NDR HK/Singapore with Credit Suisse 5-7 Sep 2016

Transcription

1 NDR HK/Singapore with Credit Suisse 5-7 Sep

2 1 Contents Overview Q2 & 1H/16 Performance Outlook 2H/16

3 Oil Balance Thailand: Jan - Jun 2016 Adequate refining capacity maintains the stability of supply Supply Production Sales Import (78%) 934 KBD Imported Refined Petroleum Products 81 KBD Domestic Crude/ Condensate 853 KBD Total Refining Capacity in Thailand: 1,097 KBD Refined Products 1039 KBD* Crude/ Indigenous (22%) Condensate 266 KBD 242 KBD PTT s Associated Refineries : 635 KBD (TOP, PTTGC, IRPC) Refined Products 160 KBD 946 KBD (**) Export Other Refineries : 462 KBD (SPRC,ESSO, BCP) Crude Export 24 KBD 184 KBD Source: PTIT Remark : (*)Refined product from refineries = 936 KBD, including domestic supply of LPG from GSPs and Petrochemical Plants = 103 KBD (**) Not included Inventory KBD = Thousand Barrels per day 2

4 Natural Gas Balance: Jan Jun 2016 Main driver of the Thai economy Supply Production Sales Gulf of Thailand (70%) Others, 42% Chevron, 28% PTTEP, 30% Onshore (3%) 3,347 MMSCFD Bypass Gas 865 MMSCFD 6 GSPs Total Capacity 2,740 Actual Heat 147 MMSCFD Ethane/ Propane/ LPG/NGL 884 MMSCFD (19%) LPG/NGL Petrochemical Feedstock (12%) Industry Household Transportation (7%) Import (27%) Methane 1,599 MMSCFD Power (61%) Industry (14%) Myanmar 66% LNG 34% 1,284 MMSCFD NGV (6%) Remark: MMSCFD = Million Cubic Heating Value 1,000 Btu/ft 3 3

5 PTT is Thailand s Largest Energy Company PTT Public Limited Company ( PTT ) Largest company on Thai Stock exchange Market cap ~US$50.0bn 1 or ~ THB 1.8 trillion Group companies: 12.8% 1 of Thai Stock Exchange market capitalization Majority owned by Thai government (66%) 51% by Ministry of Finance 15% by Vayupak Fund Fully integrated and highly diversified over the entire O&G value chain International exploration and production business with 738 mmboe of proved reserves in 2015 Sole operator and owner of gas transmission pipelines and GSPs in Thailand Largest refinery group in Thailand with stakes in 3 of 6 refineries in the country Largest petrochemical producer group in Thailand with stakes in 6 of 8 major petrochemical plants Leading oil marketing business with 1,469 retail stations and 40% 2 of market share by volume International oil trading business having traded 81.3 bn liters 3 in 2015 Coal business assets in Indonesia, Madagascar, and Brunei New Power Flagship (GPSC) to capture opportunity in neighboring ASEAN countries 1 As of 30 June 2016 : Avg. BOT selling rate USD/THB of As of 30 June For the year 2015 Robust revenue and Net Income growth since IPO (MMUSD) Revenue Net Income 12, % 19% 81% 142% -42% IPO International and local recognition 180 th in th in th in th in 2011 Thailand best borrower award 2014 Best CEO Best CFO Best Managed Company Best Corporate Governance Best Investor Relations Best Corporate Social Responsibility Best Commitment to Strong Dividend Policy SET Awards CAGR -1% Platts Top 250 Global Energy Company 24th Overall Global Performance in Asia of 2014 Top Corporate Governance Report Award 2010 & 2011 Best Corporate Social Responsibility Awards 2011 & ,922 PTT Affiliate 146 th Fortune Global 500 in rd in th in st in th in 2012 Dow Jones Sustainability Index (DJSI) DJSI Member (Listed in 2011) 4

6 PTT s Strategic Importance to Thailand Ministry of Finance holds majority stake in PTT PTT ratings at Thai sovereign level Public 34% Foreign 15% Thai 19% Thai Ministry of Finance 51% Kingdom of Thailand FC Baa1 BBB+ BBB+ A- PTT FC Baa1 BBB+ BBB+ A- Vayupak Fund 1 15% PTT LC Baa1 BBB+ BBB+ A Note: As of March 2016 Largest market cap on the Thai Stock Exchange PTT PTTEP PTTGC TOP IRPC GPSC Total Others Market cap (BNUSD) % of SET 6.5% 2.4% 1.9% 0.9% 0.7% 0.4% 12.8% 87.2% Moody s rating Baa1 Baa1 Baa2 Baa1 Ba1 N.A. - - S&P rating BBB+ BBB+ BBB BBB BB+ N.A The Vayupak Fund is a registered investment management fund in Thailand in which the Government is a major unit holder. The Government has rights of first refusal with respect to any of our shares to be sold by the fund. Although the fund s shareholding may be considered to be beneficially owned by the Government under international standards, such shares are not considered to be owned by the Government for the purposes of Thai law or our compliance with certain of our debt covenants 5 2 As of 30 June 2016 : Avg. BOT selling rate USD/THB of

7 Downstream Upstream Intermediate Infrastructure 6 Our Major Businesses & Activities Business Areas Company PTT s holding (%) Activities E&P Coal Gas PTTEP 65.29% Exploration and Production PTT Energy Resources 100% Coal Business PTT PLC Gas Pipeline 100% Sole owner/operator of the Transmission pipeline S&M 100% Supply & Marketing of Natural Gas GSP 100% Extracting Hydrocarbon contents in NG for Petrochemical s feedstock Oil Marketing Oil Marketing 100% Retail service Stations and commercial Marketing Int l Trading Int l Trading 100% Import/Export/Out-Out trading of petroleum and petrochemical products Petrochemical & Refining PTTGC 48.91% Petrochemical Flagship TOP 49.10% Refinery Flagship IRPC 38.51% Integrated Refinery & Petrochemical Power GPSC 22.58% Power Flagship 6

