Analyst Meeting 2012

Transcription

1 Analyst Meeting March 2013 Petroleum Deep Seaport Industrial Zone Petrochemical

2 Agenda I Highlights II. Operation & Financial Performance III. Economic & Industry Outlook IV. Near-term Project Update V. Appendix 2

3 2012 Highlights Overview of Performance Dubai Price & Crude Utilization Rate $/bbl % AVG Dubai (LHS) Crude utilization rate (RHS) Net Sales Average Dubai price rose to $109/bbl in 2012 from $106/bbl in However, Dubai price remained volatile due to concerns about US fiscal cliff. 2. The yearly average crude utilization in 2012 rose to 175 KBD or 82% of total capacity from 160 KBD or 74% of total capacity in 2011 in which there was a turnaround for 49 days. 3. Net sales were 283,668 MB rose by 20% from 2011 due to increases in sales volume by 16% and product price by 4%. 236,519 20% 283,668 Unit: MB 4. Market GIM was $5.8/bbl in 2012 dropping from $9.6/bbl in 2011 and Accounting GIM dropped to $6.3/bbl in 2012 from $11.0/bbl in 2011 because net stock gains and LCM declined to $0.43/bbl in 2012 from $1.32/bbl in

4 2012 Highlights Finance Project 5. Land sales of 132 rai in Eco Industrial Zone to Japanese investors: gains of 362 MB 6. Gains of 443 MB from reversal of asset impairment and disposal in 4Q12. The land revaluation is undertaken every 3 years. 7. Gains of 215 MB from financial swap contracts in 4Q12, mainly from cross currency swap contracts 8. Gains of 282 MB from revaluation of platinum & palladium in Total long-term fund raising of 13,700 MB and $175 million in Fitch Ratings affirmed our national long-term rating at A-(tha) with a stable outlook in Jan % overall progress of Phoenix Projects 12. Diesel EURO IV (Multi-product pipe line): COD in Feb 13, expected EBIT of $8 million/year 13. EBSM Upgrading for ABS specialties: 64% progress, expected EBIT of $12 million/year - ABS 60 KTA: MC in Jan 13 & COD in Apr 13 - EBSM upgrading 60 KTA: MC in July 13 & COD in Sep Lube Blending Business Improvement: 80% progress, COD in May 13, expected EBIT of $3 million/year 15. Ethylene Specialty Development: 51% progress, COD in 4Q13, expected EBIT of $5 million/year 16. UHV: 40% progress, EHIA approved in Nov 12 & MC in 1Q15 4

5 Agenda I Highlights II. Operation & Financial Performance III. Economic & Industry Outlook IV. Near-term Project Update V. Appendix 5

6 Movement of Oil Price & Product Crack Spread Price $/bbl 160 NP-DB (RHS) ULG95-DB (RHS) GO-DB (RHS) FO-DB (RHS) Dubai (LHS) Spread $/bbl (0.2) (0.5) (2.2) (1.3) (3.0) (3.2) (2.8) (3.3) (2.4) (3.9) (8.5) (6.0) (9.1) (8.6) (9.8) (9.0) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q The average Dubai price in 4Q12 was slightly higher than that in 3Q12. Dubai price was rather volatile facing global economic concerns and supply concerns in the ME along with supply disruption /resumption in UK, Buzzard oil filed. ULG spread decreased due to the end of US travel season and the peak global refinery run in Q4, contributed from such factors as the start up of CPC refinery, Talin RFCC (80 KBD) and the resumption of Vietnamese refineries operation. A decline in the gas oil spread in 4Q12 was attributed to weak demand and a rise in supply in China, reflecting in a sharp rise in China s diesel export. HSFO spread in 4Q12 worsened quarter-on-quarter due to continued weak demand from both bunker grade and boiler grade combined with western supply flowing into Asia. Source: Platts, IRPC Analysis Team 6

