ROADSHOW WITH UOB KAY HIAN : INVESTOR PRESENTATION

Transcription

1 ROADSHOW WITH UOB KAY HIAN : INVESTOR PRESENTATION SEPTEMBER 13, 2016

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 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.

3 Agenda PTTGC s BUSINESS OVERVIEW Recent Development STRATEGIC EXECUTION 2Q/16 FINANCIAL RESULTS 3

4 Agenda PTTGC s BUSINESS OVERVIEW Recent Development STRATEGIC EXECUTION 2Q/16 FINANCIAL RESULTS 4

5 Overview of PTTGC 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 the 3 rd Consecutive Year Incorporated on October 19, 2011 from the amalgamation of PTTAR and PTTCH 2015 Sales : $11.7 bn; Adj. EBITDA: $1.5 bn Asset size: $11.0 bn (as of Dec 31, 15) Number of employees: 6,113 persons Strong footprint in fast growing regions with 6 operating countries Shareholding Structure 4,509 mil shares Foreign Limit <=37% Historical Dividend Payment 1st Half 2nd Half Payout Ratio 71% 45% 45% 46% % Dividend Policy >=30% 49%

6 Agenda PTTGC s BUSINESS OVERVIEW Recent Development STRATEGIC EXECUTION 2Q/16 FINANCIAL RESULTS 6

7 Recent Development ARO II REF OLE III PHN II VCR FR PHN Aromatics II expansion fully operate in 2Q/2016 Olefin III unplanned shutdown due to thermal shock, 17 May 14 June VCR France start up HDI monomer unit in Aug Completion of Refinery planned turnaround for 2 months, May-June Phenol II COD beginning July Phenol s waste water storage tank damage from fire on 22 Aug but no damage to operating unit 7

8 Agenda PTTGC s BUSINESS OVERVIEW Recent Development STRATEGIC EXECUTION 2Q/16 FINANCIAL RESULTS 8

9 Strategic Direction Sustain Core To be a Leading chemical company for Better living Accelerate Growth levers Balance Business & Social Value Regain Competitiveness Project MTP retrofit Unlock feedstock constraint Project MAX Improve productivity Project Asset Injection Reduce complexity & Maximize integration International hub Performance chemicals Green business Sustainable development Effective CSR programs Stakeholder management Transform toward diversified business 9

10 Sustain Core : MTP Retrofit Unlock feedstock constraint Project Scope Build new Cracker 500 KTA ethylene for flexible feed cracker to utilize internal naphtha Maximize utilization of the existing utilities and support facilities to reduce investment cost Project Update Issued invitation to bid (ITB) to license contractor and will receive technical and commercial proposal in 3Q Submitted BOI application and prepared for EIA/EHIA filing in November Continued market study to capture opportunity in olefins chain Timeline : Q/18 COD 2020 ITB Construction 10

11 Phase 1 : Top-Down Diagnostic Duration: 6 Weeks Sustain Core : Project MAX Improve productivity To streamline operation process, enhance efficiency, and cost saving in multi-dimension Area of improvement Procurement Plant Operation Supply Chain Maintenance Commercial Est. Benefit MUSD Phase 2 : Bottom up planning Duration: 12 Weeks Develop initiative with estimated benefit and implementation plan (IL III) This phase is conducted from early of June to end of August. Phase 3 : Transformation Implementation Duration: 18 Months Implement plan Apr-16 May-16 Jun-16 Jul-16 Aug-16 Capture quick win benefit for

12 Sustain Core : Asset Injection Reduce complexity & Maximize integration PTTGC Petrochemical Portfolio To review investment and supply chain that PTT hold to find synergies among Group operating asset and enhance competitiveness Propylene Chain Bio Plastic Service & Related 12