8 Pride & Treasure of Thailand 7

9 1H/2016 Performance: Strong PTT operations offset weaker performances from affiliates MMTHB Extra Items Gain form BCP divestment in 1H15 48,548 Others Affi PTTGE loss on disposal of PT.MAR in 1H 15 Net Income 46,330 Petrochem & Refining Avg. A/C GRM decreased 26% BCP and SPRC divestment on Apr 15 & Dec 15 Extra Items Others Affi. BCP & SPRC P&R PTTEP 3,397 3,221 2,803 14,770 6,482 10,789 Margin 6,164 OPEX* 42,933 Operating Performance 5,342 9, ,901 FX & Other Int. & Derivatives Income CIT exp. Depre & & Other Amortization 48,548 3,918 14,143 5,405 25,082 22% 20% 17% 60% Lower Olefins performance from unplanned S/D of PTTGC Aromatics improved from spreads margin and volume increase PTTEP Lower avg. price 27% Unit cost reduced 28% from DD&A and project SAVE to be SAFE Sales vol. increase 3% Gas GSP margin improved from lower feed cost better NGV performance Increased TM performance Decreased Volume from GSPs major T/A PTT 15,657 Oil Vol. increased 5% mainly from increased demand from lower retail prices Performance increased from stock gain 1H/15 1H/16 *including petroleum exploration expenses and royalties Trading Margin increased 50% from domestic condensate Vol. decreased 14% from out-out transactions 8

10 Contents Overview Q2 & 1H/16 Performance Outlook 2H/16 9

11 E&P : QoQ while oil price edged up, NI was dented by hedging loss E & P Gas Oil & Trading Refining PetChem Others Product Prices Sales Volume Liquid ($/BBL) Weighted Avg. ($/BOE) Gas ($/MMBTU) % QoQ 31% HoH 4% QoQ 27% HoH 8% QoQ 24% HoH KBOED 330 3% QoQ 3% HoH Liquid Gas Q1/16 Q2/16 1H/15 1H/16 Q1/16 Q2/16 1H/15 1H/16 MMUSD Q1/16 Net Income (100%) % QoQ 22% HoH Q2/16 1H/15 1H/16 Recurring NI Non-recurring*** *** Includes Deferred tax from Functional currency, Current Tax from FX Revaluation, Gain/loss from Financial instruments, Gain/(loss)on FX, H1 incident Insurance Claim, and etc. Key Highlights QoQ Avg. selling price edged up by 4% due to rising oil price Sales volume decreased from Montara s lower production Recurring income rose from higher oil price, while Net Income declined, mainly from oil price hedging loss of $96m in Q2/16 HoH Avg. selling price declined significantly from slump in both oil and gas prices Sales volume increased from Arthit and Contract 4 Recurring net income declined mainly due to 27% lower in selling price, while non-recurring loss decreased from the help of FX gain in 1H/16 (vs. FX loss in 1H/15) 10

12 PTT EBITDA Breakdown by BU s: (Unit:MMTHB) Business Unit Q1/16 Q2/16 QoQ 1H/15 1H/16 HoH Gas- EBITDA 14,562 16,975 17% 22,945 31,537 37% S&M 1,365 2,028 49% 5,490 3,393-38% TM 8,431 8,364-1% 13,597 16,795 24% GSP 3,497 4,881 40% 5,010 8,378 67% NGV % -5,439-1,846 66% Others 2,206 2,610 18% 4,287 4,816 12% Oil- EBITDA 5,875 6,941 18% 8,540 12,816 50% Trading*- EBITDA 1,108 1,758 59% 1,815 2,866 58% Total** 21,545 25,674 19% 33,300 47,219 42% *MIS ** Included Gas & Oil subsidiaries 11

13 Gas BU: Pooled gas cost continues to fall, though NG volume declined from GSP s T/A E & P Gas Oil & Trading Refining PetChem Others $/MMBTU Fuel Oil* RHS 9.2 Avg. Pooled gas price NG Price VS FO LHS * MOPS HSFO 180 CST %QoQ %HoH FO 37% 45% Pooled Price 6% 27% 160 $/Ton Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 NGV Price/Sales Volume NG Customer Breakdown MMSCFD 6% QoQ 2% HoH 4,628 4,881 4,855 4, NGV (6%) Industry (14%) GSP (19%) SPP (17%) 894 1, IPP (21%) 1,075 1,081 1,213 1,078 EGAT (23%) Q1/16 Q2/16 1H/15 1H/16 Key Highlights THB/KG K.Ton/Day Vol. MMCFD 12.5 NGV Avg. price 5% QoQ % QoQ Q1/16 Q2/16 1H/15 1H/ % HoH 8% HoH QoQ Pooled gas cost continued to decline, while F/O price picked up NG sales volume increased from seasonally high power demand in summer and new SPP s, despite GSP #6 major T/A Lower NGV volume, notwithstanding slight drop in NGV price, due to demand switching to persistently-low-price gasoline HoH Overall NG sales declined from ESP and GSP#6 major T/A s and less gas call from EGAT NGV volume decreased, as a result of lower demand 12