7 Movement of Lube Base Price $/Ton 150BS-FO 500SN-FO Asphalt-FO FO 1,200 1, , (97) (84) (95) (70) (99) (32) (40) (86) (39) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q Market GRM Refined & Lube Base Oil $/BBL Lube base oil spread dropped due to a decline in the demand from regional marine logistic sector and ample supply of Group II and III from Korea. Asphalt spread turned positive because of high demand from road construction in Australia following flooding Q11 2Q 3Q 4Q 1Q12 2Q 3Q 4Q Y11 Y12 Source: Platts, IRPC Analysis Team 7

8 Movement of Olefin Price $/Ton PP-Propylene Propylene-NP HDPE-ETH ETH-NP Naphtha 1,400 1,200 1, , Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q Naphtha price received a boost from solid demand from Asian ethylene plants, which had limited planned maintenance, and re-stocking demand ahead of Chinese New Year. The sentiment in polyolefin market was in a cautious mode. Despite better HDPE spread, PP spread deteriorated. Polypropylene continued to be adversely affected by a slowdown in Chinese exports. Source: Platts, IRPC Analysis Team 8

9 Movement of Styrenic Product Price $/Ton 2,000 1,800 ABS-NP PS-SM SM-NP Naphtha 1,600 1,400 1,200 1, , ,247 1, , ,220 1,021 1,058 1,081 1, , Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q Changes in styrenic spread were mixed. ABS spread dropped whereas PS spread rose. ABS price continued to be adversely affected by poor demand, particularly in durable goods, in the region. PS price rose on buoyant SM price. PS price was also supported by relatively low operating rates and solid and from the construction industry in China. Dem Source: Platts, IRPC Analysis Team 9

10 Movement of Aromatic Price $/Ton Tol-NP (RHS) BZ-NP (RHS) MX-NP (RHS) Naphtha (LHS) 1,400 1,000 1,200 1, , Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q Strong regional demand combined with relatively low inventory led to sizable jump in the price of toluene. Mixed xylene price was supported by high season for polyester. Source: Platts, IRPC Analysis Team 10

11 4Q12 & 2012 Financial Highlights Unit : MB 4Q12 4Q11 3Q12 (%) (%) Net Sales 66,418 50,117 70, , , EBITDA before stock G/(L)&LCM , ,280 7,829 (58) EBITDA , ,125 10,189 (60) Net Profit before stock G/(L)&LCM (134) (1,198) (1,804) 1,581 (214) Net Profit 16 (1,523) 2, (959) 3,941 (124) Crude Run: Mbbl Sales Volume: Mbbl EBITDA increased by 736 MB: 4Q12 vs. 4Q11 1. Sales revenue by 33%: Quantity 31%, Price 2%. 2. Market GIM from $ 9.39/bbl to $6.70/bbl. 3. Net stock gain & LCM was 150 MB, while net stock loss & LCM in 4Q11 was 325 MB. 4. Gain from real estate (EIZ) 362 MB. Net Profit increased by 1,539 MB 5. Unrealized FX gain from USD loan by 197 MB 6. Gain from reversal of asset impairment and disposal & write off of asset 443 MB, 4Q11 write off turnaround 375 MB 7. Unrealized gain from Thai Oil shares by 84 MB. 8. Finance cost by 166 MB (increase in gain mainly from CCS 217 MB) 9. Depreciation by 269 MB vs EBITDA decreased by 6,064 MB: 1. Sales revenue by 20%: Quantity 16%, Price 4%. 2. Market GIM from $ 9.64/bbl to $ 5.83/bbl. 3. Net stock gain & LCM was 845 MB, Y2011 was 2,360 MB. 4. Gain from real estate (EIZ) 362 MB. 5. Gain from MTM platinum & palladium 282 MB Net Profit decreased by 4,900 MB: 6. Unrealized FX gain from USD loan by 759 MB. 7. Gain from reversal of asset impairment and disposal & write off of asset by 1,053 MB. 8. Unrealized gain from Thai Oil shares by 510 MB. 9. Finance cost by 79 MB (increase in gain mainly from CCS 217 MB) 10. Depreciation by 892 MB. 11

