IRPC Public Company Limited. Analyst Meeting. 3Q11 Performance. 2 December 2011

Transcription

1 IRPC Public Company Limited Analyst Meeting 3Q11 Performance 2 December 2011

2 3Q11 Management Highlights AGENDA Operation Performance Financial Performance Industry Outlooks Project Progress 2

3 3Q11 Highlights GDP % Real GDP Growth Rate ( % change YoY.) Overview Advanced economies Emerging and developing economies 1.6 Thailand World Global recovery has become much more uncertain by reason of sovereign debt and banking sector problems in advanced economies, especially in US and Euro zone. Thai economic growth is lower than expected at an annualized rate of 3.5% in 2011 due to a slowdown in domestic demand. Flooding situation and inflationary pressure are a main threat to depress private consumption f 2012f 2013f 2014f 2015f Source: IMF, Sep 2011 Crude oil price volatized mainly resulting from uncertainty of economic situation especially the effect from a continual Euro debt crisis and ongoing tighten monetary policy in China. Resumption of Libyan crude production will alleviate tightness in light sweet crude market. Refining margins remain firm mainly due to tighten supply from unplanned S/D of refineries in this region such as Formosa and Shell. Petrochemical market sentiment is still deteriorating owing to weaken economic and ongoing tighten policies to curb inflation. Meanwhile, its spread slightly improved due to T/A season and restocking

4 3Q11 Highlights (Con t) Operation 3Q11 average crude run 82% or 176 kbd a bit higher than 2Q11 at 80% according to elevated refinery s margin. Market GIM in 3Q11 at 10.3 $/bbl: Refinery 7.0 $/bbl, Petrochemical 3.3 $/bbl, better than 2Q11 due to tighten supply. Overview Average crude price decreased 4% from 111 $/bbl to 107 $/bbl in 3Q11 caused stock loss 4.1 $/bbl. Operation Market GIM Petroleum Petrochem MKT GIM 80% 82% 80% Q11 3Q11 9M11 Granted EIA & EHIA approval: Petroleum Petrochem A/C GIM A/C GIM Q11 3Q11 9M11 EBSM Upgrading: EHIA approved on 23 Jun 2011 Multi-Product Pipeline: EIA approved on 16 Aug 2011 ABS Expansion IV: EIA approved on 8 Sept Propylene Booster: EHIA approved on 15 Sept Finance S&P affirmed credit rating of IRPC at BBB - with stable outlook ESOP maturity at totally exercised 4.79% of total shares 4

5 Operation Performance 5

6 Plant Utilization Crude run 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 9M10 9M11 KBD MBBL % 28% 30% 28% 27% 22% 23% 26% 24% Sweet Crude 76% 72% 70% 72% 73% 78% 77% 74% 75% Sour Crude % Utilization % 100% 80% 60% 93% 91% 96% 98% Petroleum 82% 99% 97% 93%93% 81% 80% 80% 83% 79% 80% 82% 80% 80% 100% 80% 60% % Petrochemical 96% 97% 93%87% 89% 90% 94% 100% 93% 93% 89% 80% 101% 93% 90% 92% 90% 90% 100% 80% 60% % Overall 83% 84% 81% 81% 81% 80% 82% 82% 80% 40% 40% 40% 20% Refinery Lube 20% Olefins Aromatic+Styrenic 20% 0% 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 9M109M11 0% 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 9M109M11 0% 1Q10 2Q 3Q 4Q 1Q11 2Q 3Q 9M109M11 6

7 Oil Price Movement, Product Crack & GRM: Crude price maintain above $100 due to EURO Debt and MENA Crisis $/BBL Ending Price Avg. Dubai Dubai S pore GRM Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Dubai ULG Gasoil Fuel Oil Gas oil - DB $/BBL ULG 95 - DB $/BBL HSFO - DB $/BBL Source: Platts, IRPC Analysis Team Market GRM Lube Base Refined $/BBL 6.2 7

8 Lube Base Movement: Lube Base price soften after starting up plant in Europe and Asia 2,000 Lube Base FO %S 500SN 150BS 1,500 1, FO %S 0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q SN FO %S Spread BS FO %S Spread 986 1,

