Pride & Treasure of Thailand. Investor Update November 2015

Transcription

1 Pride & Treasure of Thailand Investor Update November 2015

2 1 Contents Overview Performance Industry Outlook 2016

3 Oil Balance Thailand: Jan Sep 2015 Adequate refining capacity maintains the stability of supply Overview Performance 9M/2015 Outlook Supply Production Sales Import (80%) 957 KBD Imported Refined Petroleum Products 66 KBD Crude/ Condensate 891 KBD Total Refining Capacity in Thailand: 1,087 KBD Refined Products 1055 KBD* Domestic Indigenous (20%) 246 KBD Crude/ Condensate 246 KBD PTT s Associated Refineries : 790 KBD (TOP, PTTGC, SPRC, IRPC) Refined Products 211 KBD 909 KBD (**) Export Other Refineries : 297 KBD (ESSO, BCP) Crude Export 0 KBD 211 KBD Source: PTIT Remark : (*)Refined product from refineries = 955 KBD, including domestic supply of LPG from GSPs and Petrochemical Plants = 100 KBD (**) Not included Inventory KBD = Thousand Barrels per day 2

4 Natural Gas Balance: Jan Sep 2015 Main driver of the Thai economy Others 42% Supply Production Sales Gulf of Thailand (70%) PTTEP 30% Chevron 28% Onshore (3%) 3,392 MMSCFD Bypass Gas 878 MMSCFD 6 GSPs Total Capacity 2,740 Actual Heat 142 MMSCFD Ethane/ Propane/ LPG/NGL 942 MMSCFD (20%) LPG/NGL Methane 1,572 MMSCFD Petrochemical Feedstock (14%) Industry Household Transportation (6%) Import (27%) Power (60%) Industry (14%) Myanmar 72% LNG 28% 1,326 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$46bn 1 or ~ THB 1.6 trillion 1 Group companies: 12.0% 1 of Thai Stock Exchange market capitalization Majority owned by Thai government (66%) 51% by Ministry of Finance 15% by Vayupak Fund Fully integrated and highly diversified over the entire O&G value chain International exploration and production business with 777 mmboe 3 of proved reserves in 2014 Sole operator and owner of gas transmission pipelines and GSPs in Thailand Largest refinery group in Thailand with stakes in 4 of 6 refineries in the country Largest petrochemical producer group in Thailand with stakes in 6 of 8 major petrochemical plants Leading oil marketing business with 1,417 retail stations and 40% 2 of market share by volume International oil trading business having traded 74.2 bn liters 3 in 2014 Coal business assets in Indonesia, Madagascar, and Brunei New Power Flagship (GPSC) to capture opportunity in neighboring ASEAN countries 1 As of 16 November 2015 : Avg.THB/US$ exchange rate of As of 30 September As of December 2014 Robust revenue and Net Income growth since IPO (MMUSD) Revenue Net Income 12, % 81% 87,223 1,716 29% 71% 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 Platts Top 250 Global Energy Company 24th Overall Global Performance in Asia of 2014 SET Awards Top Corporate Governance Report Award 2010 & 2011 Best Corporate Social Responsibility Awards 2011 & 2012 Affiliate PTT 93 rd Fortune Global 500 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+ A- A Note: As September 2015 Largest market cap on the Thai Stock Exchange PTT PTTEP PTTGC TOP IRPC GPSC Total Others Market cap (BNUSD) % of SET 5.9% 2.1% 1.9% 0.9% 0.6% 0.3% 12.0% 88.0% 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 Based on data as of 30 September 2015/ Avg. THB/US$ exchange rate 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% Integrated Refinery & Petrochemical IRPC 38.51% Integrated Refinery & Petrochemical SPRC 36.00% Stand alone Complex Refinery Power GPSC 22.58% Power Flagship 6

8 Pride & Treasure of Thailand 7

9 9M/15 Performance: PTT Group: still strong core operations despite impairment MMTHB Others Petrochem Refinery PTTEP PTT 84,485 2,902 11,878 2,321 30,265 37,119 34,867 Margin 17,970 FX gain 5,270 6,406 1,129 Other Income OPEX* Share of income *including petroleum exploration expenses and royalties 14,988 Interest exp. & income taxes 21,927 51,080 NCI Impairment PTTEP (65.29%) 34,956 PTTGE (100%) 1,187 Total 36,143 77% 19,748 5,915 8,374 9,906 19,241 (23,688) 9M/2014 9M/ % 29% 327% 48% 178% Others Higher performance mainly from PTTLNG, PTTT, and divestment of BCP Petrochem Olefins business declined from Polymer price dropped Refinery s margin increased 10% Aromatics improved P2F margin 16% Refinery Avg. A/C GIM increased 64% Aggregate intake increased 14% Gas GSP and Industrial margin squeezed better NGV performance NG Sale Volume increase 4% mainly from new IPPs Oil Vol. increased 2% mainly from increased demand from lower retail prices Performance decreased from stock losses Trading Vol. increased 5% from no major T/A Margin dropped 53% from condensate business PTTEP Impairment loss on assets Avg. selling price decreased 29% Sales volume increased 5% 8