12 Current Production Crude Intake % 34% 30% 24% 30% Unit : KBD Total Sweet Crude Sour Crude 74% 66% 70% 76% 70% 4Q11 3Q12 4Q Mbbl Petroleum Utilization Petrochemical 56% 86% 46% 87% 93% 97% 80% 83% 92% 80% 78% 74% Refinery Lube 93% 82% 59% 55% 43% 101% 98% 83% 89% 88% 63% 97% 102% 97% 88% 85% 93% 92% 89% 79% 85% 80% 70% Olefin Aromatic Styrenic 4Q11 1Q12 2Q 3Q 4Q Q411 1Q12 2Q 3Q 4Q

13 Petrochemical Petroleum Revenue Structure Net Sales (MB) 50,117 66,418 70,989 12% 13% 14% 88% 87% 86% Petrochem Petroleum 236, ,668 13% 87% 13% 87% % 41% 46% 42% 41% 55% 59% 54% 58% 59% Unit:Mbbl Export Domestic 4Q11 3Q12 4Q Q11 3Q12 4Q Polymer Marketing Mix Towards High Value Product ,143 1,283 Unit: KTon 16% 22% 30% 33% High Value 37% 36% 36% 36% 36% Export 84% 78% 70% 67% Commodity 63% 64% 64% 64% 64% Domestic Q11 3Q12 4Q Net Sales Petroleum Petrochemical Domestic 62% Export 38% Export by Destination Singapore, 53% Asia, 46% Others, 1% Others, 2% Australia, 3% America, 2% China, 36% Europe, 7% Asia, 50% 13

14 Gross Integrated Margin (GIM) Market GIM Accounting GIM Power & Utility Petrochemical Petroleum Unit: $/bbl Market GIM Stock G/(L) net LCM + Hedging Unit: $/bbl 56% 83% 78% Utilization rate 74% 82% Q11 3Q12 4Q (0.9) (7.0) Q11 1Q12 2Q12 3Q12 4Q Q12 Vs. 4Q11 Market GIM was at $ 6.70/bbl or 3,202 MB, decreasing by $2.69/bbl or 45 MB. Market GRM was at $ 2.71/bbl or decreasing by $ 2.31/bbl due to the volatility of crude oil and product prices. Net stock gain & LCM was at $ 32/bbl or 150 MB, increasing $1.26/bbl and hedging gain 309 MB. Y2012 Vs. Y2011 Market GIM was at $ 5.83/bbl or 11,699 MB, decreasing 3.81 $/BBL or 5,494 MB. Market GRM was at $ 2.48/bbl, decreasing $ 3.64/bbl due to spread over Dubai price decreasing. Net stock gain & LCM was at $ 0.43/bbl or 845 MB, decreasing $ 0.89/bbl. 14

15 Inventory Balance Volume (Mbbl) Unit Price ($/bbl) % 42% QoQ 3% YoY 23% % 14% 44% 40% Total Petrochem Petroleum Crude % 44% 46% Q11 3Q12 4Q12 4Q11 3Q12 4Q12 Value (MB) 35,751 17% 39% QoQ 3% YoY 29% 28,487 27,764 21% 24% 39% 36% Petrochem Petroleum Crude 72 Inventory Day (Days) 44% 40% 40% Q11 3Q12 4Q12 4Q11 3Q12 4Q12 15

