Thailand Focus 2015 December 3, 2015
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.
Agenda PTTGC S BUSINESS OVERVIEW STRATEGIC EXECUTION FINANCIAL PERFORMANCE 3
Overview of PTTGC Overview of PTTGC 4 PTTGC at a Glance PTT Group s Chemical Flagship Thailand s largest ethane-base cracker with integrated aromatics and refining business Highly competitive cost structure with pricing arrangement for gas feedstock based upon equitable return on investment for both PTT and PTTGC Fully integrated petrochemical and refinery operations with diversified product portfolio covering full hydrocarbon chain Committed to operational excellence targeting best in class/ first quartile business efficiency Ranked in Dow Jones Sustainability Indices Chemicals Sector for 2 nd Consecutive Year Incorporated on October 19, 2011 from the amalgamation of PTTAR and PTTCH 2014 Sales : $17.6 bn; Adj. EBITDA: $1.6 bn Asset size: $13.2 bn (as of Dec 31, 14) Number of employees: 3,742 persons Strong footprint in fast growing regions with 6 operating countries Shareholding Structure Historical Dividend Payment 4,509 mil shares Foreign Limit <=37% Dividend Policy >=30% * From pro-forma financial statements
Thailand s Largest Petrochemical Player Our Business Structure 7 Business Units 5 280 (Thousand Barrels per Day) Petroleum Distillation Capacity (1) 8.75 (Million Tons per Annum) Petrochemical Capacity 1 2 3 4 5 6 7 Refinery Capacity* & Key Products Aromatics Olefins Polymers EO-Based Performance Green Chemicals High Volume Specialties 280 KBD (1) 2,259 KTA 2,988 KTA 1,590 KTA 470 KTA 829 KTA 610 KTA LPG Light Naphtha Reformate Jet A1 Diesel Fuel Oil Benzene Toluene Paraxylene Orthoxylene Mixed Xylenes Cyclohexane Ethylene Propylene Mixed C4 Pyrolysis Gasoline Butadiene Butene-1 HDPE LLDPE LDPE Polystyrene Ethylene Oxide Ethylene Glycol Ethanolamines Ethoxylate Methyl Ester Fatty Acid Fatty Alcohol Grycerin Specialty Oleochemicals Bioplastics Phenol Bisphenol A Toluene Dilsocyanate Hexamethylene Diisocynate and Derivatives (1) (1) Refinery Refinery = = 145 145 KBD, KBD, Condensate Condensate Splitter Splitter Units Units = = 135 135 KBD KBD * Calculate proportionate by percent share
1 Key Competitive Strengths Strategic Relationship with PTT with Secured Feedstock Position and Offtake Agreements 6 4 2 Experienced Management with Strong Track Record Highly Competitive Cost Structure 4 Strategic location creates proximity to suppliers and customers 3 Fully Integrated Operations with Flexible Feedstock, Enhanced Optimization and Diversified Product Portfolio
Strategic Relationship with PTT with Flexible Feedstock and Secured Product Offtake 1 7 Feedstock Supply Product Marketing Customers 79% Polymers (1) Ethane, Propane, LPG Condensate Domestic 70% Import 30% Olefins & Derivatives Aromatics 66% C 2 -C 4 C 5 -C 9 Captive Use 21% 34% 54% 46% EO Based Others Others Others Crude Oil Refinery C 10 -C 25 30% Others 70% Feedstock Supply Commercial Agreements Flexible Feedstock and By-Product Enhancement PTTGC's refinery is one of the most complex refineries in Thailand, with Nelson Index of 10.17 and refining capacity accounting for 13% of country s total capacity Value enhancement from by-product exchange among Olefins, Aromatics and Refinery units highlights operational integration and efficiency: -CR from Aromatics units sent to Refinery to produce middle distillates -Pygas from Olefins unit sent to Aromatics for BTX -Offgas from Refinery sent to Cracker for Olefins products Product Marketing Commercial Agreements (1) PTT owns 50%, PTTGC and IRPC each owns 25% in PTTPM Domestic / Export Volume Portion Export 30% Domestic 70% Export 40% Export 60% Domestic 60% Domestic 40% Refinery Aromatics Polymers
Highly Competitive Cost Structure & Performance driven by Olefins and Derivatives 2 8 Typical Revenue Breakdown 5% 1% 5% 21% 48% 2014 Global Ethylene Cash Cost by Region USD/Ton 20% s Source: IHS (formerly CMAI) Note: MDE = Middle East, NAM = North America, NEA = Northeast Asia, SEA = Southeast Asia, WEP = Western Europe. MDE cash costs are average values of Iran and Saudi Arabia. Typical Adj. EBITDA Breakdown % Adj. EBITDA Margin 3% 5% 3% 16% 27 27 26 56% 16% 3 2 8 10 4 3 5 14 7 4 5 2 10 10 10 s Refinery Aromatics Olefins Green HVS PTTGC 2012 2013R 2014R
