IRPC Public Company Limited. Analyst Meeting. Year 2010 Performance. 1 March 2011

Transcription

1 IRPC Public Company Limited Analyst Meeting Year 21 Performance 1 March 211

2 AGENDA 21 Management Highlights Industry Outlooks Operation Performance Financial Performance Project Progress 2

3 21 Highlights Recovery is apparent Global GDP Growth, %QoQ Overview Global economy is continuing recovery even though there is a double dip crisis in Europe, the uncertainty in US economic improvement, and tighten financial policy in China. IMF: The two-speed recovery continues: In advanced economies, activity has moderated less than expected, but growth remains subdued, unemployment is still high, and renewed stresses in the euro area periphery are contributing to downside risks. In many emerging economies, activity remains buoyant, inflation pressures are emerging, and there are now some signs of overheating, driven in part by strong capital inflows. Overview Crude price in 21 volatile in upward trend mainly resulting from global economic recovery conditions, geopolitical tensions, and weaken USD. Refining margin in 21 improved comparing to 29 according to higher demand from economic recovery and an extraordinary weather conditions. Petrochemical margin improved especially in styrenics group directly relied on economic recovery Market GIM Petchem Refined GIM % Utilization 8% 83% 7% % 81% 1% 7.8 8% % % % % 3Q1 4Q1 4Q Q1 average crude run elevated at 83% or 179 kbd., 21 average crude run at 81%, increase 18% from 29 at 66% due to economic recovery and no maintenance shutdown for 3 weeks. 21 Market GIM at 7.8 $/bbl higher than 6.6 $/bbl in 29 from improving of both refining and petrochemical spread.

4 21 Highlights (Con t) Thailand Energy Awards 21 GE Ecomagination Awards Successfully launching 3 groups of new innovation products: Styrenics: 1 st company in the world using the natural rubber substitute synthetic rubber: e.g. Green ABS, Anti-Dripping Additive, Anti-Bacteria, and Impact Modifier MBS, etc. Petroleum: Greener Products with environmental friendly concept e.g. TDAE & RAE. Polyolefins: Polyolefins for better quality of life e.g. UHMW-PE, Baby Bottle PP, Antimicrobial Compound, LPG Gas Cylinder Composite, Natural Coloring, etc. 2 Units of total 6 gas turbines of CHP project have already started commissioning run and will be fully operated in May 211. Growing with the concerns in energy efficiency and environmental preserved which leads to sustainable growth as proven by Thailand Energy Awards 21 for Outstanding Designated Factory in Energy Conservation and Ecomagination Awards from GE Water and Process Technologies for Ecomagination Leadreship Award, Return on Environment Award, and Proof not Promises Award. TDAE Styrenics Polyolefins Operation 13 Initiatives were approved by total CAPEX of 1,137 MUSD or 85% of total. 7 Quick win initiatives generated EBITDA 1,981 MB mainly from operational excellence projects of 1,696 MB. MOU with East Water Company for water management and best practice sharing. Ban Kai and Wang Chan have been preliminarily approved by Industrial Estate Authority of Thailand (IEAT) as Green Industrial Park. Be a consultant for service offering with Philippines Polypropylene Incorporate Company. Finance Credit ratings affirmed by S&P: BBB- and Moody Baa3 with stable outlook and Fitch Thailand: A- ESOP exercised until end of 21 was executed 3.92% of total shares. 4

5 Industry Outlooks 5

6 Crude Oil Price: Sharply boost due to fund flow movement Dubai S pore GRM-9 Dubai-9 Dubai-11 Dubai-1 S pore GRM-1 S pore GRM Q Highlight - Incremental tightening China s monetary policy to release inflation - Uncertainty of the EU economic recovery + Fund flows into oil market resulted from QE2 + Winter demand reduce the world s supply condition + Crude oil demand extremely strong by energy economic driven + Weakened USD and drawdown in US product inventory 4 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Outlook - Decelerated Chinese economy - FED s decision on interest rate hike - Crude demand during refinery turnarounds in the US and EU + Geopolitical tensions + PIGS economic recovery and QE2 + Tension of Iran nuclear sanction + High oil demand to track economy recovery 6

7 Petroleum Product $/bbl $/bbl Dubai Gasoil ULG Fuel Oil Price Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan S pore GRM ULG95-Dubai Gasoil-Dubai Fuel Oil-Dubai Spread Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Q Highlight - Weak demand due to flood higher - Western arbitrage inflows to Asia remain at average level + Higher demand from China for Asian Games + Healthy demand from Vietnam and Indonesia + Strong bunker demand + Winter heating oil demand Outlook: Slightly higher - Lower demand during refinery turnarounds in the US and EU - Rising supplies in Asia as refineries hike run to meet winter demand + Winter heating oil demand + Inventories start to drawdown + Peak maintenance in US/EU and Asia + US summer stockpiles end-mar 7