14 Gas BU: Performance continues to improve, in almost all segments E & P Gas Oil & Trading Refining PetChem Others GSP Feed Cost vs Petroleum price USD/Ton 1,375 1,234 1, ,266 1,188 1,375 1,234 1,153 1,103 Q1/14 Q3/14 Q1/15 Q3/15 Q1/16 * Effective on February 2, 2015 ** Revised feed cost calculation from per sale volume to per GSP production volume MMTHB 14,562 2,206 2,610 3,497 4,881 Gas - EBITDA 16, % QoQ %QoQ %HoH HDPE 5% -12% LPG Ex-GSP -1% -9% Feed Cost -2% -20% ,945 4,287 5, ,816 8,378 13,597 16,795 8,431 8,364 5,490 3,393 1,365 2,028 (937) (909) (5,439) (1,846) Q1/16 Q2/16 1H/15 1H/16 1,153 HDPE % HoH 31, Q2/16 LPG Ex-GSP* Feed Cost** Others GSP TM S&M NGV kton 1, GSP Sales Volume 1% QoQ 1,473 3, , ,283 1,341 Q1/16 Q2/16 1H/15 1H/16 5% HoH Ethane (30%) NGL (11%) LPG (45%) Key Highlights QoQ S&M margin increased from improved performance on industrial sales, as a result of rising F/O price and declining gas cost GSP margin improved from better petchem prices and lowered feed cost, notwithstanding GSP#6 s major T/A and PTTPE s unplanned S/D Gas BU s EBITDA is better from improvement in almost all segments, despite GSP#6 s major T/A HoH S&M margin decreased as a result of lower gas price GSP s feed cost decline (-20%) more than its selling price (HDPE -12% & LPG -9%) helped boost GSP s margin TM margin increased from high TDC volume, while subsidies on LPG & NGV are virtually removed Hence, Gas BU s EBITDA continued to improve 2,965 9 Pentane (1%) 374 Propane (13%) 13

15 Oil BU: Demand continues to adjust, following price liberalization K Tons/day M.Litre 1,500 1, NGV - volume continues to fall despite price decline Sales Vol. Avg. Sales Vol. (K.Ton/day) Price (THB/Kg) Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Export Vol % -10% Gasoline - demand surged, as a result of price drop Export 4% -10% -50 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 E & P Gas Oil & Trading Refining PetChem Others Change Avg QoQ HoH Price % -3% THB/Litre Change Avg. QoQ HoH 50 Price 6% -8% M.Ton M.Litre 3,000 2,000 0 Vol. 2% 10% 1,000 0 LPG - demand (automobile) and import fall, following price liberalization Import Industry Auto Household Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Diesel - demand improved as price fall Sales vol Export THB/kg THB/Litre Change Avg. QoQ HoH Price -3% -15% Total vol. 2% -18% Import 41% -56% Industry 6% 14% Auto -1% -17% Household -6% -0.4% Change Avg QoQ HoH Price % -5% (10.00) Vol. -2% 4% (20.00) (30.00) (40.00) Export 8% -25% (50.00) Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 14

16 Oil BU : Better overall performance mainly from stock gain E & P Gas Oil & Trading Refining PetChem Others Petroleum Prices Contribution margin 1 /Sales volume 2 (Average Prices) USD/BBL Gasoline Diesel THB/Liter 33% QoQ MM Liter 2% QoQ 6,677 6, ,600 13,235 24% HoH 5% HoH Dubai MMTHB Stock Gain/Loss (MMTHB) Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Apr-16 May-16 Jun-16 5,875 4,996 6,941 5,976 QoQ HoH Oil 20% 58% Non-oil 10% 16% 8,540 6,953 12,816 10, ,587 1,844 Q1/16 Q2/16 1H/15 1H/ ,572 (1,269) 4,529 * EBITDA from Operating Oil - EBITDA Oil Non-Oil* Q1/16 Q2/16 1H/15 1H/16 (PTTGC T/A) 1 /Excluded Non-oil and stock gain/loss 2 /PTT only Key Highlights QoQ Increases in petroleum prices have led to high stock gain Sales vol declined slightly, mainly from LPG as customers continue to switch to gasoline Squeezed contribution margin mainly from - higher diesel imports from the effect of refinery T/A - lower margin for aviation fuel and lube Higher EBITDA mainly from higher stock gains HoH Sales volume increased mainly from higher demand following lower product prices Lower contribution margins mainly from higher diesel imports during PTTGC T/A in Q2 16 Higher EBITDA mainly from stock gains and increase in non-oil (Amazon +35% mainly from expansion +245 branches) 15

17 Trading BU: Performance improved from better domestic condensate margin Contribution Margin* E & P Gas Oil & Trading Refining PetChem Others Sales Volume NWS ($/BBL) Dubai ($/BBL) Contribution Margin (THB/Liter) Q1/16 Q2/16 1H/15 1H/16 * PTT only : FX Adjusted MMTHB 1,108 * PTT only : FX Adjusted Trading - EBITDA* 59% QoQ QoQ 24% 42% 38% 1,758 1,815 58% HoH 2,866 Q1/16 Q2/16 1H/15 1H/16 HoH 24% 35% 50% MM Liter 7% QoQ 18,549 17,168 41,314 35,717 Q1/16 Q2/16 1H/15 1H/16 Key Highlights 14% HoH QoQ Contribution margin improved mainly from domestic condensate margin, following higher crude price (Dubai of $43.2 in Q2/16 vs $30.4 in Q1) Volume decreased from less crude and condensate supply to PTTGC, due to planned S/D during May-Jun Better EBITDA performance, mainly due to - Gain from paper swap timing mismatch - Better domestic condensate margin HoH Margin improved mainly from domestic condensate following higher demands Sales volume declined, mainly from reduction in out-out trading volume supplied to Indonesia, following the Country s policy change since Q2/15 Better performance, from better domestic condensate margins & higher demand 16