Fully Integrated Petrochemical and Refinery Operations with Diversified Product Portfolio 3 9 Feedstock Upstream Intermediates Downstream Proximity to Suppliers and Customers HDPE Natural Gas Exchange Stream Products By-Products Light Naphtha Cracker Ethylene Propylene EO EB/SM / PO Polyols MEG LDPE LLDPE Ethanolamine Ethoxylate PS ABS OffGas Mixed C 4 Butadiene PP Condensate Crude Crude Palm Oil Agricultural Products REFINERY & SHARED FACILITIES Reformate, Heavy Naphtha Refinery Pygas Aromatics Plants Condensate Residue, Hydrogen C 3,C 4 Cracker Bottom, Hydrogen Benzene Toluene Paraxylene Orthoxylene Oleochemicals PLA Plant Succinic Acid Plant AROMATICS OLEFINS POLYMERS PTT Phenol Cumene Cyclohexane Phenol Adipic Acid HDMA TDI / HDI PTA PA Fatty Alcohol Methyl Ester (B - 100 ) Phenol Acetone HDI TDI EO-BASED PERFORMANCE BPA MMA SBR Caprolactam Nylon Caprolactam Nylon 6 6 System House GREEN CHEMICALS PC Epoxy Epoxy Resins PMMA Nylon 6,6 PU PU Polyester Fiber/ PET PET Fiber Resin / Resin Plasticizer Petroleum Products - LPG - Reformate - Light Naptha - Jet Fuel - Diesel - Fuel Oil PLA Succinic Acid 1 st Screen for Further Feasibility Study PTTGC does not currently produce these products Not qualify for 1 st Screen HIGH VOLUME SPECIALTIES
Strategic location of each plant in Map Ta Phut Industrial Complex creates proximity to suppliers and customers 4 10
Experienced Management with Strong Track Record and Organization Structure to support Growth 5 Audit Committee Risk Management Committee Board of Directors President and CEO Mr. Prasert Bunsumpun Chairman Nomination and Remuneration Committee CG Committee Mr.Athavudhi Hirunburana Mr. Patiparn Sukorndhaman VP Internal Audit Mr. Supattanapong Punmeechaow Effective Jan 1, 2016 COU Upstream Petrochemical Business COD Downstream Petrochemical Business SVP GPC Refinery and Shared Facilities SVP GPC Aromatics EVP GPC Olefins SVP CAPEX Excellence SVP Technical and Operations SVP Quality, Safety, Occupational Health and Environment SVP Polymers Business Unit EVP EO Based Performanc e Business Unit SVP Green Chemicals Business Unit SVP - High Volume Specialties Business Unit SVP - Phenol Business Unit SVP Marketing, Commercial and Supply EVP Organizational Effectiveness EVP Finance and Accounting EVP External Affairs EVP Project Executive Director Mr.Saroj Putthammawong EVP International Business Operations EVP Corporate Strategy Miss Duangkamol Settanung SVP Corporate Affairs SVP Science and Innovation 11
Agenda PTTGC S BUSINESS OVERVIEW STRATEGIC EXECUTION FINANCIAL PERFORMANCE 12
Strategic Direction CORE UPLIFT PROJECTS Excellence Projects Debottlenecki ng Map Ta Phut Retrofit 1-STEP ADJACENCIES NEW GEOGRAPHIES NEW PRODUCTS ASEAN: Pertamina System House CHINA: Sinochem Compounding US: Shale Gas PC, PU, Nylon 6-6 GREEN Oleochemical, PLA Succinic Acid PLA/PBS Compound - Bio Fuel - Bio Chemical - Bio Plastic
Strategic Plans : Major Projects 2015 TOCGC Improvement Construction Completed Under Performance test run Aromatics II Debott. Progress : 99.5% Phenol II Progress: 99% HDI Derivative Thailand HDI Monomer France mlldpe PO/Polyol MTP Retrofit US Petrochemical Complex 3Q/15 4Q/15 2016 2017 2018 2019 2020 2021 Offgas TOCGC ARO2 Phenol2 HDI Thailand HDI France MLLDPE PO/Polyol CAPEX 180 MUSD 94.2 MUSD 128.8 MUSD 345 MUSD 40 MEUR 17 MEUR 288.2 MUSD 1,000 MUSD Additional Ethylene Additional PetChem* (per year) EOE 90KTA PX 115 KTA BZ 35 KTA OX 20 KTA PH 250 KTA AC 155 KTA HDI Derivative 12 KTA HDI Monomer 70 KTA MLLDPE 400 KTA Hexene-1 34 KTA EBITDA 22 MUSD 26 MUSD 24 MUSD 63 MUSD 8 MEUR 4 MEUR 59 MUSD Uplift/Year** * 100% stake of additional capacity ** Estimate EBITDA uplift with 100% stake at mid cycle price PO 200 KTA Polyol 150 KTA US Petrochem Ethylene 1 MTA HDPE 700 KTA MEG 500 KTA EO 100 KTA 14
Excellence Project Update Performance Excellence Target Crude $109 (M$) 9M/15 Actual (M$) FY2015 Estimate (M$) Synergy Excellence 149 19 26 Marketing Excellence 86 77 104 Operational Excellence 68 48 67 Total 303 144 197 Synergy Excellence : EBITDA Uplift lower than target due to o Low crude price vs. target which based on Dubai at 109 USD/bbl o Off gas project delayed (in preparation for hydrocarbon feed in after Aromatics 2 return from shutdown in 4Q/15) o Additional off gas volume from refinery after refinery turnaround in 2Q/2016 Off gas project at Olefins I-1 plant 15
Map Ta Phut Retrofit : The Possibilities Objective : Utilize light naphtha being sold to external customers Possibilities under study Upstream Maximize Product Value Downstream Product Value Creation Modify Olefins Cracker for Flexible Feedstock To Utilize naphtha being sold to spot market for captive use Modify olefins plant (i.e. I-1) to be flexible in feedstock and resilience to feedstock price PE / Special PE EO / EG PP Modify olefins plant to run as a pure naphtha cracker Create Olefins and by products capacity addition Acrylic Acid SAP Capacity Expansion Study SM PS / Special PS Compound To Utilize Gas Feedstock from Modified Olefins Plant MMA MS Debottleneck PTTPE Plant to use excess gas feedstock reshuffled from modified olefins plant AN Butadiene ABS / SAN SSBR/TPE/PBR Timeline MTP Retrofit Configuration is to be finalized by end of 2015 Legends Existing Product Potential Product PTTGROUP Product 16