8 Polyolefins 2,1 1,8 1,5 1, ,2 1, $/Ton Naphtha Ethylene Proplene HDPE PP Price Jan Feb Mar Apr May May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Jul Aug Sep Oct Nov Dec Jan $/Ton Ethylene-Naphtha Propylene-Naphtha HDPE-Naphtha PP-Naphtha Spread Q Highlight - Plan & unplanned S/D together with lack of M.E. cargo - Limited spot demand due to tank constrain - High inventories & surplus ethylene in China from S/D of derivatives plant and S/D of Fomosa no.2 -China Central Bank move to raise interest rate raised fears of credit tightening & raw material + Price firm in line with crude & feedstock cost + Limited supply due to plant outage + Tight supply situation in China due to production cut as diesel shortage Outlook: Remained weak - Weak Demand due to Lunar New Year in China - More supply from new capacity in China and ME + Demand from Agricultural seasonal + Strong feedstock cost + One of RFCC Formosa plans to S/D 8

9 PolyStyrenics $/Ton Price Naphtha Styrene ABS PS EPS 4Q Highlight - Thin trade as manufacturing season - Weak demand in the key Chinese market weigh on market sentiment - End of manufacturing season for export 5 1, $/Ton Jan Feb Mar Apr May May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Jul Aug Sep Oct Nov Dec Jan Spread ABS-Feed PS-SM EPS-SM Jan Feb Mar Apr May May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Jul Aug Sep Oct Nov Dec Jan Tight supply due to T/A & plant outage in this region + Prices firm supported by strong energy and feedstock costs Outlook: Stable - Traders come back from holiday to pick up stock - New capacity and plant restart + Strong feedstock costs + Demand from Chinese market return after Lunar New Year + NEA turnaround season will be starting in March 9

10 Operation Performance 1

11 Capacity Utilization KBD 29 Crude run 21 Crude run 29 % Utilization 21 % Utilization Refinery Capacity Utilization % 8% 8% 8% 74% 8% 83% 78% 8% 82% 83% 84% 81% 73% 7% 7% 71% 68% 68% 67% 78% 51% 68% 75% 66% 29% 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % JAN FEB MAR APR MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC. Y. AVG. Petrochemical and Lube Ton Utilization 29 (LHS) %Utilization 29(RHS) Utilization 21 (LHS) %Utilization 21(RHS)

12 21 GRM & PTF 1 st Draft Confidential $/BBL MKT GRM 4.3 Gross Refinery Margin Lube Refined GRM $/BBL A/C GRM Gross Integrated Margin $/BBL MKT GIM Petchem Refined GIM $/Ton MKT PTF Product to Feed PTF Styrenics Olefin $/Ton A/C PTF $/BBL A/C GIM Petchem Refined GIM Note: Based on Production 12

13 21 Product Sales Value by Market Sales Proportion Total Products Sales: Local vs Export 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 53,165 53,165 56, ,36 114, , ,34 2% 1% 1% 2% 2% 23% 22% 23% 27% 24% 75% 76% 75% 72% 75% 4Q9 3Q1 4Q Others Petrochemical Petroleum Unit:M.Baht 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 51,1 52,34 55, , ,23 35% 36% 39% 34% 36% 65% 64% 61% 66% 64% 4Q9 3Q1 4Q Export Domestic Unit:M.Baht Oil products: Local vs Export Petrochemical products: Local vs Export 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Unit:M.Baht 38,843 4,684 42, , ,32 34% 38% 41% 33% 37% 66% 62% 59% 67% 63% 4Q9 3Q1 4Q % 9% 8% 7% 6% 5% 4% 3% 2% 1% % 12,158 11,655 13,154 44,512 52,198 37% 32% 37% 36% 35% 63% 68% 63% 64% 65% 4Q9 3Q1 4Q Unit:M.Baht Export Domestic Export Domestic 13

14 1,441 3,52 3,128 6,251 5,698 5,882 5,6 4,267 4,329 2,58 2,146 2,746 3,229 3,65 3,692 4,533 11,835 2,217 24,133 13,646 17,783 8,558 9,271 1,32 15,184 61,571 2,354 21,467 21,977 87, ,32 1, , ,372 4, Petroleum Product Sales 1 st Draft Confidential Volume: M.Liters 1,2 1, Value: M.Baht 4Q9 3Q1 4Q1 Diesel Mogas Naphtha ATB/LR Lube Others 4,5 4, 3,5 3, 2,5 2, 1,5 1, Diesel Mogas Naphtha ATB/LR Lube Others 25, 4Q9 3Q1 4Q1 1, , 2, 8, 7, 15, 6, 5, 1, 4, 5, 3, 2, Diesel Mogas Naphtha ATB/LR Lube Others 1, - Diesel Mogas Naphtha ATB/LR Lube Others 14