10 9 Contents Overview Performance Industry Outlook 2016

11 E&P : Net loss in Q3 from settling once and for all the overhanging issue of impairment E & P Gas Oil & Trading Refining PetChem Others Product Prices % 17% Liquid ($/BBL) % eighted Avg. 8% ($/BOE) % 7% * 7.47 Gas ($/MMBTU) MMUSD Q2/15 Q3/15 9M/14 9M/15 * Gas price, if excludes Vietnam 16-1 retroactive sale recording, is 8.08$ for 9M14 ** Average selling price, if excludes Vietnam 16-1 retroactive sale recording is 66.24$ for 9M14 35 Non-recurring*** Recurring NI Q2/15 Net Income (100%) 3,769% QoQ (1,284) Q3/15 1,417 9M/14 (986) 9M/15 170% YoY *** Includes Impairment loss, 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. KBOED Sales Volume 2% QoQ Q2/15 Q3/15 9M/14 9M/15 Key Highlights Liquid Gas QoQ Avg. selling price slightly decreased, mainly from lower oil price Sales volume increased slightly from Myanmar gas field recovery from shutdown in Q2/15 Net loss in Q3 from non-recurring items, i.e., loss on impairment (1,385 MMUSD), deferred taxes from USD functional currency and FX loss; while operationally registered a net profit of 264 MMUSD YoY Avg. price significantly decreased from a slump on oil price Volume increased from Zawtika full production & Hess acquisition Net income declined from loss on impairments and other nonrecurring items in Q3/15 Registered net loss of 986 MMUSD 328 5% YoY 10

12 11 E&P : Roadmap New investment opportunities assessed against the new normal in price and cost 11

13 PTT EBITDA Performance Breakdown by BU s: (Unit:MMTHB) Business Unit Q2/15 Q3/15 QoQ 9M/14 9M/15 YoY Gas- EBITDA 14,348 9,033 (37%) 45,120 32,643 (28%) S&M 3,145 1,260 (60%) 17,155 6,881 (60%) TM 6,784 4,541 (33%) 20,180 18,100 (10%) GSP 4,380 4,137 (6%) 16,372 9,433 (42%) NGV (2,488) (2,831) (14%) (15,102) (8,338) 45% Others 2,527 1,926 (24%) 6,515 6,567 1% Oil-EBITDA Trading*-EBITDA 4,455 2,375 (47%) 11,760 10,757 (9%) (9%) 5,400 2,548 (53%) Total** 19,752 12,267 (38%) 62,280 45,948 (26%) *MIS ** Included Gas/Oil/Trading subsidiaries 12 12

14 Gas BU: NG volume slightly lower from EGAT/ Industry sector/ NGV MMSCFD K.Ton/Day Vol. MMCFD 4,832 4,704 4, NG Sales Volume* 4,879 4,768 4,731 4,802 4,685 4,497 4,469 3% QoQ ,822 Q1 Q2 Q3 Q4 * NG Sales Volume include Inter-BA Transaction NGV Sales Volume Q2/15 Q3/15 9M/14 9M/ E & P Gas Oil & Trading Refining PetChem Others AVG. 4,845 4,688 4,589 2% YoY MMSCFD 4,879 NG Customer Breakdown 1% QoQ 4,822 4, , ,003 1,297 1,105 1,252 1,177 Q2/15 Q3/15 9M/14 9M/15 Key Highlights 4,845 4% YoY NGV (6%) Industry (14%) GSP (20%) SPP (15%) IPP (21%) EGAT (24%) QoQ NG volume decreased mainly from lower power sector (EGAT) and industry sector demand. NGV demand was lower, following gradual price rise amid other petros falling prices YoY NG volume increase mainly due to higher new IPPs and GSP gas demand NGV demand declined slightly due to gradual retail price adjustment amid lower oil prices 13