Polyurethane Chain Updates Feedstock EO Propylene Cumene 1 PU Raw Materials Isocyanate TDI/HDI MDI 160 KTA 2 PO PU Formulation Polyols System House Isocyanate Update 1 2 COD: 2016 Cap.: 12 KTA CAPEX: 40 MEUR COD: 2016 Cap.: 70 KTA CAPEX: 17 MEUR TDI Development : Engaging 2 external consultants to jointly develop a specific Basic Engineering Design Package (BEDP) for a future unit development in Asia. Proceeding with technology and process improvement to optimize productivity and cost efficiency. HDI Derivatives Thailand: Under construction with project progress of 95% Convert TDI to HDI, France: Detailed engineering & construction of new parts, project progress : 20% PO/Polyols Project Update License : Signed engineering service agreement for both PO and Polyols Finance: Exploring project financing, engaging potential lenders Engineering : Issued TOR for FEED contractor, expect to award contractor by December 2015 Marketing: Shortlisted PO customers and conducting market survey for Polyols potential buyers in 5 countries Partners: PO Majority Shareholder Capacity 200 KTA PO Licensor Polyols/ System House Majority Shareholder Capacity 130 KTA Polyols Licensor COD: 2019 Cap.: 12 KTA HDI Derivatives in Freeport, USA : Under feasibility study Total CAPEX of approx. USD 1 Bn 2016 2017 4Q/16 Set up JV company 2Q/17 Construction 2019 COD 2Q/19 17
US Petrochemical Complex Petrochemical Complex World Scale Ethane Cracker Utilize ethane from shale gas as feedstock Capacity : 1 MTA Ethylene Derivatives HDPE : 700 KTA MEG : 500 KTA EO : 100 KTA Location : Dilles Bottom, Ohio Capex: Approx. US$ 5.7 Billion Key Criteria for FID Investment cost justify investment return Enough ethane capacity with capped price Partner can distribute products in N. America Timeline BOD approved FEED Study Mar, 2015 CHECK POINTS FID 4Q/16 COD 2021 FEED Selection Dual-FEED Contractor Selection Construction 18
Project Updates US Petrochemical Complex Updates 1.FEED 2. Feedstock 3. Marketing and Logistic 4. Site, permitting & State support 5. Partner 6. Finance Selected 2 FEED contractors : Fluor-Technip-SK (FTSK) and Bechtel-JGC-Samsung (BJS) Process design package by Technip, INEOs and SD to be completed by end of the year Developing ethane feedstock supply agreement In discussion with utilities providers and pipeline network companies To finalize sell purchase agreement at least 50% of required volume by year end On going discussion with potential product offtakers, capacity reservation offtakers, and logistic providers Market survey by customer conducted around 34% of target customers, expect to complete within 1Q/16 Finalized land option agreements to use the land during FEED study period Federal, State, and local put project as high priority Land owners are doing site works and will deliver clean land Community outreach program start on November 2015 Discussing with potential 3 rd partner for JV possibility Shortlist additional potential partners who are local marketing companies, offtakers with and without capacity reservation, and local O&M FEED contractors are working on vendor shortlist for ECA financing Developing information memorandum for potential lenders 19
Indonesia Project Petrochemical Complex Project Update Petrochemical Complex in Indonesia to Expand production facilities Capture domestic demand Replace import volume Naphtha based cracker 1.5 MTA HDPE LDPE EO/EG PP Pygas. With current demand, Indonesia requires > 1 world scale Petrochemical Complex BD Pertamina has recently prioritized its refinery project investment plan o Balikpapan and Cilacap refinery upgrade projects will be proceeded as the first priority o Other refinery upgrades, including Balongan, are planned for a later phase Pertamina is evaluating options for the new location for the planned integrated refinery and petrochemical complex PTTGC is well positioned as a strong candidate for project partner due to o Strong relationship with Pertamina o Knowledge of the industry and Indonesia market 2000 1500 1000 500 0 Indonesia market (2015, KT) Production Domestic Demand 1642 580 619 629 692 360 269 329 244 0 58 58 HDPE LDPE LLDPE MEG PP BD In the meantime, PTTGC and Pertamina are continuing to collaborate closely in the sales and marketing activities under ITT, a joint venture between PTTGC and Pertamin IndoThai Trading: PTTGC supplies PE which accounts for 70%. Pertamina supplies PP, 30% of ITT s total sales volume. 20
Green: Bio-Hub Concept Create Sustainability in a Long Term Integration Interdependence feedstock which creates feedstock security Saving on logistic cost from proximity to feedstock location Saving on energy cost from turning waste into biofuel Saving from infrastructure sharing 21
Agenda PTTGC S BUSINESS OVERVIEW STRATEGIC EXECUTION FINANCIAL PERFORMANCE 22