16 Statements of Financial Position Change Unit : MB 31-Dec Dec-11 (% ) Assets 141, ,119 7% Operation Investment Financing Cash and ST Investments 2,401 MB (13,429) MB 13,558 MB 2,530 MB Cash and Mkt. Sec. 6,524 3,994 63% AR 14,140 9,924 42% Inventory 31,253 38,810 (19)% PPE & IP 75,021 71,711 5% Other assets 15,039 7,679 96% Liabilities & Equity 141, ,119 7% AP 15,515 17,408 (11)% IBD 44,207 28,531 55% Account Receivable 42%: Sales Volume 27% (Dec 12=0.75 MT, Dec 11=0.59 MT) while Product Prices 12% (Dec 12= $985/Ton, Dec 11=$876/Ton) Inventory 19% : Quantity of Inventory 23% due to Crude 1.15 Mbbl, FG 0.94 Mbbl, although Prices 4% (Inventory Cost 4Q12 = $130/bbl, 4Q11 = $125/bbl) PPE & IP Asset Purchase (PRP, ABS6) 7,232 MB Depreciation (4,284) MB Losses from Impairment 362 MB Other Assets Purchase Shares of UCHA, 25% = 5,300 MB Account Payable 11%: quantity of crude purchasing in Dec Mbbl compared with end of year 11 while Dec 12 purchasing crude price= 110$/bbl which price same as the previous year Other liabilities 8,093 10,258 (21)% Equity 74,162 75,922 (2)% IBD 55% : Due to Loan Drawdown & 10,000 MB Bond Issue despite Loan Repayment of 3,102 MB 16

17 Debt Portfolio Debt Profile MB 60,000 40,000 20,000 28,531 1,340 27,190 Cash & S/T investment Long term 24, Short term Net Debt ,048 37,683 45,044 43,969 Debt Structure As of Dec 31, 2012 As of Dec 31, 2012 Bond (THB) 44% ST Loan 1% Bond (USD) 16% LT Loan 39% Net Debt = 37,683 MB Debt (MB) ST Loan 238 LT Loan 17,038 Bond (USD) 7,305 Bond (THB) 19,626 Total 44,207 Fx : USD/THB = ,258 3,994 6,524-4Q11 3Q12 4Q12 Net Debt/Equity As of Dec 31, 2012 < 1.0x Interest Rate (%) Currency (%) Float 30 THB 44 Fixed 70 USD 56 4Q11 3Q12 4Q12 Cost of Debt 5.43% p.a. 5.25% p.a. 4.20% p.a. Credit Ratings Baa3 Stable outlook 4Q11 3Q12 4Q12 BBB- A- (tha) Stable outlook Stable outlook 17

18 Agenda I Highlights II. Operation & Financial Performance III. Economic & Industry Outlook IV. Near-term Project Update V. Appendix 18

19 Economic Outlook Global Economy Moving into 2013, we saw evidence of a positive transition in the global economy. The U.S. has moved beyond the immediate threat of the fiscal cliff, financial distress in the Eurozone has eased, and China has moved off the hard-landing watch list. China gathering strength, with GDP climbing from 7.4% in Q3 to 7.9% in Q4, the rebound in manufacturing continued in Dec, with both the official and HSBC PMIs indicating expansion for the second consecutive month. % YoY Global GDP US Euro Zone China Thailand World 9.3 Overview f 2014f Source: IMF, Jan 2013; NESDB,Feb 2013; Bloomberg; and FPO, 2013 Thailand s Business Outlook The Thai economy expanded more than expected in 4Q12 and is predicted to expand further in Q1/13. Private consumption expenditure robustly surged 12.2% YoY (2.6% QoQ), the highest YoY growth since the current GDP data series was published. Exports of goods and services rose 19.0%YoY (3.1% QoQ), after a decline in previous quarter (-2.8% YoY). MPC hold rate constant at 2.75% as market expected, a bit more hawkish tone of statement., February

20 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Global Oil Demand/Supply $/bbl Brent/WTI/Dubai Brent Duai WTI Forecasting by Pira In 2013 world oil demand is expected to rise to mbd, due to evidence of economic recover gaining some momentum in developing countries. Demand growth from Asia remains a key component of global year-on-year oil demand growth. Supply is expected to grow in the same pace at 1.11 mbd to mbd, largely from Canadian oil sands, US shale oil, Iraq and Libya Taking demand/supply factors into account combined with possible further turmoil in ME, it appears that oil price is expected to be well-supported. Source : PIRA,