9 Olefins Movement: Olefins and Polyolefins prices volatile from ongoing Euro crisis and increase supply from ME 2,000 Olefins Naphtha Ethylene Propylene HDPE PP 1,500 1, Q10 Naphtha 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 HDPE - Ethylene - Naphtha HDPE - Ethylene Ethylene - NP PP - Propylene - Naphtha PP - Propylene Propylene - NP

10 Aromatics Movement: Aromatics prices improved from supply /demand imbalance 2,000 1,500 Aromatics Naphtha Benzene Toluene MX EB MX 1, Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 MX-Naphtha Toluene - Naphtha BZ-Naphtha EB MX - Naphtha

11 3,000 2,500 Styrenics Movement: Styrenics prices weak from unhealthy demand Styrenics Styrene ABS PS 2,000 1,500 1, Q10 Styrene 2Q10 3Q10 4Q10 1Q11 2Q11 3Q PS SM SM - NP ABS - Feed PS - SM - Naphtha Market PTF MKT PTF Styrenics Olefins

12 GRM & PTF $/BBL MKT GRM Lube Refinery Market GIM Petrochem Petroleum $/BBL Q10 4Q 1Q11 2Q 3Q. 9M10 9M Stock Gain/(Loss) $/BBL $/BBL 3Q10 4Q 1Q11 2Q 3Q. 9M10 9M11 MKT PTF Q10 4Q 1Q11 2Q 3Q 9M10 9M11 Note: Market based on Production Accounting based on Sales Styrenics Olefins Aromatic Q10 4Q 1Q11 2Q 3Q. 9M10 9M11 Accounting GIM Petrochem Petroleum $/BBL Q10 4Q 1Q11 2Q 3Q. 9M10 9M11 12

13 3Q11 Product Sales Value by Market Sales Revenue Unit: MB Total Products Sales: Local vs Export Unit: MB 100% 80% 60% 53,165 67,636 67, , ,585 1% 1% 1% 1% 1% Others 22% 21% 22% 24% 22% Petrochemical 100% 80% 60% 52,340 66,701 66, , ,780 36% 35% 38% Export 34% 34% 40% 20% 76% 78% 76% Petroleum 75% 77% 40% 20% Domestic 64% 65% 62% 66% 66% 0% 0% 3Q10 2Q11 3Q11 9M10 9M11 3Q10 2Q11 3Q11 9M10 9M11 Petroluem products: Local vs Export Unit: MB Petrochemical products: Local vs Export Unit: MB 100% 40,684 52,679 51, , , % 11,655 14,022 14,979 39,044 42,743 80% 38% 34% 39% 35% 34% Export 80% 32% 37% 37% 32% Export 34% 60% 60% 40% 20% Domestic 62% 66% 61% 65% 66% 40% 20% Domestic 68% 63% 63% 68% 66% 0% 0% 3Q10 2Q11 3Q11 9M10 9M11 3Q10 2Q11 3Q11 9M10 9M11 13

14 Financial Performance 14

15 Financial Highlights EBITDA 3Q11 Net Profit 3Q11 Unit : $/bbl 3Q10 4Q10 1Q11 2Q11 3Q11 Market GIM Stock Gain Unit : M.Baht 9M10 9M ,543 Unit : M.Baht 776 2,330 4,795 3,699 1,049 5, ,230 3,499 2,981 3,870 6,302 3Q10 4Q10 1Q11 2Q11 3Q11. 9M10 9M Q10 4Q10 1Q11 2Q11 3Q11. 9M10 9M11 1,845 3Q11 Net Profit Tracking -1, Operating Profit Stock G/(L) LCM Hedging Unrealized-FX & Swap Contract MTM-MKT Security NPAT 15