13 Accelerate Growth Lever : PO & Polyols Project Majority Majority Propylene Propylene Oxide (PO) Capacity : 200 KTA Ethylene Oxide (EO) PO Polyols Capacity : 130 KTA System House Capacity: 20 KTA Project Update Funding : Engaged financial advisor and lender advisors Submitted Information memorandum to potential lenders Marketing Plan PO Allocated Volume Polyols Sale Allocation 82% Reserved Volume 57% is Base Polyols Sales & Marketing : Completed PO & Polyols deep dive market survey with Toyota Tsusho and Sanyo Chemicals Completed sale & marketing strategy in 11 countries Ongoing development HOA for product offtake and distribution Merchant 18% Offtaker 35% JV Polyols 47% 33% 16% 7% 43% FEED & ITB & EIA : Issued ITB to potential EPC bidders Submitted EIA reports to Office of Natural Resources and Environmental Policy and Planning (ONEP) Timeline 2% JVA : Ongoing negotiation on key terms and development AOA 13

14 Accelerate Growth Lever : International Hub US Petrochemical Complex Project Overview Type: Capacity : Location : Key Criteria for FID Ethane Cracker Complex 1 MTA Ethylene HDPE 700 KTA (350 KTA x2) MEG 500 KTA EO 100 KTA Ohio, USA Investment cost justify investment return Enough ethane capacity with competitive pricing structure Partner can distribute products in N. America Project Update Growing in AEC Market PTTGC is diversifying its sales portfolio toward AEC market, especially CLMV. PTTGC targets to increase PE market share in CLMV from 6% in 2015 to 15% in 2020 as CLMV is a high growth market. Estimated Demand for PE Product (KTA) in 2015 Feedstock : Finalizing contract terms with specific names of ethane supplier Permit: Submitted air, water, and wetlands permit applications Partner : Received letter of intend (LOI) from 2 potential partners FEED : FEED contractors on schedule to deliver cost estimates within 4Q/16 Under economic uncertainty, PTTGC is carefully considering the investment through internal investment process Plan of PE Sales vol. in CLMV (KTA) A 2016E 2020E 14

15 Strategic Investment 11,000 10,500 MTP Retrofit 761 KTA 10,000 9,500 9,000 HDI Monomer 70 KTA Phenol II 405 KTA Aromatics 170 KTA mlldpe 400 KTA PO/Polyol 250 KTA 8,500 Existing Non Captive Upstream and Downstream HDI Deriv. 12 KTA 8, A 2016F 2017F 2018F 2019F 2020F

16 Agenda PTTGC s BUSINESS OVERVIEW Recent Development STRATEGIC EXECUTION 2Q/16 FINANCIAL RESULTS 16

17 2Q16 Business Unit s Performance (Unit: Million Baht) 2Q/2015 1Q/2016 2Q/2016 YoY % + /(-) QoQ % + /(-) 6M/2016 YoY % + /(-) Sales Revenue 111,169 80,764 65,543-41% -19% 146,307-30% EBITDA 16,055 9,515 10,119-37% 6% 19,634-26% EBITDA Margin (%) 14% 12% 15% 1% 4% 13% 0% Net Profit 8,974 4,707 4,924-45% 5% 9,632-34% EPS (Baht/Share) % 5% % Adjusted EBITDA* 13,784 9,789 7,938-42% -19% 17,727-30% Adjusted EBITDA Margin (%) 12% 12% 12% 0% 0% 12% 0% Note: * Adjusted EBITDA refers EBITDA excluding impact of oil stock value 2Q/16 Revenue and Adjusted EBITDA Structure 65,543 M.Baht 7,938 M.Baht % Adj. EBITDA Margin 2Q/2015 1Q/2016 2Q/2016 Business Unit : Refinery Aromatics Olefins and Derivative Green HVS 6 (3) (1) Average