15 ,353 1,491 5,88 6,7 4,759 1,61 1,361 1,512 1,245 1,45 1,453 5,774 5,337 6,623 5,553 7,27 5,69 1,67 1,542 1,757 1,593 1,443 1,73 1,538 1,519 2,38 7,23 15,941 17,84 4,235 4,67 4,348 23,676 21,331 22,77 14,216 6,364 5,694 55,242 28,95 38,428 35,54 37,598 4,159 38,495 41,926 45,633 44,644 5,49 153, ,855 1,59 91, , ,823 59,5 61,983 74,486 21,789 19,54 234,28 263,421 13,36 97,842 11,823 48,32 48, Petrochemical Product Sales 1 st Draft Confidential Volume: M.Tons 12, 1, 8, 6, 4, 2, - HDPE,CD1 ABS PP PS,EPS Olefin BTX Others Value: M.Baht 5, 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5-4Q9 3Q1 4Q1 5, 45, 4, 35, 3, 4Q9 3Q1 4Q1 HDPE,CD1 ABS PP PS,EPS Olefin BTX Others 25, 2, 15, 1, 5, - 25, 2, 15, 1, 5, HDPE,CD1 ABS PP PS,EPS Olefin BTX Others HDPE,CD1 ABS PP PS,EPS Olefin BTX Others15

16 Financial Performance 16

17 Financial Highlights EBITDA 21 Unit : $/bbl 4Q9 1Q1 2Q1 3Q1 4Q1 Market GIM Stock Gain / (Loss) Unit : M.Baht EBITDA Margin 1.6% % 2, % 2, % % 2,35 Stock Gain Incl. LCM , % 2,56 8, % 5,318 4Q9 1Q1 2Q1 3Q1 4Q Net Profit 21 Unit : M.Baht 5,416 6,183 2,417 1, ,251 Stock Gain Incl. LCM 7,672 3,4 3,179 (928) (2,257) 4Q9 1Q1 2Q1 3Q1 4Q

18 Financial Performance: 1 st Draft Confidential Unit: USD 4Q1 3Q1 %QoQ 4Q YoY %YoY Avg. Dubai Price % % Dubai Price- Ending % % Market GIM % % Unit: M illion Baht Sales 56,271 53,165 6% 51, , ,36 55,575 33% Cost of Goods Sold (47,18) (46,63) 1% (44,384) (187,859) (141,657) (46,23) 33% EBITDA (Incl. Stock G/L) 2, % 735 8,322 9,728 (1,47) -14% Depre. & Amort. (852) (846) 1% (851) (3,384) (3,336) (47) 1% Net Financial Expenses (261) (35) -14% (296) (1,159) (1,28) 121-9% Taxes (56) (33) 66% 4 (13) (51) (79) 155% FX. & Oil Hedging G/(L) % (149) 1, ,54 585% Investment G/(L) % (16) % Asset G/(L) 7 (8) 117% (258) 58 (256) % Net Profit 2, % (928) 6,183 5, % EPS % (.5) % THB/USD-Ending % (3.22) -1% Effective Tax Rate (%) 2% 9% % 2% 1% 18

19 Financial Position: Balance Sheet Debt Profile Unit: M.THB Cash & ST Investment Other Assets PP&E 5, ,194 12,458 27,982 43,982 14,311 48,113 64,28 71,91 6,179 3,431 14,448 66,166 75,579 IBD Other Liabilities Equities Bond (BHT) 32% Bond (USD) 23% ST Debt 2% LT Debt 25% Loan (M.Baht) ST Debt 6, LT Debt 7,529 Bond (USD) 7,179 Bond (BHT) 9,64 Total 3, Financial Ratios Net Debt = 24,253 MB Debt Structure Net Debt/EBITDA Net Debt/Equity Interest Rate (%) Currency (%) < 2.x < 1.x Float 37 THB 76 Fixed 63 USD 24 Cost of Debt (%) (1.34) Note : EBITDA after LCM 19

20 Cashflow: Unit : Million Baht FY 1 FY 9 Operating 6,326 1,771 EBITDA 8,322 9,728 Changes in assets/liabilities (1,996) (7,957) + FY 1 FY 9 Investing (6,88) (2,864) CAPEX (PP&E, Intangible asset) (6,23) (3,5) Other investments Free Cash Flow 237 (1,93) + Financing (63) (2,294) Drawdown/(Re/Prepayment) of ST/LT Loan 3,237 1,72 Interest and Others (1,396) (1,315) ESOP 1, Dividend Paid (3,6) (3,147) Beginning Cash 5,163 8,55 + Net Increase in Cash (393) (3,387) = Ending Cash 4,77 5,163 2