2014 Overview of Business Performance (Unit: MB) 2012 2013R 2014R Sales Revenue 562,811 531,868 550,908 EBITDA 57,168 57,726 34,225 EBITDA Margin (%) 10% 11% 6% Adjusted EBITDA* 56,993 54,685 52,374 Adjusted EBITDA Margin (%) 10% 10% 10% Net Profit 34,001 33,260 15,372 EPS (Baht/Share) 7.54 7.38 3.41 Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (Inventory gain/(loss) and NRV) and provision for business restructuring 2014R Revenue and Adjusted EBITDA Structure % Adjusted EBITDA Margin 25% Sales Revenue 3% 6% 550,908 MB 48% 52,374 MB 19% Adjusted EBITDA 67% 3% 1% 3% 20% 6% 2012 2013R 2014R Business Unit : Refinery 3 2 4 Aromatics 8 10 3 Olefins and Derivative 27 27 26 Green 5 14 4 HVS 7 2 5 Average 10 10 10 23
3Q/15 Overview of Business Performance (Unit: MB) 3Q/14R 2Q/15 3Q/15 YoY % + /(-) QoQ % + /(-) Sales Revenue 141,081 111,169 93,620-34% -16% EBITDA 12,728 16,055 7,824-39% -51% EBITDA Margin (%) 9% 14% 8% -1% -6% Net Profit 7,658 8,974 1,207-84% -87% EPS (Baht/Share) 1.70 1.99 0.27-84% -87% Adjusted EBITDA* 15,582 13,784 10,511-33% -24% Adjusted EBITDA Margin (%) 11% 12% 11% 0% -1% Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (Inventory gain/(loss) and NRV) 3Q/15 Revenue and Adjusted EBITDA Structure % Adjusted EBITDA Margin Sales Revenue Adjusted EBITDA 3Q/14R 2Q/15 3Q/15 33% 3% 7% 4% 2% 2% 45% 93,620 MB 10,511 MB 12% 70% 18% 4% Business Unit : Refinery 3 5 4 Aromatics 9 9 4 Olefins and Derivative 28 28 24 Green 1 1 6 HVS 11 6 6 Average 11 12 11 24
Olefins Adjusted EBITDA Margin maintain at normal level despite lower HDPE price Adj. EBITDA margin declined o Lowest HDPE price o Less benefit from naphtha cracker due to I-4/1 shutdown Adj. EBITDA margin rebounded o HDPE price bounced o Benefit from high naphtha crack spread Adj. EBITDA margin maintained o Benefit from high naphtha crack spread o HDPE price dropped o I-4/2 shutdown Adj. EBITDA margin declined o Lower HDPE price 1,800 1,600 1,400 1,200 24% 25% 28% 25% 19% 28% 24% 30% 25% 20% 1,000 800 600 1,554 1,569 1,604 1,448 1,188 1,375 1,234 15% 10% 400 200 620 618 691 802 694 812 774 5% - 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 0% HDPE Price ($/Ton) HDPE-Naphtha ($/Ton) Adj. EBITDA Margin (%) 25
Gas Cracker is still more competitive over Naphtha at Crude 43 $/BBL Gas Cracker Unit: USD/ton ethylene 1,190 Main Price Assumption Crude ($/bbl) 43 Naphtha Price ($/Ton) 433 Ethylene ($/Ton) 1000 Propylene ($/Ton) 515 C3/C4 ($/Ton) 433 430 HDPE Price By Product Feedstock Cost Variable Cost Fixed Cost EBITDA Margin Naphtha Cracker Unit: USD/ton ethylene 1,190 378 HDPE Price By Product Feedstock Cost Variable Cost Fixed Cost EBITDA Margin 26
Strong Financial Position Statements of Financial Position THB 381 Bn THB 394 Bn Loan Type Debenture, 49% ST Bank Loan, 0% Cash +ST Investment CA PPE Non CA As of Dec 31, 2014 As of Sep 30, 2015 Liab. IBD Share Holder s Equity THB 116 Bn LT Bank Loan, 51% Interest Rate Currencies 54% Fixed 62% THB 46% Float 38% USD&Others Cost of long term debts ~ 4.24% (Include W/H Tax) Average loan life after refinancing - 5.35 Years Repayment Profile THB Bn PTTGC PPCL Others 39.2 15.9 14.9 12.9 10.1 7.0 9.1 11.1 1.2 1.3 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 * After Refinance Net IBD/EBITDA 1.97 1.59 1.28 Treasury policy Net IBD to EBITDA ratio of 2.4x Net IBD to Equity ratio of 0.7x Key Financial Ratios NET IBD/Equity 1.72 0.30 0.23 0.21 0.26 31 Dec 14 31 Mar 15 30 Jun 15 30 Sep 15 ROE 6.86% 6.40% 5.05% 4.92% 27 7.57% ROA 6.10% 4.80% 4.21% 31 Dec 14 31 Mar 15 30 Jun 15 30 Sep 15 27
Prudent CAPEX Plan to Support Growth Approved CAPEX Plan 2015-2019* Uncommitted 5 Years Investment CAPEX 738 Unit: USD mn 26 19 325 614 616 545 39 7 58 36 280 262 387 389 365 66 175 47 38 24 32 138 193 226 251 252 263 248 251 36 Green 1-step Core uplift Phenol Annual Maintenance Total Total Growth Project 6 1 228 242 251 36 6 1 Green 5% $ 4.5 Bn 1-Step Adjacencies 64% Core Uplift 31% $ 2.5 Bn Cash Flow From Operation $ 2 Bn Debt Financing 2013A 2014A 2015 2016 2017 2018 2019 *FX = 30 THB/USD $1 Bn secured from USD Bond issued in Sep 12 28
Agenda PTTGC S BUSINESS OVERVIEW STRATEGIC EXECUTION FINANCIAL PERFORMANCE APPENDIX 3Q/15 FINANCIAL PERFORMANCE 29
