Analyst Meeting Presentation 2Q/12 Operating Results. August 16, 2012 PTT Auditorium, Bangkok

Transcription

1 Analyst Meeting Presentation 2Q/12 Operating Results August 16, 212 PTT Auditorium, Bangkok 1

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 anyforward looking statements. Forward lookingstatementsrepresentestimatesandassumptionsonlyasofthedatethatthey 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 lookingstatements,andthe estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 2

3 Agenda Highlights Market Outlook 2Q/12 Financial Results Conclusion Appendices 3

4 Business Environment Highlights Global economic recovery was still at risk, and Eurozone economies remained in a precarious situation. Growth in emerging economies slowed down amid key concerns over global economic recession Crude oil prices tumbled, governed more by sentiment rather than fundamentals i.e. ease of concern over supply shortage in oil producing countries, uncertainty in Euro debt crisis Petrochemical demand softened amid weak demand among end users, while supply was reduced from scheduled maintenance and production slowdown THB currency remained volatile against USD due to the uncertainty of global economic outlook 4

5 Key Developments Highlights May 212 Mr. Anon Sirisaengtaksin joined as the new CEO in May 1, 212 Closing of Vencorex Holding acquisitions on May 31, 212 PTTGC acquired 51% of the shares in Perstorp Holding France SAS in the amount of Euro 121 million Renamed the purchased entity from Perstorp Holding France SAS to VENCOREX Holding Closing of NatureWorks acquisitions on May 31, 212 PTTGC acquired 5% of the shares in NatureWorks in the amount of USD 15 million Signed Head of Agreement with Petronas and Itochu under Petronas Rapid Project for the feasibility study to expand downstream product portfolio the study targets to complete by June 213 June 212 Map Ta Phut Case: TOCGC s Expansion The Supreme Administrative Court, on June 28, 212, passed a judgment which released TOCGC s expansion project from suspension list. An environmental impact assessment report for this project has been submitted to the authority and PTTGC is currently seeking IEAT approval July 212 Kick off 1 SAP Project The Company has been smoothly running 3 SAP since the amalgamation and currently in the process of achieving 1 SAP project which targets to finish by 214 Integration Management Office (IMO) has completed the overall integration process 5

6 Strategic Moves Highlights To prepare for unfavorable circumstances arisen from Euro debt crisis Adopted a stress test program among PTT group to establish a mitigation plan Company s austerity program cut 5 1% OPEX in preparation of unexpected circumstances Liquidity program : S T working cap of THB 3,85 million and L T committed THB 46,552 million To be benchmarked in the 1 st quartile of Philip Townsend and Solamon Energy Corporation for the 4 aspects of operational excellence within 22 Efficiency Reliability Safety Cash Cost To complete one single business process and information platform by 214 One SAP and IPACK (Financial consolidation information package) Single and streamlined business process To study together with McKinsey&Co on firms competitiveness Investment under study > 8 projects, of which 4 projects under screening process and approximately 3 projects under feasibility study Leadership Focus Align newly amalgamated entities to grow in the same integrated direction Establish strong fundamentals to support future investment 6

7 Business Operation Highlights Highlights 2Q/12 performance driven by volume while market was weak 2Q/12 (MB) YoY % QoQ % Sales Revenue 139,241 5% 4% EBITDA 6,75 57% 54% Adjusted EBITDA* 12,892 1% 15% Net Profit 851 9% 91% Ending Dubai Crude (USD/BBL) 93 13% 23% 7 * Adjusted EBITDA = EBITDA excluding Stock Gain/(Loss) and NRV

8 Adjusted EBITDA Margin Highlights Improving Margins QoQ but down YoY 2Q/12 % 2Q/11 % 1Q/12 % Refinery 3% 4% 2% Aromatics 5% 2% 5% Olefins and Derivatives 27% 29% 26% PTTGC Adjusted EBITDA Margin 9% 11% 8% 8