16 Financial Position Unit: M.THB Cash & ST Investment Other Assets PP&E 6,179 50,353 63,926 Balance Sheet 120, ,245 30,432 15,312 74,714 3,822 67,974 65, M11 Financial Ratios 34,526 24,603 78,116 IBD Other Liabilities Equities Debt Profile Bond ST (BHT) Loan (M.THB) Debt 28% 31% ST Debt 10,623 Bond (USD) 22% LT Debt 20% Net Debt = 30,705 MB Debt Structure LT Debt 6,776 Bond (USD) 7,424 Bond (BHT) 9,640 Total 34,463 F X.USD/THB = Net Debt/EBITDA Net Debt/Equity Interest Rate (%) Currency (%) Fixed < 2.0x Float 56% Float 44% Fixed < 1.0x USD 25% USD THB THB 75% 3Q10 2Q11 3Q11 Note : EBITDA after LCM 3Q10 2Q11 3Q11 Cost of Debt (%)

17 Cashflow Unit : Million Baht 9M11 9M10 Operating 2,071 8,359 EBITDA 9,543 5,909 Changes in assets/liabilities (7,472) 2, M11 9M10 Investing (3,568) (4,663) CAPEX (PP&E, Intangible asset) (3,662) (4,731) Other investments Free Cash Flow (1,497) 3,696 + Financing (366) (1,248) Drawdown/(Re/Prepayment) of ST/LT Loan 3,859 2,500 Interest and Dividend (4,825) (4,590) ESOP Beginning Cash 4,770 5,163 + Net Increase in Cash = (1,863) 2,448 Ending Cash 2,907 7,611 Audited Statement as of Sep. 30, 11 Ending Cash 2,907 MB 17

18 Industry Outlook 18

19 Dubai Crude Projection Crude & Refined Products Outlook $/BBL 140 Gas Oil Refined Products 2, BS Lube Base 120 Gasoline 1, , N FO Q11 Dubai 2Q11 3Q11 Dubai Gas Oil Gasoline Fuel Oil 4Q11 1Q12 2Q12 3Q12 Dubai Gas Oil Gasoline Fuel Oil Dubai price in 2012 volatility remains as per uncertainty of global economy, shift in demand/supply and geopolitical risk Demand growth is expected to increase 1.2 M.bbl/year Global demand for middle distillates has tendency to outpace light product 4Q12 0 FO 1Q11 2Q11 3Q11 FO 500N 150BS 4Q11 1Q12 2Q12 3Q12 FO 500N 150BS 4Q12 Lube Base Demand growth rate is lower while Fuel oil demand is still healthy throughout Asia Supply surplus from Lube Base group II and III after major turnaround. 19

20 Olefins Outlook 2,000 HDPE 2,000 PP PP 1,500 HDPE 1,500 1,000 Ethylene 1,000 Propylene Q11 Naphtha 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12-1Q11 Naphtha 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Naphtha Ethylene HDPE Naphtha Ethylene HDPE Naphtha Propylene PP Naphtha Propylene PP Asian cracker s operating rate is projected to gradually improve from the lowest point in Restocking in China is expecting in 2012 hence slightly improve of margin is observed Growing demand of PP in Asia especially China (55 percent of regional demand) for consumer goods consumption. 20

21 Styrenics Outlook 2,500 ABS ABS 2,000 PS PS 1,500 2,000 SM 1,000 1, ,000 Feed-ABS - Naphtha 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Feed-ABS ABS Feed-ABS ABS Naphtha SM PS Naphtha SM PS Cost push by Butadiene is improving. Margin recovery is slowly pacing due to negative growth rate in car manufacturing industry and luxury goods PS prices will tend to move along monomer prices. Short term Demand/supply still be the key driver for margin 21

22 Project Progress

23 Pre-Phoenix Projects: Progress PRP Project : 66% Progress Propylene Booster (PRP) Completion : 2Q12 EHIA Approved on 15 Sept 2011 SCOPE TIME COST 66% progress during EPC stage and EHIA has already been approved by ONEP. Timeline for EHIA approval : Sep DIW approval : Mar EPC completion : Apr Start Up : May 2012 On budget