Business Environment and Operations Recap Average and Ending Dubai Crude Price: USD/BBL Average Price Closing Price 104.8 109.2 94.6 60.2 52.9 53.4 43.5 104.0 54.3 104.5 106.1 101.5 74.4 51.9 61.3 49.7 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Average and Closing FX : THB/USD o Dubai dipped from average at 61.3 USD/BBL in 2Q/15 to 49.7 USD/BBL in 3Q/15. As a result, PTTGC reported Stock Loss & NRV totaling to 2,687 M.THB in 3Q/15 o FX Loss amounting to 2,140 M.THB, resulting from depreciation in THB against USD from 33.93 THB/USD at the end of 2Q/15 to 36.53 THB/USD at the end of 3Q/15 o Modest Refinery GRM, declined Aromatics P2F, yet, strong Olefins margin o Diesel-Dubai 10.8 USD/BBL -25% YoY -21% QoQ o ULG95-Dubai 19.3 USD/BBL +47% YoY -2% QoQ o FO Dubai -8.1 USD/BBL +4% YoY -128% QoQ o PX-Cond 397 USD/Ton -17% YoY +1% QoQ o BZ-Cond 235 USD/Ton -45% YoY -14% QoQ o HDPE 1,234 USD/Ton -23% YoY -10% QoQ o MEG 1,025 USD/Ton -10% YoY -0% QoQ o Overall utilization rate of major businesses Average FX Closing FX 36.53 33.93 32.58 32.60 32.52 33.11 32.70 32.40 33.72 32.66 32.45 32.10 32.71 32.65 33.26 35.25 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 3Q/14 2Q/15 3Q/15 30 YoY + /(-) QoQ + /(-) Refinery CDU Utilization (%) 102% 100% 101% -1% 1% Aromatics BTX Utilization (%) 82% 85% 57% -25% -28% Olefins Utilization (%) 94% 89% 93% -1% 4% Polymers Utilization (%) 104% 92% 113% 9% 21% EO Based MEG Utilization (%) 112% 106% 51% -61% -55% Phenol Phenol Utilization (%) 132% 121% 132% 0% 11% BPA Utilization (%) 104% 85% 107% 3% 22% 30
Refinery Performance Production optimization supported decent GRM ULG 95 - DB JET - DB Diesel - DB Petroleum Products - Dubai Spread (USD/BBL) 14.6 18.2 14.6 16.1 13.2 13.4 15.3 15.3 13.8 17.0 14.3 14.5 17.7 17.1 13.5 10.9 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 16.1 13.6 19.8 19.3 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 17.8 16.0 14.4 16.0 16.3 13.7 10.8 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 +47% YoY -2% QoQ -25% YoY -19% QoQ -25% YoY -21% QoQ Crude Total Intake (KBD) CDU U-Rate 102% 101% 101% 103% 102% 101% 102% 100% 101% Condenstate Residue & Others 205.4 205.1 198.9 208.0 209.2 198.6 208.1 211.1 196.2 57.6 58.6 52.4 59.4 61.0 52.0 60.3 66.1 49.5 147.8 146.5 146.5 148.6 148.2 146.6 147.8 145.0 146.7 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Market GRM Gross Refinery Margin (USD/BBL) Hedging Gain/(Loss) Stock Gain/(Loss) Net NRV Accounting GRM -6% YoY -7% QoQ FO - DB 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 (9.2) (4.5) (8.5) (10.7) (8.4) Sales Volume (KBD) (5.6) (1.9) (3.6) (8.1) Others Fuel Oil Diesel Jet Naphtha+Ref. 184 186 185 188 179 186 184 194 180 14% 16% 16% 16% 10% 16% 16% 15% 17% 13% 12% 13% 13% 12% 15% 17% 10% 9% 52% 49% 52% 51% 54% 45% 46% 51% 50% 13% 13% 7% 9% 14% 13% 14% 14% 12% 14% 15% 5% 8% 9% 9% 9% 10% 9% 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 +4% YoY -128% QoQ +1% YoY -7% QoQ 3.84 0.33 0.73 0.56 0.66 0.70 2.08 4.24 5.16 4.48 4.44 3.83 4.91 (0.97) (0.82) (0.12) 4.22 4.12 (0.69) 5.83 1.61 (2.92) (7.69) (14.68) 4.17 7.59 2.22 0.91 5.40 5.98 4.16 (1.50) (3.22) (0.31) (0.04) (0.03) 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Market GRM 4.24 5.16 4.48 4.44 3.83 4.91 5.98 5.40 4.16 GRM on CDU 5.38 6.73 5.52 5.74 4.81 6.30 31 7.97 7.27 5.11 GRM on CRS 2.81 2.79 2.85 2.76 2.82 2.57 2.58 2.69 3.16 31
Aromatics Performance 3Q/15 margin impacted by Aromatics 2 plant shutdown Aromatics Products Prices and Spread (USD/Ton) BTX U-Rate and Sales Volume (KTons) Prices PX FECP - Cond BZ Spot - Cond Naphtha - Cond Condensate Erawan PX FECP BZ Spot Korea 1,303 1,303 1,350 1,256 1,297 903 394 844 471 241 712 400 373 386 334 1,035 1,297 1,293 1,301 917 922 872 954 634 785 670 453 924 380 370 430 320 217 271 235 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15-17% YoY +1% QoQ 479 401 333 391 397 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 30 35 18 29 42 13 41 31 34 823 804 661 533 427 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 BTX U-Rate BZ Group PX Group Naphtha Group Other By- Products 88% 77% 91% 89% 82% 63% 88% 85% 57% 2,488 2,125 806 860 822 668 707 866 552 23% 23% 24% 23% 22% 21% 25% 21% 25% 37% 39% 38% 37% 36% 33% 45% 36% 36% 28% 29% 25% 28% 33% 35% 30% 30% 28% 11% 8% 12% 12% 9% 11% 13% 2% 10% 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15-45% YoY -14% QoQ Products to Feed Margin (USD/Ton BTX) -18% YoY +11% QoQ Market P2F Stock Gain/(Loss) Net NRV Hedging Gain/(Loss) Accounting P2F 167 205 178 207 166 (10.18) (2.65) (7.90) 158 127 40.44 86 222 290 164 191 (68.54)(398.22)(27.63) (0.02) (235) 271-33% YoY -36% QoQ 54.93 134-219 216 183 (48.94) (0.37) 32 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 32