9 Highlights Feedstock Pricing Formula Adjustment 212 Gas Price adjustment rationale Structural Change of Gas from Higher E&P Cost, and, Higher long term crude projection Current gas feedstock pricing with linear relationship (ax + b) no longer reflects equal IRR Assumptions Assumptions: Crude price assumption range of 7 13 USD/BBL Investment cost, production cost and sales expenses based on global standard (Foster Wheeler and CMAI) Accounted for future increase in E&P cost from the existing sources. Accounted for changes in product price movement Principle of the profit sharing basis preserved Results from the Adjustment Increased PTTGC s current gas cost by 4 USD/ton or 8%, effective August 1, 212 Extend contract terms expiring year 216 to be expired year 22, other contracts expiring after 22 remain the same PTTGC remains PTT s Petrochemical Flagship, reflected in downstream derivative expansion support including asset injections and gas supply commitment for Debottleneck project 9

10 Dubai Crude Oil prices pressured by economic slowdown but minimized by ME politics Market Outlook USD/BBL USD/BBL Gasoline 95-Dubai Jet-Dubai Diesel-Dubai Fuel Oil-Dubai Dubai Crude Gasoline 95 Jet Diesel Fuel Oil USD/Barrel Dubai Crude Gasoline Dubai Jet Dubai Diesel Dubai Fuel Oil Dubai Source: PIRA, May 212

11 Olefins Prices to decline but eased by shutdowns and seasonal demand Market Outlook USD/Ton 1,6 1,4 1,2 1, Unit : KMT ,251 1, Fushun PC China 8 KMT Q1 1 to Q3 12 Daqing PC China 6 KMT Q1 11 to Q3 12 1,281 1,284 1,263 1,227 Saudi Polymers Saudi 1,2 KMT Q3 11 to Q3 12 Short term Price Forecast 1, Sichuan PC China 1, KMT Q3 11 to Q1 13 ExxonMobil SG 1, KMT Q3 11 to Q1 13 SINOPEC Wuhan CH 8 KMT Q1 11 to Feb Kavyan PC Iran 1, KMT Q1 13 to Q1 14 1,15 1,15 1Q/12 2Q/12 3Q/12 4Q/12 Long term Supply/Demand Shanghai PC China 6 KMT Q3 12 to Q1 14 Ilam Iran 458 KMT Q1 12 to Q1 15 Ilam Iran 458 KMT Q1 12 to Q America Europe Middle East China Other Asia Additional demand Short Term Olefins prices expected to decline in 3Q/12 due to lower crude oil prices and additional supplies in China and Middle East amid the uncertain global economic and energy outlook. However the market will be eased by 1) scheduled maintenance of crackers of which estimated 1 15% of total Asia ethylene capacity will be lost and, 2) improve demand due to peak manufacturing season towards end 3Q/12 Additional ( ) (Unit : MMT) Supply Demand Source: CMAI July 212

12 Polyethylene Short term weak demand, expected improving margin in long term Market Outlook USD/Ton 1,6 1,4 1,2 1, Unit : KMT Short term Price Forecast 1,395 1,387 1,391 1,362 1,35 1,295 1,232 1,228 1,318 1,21 1, ,253 1, Q/12 2Q/12 3Q/12 4Q/12 Fushun PC China 575 KMT Q2 12 to Q3 12 Daqing PC China 275 KMT Q2 11 to Q3 12 Saudi Polymers Saudi. 1,1 KMT Q3 11 to end Q3 12 HDPE Long term Supply/Demand ExxonMobil Singapore 325 KMT Q3 11 to canceled OPAL India SINOPEC Wuhan China 3 KMT Q1 11 to Feb KMT Q1 13 to Q America Europe Middle East China Other Asia Additional demand Short Term Strong buying resistance from end use producers due to squeezed margins and debt crisis in Eurozone will weigh on PE demand. PE supply from Asia and Middle East will be less due to schedule maintenance and high manufacturing season since end 3Q/12 Additional ( ) (Unit : MMT) Supply Demand Source: CMAI July 212