24 Phoenix Projects: Progress Initiative No. STATUS E Execute S Study #1: Petrochem Operation and Energy Efficiency #2: Upstream Project for Hygiene and Value Added Products (UHV) #3: Ethylene Specialty Products E E E ETP: Under Back Pressure Turbine modification. HDPE: Polymerization Unit under construction PP: Completed Technical Support Agreement and under design package. Licensors selected. Basic Engineering Design is developing. HDU Phase I: Machinery installation process HDU Phase II: During EPC selection process #4: EBSM Upgrading for ABS Specialties E EBSM : EHIA approved by ONEP on June During public hearing arrangement. ABS: EIA adopted, during Basic Engineering Design Package SAN: During EPC selection process #5: Petroleum Operation and Energy Efficiency E Assessment process for phase III completed. Consultant for gap closing is under processing. #6: Supply Chain Optimization (Griffin and Trading) E Complete ISC phase 1 : Orion Program for schedule control implementation. #7: Lube Group I Specialty Products Focus E Civil construction is in preparation and piping work has started. 24

25 Phoenix Projects: Progress Initiative No. STATUS E Execute S Study # 8. Petroleum Quality Improvement to Clean Fuel and Green Growth Development # 9. Maximize Tank Efficiency with LCT E E GHU: During Long Lead Item purchasing process. EIA approved by ONEP on 16 Aug Validation process of CDM from CHP project. Managing 20 tanks from 34 tanks (59% utilization) and already have MUSD benefit in the third quarter. S # 10. Dry Port Commercialization Conceptual design has completed and already been approved. # 11. Build and Sustain Land for Green Industrial Complex E Baan Kai: Got approval from IEAT to be Industrial Estate since June Under EIA approval process. IP: Revision of Master Plan and allocation of utilized area. Preparation of documents for EHIA approval. # 12. I'M ACE: IRPC Service Solutions E On Going 1. Service Solution Smart Planning, 2. Financial EBIT tracking, 3. IRPC&TABS 2012 service contract preparation. # 13. Petrochem Catalyst Commercialization E During commercial production and catalyst testing by customer. # 14. Performance Chemical Business Development Project E PP-inline: During negotiation of License Agreement 25

26 3Q11 Phoenix s Benefits #1. Petrochemical Operation & Energy efficiency #4. EBSM Upgrading fro ABS Specialties 18% 1% 1% 0% #5. Petroleum Operation & Energy efficiency #6. Supply Chain Optimization (Griffin and Trading) #7 Lube group1 specialty product focus #9. Maximize tank efficiency with LCT 1% 4% 42% 3Q11 36% #12. I'M ACE : IRPC Service Solutions Other 17% 1% 0% 1% 3Q11 benefit from Phoenix projects 578 MB ~ 42% from initiative #5 (Petroleum Operation & Energy efficiency) ~ 36% from initiative #1 (Petrochemical Operation & Energy efficiency) ~ 18% from initiative#6 (Supply Chain Optimization) 38% 9m11 2,172 MB 37% 9M11 benefit from Phoenix projects 2,172 MB ~ 38% from initiative #5 (Petroleum Operation & Energy efficiency) ~ 37% from initiative #1 (Petrochemical Operation & Energy efficiency) ~ 17% from initiative#6 (Supply Chain Optimization) 1% 26

27 Turnaround Progress & Strategies % Progress Planned Actual 98% Success Start up: ADU1 ADU2 NTU D/K VGOHT EPS PP HDPE EBSM ETP VDU SAN1 ABS CCM 13-Nov 18-Nov 23-Nov 28-Nov 3-Dec 8-Dec 13-Dec Defensive Strategies imposed during turnaround period include: Strictly monitor turnaround period to achieve progress as planned 3 months Sales over 2 months inventory Tie-in transmission network completion, to ensure power system reliability and reduce opportunity loss from blackout As of 1 Dec 2011

28 Flood Impacts Flood Thread to domestic customers Direct: Production ceased Refining Business No impact Sales volume re-routed to other areas Petrochemical Business 10-15% of domestic Sales in Oct Automotive Industry Spare parts Food Industry Film & Packaging Indirect: Supply chain effect Spare parts shortage Logistic problem Lower demand Allocate more volume from Domestic to Export market. Focus on sudden demand applications i.e. Yarn, Blow molding, Pipe, Paint container, etc. Seek for customers who are unaffected by the floods. Closely communicate and follow up with customers. 28

29 IRPC Contribution Donations Survival Packs 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. 30