Prices MEG ACP 0.65Ethylene HDPE - Naphtha 1,615 1,580 1,576 1,139 Olefins Derivatives Prices and Spread (USD/Ton) 933 HDPE (FILM) SEA LLDPE CFR SEA LDPE CFR SE Asia MEG ACP Naphtha MOPJ 1,279 1,260 1,266 985 506 1,639 1,605 1,601 1,440 1,401 1,560 1,578 1,601 1,192 1,375 1,244 1,554 1,569 1,604 1,431 1,181 1,224 1,448 1,375 1,182 1,093 1,143 1,188 1,234 1,035 1,027 1,025 935 951 913 903 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 647 193 252 245 152 182 246 236 Olefins and Derivatives Performance Margin stayed strong at 24% 494 126 563 394 HDPE Price -23% YoY -10% QoQ 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 HDPE (FILM) SEA 1,576 1,266 1,554 1,569 1,604 1,448 1,188 1,375 1,234 LLDPE CFR SEA 1,580 1,260 1,560 1,578 1,601 1,431 1,181 1,375 1,224 LDPE CFR SE Asia 1,615 1,279 1,639 1,605 1,601 1,440 1,192 1,401 1,244 MEG ACP 1,139 985 1,182 1,093 1,143 1,035 903 1,027 1,025 Naphtha MOPJ 933 506 935 951 913 647 494 563 461 643 760 620 618 691 802 694 812 774 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 461 +12% YoY -5% QoQ +116% YoY +214% QoQ U-Rate (%) 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Olefins 87% 93% 77% 91% 94% 101% 96% 89% 93% HDPE 105% 105% 93% 107% 114% 115% 109% 97% 109% LLDPE 98% 95% 99% 112% 84% 105% 110% 61% 113% LDPE 104% 114% 115% 93% 104% 106% 99% 119% 124% Total PE 103% 104% 99% 106% 104% 111% 107% 92% 113% MEG 92% 88% 65% 99% 112% 104% 108% 106% 51% Sales Volume (KTons) 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Olefins 484 557 134 168 182 224 196 173 189 HDPE 630 633 202 218 210 243 219 195 219 LLDPE 288 276 98 105 85 120 108 69 99 LDPE 239 243 72 92 75 83 80 80 83 Total PE 1,157 1,152 373 415 369 446 407 344 402 MEG 275 290 71 95 110 107 102 108 80 GAS : NAPHTHA Intake % Ethane Other Gas Naphtha Adjusted EBITDA Margin 26% 24% 24% 25% 28% 25% 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 331Q/15 2Q/15 3Q/15 19% 28% KTons 2,695 2,888 799 932 965 1,032 991 932 964 9% 8% 13% 11% 4% 6% 7% 8% 8% 34% 36% 26% 35% 40% 36% 37% 38% 35% 56% 56% 60% 54% 56% 59% 56% 54% 57% 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 24% 33
Phenol and BPA Performance Lower Margin from Soften Product Spread Phenol/ BPA Prices and Spread (USD/Ton) U-Rate and Sales Volume (KTons) Prices 1,728 1,490 1,297 1,244 923 712 Benzene Phenol BPA 1,894 1,638 1,653 1,592 1,595 1,424 1,456 1,235 1,364 1,334 1,297 1,293 1,301 909 979 954 670 804 1,036 882 661 U-Rate 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Phenol 114% 128% 78% 131% 132% 132% 131% 121% 132% BPA 94% 102% 70% 107% 104% 116% 114% 85% 107% Sales Volume (KTons) Phenol -2% YoY +10% QoQ 187 212 48 66 73 70 74 66 72 44% 45% 40% 42% 48% 40% 41% 52% 43% BPA-Phenol Phenol-BZ 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Phenol (CMP) 1,490 923 1,424 1,456 1,592 1,235 909 979 882 BPA (CMP) 1,728 1,244 1,638 1,653 1,894 1,595 1,364 1,334 1,036 Benzene 1,297 712 1,297 1,293 1,301 954 670 804 661 193 212 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 Phenol Mkt P2F 425 289 358 389 528 456 347 236 285 238 321 126 164 214 197 291 282 240 302 360 454 355-24% YoY +26% QoQ 175 221-49% YoY -57% QoQ 154 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 BPA Mkt P2F 148 285 103 112 228 299 402 318 137 BPA 10% 11% 56% 55% 60% 58% 52% 60% 59% Adjusted EBITDA Margin 48% 57% 9M/149M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4% 7% 16% 13% 19% 7% 6% 9M/14 9M/15 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 34
Phenol and BPA Phenol and BPA Market P2F Margin Soon getting on up trend after hitting the bottom $/Ton 1,100 Phenol and BPA Market P2F Margin 1,000 900 800 700 600 500 400 300 200 100 0 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 P2FM-PH P2FM-BPA Note: Phenol Market P2F: BPA Market P2F: Phenol 0.878 Benzene - 0.474 Propylene +0.616 Acetone BPA 0.853 Phenol 0.273 Acetone 35
3Q/15 Income Statements Consolidated 3Q/2014** 2Q/2015*** 3Q/2015 YoY QoQ MB % MB % MB % MB % MB % 1 Sales Revenue 141,081 100 111,169 100 93,620 100 (47,461) -34% (17,549) -16% 2 Feedstock Cost (113,516) (80) (86,168) (78) (71,236) (76) (42,280) -37% (14,932) -17% 3 Product to Feed Margin 27,565 20 25,001 22 22,384 24 (5,181) -19% (2,617) -10% 4 Variable Cost (6,726) (5) (6,130) (6) (6,228) (7) (498) -7% 98 2% 5 Fixed Cost (3,896) (3) (4,003) (4) (3,974) (4) 78 2% (29) -1% 6 Stock Gain/(Loss) & NRV (2,854) (2) 2,271 2 (2,687) (3) 167 6% (4,958) -218% 7 Gain/(Loss) Commodity Hedging 428 0 (72) (0) 52 0 (376) -88% 124 172% 8 Other Income 898 1 1,373 1 877 1 (21) -2% (496) -36% 9 SG&A (2,687) (2) (2,384) (2) (2,600) (3) (87) -3% 216 9% 10 EBITDA 12,728 9 16,056 14 7,824 8 (4,904) -39% (8,232) -51% 11 Depreciation & Amortization (3,941) (3) (4,062) (4) (4,132) (4) 191 5% 70 2% 12 EBIT 8,787 6 11,994 11 3,692 4 (5,095) -58% (8,302) -69% 13 Finance Cost (1,071) (1) (993) (1) (960) (1) (111) -10% (33) -3% 14 FX Gain/(Loss) 380 0 (1,235) (1) (2,140) (2) (2,520) -663% (905) -73% 15 Shares of profit/(loss) from investments 137 0 162 0 485 1 348 254% 323 199% 16 Income Tax Expense (540) (0) (932) (1) 216 0 (756) -140% (1,148) -123% 17 Net Profit 7,693 5 8,996 8 1,293 1 (6,400) -83% (7,703) -86% Profit/(loss) attributable to: *** 18 Owners of the Company 7,658 5 8,974 8 1,207 1 (6,451) -84% (7,767) -87% 19 Non-controlling interests 35 0 22 0 86 0 51 146% 64 291% 20 Adjusted EBITDA* 15,582 11 13,785 12 10,511 11 (5,071) -33% (3,274) -24% Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (excludes Inventory gain/(loss) and NRV) ** Restated 3Q/2014 Income Statements from the implementation of new accounting standards (Pack 5) *** Restated 2Q/2015 Income Statements to reflect share purchase of PTTPL on the basis of business combination under common control 36 36