15 Gas BU : Lower margin and one-time compensation pressured performance E & P Gas Oil & Trading Refining PetChem Others GSP Feed Cost vs Petroleum price USD/Ton M/14 9M/15 %YoY LPG Ex-GSP % Naphtha % Fuel Oil % Feed Cost % Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 * Effective on February 2, 2015 ** MOPS HSFO 180 CST *** Revised feed cost calculation from per sale volume to per GSP production volume MMTHB 14,348 2,527 4,380 1,926 6,784 4,137 3,145 4,541 1,260 (2,488) (2,831) Gas - EBITDA 9,033 6,515 16,372 20,180 17,155 (15,102) 6,567 9,433 18,100 6,881 Others GSP TM (8,338) NGV Q2/15 Q3/15 9M/14* 9M/15 *Restated 37% QoQ 45,120 LPG Ex-GSP* Naphtha Feed Cost*** Fuel Oil** 28% YoY 32,643 S&M kton 1,502 1, GSP Sales Volume 6% QoQ 1% YoY 4,713 4, Pentane (1%) Propane (13%) 1,509 1, ,025 1,935 Q2/15 Q3/15 9M/14 9M/15 Key Highlights Ethane (34%) NGL (11%) LPG (41%) QoQ GSP margin pressured by more petchem price decrease vs feed cost, despite LPG price lifting GSP sales volume increased due to the return of GSP#1 from major T/A EBITDA dropped from squeezed S&M and GSP margins, as well as a one-time compensation to EGAT for 4th pipeline delay (charged on TM and S&M) YoY Lower EBITDA performance, mainly from GSP and S&M margin squeeze, despite decreased NGV loss 14

16 Gas Business Roadmap E & P Gas Oil & Trading Refining PetChem Others Demand & Supply Key Progress LNG Terminal Phase 2 Construction completed 66.21%, consisting of Jetty and LNG tank 4th Onshore Gas Pipeline Commence gas flow on 17 th Sep 2015 Design Capacity: 1,400 mmscfd Customer: Power Plant, NGV, Industrial Estate 5th Onshore Gas Pipeline Approved by NEPC and wait for the Cabinet approval within

17 Oil BU : Fallen oil price, hence stock loss weighed on performance E & P Gas Oil & Trading Refining PetChem Others Petroleum Prices Sales Volume 2/ (Average Prices) USD/BBL MM Liter 1% QoQ 2% YoY 18,448 18, Q1/14 Q3/14 Q1/15 Q2/15 Jul Aug Sep Contribution Margin 1/ 6,214 6,158 Q2/15 Q3/15 9M/14 9M/15 2 / Only PTT and PTTRM Oil - EBITDA THB/Liter 34% QoQ 6% YoY MMTHB 47% QoQ 11,760 10,757 9% YoY Q2/15 Q3/15 9M/14 9M/15 1/ Excluded non oil business Stock Gain/Loss (MMTHB) 4,455 3,614 2,375 1, ,721 8,395 2,039 2,362 Q2/15 Q3/15 9M/14 9M/15 (119) (1,765) (902) (3,113) * EBITDA from Operating Oil Non-Oil* 16

18 17 Oil BU : Overseas expansion continues E & P Gas Oil & Trading Refining PetChem Others PTT Lubricants and IRPC entered Industrial Lubricants market in New Zealand Export to over 30 countries 1st Platinum PTT station in Cambodia with plans to increase to 70 PTT stations within the year 2020 (currently 29 stations) Myanmar Laos Cambodia Philippines PTT plans to expand the no. of stations in neighboring countries, especially in major ASEAN countries

19 Trading BU : Margin continued to be squeezed from sustained low oil price E & P Gas Oil & Trading Refining PetChem Others Contribution Margin* Sales Volume % QoQ % QoQ NWS ($/BBL) % YoY MM Liter Contribution Margin (THB/Liter) 4% QoQ 20,248 19,470 58,098 5% YoY 60,785 50% YoY Q2/15 Q3/15 9M/14 9M/15 * PTT only : FX Adjusted MMTHB 9% QoQ 5,400 53% YoY 2, Q2/15 Q3/15 9M/14 9M/15 * PTT only : FX Adjusted Trading - EBITDA* Q2/15 Q3/15 9M/14 9M/15 Key Highlights QoQ Lower margins mainly from timing mismatch of paper settlement Sales volume lowered from decline in Out-Out activities supplied to Indonesia YoY Margins squeezed from sustained low oil prices Sales volume increased mainly due to the absence of refinery turnarounds in On the contrary, high GRM encourages refineries to maximize productions EBITDA declined, mainly from squeezed margins on domestic condensate 18

20 Trading BU : Contract with Petro-Ecuador - Growth Strategy Unlocked GROWTH STRATEGY Step out into new markets for global coverage GLOBAL TREND US Shale Renaissance changes Latin America crude trade flow STRATEGY UNLOCKED Captured crude paradigm shift opportunity by proceeding long term Latin America crude supply contract with EP Petro-Ecuador BENEFITs 1. Support TBU s aspiration on generating revenue by capturing opportunity in new region 2. Sustainably establish business for prospective London office by developing new trading network and new trading structure in Western region CRUDE GRADE Oriente / Napo Crude Oil AGREEMENT PERIOD June 2015 Dec 2020 TOTAL QUANTITY MMBBL One extra SPOT in Sep 15 19