13 LLDPE & LDPE New Capacities and Closures Market Outlook ExxonMobil SG 975 KMT Q1 11 to Q4 12 Daqing PC China 275 KMT Q2 11 to Q3 12 LLDPE Long term Supply/Demand SINOPEC Wuhan China 3 KMT Q1 11 to Feb 13 Sichuan PC China 3 KMT Q3 12 to Q4 13 Shanghai PC China 125 KMT Q3 12 to Q America Europe Middle East China Other Asia Additional demand LDPE Long term Supply/Demand Additional ( ) (Unit : MMT) Supply Demand Unit : KMT QAPCO Qatar 3 KTA Q1 12 to Q America Europe Middle East China Other Asia Additional demand Additional ( ) (Unit : MMT) Supply Demand

14 MEG Cautious buyers but expect to improve at year end Market Outlook USD/Ton 1,6 1,4 1,2 1, Unit : KMT Short term Price Forecast 1,237 1,167 1,13 1,41 1,251 1,184 1,15 1,15 1, Q/12 2Q/12 3Q/12 4Q/12 Tongliao Jinmei China 4 KTA Q1 13 to Q4 12 PetroChina China 38 KTA Q1 12 to postpone MEG Long term Supply/Demand Tongliao Jinmei China 4 KTA Q1 13 to Q3 13 Heyuan Chem China 5 KTA Q4 12 to Q3 13 Qianxi Coal Chem China 3 KTA Q3 13 to Q America Europe India Middle East China Other Asia Additional demand Short Term Most players are still keeping cautious given poor downstream Polyester demand amid uncertain global economic outlook. Buying sentiment is expected to be driven up from stronger demand in the downstream textiles and fabrics sectors in China from high manufacturing season in 3Q 4Q/12 Cotton price remains high from expected shortage in a near term due to draught in US and Pakistan, and flood in China Additional ( ) (Unit : MMT) Supply Demand Source: CMAI July 212

15 Paraxylene High cotton price helps stabilizing PX demand Market Outlook USD/Ton 1,8 1,6 1,4 1,2 1, MTon Thousands ,562 1, Short term Price Forecast 1, ,314 1, Q/12 2Q/12 3Q/12 4Q/12 Tenglong Aromatics1 China 8 KTA Q3 12 to Q4 12 Tenglong Aromatics2 China 8 KTA Q2 12 to Q3 12 PX Long term Supply/Demand Sinopec Hainan Ref. China 6 KTA Q1 15 to Q4 14 PetroRabigh Saudi. 1,4 KTA Q3 15 to Q America Europe Middle East Asia Additional demand Short Term PX market in 2H/12 remains under pressure from squeezed PTA margins and high inventory levels among downstream Polyester market. Improved demand in the downstream textiles and fabrics sectors in China from high manufacturing season in Q3 Q4. Price will still be driven by high cotton price inline with views on MEG Additional ( ) (Unit : MMT) Supply Demand Source: CMAI July 212

16 Benzene Less surplus due to refineries shutdown in US Market Outlook USD/Ton 1,4 1,2 1, Unit : KMT ,18 1, Short term Price Forecast 1, ,71 1, Q/12 2Q/12 3Q/12 4Q/12 Daqing PC China 15 KTA Q1 13 to Q3 12 BZ Long term Supply/Demand Tenglong (Dragon) China 229 KTA Q3 12 to Q3 13 Anqing PC China 54 KTA Q3 12 to Q1 13 Samsung Total PC S. Korea 422 KTA Q4 14 to Q Nghi Son Vietnam 246 KTA Q1 15 to Q3 16 Short Term Supply continue to be short due to shutdown of refineries in the US Naphtha crackers in Europe are expecting to operate at low level which resulted in decreased supply of pygas Demand of BZ weaken from uncertain global economic fundamentals Additional ( ) (Unit : MMT) Supply Demand America Europe Middle East China Other Asia Additional demand 16 Source: CMAI July 212

