Global Operating Rate 92% 88% ,200 2,400 2,100 5,200 2, ,985 2, % 80% 76% 72% 68% 64% 60% MARKET SIZE 37.1 MTA Capacity Addition MARKET SIZE 45.9 MTA MT Operating Rate Demand Growth 2015 New Capacity (MT) 5.0 Global Operating Rate 80% BZ Balance of Each Region Reliance 2, Sinopec Hainan % JSC KazMunaiGas N. America - 1,612-1,579 PTTGC % Lotte Chemical (200) 2,541 Europe Total 3, % 2.0 1,185 N.E. Asia Effective Cap ,392 1, % S.E. Asia Carry Over , % S. Asia Total Eff. Cap ,985 1,175 1,010 1, Middle East % Source: PCI, IHS (Oct 14) Source: IHS (Oct 14) Low Cyclohexane Capacity Growth Boosts 2015 O/R Shale Gas Utilization Strengthens Benzene Margin KT 1, Capacity Addition Demand Growth Global Operating Rate Operating Rate % 70% 65% 60% 55% 50% 45% MARKET SIZE 5.7 MTA Other Cyclohexanol Adipic Acid Caprolactam Derivatives of CX Source: IHS (Oct 14) USD/MT 1,800 1,600 1,400 1,200 1, Source: PRISM, Oct 14 1,542 1,497 1,474 1,250 1,156 1,301 1,207 1,104 1,277 1,161 PX-MOPJ BZ-MOPJ BZ (Korea) PX (Korea) (F) 29

30 AROMATICS BUSINESS: Paraxylene Still in Down Cycle but Backed by Vigorous Benzene and Cyclohexane More Paraxylene Capacity to Come in 2015 Lighter Feedstock Reduces Benzene Supply Growth in 2015 MT ,200 Capacity Addition Demand from PTA Global Operating Rate 2,400 2,100 5,200 2, Operating Rate 3,985 2,500 92% 88% 84% 80% 76% 72% 68% 64% 60% MARKET SIZE 37.1 MTA 2015 New Capacity (MT) Reliance 2,250 Sinopec Hainan 600 JSC KazMunaiGas 469 PTTGC 120 Lotte Chemical (200) Total 3,239 Effective Cap ,392 Carry Over ,593 Total Eff. Cap ,985 Source: PCI, IHS (Oct 14) MT Capacity Addition MARKET SIZE 45.9 MTA Operating Rate Demand Growth Global Operating Rate 80% BZ Balance of Each Region 1,406 1, ,541 1, ,185 1, % 70% 65% 60% 55% 50% N. America - 1,612-1,579 Europe N.E. Asia S.E. Asia S. Asia Middle East Source: IHS (Oct 14) Shale Gas Utilization Strengthens Benzene Margin Factors to be Watched USD/MT 1,800 1,600 1,400 1,200 1, ,542 1,104 1,497 1,474 1, ,301 1,250 1,277 PX-MOPJ BZ (Korea) Source: PRISM, Oct 14 1,156 1,161 BZ-MOPJ PX (Korea) (F) More lighter feedstock further tightens benzene supply Tight benzene supply makes cyclohexane more value Cheap U.S. condensate lowers Far East condensate prices North East Asia turns to be benzene net importer China s slowdown economy affects polyester demand Lower phenol price substitutes cyclohexane demand for caprolactam 30

31 POLYETHYLENE BUSINESS: Continue Strong Margin, U.S. Cracker Projects Likely to be Delayed and Costly 2015 Ethylene Demand Growth Outpaces Capacity Addition Polyethylene Operating Rate Remains High in 2015 MT MARKET SIZE MTA % Operating Rate Americas W.Europe Middle East/Africa Asia Others Demand Growth Global OR Source: IHS (Oct 14) Tight Ethylene Supports HDPE Price above USD 1,400/MT MT MARKET SIZE 89.1 MTA Americas W.Europe Middle East/Africa Asia Others Demand Growth Global OR Source: IHS (Oct 14) Factors to be Watched % Operating Rate USD/MT 1,800 1,600 1,400 1,200 1, Source: PRISM, Oct 14 1,557 1,488 1,366 1,371 1,421 1,352 1,423 1,286 1,187 1,230 HDPE-Ethylene Ethylene-MOPJ Ethylene HDPE U.S. cracker expansion projects are likely to be delayed and more costly More plant closures in Europe (1,645 KTA announced until 2015) Constraints of Coal-to-Olefins plants in China Lower oil price stimulates PE demand Weak naphtha price pulls HDPE price down Lower polypropylene (PP) price harms PE demand 31