18 Refining BU: GRM soften, but better Aromatics performance & stock gain help; NI lower from refineries divestment Dubai 30.4 Mkt GRM A/C GRM* Q1/16 Q2/16 1H/15 1H/16 Stock Gain/Loss Aggregated Intake (KBD) GRM/GIM Refinery Utilization 36.8 U-Rate (%) Q1/16 Q2/16 1H/15 1H/16 Aggregated U-Rate QoQ HoH A/C GIM USD/BBL 49% A/C GIM 7% A/C GIM* *A/C GRM and A/C GIM include effect from hedging gain/(loss) TOP IRPC E & P Gas Oil & Trading Refining PetChem Others QoQ HoH 1% Aromatics Production USD/Ton 80% 156 BZ-ULG95 3,014 4, Aromatics 80% 138 3,706 7, SPRC 1,933 6,991 8,068 75% 80% Q1/16 Q2/16 1H/15 1H/16 Unit : MMTHB 7,740 PX-ULG95 12% Net Income (100%) 48% 11,459 5% QoQ QoQ BCP IRPC TOP 27,719 39% 31% 19,199 6,720 10,727 12, Q1/16** Q2/16** 1H/15 1H/16** ** Sold out of BCP and SPRC 29% 324 HoH HoH 2% w/o BCP and SPRC 17

19 Petrochemical BU: Petrochemicals BU : Better Aromatics & stock gain partially offset weaken GRM/Olefins margins and refinery s T/A E & P Gas Oil & Trading Refining PetChem Others CDU U-Rate USD/BBL Mkt GRM 93% A/C GRM* Refineries QoQ HoH 35% ** 101% 64% % % BTX U-Rate USD/Ton BZ-Cond 90% Aromatics 83% QoQ 86% 87% 2% 13% % % PX-Cond HoH Stock Gain/Loss Net NRV Q1/16 Q2/16 1H/15 1H/ *A/C GRM include effect from hedging gain/(loss) **PTTGC s shutdown Olefins Q1/16 Q2/16 1H/15 1H/16 Aromatics Mkt P2F Net Income (100%) Mkt P2F 27% QoQ 20% HoH 81% 85% 92% Olefins 83% Unit : MMTHB U-Rate QoQ HoH QoQ HoH 16, % USD/Ton 1,868 5% 16% 11,956 1,282 1,246 12% 1,153 19% 1,128 1,103 1,082 18% 2, ,006 HMC 5,482 6, ,605 2, ,632 PTTGC HDPE PP 4,707 4,925 Price Price Others Q1/16 Q2/16 1H/15 1H/16 Q1/16 Q2/16 1H/15 1H/16 18

20 Other Businesses : Coal - SAR Continued under pressure from low coal price, despite cost improvements E & P Gas Oil & Trading Refining PetChem Others Avg. Selling Price* & Cash cost Sales Volume USD/Ton New Castle 51 Avg. Selling Price Total Cash Costs 52 QoQ 2% % 37 5% HoH 19% 23% 25% kton 2, ,446 24% QoQ 2, ,153 9% HoH 4,229 4, ,031 Sebuku 3,340 3,599 Jembayan Q1/16 Q2/16 1H/15 1H/16 *Calorific value ~ 5,400 5,800 Net income MMUSD 150% QoQ % HoH Q1/16 Q2/16 1H/15 1H/16 Q1/16 Q2/16 1H/15 1H/16 Key Highlights QoQ Selling price declined by 7% despite higher New Castle price, mainly due to contract price expired since Q1/16 Sales vol. increased by 24%, mainly from an effort to reduce high inventory to prevent quality degradation as a result of long-period storage Performance improved mainly from higher sales volumes and other operating income from mining services to third party HoH Cash cost declined by 25% from successful negotiation w/ contractors and reduction in fuel cost, following lower oil price Sales vol. increased from inventory reduction Performance dropped, mainly from lower coal price, despite reduction in production costs 19

21 Other Businesses : Power - GPSC Outstanding performance supported by higher sales volume E & P Gas Oil & Trading Refining PetChem Others Sales Volume GWh QoQ HoH 000 Ton 12% 2,795 2,487 12% Steam 1,475 8% 1,320 9% 1,107 1,197 Power MMBaht Net Income (100%) 55% HoH 1,557 21% QoQ 180 Dividend 1, ,377 Cogen : SPP 31.2% Q1/16 Q2/16 1H/15 1H/16 Renewable 2.3% Operating 1,376 MW Committed Capacity Combined heat: VSPP 0.4% Hydro Electricity 63% Combine Cycle : IPP 66.1% Cogen: SPP 32% Renewable 5% Under construction 546 MW Q1/16 Q2/16 1H/15 1H/16 Key Highlights QoQ Higher sales vol from higher demand of industrial customers as well as higher demand dispatched to EGAT during summer Lower NI, mainly from the absence of dividend income from RPCL amounting to THB 180m received in Q1/16 HoH Higher sales vol from higher demand from industrial customers and also COD of IRPC-CP in Q4/15 Higher NI as a result of higher demand from new and existing customers, received NI from NNEG of THB 51m (COD Jun 16), and better cost management 20

22 PTT Consolidated Performance: 1H/2016 Avg. Dubai (USD/BBL) Unit : MMTHB Revenue 42% QoQ 35% HoH ,051,357 23% HoH 807,387 9% QoQ 386, ,447 1H/15 1% 28% Revenue 6% 17% 48% P&R PTTEP 1H/16 Others 1% 29% Revenue 6% 19% 45% PTT - Oil & Trading Q1/16 Q2/16 1H/15 1H/16 PTT - Gas Others EBITDA 71,341 15% QoQ 82,150 3% HoH 158, ,492 2% 34% EBITDA 6% 14% 44% P&R PTT - Oil & Trading 32% 10% 1% EBITDA 20% 37% PTTEP Q1/16 Q2/16 1H/15 1H/16 PTT - Gas 5% HoH Others Net Income 5% QoQ 46,330 48,548 23,669 24,879 Q1/16 Q2/16 1H/15* 1H/16 * Included gain on BCP divestment and IRPC reverse allowance for doubtful debt 14% 12% Net Income 40% 34% PTTEP P&R 8% 11% 29% Net Income 52% PTT 21