21 Dividend Payment: Dividend Policy Not less than 25% of NPAT after deducting required statutory reserves DPS Payout 35% 43% N/A 67% 59% Yield* 1.6% 4.8% 4.2% 5.6% 4.1% Unit : THB EPS.7.35 DPS EPS Dividend (DPS) -.93 Interim 1H H * Based on IRPC average price 21

22 Project Progress 22

23 Projects: Progress Project Total CAPEX (M$) Total EBIT/Yr (M$) Completion CAPEX Phase I & II Power Plant (CHP) Q11 ABS/San Expansion Q13 Propylene Project Q12 Total CHP Project: Progress 86.21% completion Start up Success!!! Jan 14,211 5 : 57 PM Ready for start up 23

24 Initiatives & Impacts Operational Efficiency Improvement Asset Utilization Enhancement Product & Services Improvement Capacity & Products Expansion 1. Petrochem Operation & Energy Efficiency 11. Maximize Tank Efficiency & Utilization 3. Ethylene Specialty Development 2. Capacity Development for Propylene Growth 5. Petroleum Operation & Energy Efficiency 12. Dry Port Commercialization 8. Lube Group 1 Specialty Products Focus 4. EBSM Upgrading for ABS Specialty 6. Supply Chain Optimization 13. IRPC Green Industrial Complex 9. Petroleum Quality improvement to EURO IV standard 18. Vinyl Acetate Monomer (VAM) 7. Inventory Optimization 14. Build & Sustain Rayong Land 16. Professionalize M&E Service Offerings 1. Liquid Port Efficiency & Safety 15. Develop Jana for the South 17. HDPE, PE, PP Catalyst Commercialization 19. Trading New Approved Under Studying Petrochem Petroleum Port & Tank Real Estate & Services 24

25 Phoenix Site Map: #5 #1 Ethylene Plant 596 KTA HDPE 14 KTA PP 475 KTA #3 HDPE/PP Catalyst #17 GRIFFIN #6 #7 CD1 57 KTA POLYOL 25 KTA PORT & TANK BTX 6 KTA EBSM 2 KTA 6 KTA #4 ABS/SAN 96 KTA 61 KTA PS 1 KTA EPS 3 KTA #1 #11 #12 REAL ESTATE DCC CCM 19 KTA Clean Diesel/ Gasoline PE Expansion (UHMWHDPE or Multimodal) #9 #3 #13 #14 New Approved #8 LUBE 33 KBD Under Studying DCC/ CPP #2 Already Approved PP / PP Derivatives VAM / VAM Derivatives Power Plant Power 18 MW Steam 2 MT #18 TRADING #15 #16 #19 25

26 Initiative #2: Capacity Development for Propylene Growth Shortage even PRP would be started up in 212 Move toward PP specialties Leader. Propylene existing 312 KTA Propylene existing 312 KTA existing 475 KTA Polypropylene (PP) PRP 1 KTA PRP 1 KTA Polypropylene (PP) (existing 475 KTA) Propylene Booster Propylene Booster 212 Propylene (Import 63 KTA) UHV 1Q15 Initiative #2 237 KTA 174 KTA PP Derivatives Under Studying 26

27 CAPEX Plan: Phoenix Project Gasoline Euro IV Diesel Euro IV New Approved

28 Phoenix s Benefits #1. Petrochemical Operations #4. C4s Derivatives #5. Refining Operations #1. Liquid Port Efficiency.1% 4Q1 48.9% 41.2% 1.% 3.7%.9% 3.2% 1.1% #11. Tank Utilization #16. Professionalize M&E Service #19. Trading Other #8/13/ % Y21.8% 2.8%.7% 8.2% 4Q1 benefit from Phoenix projects 629 MB 49% from initiative #5 (Refining Operation ) 41% from initiative #1 (Petrochemical Operation) 4% from initiative#11 (Tank Utilization) 3% from initiative #19 (Trading) 1.5%.4% 31.% YTD benefit from Phoenix projects 1,981 MB 55% from initiative #5 (Refining Operation ) 31% from initiative #1 (Petrochemical Operation) 8% from initiative#19 (Trading) 3% from initiative #11 (Tank Utilization) 28

29 Phoenix s Benefits in 211 3, M.THB 2,5 2,594 2, 1,5 1, 5 - Initiative # & Overall Petrochem Petroleum Port & Tank Real Estate &Service #1 Petrochemical Operational and Energy Efficiency #5 Petroleum Operational and Energy Efficiency #1 Liquid Port Efficiency & safety #13 IRPC Green Industrial Complex #17 HDPE, PE, PP Catalyst Commercialization # 19 Trading #6 Supply Chain Optimization #7 Inventory Optimization #11 Maximize Tank Efficiency & Utilization #12 Dry Port Commercialization #16 Professionalize M&E Service Offerings 29

30 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. 3