21 Refining BU: Stock losses dented Q3 performance Dubai USD/BBL Mkt GRM A/C GIM 1.78 A/C GRM Stock Gain/Loss GRM/GIM* Q2/15 Q3/15 9M/14 9M/ E & P Gas Oil & Trading Refining PetChem Others A/C GIM QoQ: 56% YoY: 64% Aromatics Production 84% USD/Ton 115 BZ-ULG % PX-ULG95 BZ: 36% Aromatics QoQ PX: 5% 79% BZ: 67% 96 80% Q2/15 Q3/15 9M/14 9M/ YoY PX: 15% Refinery Utilization* Net Income (100%) 2% QoQ Aggregated Intake (KBD) U-Rate (%) Q2/15 Q3/15 9M/14 9M/15 Aggregated U-Rate TOP (23 days ) IRPC T/A *Adjusted to exclude BCP (46 days) T/A 14% YoY Operating NI Total NI YoY YoY % 345% Stock gain/loss net NRV Operating Income 6,976 15,750 8,774 7,997 Operating NI QoQ 9% Total NI QoQ 113% 15,659 31,953 (6,251) Q2/15 (10,013) Q3/15 (9,877) 9M/14 9M/15 (2,016) 5,782 25,702 IRPC BCP SPRC TOP ** Performance BCP 4 mths 20

22 Refineries : Projects Updates E & P Gas Oil & Trading Refining PetChem Others Ongoing Projects: LABIX : 99% progress COD: 1Q16 SPPs : 97% progress COD: 2Q16 (2 SPPs: Total power capacity 239 MW) UHV: 98% progress COD: Dec 2015 PPE+PPC: (Total PP Capacity 775 KTA) COD: 2H17 Status Total investment = $236.5 MM EPC awarded with Sinopec : May, 2015 IPO: during IPO Roadshow (Targeted Listing will be in early Dec 15) 21

23 Petrochemical BU: Lower performance from stock loss and pressured petrochemical prices CDU U-Rate USD/BBL 5.40 Mkt GRM Stock Gain/Loss Net NRV 100% 101% 102% 101% 7.59 A/C GRM Refineries A/C GRM 88% QoQ A/C GRM 10% YoY Q2/15 Q3/15 9M/14 9M/ E & P Gas Oil & Trading Refining PetChem Others Aromatics 85% 57% 84% 77% YoY QoQ PX:-Cond 2% PX-Cond: 7% BZ-Cond: 13% BZ-Cond: 39% BZ-Cond PX-Cond BTX U-Rate USD/Ton Aromatics Mkt P2F Q2/15 Q3/15 9M/14 9M/15 Mkt P2F QoQ 15% Mkt P2F YoY: 16% Olefins U-Rate 89% 93% USD/Ton 1,3751,343 1,234 1,135 HDPE Price PP Price HDPE: 10% Olefins QoQ PP: 15% 87% 1,576 1,587 1,266 1,209 Q2/15 Q3/15 9M/14 9M/15 93% YoY HDPE: 20% PP: 24% Stock Gain/loss net NRV- PTTGC Operating Income Unit : MMTHB 2,325 7,389 9,714 8,974 Net Income (100%) Operating NI QoQ 39% Total NI QoQ 85% 1,421 4,485 1,207 26,780 24,521 Operating NI YoY Total NI 25% YoY 26% 18,043 20,152 20,143 15,812 HMC PTTGC -3,064-2,259-2,100 Others Q2/15 Q3/15 9M/14 9M/15 22

24 23 Petrochemical : Strategic Plans : Major Projects E & P Gas Oil & Trading Refining PetChem Others

25 Other Businesses : Coal - SAR (95.26%) Additional cost reductions relieved the effect of price decline E & P Gas Oil & Trading Refining PetChem Others Avg. Selling Price & Cash cost Sales Volume New Castle Avg. Selling Price Cash Costs USD/Ton QoQ YoY 2% 16% 4% 15% 17% 9% kton 4% QoQ 1,688 1, ,372 1,179 23% YoY 7,602 2,474 5,854 1,335 5,128 4,519 Sebuku Jembayan Q1/15 Q2/15 Q3/15 9M/14 9M/15 EBITDA & Net Income (100%) MMUSD QoQ YoY EBITDA 13% EBITDA 35% NI 67% 113 NI 25% Q2/15-3 Q3/15-1 9M/14 9M/15 Q2/15 Q3/15 9M/14 9M/15 Q2/15 Q3/15 9M/14 9M/15 Key Highlights QoQ Cash cost decreased mainly from: - Additional cost savings from further negotiations with contractors as well as lower fuel cost from lower diesel price - Sales of coal produced from previous quarter NI increased mainly from the decrease in depreciation from lower production volumes YoY Sales volume decreased as coal price dropped from oversupply Cash cost improved from cost saving initiatives, reduced admin costs and mine plan review 24