23 Statement of Financial Position MMTHB 1,805,041 1,818,746 2,173,996 1% 2,152,472 Assets/Liabilities slightly decreased : Decrease in A/R from lower in product price and sales volume A/P Payment, loan repayment and bond buy back Cash & S/T Invest Other Current Assets Others Noncurrent Assets 346, , , , , , , , , ,738 Other Liabilities L/T Liabilities (incl. due within 1 yr) Net Debt/EBITDA Net Debt/Equity (0.1) YE15 1H/ PP&E 1,118,677 1,087,687 1,106,396 1,123,750 Total Equity PTT Ratings at Sovereign Level FC : Moody s (Baa1), S&P (BBB+), JCR (A-), FITCH (BBB+) 1 31 Dec June Sep LC : Moody s (Baa1), S&P (BBB+), JCR (A), FITCH (BBB+) 22

24 Dividend Policy & Historical Payments PTT is firmly committed to pay dividend at no less than 25% of net income 148.6% 32.4% 32.6% 29.8% 30.1% 30.3% 30.8% 33.0% 43.6% 40.4% 34.7% 34.9% 35.5% 40.0% 54.1% 25% PTT s minimum payout ratio 25% Baht / share % Dividend payout EPS DPS H/

25 PTT: CAPEX (PTT and Wholly Owned Subsidiaries) PTT plans to invest ~Bt 297bn ($8bn) during CAPEX revision Y2016: lower by ~ THB 7.5 bn mainly from Increase efficiency: Natural gas: Early completion & lower land cost Project cancellation/postponement: Natural gas: Terminated GSP capacity expansion, Postpone Hybrid NGL project Infrastructure: Delayed Offshore compressor By Strategy Green, 1% 2,969 JV & Investment in Subsidiaries 23% M&A and Oversea investment 8% By Business Unit LNG 15% R&D, Others 1% Infrastructure 55% 89, ,595 Energy Infrastructure 69% Oil & Trading 8% Gas 13% PTT 5-Years CAPEX Plan Bt 297 bn Infrastructure Investment in JV and its subs Head Office and Others Oil and International Trading Natural Gas 50,839 43,307* 20,612 18,741 10,967 10, , ,868 11,118 4, (revised) * budget approved by BOD on 17 Jun 16 67,514 68,517 58,306 32,983 34,649 46,042 29,008 17, ,106 5,466 13,245 13,586 4, ,850 3, , ,619 5,698 5, ,473 Unit: MMTHB 5 th pipeline & extension LNG, M&A and Investment Oversea 24

26 25 Contents Overview Q2 & 1H/16 Performance Outlook 2H/16

27 26 Summary: 2H/ Outlook Business 1H/2016 2H/2016 (Forecast) Gas Price ($/mmbtu) - Henry Hub - JKM Oil Price ($/bbl) Dubai Price 37.1 Range Range Reason Demand increase both export domestic New projects delay and supply disruption Decline in US oil output Oversupply remains but decreasing Geopolitics uncertainties Refinery Margin ($/bbl) Singapore GRM 6.37 Range 4-5 Gasoline crack spread decreased from global oversupply Petrochemical ($/ton) - Olefins (HDPE, PP) - Aromatics (PX, BZ) HDPE-Naphtha =751 PP Naphtha = 608 PX-Naphtha = 400 BZ-Naphtha = 224 HDPE-Naphtha = 750 PP Naphtha = 669 PX-Naphtha = 396 BZ-Naphtha = 211 Olefin Additional supply from Shell resumption New capacity in China pressure price Cracker turnaround in Q3 will support price PP seasonal demand will slightly pick up around Oct. Aromatics Tight supply from shutdown in Q2 supported 1H spread. Additional capacity from LOTTE Chem and JAC (Jurong Aromatics)

28 Strategic Thinking Session Make It Happen with Productivity & Innovation PTT market cap Customer-centric Disruptive Technologies S-Curve 2016 PTT Strategies Shape now Scale -up Rapid prototyping Incubate ExpresSo Express Solutions Learn Experiment + Act Be ready to jump Energy transformation Domestic resource decline Business Growth Top Quartile Performance Decide now Do now Electricity Value Chain LNG Value Chain Regional Growth Productivity Improvement Time

29 Social Enterprise: Business + Society 28 Upstream Waste Heat & Cold Energy Utilization Downstream Sustainable Coffee Sourcing Infrastructure Waste to Energy (Rayong)

30 29 Thank you PTT Public Company Limited Investor Relations Department Tel , Fax , ir@pttplc.com Website: Disclaimer The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that our assumptions are correct. Actual results may differ materially from those projected. Petroleum Reserves and Resources Information In this presentation, the Company discloses petroleum reserves and resources that are not included in the Securities Exchange and Commission of Thailand (SEC) Annual Registration Statement Form 56-1 under Supplemental Information on Petroleum Exploration and Production Activities. The reserves and resources data contained in this presentation reflects the Company s best estimates of its reserves and resources. While the Company periodically obtains an independent audit of a portion of its proved reserves, no independent qualified reserves evaluator or auditor was involved in the preparation of reserves and resources data disclosed in this presentation. Unless stated otherwise, reserves and resources are stated at the Company s gross basis. This presentation may contain the terms proved reserves, probable reserves, and/or contingent resources. Unless stated otherwise, the Company adopts similar description as defined by the Society of Petroleum Engineers. Proved Reserves - Proved reserves are defined as those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations. Probable Reserves - Probable reserves are defined as those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. Contingent Resources Contingent resources are defined as those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable. The reasons for non commerciality could be economic including market availability, political, environmental, or technological. 29