18 2Q/2016 Income Statements Consolidated 2Q/2015 1Q/2016 2Q/2016 YoY QoQ 6M/2016 YoY H MB % MB % MB % % % MB % Sales Revenue 111, , , % -19% 146,307-44% Feedstock Cost (86,168) (78) (59,635) (74) (46,620) (71) -46% -22% (106,255) -52% Product to Feed Margin 25, , , % -10% 40,052-21% 1 Variable Cost (6,131) (6) (5,898) (7) (5,569) (8) -9% -6% (11,467) -13% 2 Fixed Cost (4,003) (4) (4,178) (5) (4,161) (6) 4% 0% (8,339) 8% 3 Stock Gain/(Loss) & NRV 2,271 2 (274) (0) 2, % 896% 1,907 40% 4 Gain/(Loss) Commodity Hedging (72) (0) 43 0 (0) (0) 100% -100% % 5 Other Income 1, , % 15% 2,102-18% 6 SG&A (2,384) (2) (2,285) (3) (2,379) (4) 0% 4% (4,664) -1% 7 Extraordinary Item N/A N/A 0 N/A EBITDA 16, , , % 6% 19,634-35% Depreciation & Amortization (4,062) (4) (4,141) (5) (4,158) (6) 2% 0% (8,299) 3% EBIT 11, , , % 11% 11,335-63% Finance Cost (993) (1) (822) (1) (834) (1) -16% 1% (1,656) -25% 8 FX Gain/(Loss) (1,235) (1) % -84% % 9 Shares of profit/(loss) from investments % -70% % 10 Income Tax Expense (932) (1) (623) (1) (380) (1) -59% -39% (1,003) -43% Net Profit 8, , , % 3% 9,642-52% Profit/(loss) attributable to: Owners of the Company 8, , , % 5% 9,632-52% Non-controlling interests (37) (0) 32 0 (21) (0) 43% -166% 10-87% Adjusted EBITDA * 13, , , % -19% 17,727-43% Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (excludes Inventory gain/(loss) and NRV) and Extraordinary Item 18 18

19 Strong Financial Position Statements of Financial Position THB 378 Bn THB 370 Bn Loan Type Debenture, 51% ST Bank Loan, 0% Cash +ST Investment CA Liab. IBD THB 98 Bn LT Bank Loan, 49% Interest Rate Currencies PPE Non CA As of Dec 31, 2015 As of Jun 30, 2016 Share Holder s Equity 56% Fixed 54% THB 44% Float 46% USD & Others Cost of long term debts ~ 4.16% (Include W/H Tax) Average loan life after refinancing Years THB Bn Repayment Profile EUR Loan USD Loan THB Loan USD Bond THB Bond Net IBD/EBITDA Key Financial Ratios NET IBD/Equity Jun Sep Dec Mar Jun % 6.10% 4.80% 4.27% Treasury policy Net IBD to EBITDA ratio of 2.4x Net IBD to Equity ratio of 0.7x 19 ROE ROA 8.99% 8.42% 6.62% 7.36% 6.95% 5.65% 30 Jun Sep Dec 1531 Mar Jun 16 19

20 2H16 Outlook Oil Market Demand & Supply is expected to be more balanced from less US production, while partially offset by entering of ME volume, Global demand growth in 2016 and 2017 are projected to be 1.4Mbbl/d and 1.0Mbbl/d. Projected average 2016 Dubai price to be $40 /bbl. Refinery Global refined product inventories will pressure until next year i.e. US gasoline stock has reached a peak of 5 years average at 240Mbbl. The export volume from Chinese tea pot refinery at peak around 300kbd in June. Nevertheless, due to T/A season in 3Q, this support correction in GRM in the near term. Aromatic PX spread seem to weaken from returning of S/D capacity and new supply enter to the market in late this year. G20 effect leads to slowdown in PTA and Polyester production in Sep but will recovery by restocking in Oct. BZ is stable from high demand in PHN and SM but offset by new capacity in 3Q, 462KTA from NEA. Olefins & Derivative HDPE price is foreseen to be maintain at around $1,144/T from weak demand and high PE inventory, especially from China, and HDPE-MOPJ at$751/t. Ethylene is tight supply from demand of LDPE, especially in NEA. MEG market was unchanged with high inventory level and supply surplus.

21 Thank You For further information & enquiries, please contact our Investor Relations Team at 1 Thitipong Jurapornsiridee VP-Corporate Finance & IR Jittasak Soonthornpan IR Manager Jittasak.s@pttgcgroup.com Prang Chudasring IR Analyst Prang.c@pttgcgroup.com Nattchanon Chawinsittangkul IR Analyst Nattchanon.c@pttgcgroup.com Pantaree Nantanakom IR Analyst Pantaree.n@pttgcgroup.com Chutima Jarikasem IR Coordinator Chutima.j@pttgcgroup.com