26 25 Other Businesses : Power - GPSC (22.58%) Better performance supported by dividend income from affiliate E & P Gas Oil & Trading Refining PetChem Others GWh 000 Ton Sales Volume YoY Power 11% Steam 3% QoQ Power 44% 4,505 Steam 11% 4,061 3,702 3,604 MMBaht Net Income (100%) 33% YoY 1,571 1,181 19% QoQ 1,842 Power 1,254 1,038 1,117 Steam Q2/15 Q3/15 9M/14 9M/15 Diversified Assets 53 MW (3%) 347 MW (18%) 1,517 MW (79%) Natural Gas Hydro Renewable Natural Gas Hydro Renewable Capacity QoQ Q2/15 Q3/15 9M/14 9M/15 Key Highlights Lower sales volume due to Sriracha plant s Combustion Inspection (CI), EGAT s dispatch instruction to reserve for shutdown as well as customers maintenance shutdowns (PTTGC ARO 2/ TOCGC). Higher net income from dividend income of 288MB from Ratchburi Power (RPCL). YoY Higher power sales volume as there was a major maintenance shutdown of Sriracha plant in Q1/14 which also caused higher repair and maintenance costs. Better performance due to increased power sales and dividend received from RPCL in Q3/15.

27 Other Businesses : Power GPSC (22.58%) CUP-4 Project (Growth alongside PTT Group) CUP-4 Phase 1 Name: Central Utility Plant Project 4 (CUP-4) Type: Gas-fired Cogeneration Power Plant/ Utilities Location: PTT s WEcoZi, Asia Industrial Estate (AIE), Rayong Province E & P Gas Oil & Trading Refining PetChem Others Estimated Capacity: Phase 1: 45MW, 70 T/H (up to 390 MW, 900 T/H) Investment: <4,000 THB MM SCOD: Later Q1/2018 COD Approximately in November

28 PTT Consolidated Performance: 9M/2015 Dubai (USD/BBL) 19% 48% M/14 9M/15 Unit : MMTHB Revenue EBITDA Net Income Net Income 536, ,066 2,039,086 1,557,327 Q2/15 Q3/15 9M/14 9M/15 87,610 Q2/15 Q3/15 9M/14 9M/15 Recurring NI Recurring NI 39% 55% 84,485 Total NI 82,874 Total NI 77% 212% 50,438 23,746 19,903 19,748 9,039 Recurring Net Income (26,582) Q2/15 Q3/15 9M/14 9M/15 Recurring net income = Net Income adjusted one-time transactions 6% 32% 59,730 24% 9% 240, ,079 16% 0% 12% Revenue 6% 5% 13% 15% 19% 3% 2% EBITDA 3% 3% 14% Net Income 44% 53% 36% Refining PetChem Others 16% 1% 13% Revenue 6% PTTEP 17% PTT - Gas Refining Others 17% 2% 15% EBITDA 56% PetChem 6% PTT - Oil & Trading 14% Others PTT - Gas 47% PTT - Oil & Trading 46% PTTEP 30% Refining 50% -120% PTTEP Net Income PetChem 42% PTT 98% 27

29 Statement of Financial Position MMTHB Cash & S/T Invest Other Current Assets Others Noncurrent Assets 2,250,455 1,805,041 1,818, , ,668 1% 2,226, , , , , , , , ,685 Assets slightly declined : Drop in trade A/R primarily from international trading and oil business Drop in inventory mainly from legal reserve volume of finished product Decrease in L-T investment from disposal of BCP and capital reduction of SPRC Other Liabilities L/T Liabilities (incl. due 0.5 within 1 yr) Net Debt/EBITDA Net Debt/Equity PP&E 1,105,147 1,054,694 1,130,082 1,087, Dec Sep Sep Total Equity (0.1) 2014 Q3/ PTT Ratings at Sovereign Level FC : Moody s (Baa1), S&P (BBB+), JCR (A-), FITCH (BBB+) LC : Moody s (Baa1), S&P (BBB+), JCR (A), FITCH (A-) 28

30 Dividend Policy & Historical Payments PTT is firmly committed to pay dividend at no less than 25% of net income 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% 56.9% 37.3% 25% PTT s minimum payout ratio 25% Baht / share Overview Performance 2H/2015 Outlook Dividend payout EPS DPS H

31 PTT: CAPEX (PTT and Wholly Owned Subsidiaries) PTT plans to invest ~Bt 299 bn* ($9bn) during CAPEX revision Y2015: CAPEX lower by ~ THB 22 bn from THB 77 bn previously Reduction mainly from: Postpone new oversea investments Adjust plan for new LNG receiving terminal project While maintaining 5-years CAPEX of Bt. 299bn Unit: MMTHB CAPEX Breakdown : 5 Years By Business Unit JV & Investment in Subsidiaries 29% PTT 5-Years CAPEX Plan Bt 299 bn M&A and Investment Oversea 1 R&D, Others 5% LNG 8 Infrastructure 2% Oil &Trading Gas 55% Infrastructure Investment in JV & Sub. R&D and Others Oil & Intl Trdg Natural Gas 77,280 55,663 5,519 50,969 24,416 3,311 9,149 2,043 12,041 2,780 8,827 34,885 29,972 38, ,034 5,763 4,708 19,398 62, ,432 16,906 2,214 1,177 2,882 7,040 60,988 58, ,169 1,222 2,777 33,876 40,008 36, Revised Estimated Spending** * budget approved by NESDB at YE2014 ** 8 Months Actual + 4 Months Estimated 30 30