17 Oil Price Price Movement & Crack Spread 2Q/12 Financial Results USD/BBL Dubai ULG 95 Jet Gas Oil Fuel Oil Dubai: 78 USD/bbl 211 Dubai: 16 USD/bbl YTD Dubai: 11 USD/bbl 2 1Q/1 2Q/1 3Q/1 4Q/1 1Q/11 2Q/11 3Q/11 4Q/11 1Q/12 2Q/12 Dec 9 Mar 1 Jun 1 Sep 1 Dec 1 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun Dubai 17 6

18 Refinery Intake, Sales, and Margin 2Q/12 Financial Results Market GRM Hedging Gain/(Loss) Stock Gain/(Loss) Net NRV Q/11 1Q/12 2Q/ Q/12 Acct. GRM Total intake increased 16% YoY and 1% QoQ from additional CR volume Maximized condensate residue splitter hence yielded higher gasoil Market GRM of 4.32 USD/BBL but registered stock loss (incl NRV) of 8.79 USD/BBL +

19 Aromatics Price Movement & Spread 2Q/12 Financial Results USD/Ton Condensate Erawan Naphtha MOPJ BZ Spot Korea PX FECP , Nap J: 724 USD/ton 21 Cond: 651 USD/ton 211 Nap J: 938 USD/ton 211Cond: 926 USD/ton 1Q/1 2Q/1 3Q/1 4Q/1 1Q/11 2Q/11 3Q/11 4Q/11 1Q/12 1Q/12 Nap J: 1,21 USD/ton 1Q/12 Cond: 1,6 USD/ton Dec 9 Feb 1 Apr 1 Jun 1 Aug 1 Oct 1 Dec 1 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12 Condensate 2Q/12 Nap J: 893 USD/ton 2Q/12 Cond: 93 USD/ton PX FECP Condensate Q/1 2Q 3Q 4Q 1Q/11 2Q 3Q 4Q 1Q/12 2Q BZ Spot Korea Condensate Q/1 2Q 3Q 4Q 1Q/11 2Q 3Q 4Q 1Q/12 2Q 19

20 Aromatics Intake, Sales, and Margin 2Q/12 Financial Results BTX Rate 9% improved YoY, QoQ from higher BTX production Market P2F of 191 USD/ton, higher 38% YoY from higher discount on feedstock cost 2 *Brent Dtd 2Q/12 18 USD/BBL 2Q/ USD/BBL

21 Olefins Feedstock Breakdown 2Q/12 Financial Results Unit: K Ton 1% % 8% 7% 6% 5% 82% 83% 78% 82% 86% 89% 93% 84% 88% Gas 4% 3% 2% 1% % 18% 22% 17% 18% 14% 16% 11% 12% 7% 2Q/1 3Q/1 4Q/1 1Q/11 2Q/11 3Q/11 4Q/11 1Q/12 2Q/12 Naphtha Feedstock volume remained the same as in 1Q/12 at 883 Kton with 88% naphtha feed and 12% gas feed. The Company s I 4/1 naphtha cracker operated at 71% utilization rate 21

22 Polyethylene and MEG Price Movement and Spread 2Q/12 Financial Results USD/Ton 2Q/12 2Q/11 1Q/12 HDEP 1,376 1,389 1,395 LLDPE 1,342 1,38 1,318 LDPE 1,349 1,683 1,391 22