Shutdown Schedule Refinery Aromatics Olefins Butadiene HDPE LDPE LLDPE TOCGC Phenol I II PTTPE I-1 I-4/1 I-4/2 I-1 BPE I BPE II Phenol BPA 4Q/15 1Q/16 2Q/16 3Q/16 4Q/16 4 Ma y - 5 Jul y (63) 28 Jul-9 Nov (105) 22 Feb-31 Ma r (39) Sep (16) Sep (22) 1-15 Jun (15) 19 Sep-7 Oct (19) 12-31 Ma r(20) Sep (15) 22 Feb-11 Ma r (19) Sep (22) 9-24 Nov (16) 3-31 Ma r (29) 20 Ma y-22 Jun (34) 37
Agenda PTTGC S BUSINESS OVERVIEW STRATEGIC EXECUTION FINANCIAL PERFORMANCE APPENDIX MARKET OUTLOOK 38
CRUDE OIL : SUPPLY GLUT REMAINS BUT BETTER BALANCE AS NON-OPEC PRODUCTION SLOWDOWN 70 65 60 55 50 45 40 35 30 Q3-Q4 : ECONOMIC-DRIVEN MARKET SENTIMENT Unit : $/bbl Q3 2015 China s economic downturn Iran s nuclear deal Q4 2015 Winter crude demand & Brazil oil worker union strike OPEC unlikely to cut Fed rate rise expectations Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 2016 OUTLOOK : SLOWDOWN OF NON-OPEC Slowdown in Non-OPEC supply growth, especially in US production EIA : US crude output at 8.8 (-0.5)MBD in 2016 9.8 9.6 9.4 9.2 9.0 8.8 8.6 US Crude Oil Production (MBD) 9.1 9.1 9.2 9.3 9.4 9.4 9.4 9.6 9.5 9.3 9.1 9.1 PRICE TREND & FORECAST FACTORS TO WATCH 70 65 60 55 50 45 40 Dubai Price (USD/BBL) 51.9 61.3 49.7 44.6 Q1'15 Q2'15 Q3'15 Q4'15E 2015E 2016F Ref : EIA, IEA, JBC, PRISM 51.9 USD/bbl 53-56 USD/bbl - + OPEC Policy Iran ramp up possibility in Q1 Lifting the US ban on crude oil exports China s economic slowdown Geopolitics & Middle East tension may cause supply disruption Rising demand in 2H 16 39
CRUDE OIL : SUPPLY GLUT REMAINS BUT BETTER BALANCE AS NON-OPEC PRODUCTION SLOWDOWN 40 2016 OUTLOOK : DECLINING IN SURPLUS Global Oil Demand Growth FY2015 : 1.8 MBD FY2016 : 1.2 MBD 120 100 80 60 40 20 0 OPEC Non-OPEC Demand Unit : MBD 93.6 +0.9 96.1 +1.6 96.1 +0.4 57.0 92.7 58.3 94.5 57.8 Non 95.7 OPEC Demand 36.6 37.8 38.3 OPEC 2014 2015 2016 2014 2015 2016 PRICE TREND & FORECAST 2016 OUTLOOK : SLOWDOWN OF NON-OPEC Slowdown in Non-OPEC supply growth, especially in US production EIA : US crude output at 8.8 (-0.5)MBD in 2016 9.8 9.6 9.4 9.2 9.0 8.8 8.6 US Crude Oil Production (MBD) 9.1 9.1 9.2 9.3 9.4 9.4 9.4 9.6 9.5 FACTORS TO WATCH 9.3 9.1 9.1 70 65 60 55 50 45 40 Dubai Price (USD/BBL) 51.9 61.3 49.7 44.6 Q1'15 Q2'15 Q3'15 Q4'15E 2015E 2016F Ref : EIA, IEA, JBC, PRISM 51.9 USD/bbl 53-56 USD/bbl - + OPEC Policy Iran ramp up possibility in Q1 Lifting the US ban on crude oil exports China s economic slowdown Geopolitics & Middle East tension may cause supply disruption Rising demand in 2H 16 40
REFINERY : MORE COMPETITION FROM NEW CAPACITY, HOWEVER, BOOSTED DEMAND STILL BACKS UP Q3-Q4 : DEMAND DRIVEN BY LOW CRUDE PRICE 2016 OUTLOOK : STRONG COMPETITION IN ASIA New capacity 800 KBD in Middle East (Saudi & UAE) pushes more middle distillate to the market in Q3. Winter season still boosts middle distillate demand for heating Transportation consumption drives gasoline spread 321 90 107 Gasoline Jet/Kero Diesel Fuel Oil PRICE TREND & FORECAST Unit : KBD 4 20 18 16 14 12 10 8 6 4 2 0 Unit : MBD Balance Growth in demand but more balance from new capacity in India & China Surplus More competition from ME & India 12.6 11.5 6.6 6.5 1.2 Supply Demand Import 2.7 1.5 Gasoline Middle Distillate Fuel Oil FACTORS TO WATCH Balance Asia import demand fulfilled by Europe volume USD/BBL 25.0 20.0 15.0 10.0 5.0 0.0-5.0-10.0-15.0 ULG95 Dubai 19.8 19.3 15.4 16.0 17.6 16.0 16.3 13.7 10.8 13.7 13.6 12.8 Diesel Dubai Fuel Oil Dubai -1.8-3.5-5.3-8.1-7.6-6.5 Q1'15 Q2'15 Q3'15 Q4'15E 2015E 2016F Ref : JBC, PRISM - + China s economic slowdown Nuclear policy in Japan Low oil prices stimulate demand globally Postponement of new CDU capacity in China & India 41
POLYETHYLENE : STRONG DEMAND IN NEA WHILE MORE PE NEW CAPACITY NEA PE DEMAND REMAINS STRONG AMID SLOWDOWN OF CHINA S ECONOMY MORE PE SUPPLY FROM NEW CAPACITY Million Tons 14.00 12.00 Northeast Asia PE Import 11.72 10.97 12.67 Million Tons 8.0 6.0 4.0 Global PE Capacity Addition vs Demand Growth 2.95 Demand Growth 3.86 3.89 Europe NEA NAM 10.00 2.0 0.0 ME Indian 8.00 2014 2015F 2016F Source: IHS -2.0 2014 2015 2016 Source: IHS SQUEEZED SPREAD BUT CAN STAY OVER 700$/MT FACTORS TO WATCH USD/MT 1600 1400 1200 1000 800 600 400 200 0 HDPE Price 1375 1194 1188 1234 1199 1249 823 788 708 753 768 700 HDPE MOPJ Source: PRISM, Oct 15 Q1-15 Q2-15 Q3-15 Q4-15E 2015E 2016F - + Slowdown of China s economy. Competitiveness of lower polypropylene (PP) price. Tighten ethylene supply. Iran s PE export after sanction lifting. Delay of China s new CTO plants (~2m tons). 42