32 31 Contents Overview Performance Industry Outlook 2016

33 LNG Price Outlook and Key Drivers 2016 Henry Hub Outlook 2016 LNG Price Outlook 2016 HH $/MMBTU Long term LNG Price 7 9 $/MMBTU Spot LNG Price 6-7 $/MMBTU Price divergence Source: Wood Mackenzie, PIRA Remark: HH excludes liquefaction fees and freight costs LNG Market Key Drivers for 2016 Bull New LNG demand from emerging countries in South East Asia, Middle East, and Eastern Europe Positive outcomes from United Nation climate change conference in Paris (Nov) Faster-than-expected depletion of indigenous gas in Europe/Asia/South America EU policy for guidance of emission trading system (EU ETS) and gas diversification from Russia Bear New LNG supply from Australian and US projects (GLNG, APLNG, Gorgon, and Sabine Pass) Restart of nuclear power plants in Japan and new commercial operation plants in Korea Wildcard LNG projects in Angola and Yemen might start up their production in 2016 Existing gas price structures in India and China 32 discourage domestic gas consumption 32

34 PRICE SCENARIO Crude Oil Fundamental Dubai Crude Price Scenario MMBD $/BBL BALANCE PRISM Dubai Price Outlook Assumption Brent Dubai Spread Average = $1.5/BBL BULL CASE PRISM VIEW $53 - $ Demand Supply BEAR CASE 2015 Q1/16 Q2/16 Q3/16 Q4/16 Bearish global economy But Demand Growth remains. Due to stock over hang, the market will start to tighten in 2H16. Shale cutback offsets Rising OPEC Supply. FED Tightening Policy encourages volatile capital flow. 33 Sources: PRISM Business Plan (Oct.,15), IEA, EIA, OPEC, PIRA 33

35 REFINING BUSINESS MMBD THE GOLDEN AGE REMAINS? Total CDU and Condensate Splitter Capacity Additions/Closure Africa Europe FSU Middle East Latin America North America Asia Total Slowing global economy causes projects stalling. Lower refining capacity additions than earlier is expected before oil prices begin to flatter, especially in China. High crude inventories will continue to give refinery sector an edge over other sector in the energy business. PTT expects 2016 refinery margins remain stable (around 7-8 $/BBL) compare to year Source: PTT International Market Analysis Team, Energy Aspects, IEA 34

36 Capacity, mtpa Olefins Outlook : Ethylene/PE: Margins to be Softer than This Year Source : IHS 2015 Asia crackers by capacity and age Ethylene and PE Margins Slightly Decline China Japan Korea Taiwan India SEA Cracker Age in 2015, Years Risk emerge after the lifting of Iran sanction next year. Iran will return to be one of key players with a very competitive feedstock Old and uneconomical crackers in Japan will be closed by 2016 (2 Plants, 1,042 KTA) China s CTO/MTO projects still have several challenges such as limited economic growth, technical issues, environmental issues USD/MT 1,800 1,600 1,400 1,200 1, ,556 1,569 1,604 1,448 1,440 1,447 1, , ,188 1, ,375 1, ,234 1,170 1,242 1, HDPE Price Ethylene Price HDPE- Ethy. Ethy.- MOPS 1,072 1, Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/ Source : PRISM, Oct2015 KTA Operating Rate (%) 72% 74% 76% 72% 80% 61% 8,000 6,000 4,000 2,000 - Source : IHS Iranian Crackers Run at Low Rate during Sanction Total Capacity Domestic Demand Operating Rate (%) 60% 40% 20% 0% 35

37 Olefins Outlook : Propylene: Oversupply from New On-purpose Units Depresses Margin Economics Oil & Refining LNG & Gas Petrochemical On-Purpose Production, Drive Propylene Market Propylene capacity additions by sources (30 Million Ton) MTO/CTO 33% Metathesis 3% Source : IHS Steam Cracker 7% FCC 15% PDH 42% MT Steam Cracker PDH MTO/CTO % On Purpose % On Purpose 30% FCC Metathesis Other 25% 20% 15% 10% 5% 0% USD/MT 1,800 1,600 1,400 1,200 1, Propylene Margins Decline from Market Pressure 1,369 1,279 1,301 1, Propylene Price Propy MOPS Q1/14Q2/14Q3/14Q4/14Q1/15Q2/15Q3/15Q4/ Source : PRISM, Oct global operating rate will decline both of Propylene and PP due to capacity addition of propylene still outpace demand growth since According to the Chinese Government self-sufficient policy, numbers of MTO/CTO plants gradually increase supported by subsidies and PDH plants are also gradually started up in China to fulfill future NEA demand growth. China will be able to improve self sufficient ratio of PP to above 90% in next 5 years. Structure Change of PP and Propylene market after huge investment in On-Purpose On-purpose units have many challenges PDHs in China mostly rely on high cost propane import from Middle East and US. China s CTO/MTO projects still have several challenges such as limited economic growth, technical issues, environmental issues. 36