23 Olefins and Olefins Derivatives Sales Volume and U Rate 2Q/12 Financial Results Ton Ton Ton 25, 2, 15, 1, 5, 82% 86% 89% 211, , ,688 2Q/11 1Q/12 2Q/12 1% 8% 6% 4% 2% % 22, 2, 18, 16, 14, 12, 1, 12% 13% 99% 11% 1% 8% 23,46 6% 181, ,455 4% 2% % 2Q/11 1Q/12 2Q/12 15, 13, 11, 9, 7, 5, 3, 1, (1,) 1% 77% 6% 98,715 61,171 69,52 2Q/11 1Q/12 2Q/12 1% 8% 6% 4% 2% % Olefins U Rate HDPE U Rate LLDPE U Rate Ton 65, 6, 55, 5, 45, 4, 35, 3, 25, 2, 98% 82% 71% 59,724 54,184 5,331 2Q/11 1Q/12 2Q/12 1% 8% 6% 4% 2% % Ton 1, 8, 6, 4, 2, 8% 85% 48% 89,516 54,425 68,914 2Q/11 1Q/12 2Q/12 1% 8% 6% 4% 2% % LDPE U Rate MEG U Rate 23

24 Phenol and BPA Price Movement and Spread 2Q/12 Financial Results BZ Spot Korea BPA Phenol 21 Phenol 1,622 $/ton 211 Phenol 1,717 $/ton 1Q/12 Phenol 1,484 $/ton 21 BPA 1,945 $/ton 21 BPA 2,11 $/ton 1Q/12 BPA 1,69 $/ton 2Q/12 Phenol 1,442 $/ton 2Q/12 BPA 1,653 $/ton Dec 9 Feb 1 Apr 1 Jun 1 Aug 1 Oct 1 Dec 1 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12 Phenol (BZ*.88) Sales Volume and U Rate 1,5 1, , Q/1 2Q 3Q 4Q 1Q/11 2Q 3Q 4Q 1Q/12 2Q BPA (Phenol*.85) Q/1 2Q 3Q 4Q 1Q/11 2Q 3Q 4Q 1Q/12 2Q Phenol BPA Phenol U Rate BPA U Rate 7, 6, 119% 97% 122% 5, 26,326 12,81 29,16 4, 75% 44,77 82% 3, 32,346 31,81 2, 1, 27% 2Q/11 1Q/12 2Q/12 Remark: BPA started commercial operation in April % 12% 1% 8% 6% 4% 2% % 24 24

25 Revenues Breakdown 2Q/12 Financial Results Petrochemical 53% Petrochemical 41% Petrochemical 44% Green Chemical, 3% Others, 4% Green Chemical, 2% Phenol, 3% Others, 5% Green Others, 5% Chemical, 2% Phenol, 4% Olefins and Derivative, 21% Aromatics, 28% Refinery, 41% Phenol, 3% Olefins and Derivative, 2% Aromatics, 18% Refinery, 52% Olefins and Derivative, 2% Aromatics, 21% Refinery, 48% 2Q/11 1Q/12 133,22 MB 133,666 MB 2Q/12 139,241 MB 25

26 Adjusted EBITDA Breakdown (Exclude Stock Gain/(loss) & NRV) 2Q/12 Financial Results Green Chemical, 2% Phenol, 1% Petrochemical 72% Others, 9% Petrochemical 75% Petrochemical 71% Green Chemical, 3% Refinery, 17% Green Phenol, 2% Chemical, 2% Aromatics, 4% Others, Others, 8% Phenol, 1% Refinery, Refinery, 15% 2% 17% Olefins and Derivative, 58% Olefins and Derivative, 62% Aromatics, 11% Olefins and Derivative, 58% Aromatics, 11% 2Q/11 1Q/12 2Q/12 14,257 MB 11,21 MB 12,892 MB 26