PROPYLENE : OVER-INVESTMENT IN CHINA HAS STARTED TO PRESSURE BUTADIENE : START TO RECOVER 43 CHINA PROPYLENE CAPACITY ADDITION SHIFTS TO ON-PURPOSE In fact, China capacity addition during 2015-16 are enough to supply the world demand growth CHINA BD OPERATING RATE STARTS TO INCREASE DUE TO A LACK OF NEW SUPPLY China BD Capacity Addition vs Demand Growth Source : IHS Source : IHS USD/MT 700 600 500 400 300 200 100 0 SPREADS TEND TO BE SOFTENED IN 2H15 BD MOPJ 561 486 515 342 375 408 344 283 276 263 214 PY MOPJ 102 Source: PRISM, Oct 15 Q1-15 Q2-15 Q3-15 Q4-15E 2015E 2016F - + - + FACTORS TO WATCH -PROPYLENE More competitive propane export from US PP demand grows faster than expected FACTORS TO WATCH -BUTADIENE Economic slowdown, especially in China and India More BD supply from high-run rate of Naphtha cracker Recovery of natural rubber price Delay startup of on-purpose units in China 43
PARAXYLENE : SURPLUS SUPPLY STILL PRESSURE ON MARGIN BENZENE : MARGIN SLIGHTLY IMPROVES IN 2016 Million Tons 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Source : PCI IN 2016, PX MARKET REMAINS SURPLUS 2.90 However, cutting run rates of high cost producers in Japan and S.Korea and rationalization in Europe will support the market. 4.47 2.11 1.05 2.88 3.52 1.93 2.15 2013 2014 2015 2016 Capacity addition Demand growth AROMATICS MARGINS STAY TO FIRM IN 2016 BENZENE SLOWDOWN IN NEW SUPPLY IN BZ MARKET Million Tons 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Source : IHS 1.69 0.99 2.26 0.85 1.05 FACTORS TO WATCH 1.06 1.09 0.71 2013 2014 2015 2016 Capacity addition Demand growth USD/MT 500 400 300 200 100 0 PX MOPJ 372 360 352 354 354 333 176 240 206 200 191 149 Benzene MOPJ Source: PRISM, Oct 15 Q1-15 Q2-15 Q3-15 Q4-15E 2015E 2016F - + China economic slowdown More benzene supply from naphtha cracker due to strong olefins margin Resume production of TPPI, JAC and Dragon Aromatics Strong gasoline demand may limit feedstock to aromatics Growing BZ import demand from US Startup of SM and Phenol in Asia 44
MEG : MARGIN TENDS TO REDUCE IN 4Q15 AND EXPECTED TO IMPROVE IN 2016 Thousand Tons 800 600 400 200 ม.ค.-15 Source: ICIS MARGIN SQUEEZED IN 2H 2015 ก.พ.-15 China s inventory surges from speculation but seasonal demand lower than expected ม.ค.-15 เม.ย.-15 พ.ค.-15 ม.ย.-15 ก.ค.-15 ส.ค.-15 ก.ย.-15 ต.ค.-15 MEG MARGIN TO BE IMPROVED IN 2016 พ.ย.-15 EXPECT SLIGHTLY TIGHT SUPPLY SITUATION IN 2016 Million Tons 2.0 1.5 1.0 0.5 0.0 Source: PCI, Nov 15 Global MEG New capacity vs Demand growth 1.72 1.78 1.55 1.41 1.07 0.77 1.25 1.35 2013 2014 2015 2016 Capacity - Coal Capacity - Normal Demand Chinese Coal-based industry will probably only run at 70%-75% FACTORS TO WATCH USD/MT 280.0 240.0 200.0 160.0 120.0 80.0 40.0 0.0 USD/MT 2015 2016 *MEG Margin = MEG (0.63 x Ethylene) MEG Margin 106 180 Ethylene 1,087 1,006 180 MEG Margin 134 154 106 69 68 Source: PRISM, Oct 15 Q1-15 Q2-15 Q3-15 Q4-15E 2015E 2016F + - China s policy to boost economy Polyester market growth MEG inventory in China Coal-based MEG technology in China Volatility of crude oil price 45
PHENOL/BPA : SLIGHTLY RECOVER IN 2016 46 PHENOL : LESS SURPLUS IN SUPPLY BIS-PHENOL A : BOTTOM OUT FROM 2H 2015 Thousand Tons 800 600 400 200 0 615 71 201 140 525 465 208 235 2013 2014 2015 2016 Capacity addition Demand growth Slightly recover from 2015 as less surplus supply Capacity rationalization in US causes limited volume to Asia, especially China Potential delay of Rabigh Refining (275 KTA) from Q4-16 Thousand Tons 600 400 200 0 385 30 183 55 468 273 98 375 2013 2014 2015 2016 Capacity addition Demand growth Less surplus from new capacity due to almost captive used SINOPEC SABIC Tianjin PC (240KTA) may be delayed startup due to the incident in Tianjin PHENOL AND BPA MARGINS TO BE SOFTENED IN Q4 FACTORS TO WATCH USD/MT High restocking demand and lower feed cost 500 + 402 400 318 347 281 300 239 276 296 Phenol P2F + Producers cut run due to low margin The delay of new supply Capacity rationalization 200 100 0 235-136 122 Pressure from new capacity and demand slowdown 244 214 BPA P2F Q1-15 Q2-15 Q3-15 Q4-15E 2015E 2016F Source: PRISM, Oct 15 - Volatility in feedstock prices Slowdown in downstream demand 46
Thank You For further information & enquiries, please contact our Investor Relations Team at IR@pttgcgroup.com 1 Thitipong Jurapornsiridee VP-Corporate Finance & IR Thitipong.j@pttgcgroup.com +662-265-8574 2 Puvadol Vasudhara IR Manager Puvadol.v@pttgcgroup.com +662-140-8712 3 Prang Chudasring IR Analyst Prang.c@pttgcgroup.com +662-265-8327 4 Supika Charudhanes IR Analyst Supika.c@pttgcgroup.com +662-265-8533 5 Chutima Jarikasem IR Coordinator Chutima.j@pttgcgroup.com +662-140-8713 47