38 Aromatics Outlook : PX Market Surplus Pressures Margin PX Capacity also Outstripped Demand PX spreads are expected to be held at low levels Unit : Million Ton Operating rate : % % 78.0% 76.8% % % % Source : IHS % Africa Europe Indian Sub. Middle East N. America NEA S. America SEA Demand Operating Rate 2016 global operating rate will decline as capacity addition still outpaces demand growth Overcapacity will force more rationalization Lower oil prices reduce production costs 75.0% 74.0% 73.0% 72.0% 71.0% USD/MT 1,800 1,600 1,400 1,200 1, USD/MT 2,000 1,800 1,600 1,400 1,200 1, ,262 1,236 1, PX Price PX MOPS Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/ Source : PRISM, Oct2015 Integrated ME and US PX Cost and Competitiveness New Integrated Asia Older/Smaller NEA Europe Small and Nonintegrated Plant Closure Cumulate Capacity (Million Ton) Source : IHS 37

39 Aromatics Outlook : BZ Remains Strong Thanks to Shale Gas Stable Demand Growth from Derivative Support BZ Market Unit : Million Ton Operating rate : % % 73.0% Source : IHS 71.1% % % Africa Europe Indian Sub. Middle East 1.1 N. America NEA S. America SEA Demand Operating Rate 72.0% 71.0% 70.0% The benzene market is inherently unbalanced with inelastic supply, nonintegrated demand and growing deep sea trade 2016 global operating rate will improved from 2015 operating rate due to demand growth outpace supply growth Lighter feedstock reduces benzene output 0.7 USD/MT 1,800 1,600 1,400 1,200 1, BZ spreads are expected to be held at low levels 1,299 1,292 1, BZ Price BZ MOPS Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/ Source : PRISM, Oct2015 Lighter Cracker Feedstock Reduces Benzene Output Ton BZ per ton Ethylene Lighter Feedstock 0.00 Ethane Propane Butane Light Heavy Gas Oil Naphtha Naphtha Source : IHS 38

40 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, 39 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. 39

41 Debt Profile : Control Cost & Manage Risk Managed debt according to financial risk and policy Debt Portfolio Unit : MMTHB PTT Only Consolidated : Cost of debts ~ 4.62% : % fixed-rate ~ 75% : Avg. debt life ~ 8.34 years : Cost of debts ~ 4.44% : % fixed-rate ~ 70% : Avg. debt life ~ 7.40 years USD THB 689, , , ,127 (44%) 268,304 (41%) 307, , , ,972 83,985 81,861 (35%) 259, , , , ,298 (65%) (29%) (71%) (30%) (49%) (70%) (51%) 384, ,935 (56%) (59%) 31 Dec Dec Sep Dec Dec Sep Note : Data as of 30 Sep 15 (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. 40

42 Statements of Cash Flows (PTT Only) : 9M/2015 Operating 9M/14 46,267 9M/15 48,094 Net Income 49,963 43,355 Changes in assets & liabilities (9,247) 10,966 Income Tax (1,983) (4,589) Non-Cash Adjustment 7,534 (1,638) Investing 9M/14 13,420 9M/15 1,346 CAPEX (PP&E, Intangible asset) (21,639) (27,881) Investment (Sub. &Affiliates) 1,034 12,067 Current investment 1,366 (8,047) Dividend/Interest Received 29,749 23,724 Others 2,910 1,483 Free Cash flow 59,687 49,440 Financing (47,378) (63,745) Repayment Loans (15,815) (23,268) Interest paid (9,547) (9,076) Dividend paid (22,849) (31,401) Received from share issue - - Received from loans/bonds Adjustment (1) 28 Beginning Cash and Cash Equivalents Cash In/(Out) Ending Cash & Cash Equivalents 63,927 58,018 12,308 (14,277) 41 76,235 43,741 41