27 Statements of Income Consolidated 2Q/12 Financial Results 2Q/212 2Q/211 1Q/212 YoY QoQ M. Baht % M. Baht % M. Baht % M. Baht % M. Baht % 1 Sales Revenue 139, , , ,39 5 5, Feedstock Cost (118,78) (85) (111,996) (84) (114,69) (86) 6,82 5 3, Product to Feed Margin 21, , ,57 14 (43) () 2, Variable Cost (3,826) (3) (2,373) (2) (2,966) (2) 1, Fixed Cost (3,58) (3) (2,986) (2) (3,26) (2) Stock Gain/(Loss) & NRV (6,187) (4) 1, ,49 3 (7,37) (623) (9,596) (281) 7 Gain/(Loss) Hedging Commodity 32 (64) () Other Income 1, , SG&A (2,522) (2) (2,117) (2) (2,478) (2) EBITDA 6, , ,61 11 (8,735) (57) (7,95) (54) 11 Depreciation & Amortization (3,697) (3) (3,278) (2) (3,527) (3) EBIT 3,8 2 12, ,83 8 (9,154) (75) (8,75) (73) 13 Financing Expenses (Net Interest Earned) (1,373) (1) (1,428) (1) (1,325) (1) (55) (4) FX Gain/(Loss) (1,281) (1) (391) () 1,36 1 (89) (228) (2,317) (224) 15 Shares of gain/(loss) from investments (42) () (14) (12) Corporate Income Tax 532 (956) (1) (683) (1) 1, , Net Profit before Minority ,52 7 1,69 8 (8,515) (9) (9,82) (9) 18 Earning Attribute to Minorities (136) () (724) (1) (217) () (588) (81) (81) (37) 19 Net Profit , ,852 7 (7,927) (9) (9,1) (91) 2 Adjusted EBITDA 12,892 14,257 11,21 (1,365) (1) 1,

28 Statements of Financial Position Consolidated December 31, 211 June 3, 212 2Q/12 Financial Results Cash+ ST Inv. 22,66 Liab. 44,347 Cash+ ST Inv. 22,524 Liab. 49,832 CA 82,631 PP&E 235,343 Loans 12,165 CA 94,6 PP&E 238,69 Loans 122,595 Financial Ratio 2Q/212 1Q/212 ROA 5.37% 7.53% ROE 9.62% 13.22% Net IBD / Equity Net IBD / EBITDA Equities 28,454 Equities 217,922 Non CA 32,387 Non CA 35, ,967 MB 39,348 MB 28

29 PTTGC Repayment Schedule (after Refinancing) 2Q/12 Financial Results Unit : Million Baht 12,165 91,571 (76%) 28,594 (24%) PTTGC Debts ~ Bt bn THB USD & Foreign 122,595 88,822 (73%) 33,773 (27%) 211 Q2 212 December 31, 211 June 3, June 12 Debt Structure & Cost Cost of long term debts ~ 5.1% (Include W/H Tax) % Total fixed rate long term debt ~ 54% (THB fixed rate debt ~ 42%, Int. ~ 5.4%, USD fixed rate debt ~82%, Int. ~ 5.3%) Average loan life after refinancing 4.6 Years Unit : Million Baht 3, 25, 2, 15, 1, 5, Repayment Schedule as at 3 June 12 PTTGC PTTUT PPCL Others

30 Recap and Looking Forward Conclusion Dedication to best in class execution of the integration and strategic plan Value enhancing investment plan designed to improve profitability and develop competitive advantages Petrochemical feedstock cost increase mitigated by PTT s support for downstream derivatives expansion and their reinforced commitment to supply natural gas feedstock for the Company s debottleneck project Feedstock price agreement underlines the status as PTT's Petrochemical Flagship with strong strategic linkages and attractive business co operation opportunities Commitment to protect and maintain credit ratings through disciplined financial policy and prudent investment decisions 3

31 Thank You 31

32 Change in Calculation Method Refinery Business Appendices Previously, products internally transferred within the companies were booked at cost while now determined on a market basis. Revised information on market GRM and market P2F starting from 1Q/211 to 4Q/211 for future reference and consistency Before: GRM Margin on Net Intake Current: GRM Margin on Total Intake 32

33 Change in Calculation Method Aromatics Business Appendices Before: P2F Margin on Net External Sales Current: P2F Margin on Net BTX Sales 33