31 Debt Profile : Control Cost & Manage Risk Managed debt according to financial risk and policy Debt Portfolio Unit : MMTHB PTT Only Consolidated : Cost of debts ~ 4.67% : % fixed-rate ~ 72% : Avg. debt life ~ 8.15 years : Cost of debts ~ 4.48% : % fixed-rate ~ 69% : Avg. debt life ~ 7.28 years USD&Other THB 689, , , ,127 (44%) 256,588 (41%) 248,721 (41%) 288,545 83,985 (29%) 265, ,528 81,154 82, , , ,406 (71%) (31%) (69%) (32%) (68%) 384, , ,673 (56%) (59%) (59%) 31 Dec Dec Jun Dec Dec Jun Note : Data as of 30 Jun 16 (THB/USD = THB/JPY = ) Excluding liabilities from finance leases; Cost of debts includes withholding tax. Cost of debts, % fixed rate, and avg. debt life took into account the derivative transactions. Debt outstanding is reconciled with accounting. 30

32 Statements of Consolidated Cash Flows : 1H/16 Operating 1H/15 126,364 1H/16 130,434 Net Income 46,330 48,548 Changes in assets & liabilities 864 (8,267) Income Tax (32,429) (23,209) Non-Cash Adjustment 111, ,362 Investing 1H/15 (113,352) 1H/16 (107,256) CAPEX (PP&E, Intangible asset) (85,041) (58,938) Investment (Sub. &Affiliates) 13,938 (522) Current investment (52,030) (50,499) Dividend/Interest Received 5,474 4,791 Others 4,307 (2,088) Free Cash flow 13,012 23,178 Adjustment Financing (72,527) (59,297) Repayment Loans (53,802) (43,299) Interest paid (16,924) (16,130) Dividend paid (20,295) (22,107) Received from share issue 9, Received from loans/bonds 8,541 22,469 Others - (330) (2,032) (5,073) Beginning Cash and Cash Equivalents 234, ,978 Cash In/(Out) (61,547) (41,192) Ending Cash & Cash Equivalents Ending cash incl. S/T investment 172, , , ,032 31

33 Statements of Cash Flows (PTT Only) : 1H/16 Operating 1H/15 1H/16 21,834 36,730 Net Income 33,144 40,930 Changes in assets & liabilities (4,208) (2,526) Income Tax (1,968) (1,870) Non-Cash Adjustment (5,134) 196 Investing 1H/15 1H/16 (8,607) (26,556) CAPEX (PP&E, Intangible asset) (18,201) (11,864) Investment (Sub. &Affiliates) 11,424 (40) Current investment (3,541) (28,526) Dividend/Interest Received 12,422 16,196 Others (10,711) (2,321) Free Cash Flow 13,227 10,174 Financing (36,208) (28,323) Repayment Loans (16,765) (9,705) Interest paid (6,286) (7,194) Dividend paid (14,265) (11,424) Received from share issue Received from loans/bonds 0 0 1,108 0 Adjustment (0) (55) Beginning Cash and Cash Equivalents 58,018 67,525 Cash In/(Out) (22,981) (18,204) Ending Cash & Cash Equivalents Ending cash incl. S/T investment 35,037 49,321 58, ,727 32

34 PTT Group Performance : 1H/2016 (HoH) Unit : MMTHB Performance 100% % PTT holding Equity Method % PTT 1H2015 1H2016 HoH 1H2015 1H2016 HoH PTT Net operating Income 15,657 25,082 60% 15,657 25,082 60% E&P - PTTEP 9,928 8,286-17% 65.3% 6,482 5,405-17% Petrochemical 16,622 11,956-28% 7,578 5,634-26% - PTTGC 14,605 9,632-34% 49.3% 6,657 4,695-29% - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 2,017 2,324 15% % Refining 27,719 19,199-31% 11,082 8,509-23% Refining (Excluded SPRC & BCP) 18,795 19,199 2% 8,279 8,509 3% - TOP 10,727 12,479 16% 49.1% 5,180 5,832 13% - IRPC 8,068 6,720-17% 38.5% 3,099 2,677-14% - SPRC 6,991 - N/A 5.41%* 2,250 - N/A - BCP 1,933 - N/A 0%** N/A Others Business 7,063 6,660-6% 5,531 3,918-29% Inter - PTTER, PTTGE -2, % 100% -2, % Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 2,689 2,643-2% 2,397 2,372-1% Utilities -GPSC/ TP/ DCAP 1,673 2,369 42% % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 2,566 2,350-8% 2,393 1,684-30% Divestment 2,346 - N/A 2,346 - N/A Shared of Net Income from Affiliates 61,332 46,101-25% 30,673 23,466-23% 33 PTT Conso. Net Income 76,989 71,183-8% 46,330 48,548 5% *SPRC before disposed = 36%, **BCP divested in April