21 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Petroleum Product Market $/bbl Product Spread Over Dubai Forecasting by PTT Group Gasoil ULG95 Naphtha Fuel Oil Cold weather supports global petroleum product demand in Feb-Mar Stock draws, especially gasoil and gasoline, are expected for the next several months as Atlantic Basin turnarounds gear up. Resurgent in petrochemical margin have boosted demand for Naphtha. Overall, healthy global petroleum product demand especially in Diesel product in 2013 caused by improving industrial activities in developing countries. Source : PIRA,

22 Polypropylene & Propylene Naphtha Potential demand growth rates come from developing countries, such as China, India and Middle East Countries. China will continue importing Propylene & PP even increasing its internal supply. PP can be used in various applications up from luxury to commodity, now PP price is more competitive comparing with PS and PET. The adjacent of Shale gas in US and other places around the world will suppress propylene supply in the near future. Source : IHS Annual report

23 ABS & PS ABS market is forecasted to grow above GDP, at 4.1% per year over the next 5 years. The most dynamic growth sectors will be the Electronics, Electrical, Appliance and Transportation market. PS demand is forecast to grow slightly faster than increase in capacity. China, SE Asia and S. America is forecast to grow significantly, especially in the Electronics/ Appliances market. Source : IHS Annual report

24 Lube Base Oil Asia-Pacific base oil prices fell in 2012 to their lowest levels in at least two years, squeezed by rising supplies and weaken demand. Base oil margins fell even further, and prompting widespread standalone plant run cuts throughout the NEA region. Market stabilizes and margin may improve when approaching turnaround season in March. Demand shows promising sign due to improving in shipping activities and manufacturing production in China. Source : IHS Annual report

25 Agenda I Highlights II. Operation & Financial Performance III. Economic & Industry Outlook IV. Near-term Project Update V. Appendix 25

26 Phoenix Project: #8 EURO IV Project Progress Project Description: Petroleum quality improvement to clean fuel and green growth development Scope: Upgrading Diesel to be EURO IV specification EBIT: USD 8 million/year (Euro IV Diesel & Kerosene) Diesel Euro IV: Progress 100% Completion Diesel Euro IV (Multi-product pipe line) Volume: 25 KBD 1. EIA approval in Oct Completed construction & pipe line installation and internal facility (Salt Dryer) 3. COD: Feb First batch sent on Feb 6, 2013 Multi-Product pipe line 26

27 Phoenix Project: #4 EBSM Upgrading for ABS specialties Project Description: Increase EBSM feed stock for ABS product. Capacity Expansion: Increase EBSM from 200 KTA to 260 KTA. EBIT: USD 12 million/year Progress : 64.13% 1. EHIA approval in Jul DIW approval in Aug EBSM COD: Sep ABS6/SAN3 COD: Apr 2013 Project Progress : 64.13% To expand EBSM to support ABS specialties production and to produce NANO additive for own use and reduce production costs ABS6 Completion 2Q13 Completion 3Q13 EBSM EBSM 200 KTA EBSM 260 KTA SAN3 Completion 2Q13 27

28 Phoenix Project: #16 Lube blending business improvement Project Description: Increase lube blending capacity 60 ML per year CAPEX: USD 7.0 million EBIT: USD 3 million/year Progress: 80.36% 1. Filling Machine: Completed 2. COD: May 2013 Project Progress : 80.36% 12 m.ltrs./year (1 m.ltrs./month) 72 m.ltrs./year (6 m.ltrs./month) 28

29 Phoenix Project: #3 Ethylene Specialty Development Project Description: High Value Added Product of HDPE Specialty & PE Wax CAPEX: USD 9 million EBIT: USD 5 million/year Progress: 51% 1. HDU I: Completed 2. HDU II & Convert Plant: Completion in 4Q13 Commodity Product HDPE High Value Product HDPE 29

30 Phoenix Project: #2 Upstream Project for Hygiene & Value Added Product (UHV) Project Description: Upgrading bottom refinery product to high value added for Petrochem feedstock Capacity Expansion: Increase propylene from 412 KTA to 732 KTA. Progress : 40% Under engineering design preparation and LLI procurement 1. EHIA approved in Nov MC: 1Q15 3. COD: 3Q15 AA/ SAP UHV C 3 Specialty Products PP Compound Existing Propylene 412 KTA Total Propylene UHV 732 KTA 320 KTA 30