32 PROPYLENE/BUTADIENE BUSINESS: Moderate Margins as a Result of Excess Capacity New On-purpose Propylene Capacity Brings O/R Down New Butadiene Capacity Pressures O/R in 2015 MT MARKET SIZE 92.7 MTA Others Asia Middle East/Africa W.Europe Americas Demand Growth Global OR Source: IHS (Oct 14) Margins to be Pressured by Excess Capacity 4.5 % Operating Rate MT MARKET SIZE 11.6 MTA Factors to be Watched % Operating Rate Americas W.Europe Middle East/Africa Asia Others Demand Growth Global OR Source: IHS (Oct 14) USD/MT 2,800 2,400 2,000 1,600 1, ,386 2,742 1,804 2,188 1,267 1,244 Propylene-MOPJ Butadiene 1,471 1,296 1,326 1,280 Source: PRISM, Oct 14 Butadiene-MOPJ Propylene 1,216 1,168 Constraints CTO/PDH plants in China High operating rate of ethylene increases propylene supply Falling natural rubber price lower butadiene demand Slow growth of vehicle sales

33 MONOETHYLENE GLYCOL BUSINESS: Demand and Supply are Well Balanced but Price Depends on PTA Capacity Grows Balanced with Demand Price will Rebound as Inventory Declines MT Capacity Addition Operating Rate Demand Growth Global Operating Rate 90% , ,286 1, ,466 1, % 86% 84% 82% 80% 78% MARKET SIZE 25.5 MTA 840 KTA of coal-based MEG will start up in 2015 But expect to be unable to run at high rate due to low quality Source: IHS (Oct 14) MT Low Season MEG Price (ASP) MEG Demand INVENTORY IN CHINA USD/MT 1,100 1, Source: ICIS (Oct 14) 2015 Margin Tends to Improve from 2014 Factors to be Watched USD/MT 1,400 1,300 1,200 1,100 1, Source: PRISM, Oct 14 MEG Margin (0.63xEthylene) 700 MEG Price PTA Price , ,055 1, Low production from coal-based due to quality Improved PTA price as high-cost producers cut run Slow polyester demand growth if China s economy cools down Strong ethylene cost squeezes margin 33

34 PHENOL/BPA BUSINESS: Downward Pressure on Phenol Margin but BPA is OK Two New Phenol Plants will Start up by End of 2014 Little New More BPA Capacity in 2015 Makes OR Increase KT 1,600 1,400 1,200 1, Capacity Addition MARKET SIZE 10.0 MTA Operating Rate KT Capacity Addition Demand Growth Demand Growth Global Operating Rate 95% 800 Global Operating Rate 90% Start up by end of % % CEPSA Chemical 500 Shanghai (250 KTA) % FCFC Ningbo (300 70% KTA) % Start up mid of % PTTGC 250 KTA % Source: IHS (Oct 14) Operating Rate 85% 80% 75% 70% 65% 60% 55% 50% 45% MARKET SIZE 5.4 MTA Start up 2015 Nan Ya Plastics (150 KTA) Changchun Plastic (135 KTA) Source: IHS (Oct 14) USD/MT 2,250 2,000 1,750 1,500 1,250 1, Phenol Margin to be Softer but BPA will Improve 2,084 1,663 1,069 1, Source: PRISM, Oct 14 BPA Margin Phenol Margin BPA Phenol Acetone 1,675 1,710 1,718 1,443 1, , ,462 1,099 1,612 1,313 1, (E) 2015 (F) Factors to be Watched Strong benzene price squeezes phenol margin Market adaptability to deal with biggest oversupply situation Phenol-based caprolactam switch from cyclohexane Polycarbonate maintains high price and margin 34

35 Thank You For further information & enquiries, please contact our Investor Relations Team at 1 Thitipong Jurapornsiridee VP - Corporate Finance & IR Thitipong.j@pttgcgroup.com Puvadol Vasudhara IR Manager Puvadol.v@pttgcgroup.com Panugorn Puengpradit IR Analyst Panugorn.p@pttgcgroup.com Prang Chudasring IR Analyst Prang.c@pttgcgroup.com Supika Charudhanes IR Analyst Supika.c@pttgcgroup.com Chutima Jarikasem IR Coordinator Chutima.j@pttgcgroup.com