35 PTT Group Performance : Q2/2016 (YoY) Overview Performance Key takeaways Unit : MMTHB Performance 100% % PTT holding Equity Method % PTT Q2/15 Q2/16 YoY Q2/15 Q2/16 YoY PTT Net operating Income 9,019 13,115 45% 9,019 13,115 45% E&P - PTTEP 1,312 2, % 65.3% 866 1, % - PTTGC 8,974 4,925-45% 49.3% 3,973 2,453-38% - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 740 1, % % Petrochemical 9,714 6,474-33% 4,274 3,062-28% - TOP 6,229 7,753 24% 49.1% 2,963 3,466 17% - IRPC 4,236 3,706-13% 38.5% 1,528 1,431-6% - SPRC 4, % 5.41%* 1, % - BCP % 0%** % Refining 15,751 11,459-27% 6,342 4,897-23% Inter - PTTER, PTTGE -1, % 100% -1, % Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 1,618 1,294-20% 1,355 1,144-16% Utilities -GPSC/ TP/ DCAP 819 1,058 29% % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 3,413 1,290-62% 3,407 1,017-70% Others Business 4,169 3,288-21% 3,245 2,071-36% Shared of Net Income from Affiliates 30,946 23,882-23% 14,727 11,764-20% PTT Conso. Net Income 39,965 36,997-7% 23,746 24,879 5% *SPRC before disposed = 36%, **BCP divested in April

36 PTT Group Performance : Q2/2016 (QoQ) Unit : MMTHB Performance 100% % PTT holding Equity Method % PTT Q1/16 Q2/16 QoQ Q1/16 Q2/16 QoQ PTT Net operating Income 11,967 13,115 10% 11,967 13,115 10% E&P - PTTEP 5,625 2,661-53% 65.3% 3,671 1,734-53% Petrochemical 5,482 6,474 18% 2,572 3,062 19% - PTTGC 4,707 4,925 5% 49.3% 2,242 2,453 9% - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 775 1, % % Refining 7,740 11,459 48% 3,612 4,897 36% - TOP 4,726 7,753 64% 49.1% 2,366 3,466 46% - IRPC 3,014 3,706 23% 38.5% 1,246 1,431 15% Others Business 3,372 3,288-2% 1,847 2,071 12% Inter - PTTER, PTTGE % 100% % Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 1,349 1,294-4% 1,228 1,144-7% Utilities -GPSC/ TP/ DCAP 1,311 1,058-19% % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 1,060 1,290 22% 667 1,017 52% Shared of Net Income from Affiliates 22,219 23,882 7% 11,702 11,764 1% PTT Conso. Net Income 34,186 36,997 8% 23,669 24,879 5% *SPRC before disposed = 36%, **BCP divested in April

37 Data as of 30 June 2016 E&P and Gas Business Group Oil Business Group Petrochemicals & Refining Business Group Subsidiaries Consolidate PTT Exploration & Production Plc. PTTEP 65.29% PTT Natural Gas Distribution Co., Ltd. PTTNGD 58.00% PTT LNG Co., Ltd. PTTLNG % Thai Oil Power Co., Ltd.* TP 26.00% Global Power Synergy Co., Ltd* GPSC 22.58% Joint Ventures Equity Trans Thai-Malaysia (Thailand) Co., Ltd. TTM (T) 50.00% Trans Thai-Malaysia (Malaysia) Sdn. Bhd. TTM (M) 50.00% District Cooling System and Power Plant DCAP 35.00% Subsidiaries Consolidate PTT (Cambodia) Co., Ltd. PTTCL % PTT Retail Business Co., Ltd. PTTRB % Thai Lube Blending Co., Ltd. TLBC** 48.95% PTT Tank Terminal Co., Ltd. PTTTANK % PTT Oil Myanmar Co., Ltd. PTTOM % Associates Equity Keloil-PTT LPG Sdn. Bhd. KPL 40.00% Thai Petroleum Pipeline Co., Ltd.THAPPLINE 40.40% PetroAsia (Thailand) Co., Ltd. PA(Thailand) 35.00% Others Cost PetroAsia (Maoming) Co., Ltd. PA(Maoming) 20.00% PetroAsia (Sanshui) Co., Ltd. PA(Sanshui) 25.00% Intoplane Services Co., Ltd. IPS 16.67% Fuel Pipeline Transportation Co., Ltd.FPT % Others Fair Value Bangkok Aviation Fuel Services Plc. BAFS 7.06% Petrochemical Subsidiaries Consolidate PTT Polymer Marketing Co., Ltd. PTTPM 50.00% PTT Polymer Logistics Co., Ltd. PTTPL**50.00% PTT PMMA Co., Ltd. PTTPMMA % PTT Global Chemical Plc.* PTTGC 49.42% PTT Maintenance and Engineering* PTTME 40.00% PTT Energy Solutions Co., Ltd.* PTTES 40.00% Joint Ventures Equity HMC Polymers Co., Ltd. HMC 41.44% PTT Asahi Chemical Co., Ltd. PTTAC 48.50% PTT MCC Biochem Co., Ltd. PTTMCC 50.00% Refining Subsidiaries Consolidate Thai Oil Plc.* TOP 49.10% IRPC Plc.* IRPC 38.51% Others Fair Value Star Petroleum Refining Co., Ltd. SPRC 5.41% International Trading Business Group Subsidiaries Consolidate PTT International Trading Pte. PTTT % International Investment Subsidiaries Consolidate PTT Energy Resources Co., Ltd. PTTER % PTT Green Energy Pte. Ltd PTTGE % Others Subsidiaries Consolidate Others Fair Value Energy Complex Co., Ltd. EnCo 50.00% Dhipaya Insurance Plc. TIP 13.33% Business Service Alliance Co., Ltd. BSA * 25.00% PTT Regional Treasury Center Pte. Ltd. PTTRTC % PTT ICT Solutions Co., Ltd.* PTTICT 20.00% 36 Remark : *The companies have changed their status to subsidiaries due to impact from PACK5 ** Subsidiaries that PTT holds less than 50% but being consolidated because PTT has the power to control the financial and operating policies. 36