31 Agenda I Highlights II. Operation & Financial Performance III. Economic & Industry Outlook IV. Near-term Project Update V. Appendix 31

32 Phoenix Initiatives & Roadmap Operational Efficiency Improvement Asset Utilization Enhancement Product & Services Improvement Capacity & Products Expansion 1. Petrochem Operation & Energy Efficiency 9.1 Maximize Tank efficiency with LCT 3. Ethylene Specialty Development 2. Capacity Development for Propylene Growth 5. Petroleum Operation & Energy Efficiency 9.2 Dry Port Commercialization 7. Lube Group 1 Specialty Products Focus 4. EBSM Upgrading for ABS Specialty 6. Supply Chain Optimization (Griffin and Trading) 11. Build and sustain land for green industrial complex 8. Petroleum quality improvement to clean fuel and green growth development 14. Performance Chemical Business Development Project 12. I'M ACE: IRPC Service Solutions Under Studying 13. Petrochem Catalyst Commercialization Petrochem Petroleum Port & Tank Real Estate & Services In1,5,6,9,12 Under Implementation Power (& Steam) 220 MW Propylene (C3) 100 KTA Gasoline EURO4 15 KBD BS 25 KTA TDAE 28 KTA Diesel EURO4 25 KBD ABS 60 KTA PP Compound 100 KTA UHV(C3) 320 KTA AA 80 KTA SAP 80 KTA 32

33 Phoenix by Business Unit Refinery & Lube Initiative 7 Products ADU ADU 215 KBD 215 KBD Lube Base +25 KTA 150BS 95 KTA 120 KTA 120 KTA Asphalt +28 KTA TDAE 22 KTA 50 KTA 50 KTA Lube Group 1 Specialty Products: Increase high value added lube specialty products: TDAE & Bright Stock Initiative 8 Products Gasoline 75 M.Ltrs 75 M.Ltrs Diesel 180 M.Ltrs 180 M.Ltrs Petroleum Quality Improvement to Clean Fuel & Green Growth Development: Upgrading HSD / Gasoline to be EURO IV standard 33

34 Phoenix by Business Unit (Con t) Olefins Products Initiative 2 Ethylene 360 KTA 433 KTA 433 KTA Propylene 312 KTA +100 KTA +320 KTA 412 KTA 732 KTA 732 KTA Butadiene 56 KTA 56 KTA Acetylene 4 KTA 4 KTA Upstream Project for Hygiene & Value Added Products (UHV): +73 KTA Upgrading low value product (HS-ATB) to be high value added product for petrochemical feedstock: Propylene 320 KTA, Ethylene 73 KTA, and Heavy Aromatic Naphtha 250 KTA, etc. Polyolefins Products Initiative PP 475 KTA 475 KTA KTA PP Specialties 100 KTA HDPE 140 KTA 140 KTA Performance Chemical Business Development Project: PP Compound & PP Specialty To create value added of propylene from UHV by initiating new products shifting from commodity market to specialty market. 34

35 Phoenix by Business Unit (Con t) Aromatics Products Benzene 114 KTA 114 KTA Toluene 132 KTA 132 KTA Mixed Xylene 121 KTA 121 KTA Styrene Initiative 4 Products KTA SM 200 KTA 260 KTA 260 KTA +60 KTA ABS/SAN 117 KTA 177 KTA 177 KTA PS 100 KTA 100 KTA EPS 30 KTA 30 KTA Performance Chemical Business Development Project: Increase 60 KTA EBSM for feeding ABS specialty. To satisfy local demand for ABS/SAN expansion and to produce Nano additive. ABS/SAN Expansion 6 Increase ABS/SAN from 117 KTA to 177 KTA for support ABS specialties production and to produce Nano additive. 35

36 Q&A 36

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