38 Natural Gas Price Structure : Jan-Jun 2016 Gas prices are mostly agreed under long-term contracts and volatility pass-through to ensure stable returns. Customers Sales Price Structure Gas Pool Price + Supply Margins + Pipeline Tariffs Power Producers 61% : EGAT 23% : IPP 21% : SPP 17% GSP 19% Average Purchased Gas Price 1.75% * 1.75% * 9.33% * Charged at the same price structure of power producers 21.9 Bt/MMBtu * EGAT IPP and SPP Supply Margins not more than and respectively Petrochemicals Feedstocks Ethane, Propane, LPG NGL Local Cooking Gas Export Cooking Gas Industry 14% Profit-sharing mechanism based on market prices of petrochemicals Reference to Naphtha market price At GSPs cost (adjusted every 3 months) Reference to Saudi Aramco s contract price Charged at prices comparable to fuel oil NGV 6% 21 Jan -15 Jul 2016: Capped at Baht/Kg. If cost is less than Baht/Kg, retail price will be set to reflect the cost. Since 16 Jul 2016 : The retail price is set to reflect the cost. Contract periods are ~ years or until depletion of gas fields or the expiration of concessions 37 37

39 38 Natural Gas : A steadily growth of natural gas upon Government fuel diversification policy for power generation Gas demand forecast (CAGR during ) : Total ~ 1% : Power ~ 2% : GSP ~ -3% : Industry ~ 2% : NGV ~ 0%

40 Thailand s Projected Energy Demand Primary Energy Consumption KBD 4,187 4,500 4,000 2,613 Hydro/Import 3% 3,500 3,000 2,500 2,000 1,500 1,000 2,501 2% 20% 13% 36% 2% 20% 14% 35% 6.5% 4.0% 2.8% 1.0% Renewable Coal/Lignite Natural Gas 28% 15% 27% % 29% 2.0% Oil 27% 0 Sources : EPPO/ DEDE/ PDP 2015/ PTT analysis as of Aug

41 40 Gas Business Generates Stable Returns Overview Gas transmission pipeline capacity Sole owner and operator of entire gas transmission pipelines in Thailand (~ 4,000 km), a regulated business IRROE ranges between 12.5% - 18% for transmission pipeline investment Supply & marketing of natural gas provides fixed margin with long-term contracts of years 6 Gas Separation Plants; Total production 6.7 MTA; are on petrochemical market price-linked profit sharing basis

42 Key Business Drivers: Oil price started to pick up while NG continued to decline 90 Dubai FO Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr Dubai vs FO ($/BBL) HDPE and PX spreads($/ton) HDPE HDPE-Naphtha Spread PX-Naphtha Spread NG Prices ($/MMBTU) LNG (JLC) ($/MMBTU) JKM Spot Avg. Pooled Gas ($/MMBTU) JLC* JKM Avg. Pooled Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 * JLC = Japan LNG Cocktail : Landed LNG price in Japan FX (USD/THB) 35.9 Appreciate THB/USD (0.83%) PX Depreciated 2.5 THB/USD (7.6%) 100 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Note: Figures are average * Naphtha (MOPJ) Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 41

43 Energy Price Reform: LPG Prices Lifted GSP Capped Price from 333 USD/TON to reflect GSP Cost Imported 2.0 Mil. Ton (27%) GSP 3.6 Mil. Ton (48%) Refinery 1.9 Mil. Ton (25%) *CP Jan 15= 443 $/ton CP+85 $/ton or 528 $/ton 498 $/ton CP-20 $/ton or 423 $/ton 488 $/TON or /kg Oil Fund AS CLEARING HOUSE Tax 2.39 /kg Tax 2.39 /kg Margin 3.26 /kg Margin 3.26 /kg Oil Fund 0.63 /kg No oil Fund VAT 1.57 /kg VAT 1.19 /kg Need subsidy 4.82 /kg /kg Cooking Transport Industrial /kg Low income LPG prices for Petchem : not controlled, but linked to market price and/or contract price 42

44 43 PTT strategies to cope with low oil price Corporates Survival Strategy: ROIC strategy to drive strong performance 1. Rationalization 2. Optimization Focus On : - Core Assets/Area - Strategic Direction - Future Potential - Low Cost Rationalization Optimization Operational Excellence Supply Chain Management Optimization Synergy New Technology Development Divest from: - Non Core/Strategic - Small Investment - Non Potential - High Cost Cost Reduction 3. Integration Integration Vertical Integration Increase Stability of fluctuation on business cycle Increase Resilience Consolidation 4. Consolidation Increase Size/Scale Complement Strategic Focus Minimize Unit Cost Increase Competitiveness

45 PTT Vision Thai Premier Multinational Energy Company Stakeholder Management Rebranding RIT Champions 2016 Pride & Treasure of Thailand Inclusiveness + Sustainability Technology Roadmap Sustainability Framework Learning Triad 2012 Knowledge based Organization TAGNOC Big Long Strong International Growth / Leading Global Chemicals PTT Group Synergy Fortune 100 & DJSI Ranking 2007 High Performance Organization 44 Strengthen PTT Group Source : Strategy & Corporate Planning 44

46 45 S. P.I.R.I.T. to be Pride and Treasure of Thailand Country Customer Society & Community Shareholder Employee Responsibility R for Society Integrity Iand Ethics Synergy S Performance Excellence P Business Partner & Supplier Trust Tand Respect Innovation I Rebrand PTT to be Pride & Treasure of Thailand Strengthen from Inside Doing by heart Be faithful, honest, high morals PTT Group Ambassador I N T E R N A L E X T E R N A L Transform for Transparency Value to social, community and country PTT Group business transparency Trust and credibility in PTT Group businesses

47 46