43 Statements of Consolidated Cash Flows : 9M/2015 Operating 9M/14 204,595 9M/15 203,982 Net Income 84,485 19,748 Changes in assets & liabilities (8,452) 14,867 Income Tax (49,630) (40,969) Non-Cash Adjustment 178, ,336 Investing 9M/14 (130,855) 9M/15 (158,930) CAPEX (PP&E, Intangible asset) (126,123) (129,116) Investment (Sub. &Affiliates) (28,135) 13,993 Current investment (3,734) (60,522) Dividend/Interest Received 14,900 12,135 Others 12,237 4,580 Free Cash flow 73,740 45,052 Adjustment Financing (42,513) (121,558) Repayment Loans (110,635) (102,588) Interest paid (23,735) (25,338) Dividend paid (52,542) (43,332) Received from share issue - 9,901 Received from loans/bonds 144,756 39,799 Others (357) - (1,767) 11,972 Beginning Cash and Cash Equivalents Cash In/(Out) Ending Cash & Cash Equivalents 196, ,212 29,460 (64,534) 226, ,678 42

44 43 PTT Group Performance : 9M/2015 (YoY) Unit : MMTHB 9M/2014 (Restated) Performance 100% 9M/2015 YoY % share 9M/2014 (Restated) Equity Method % PTT 9M/2015 YoY PTT Net operating Income 37,119 19,241-48% 37,119 19,241-48% E&P - PTTEP 45,905-36, % 65.29% 30,265-23, % - PTTGC 20,152 15,812-22% 48.89% 9,851 7,454-24% - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 4,369 2,231-49% 40-50% 2, % Petrochemical 24,521 18,043-26% 11,878 8,374-29% - TOP 2,304 8, % 49.10% 1,152 4, % - IRPC 544 8, % 38.51% 336 3, % - BCP 3,201 1,933-40% 27.22% % Refining 5,782 25, % 2,321 9, % Inter - PTTER, PTTGE -2,284-4,074-78% 100% -2,284-4,086-79% Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 4,108 4,162 1% % 2,991 3,659 22% Utilities -GPSC/ TP/ DCAP 2,069 2,653 28% 20-30% % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 2,144 5, % % 1,617 5, % Others Business 6,037 8,591 42% 2,902 5, % Shared of Net Income from Affiliates 82,245 16,052-80% 47, % PTT Conso. Net Income 119,364 35,293-70% 84,485 19,748-77%

45 44 PTT Group Performance : Q3/2015 (QoQ) Unit : MMTHB Performance 100% % share Equity Method % PTT Q2/15 Q3/15 QoQ Q2/15 Q3/15 QoQ PTT Net operating Income 9,019 3,584-60% 9,019 3,584-60% E&P - PTTEP 1,312-46, % 65.29% , % - PTTGC 8,974 1,207-87% 48.89% 3, % - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA % 40-50% % Petrochemical 9,714 1,421-85% 4, % - TOP 6,228-2, % 49.10% 2,963-1, % - IRPC 4, % 38.51% 1, % - BCP % 27.22% % Refining 15,750-2, % 6,342-1, % Inter - PTTER, PTTGE -1,681-1,863-11% 100% -1,721-2,018-17% Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 1,618 1,471-9% % 1,355 1,262-7% Utilities -GPSC/ TP/ DCAP % 20-30% % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 3, % % 3, % Others Business 4,169 1,526-63% 3, % Shared of Net Income from Affiliates 30,945-45, % 14,727-30, % PTT Conso. Net Income 39,964-41, % 23,746-26, %

46 Data as of 30 September 2015 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 % Subic Bay Energy Co., Ltd. SBECL % 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 48.91% 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% Refining Associates Equity Star Petroleum Refining Co., Ltd. SPRC 36.00% International Trading Business Group International Investment Subsidiaries Consolidate PTT International Trading Pte. PTTT % Others Subsidiaries Consolidate PTT Energy Resources Co., Ltd. PTTER % PTT Green Energy Pte. Ltd PTTGE % 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% 45 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. 45

47 46 Natural Gas Price Structure : Jan-Sep 2015 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 60% : EGAT 24% : IPP 21% : SPP 15% GSP 20% 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% Capped at Baht/Kg from Sep 2015 Contract periods are ~ years or until depletion of gas fields or the expiration of concessions 46

48 Natural Gas : Increasing natural gas in power demand over long term by replacing Coal, EE and AE Gas demand forecast (CAGR during ) : Total ~ 1% : Power ~ 2% : GSP ~ -3% : Industry ~ 2% : NGV ~ -1% Source : PTT 47

49 Thailand s Projected Energy Demand Primary Energy Consumption KBD , ,052 2% 11% 15% 40% 2,438 Hydro/Import 2% Renewable 13% Coal/Lignite 16% 38% Natural Gas 2,840 4% 13% 18% 36% 5% 13% 20% 34% % 31% Oil 29% 28% 0 Source : EPPO/ PDP 2015 Preliminary ( Jan 2015) / PTT analysis as of Jan

50 49 Gas Business Generates Stable Returns Overview Gas transmission pipeline capacity Sole owner and operator of entire gas transmission pipelines in Thailand (> 3,000 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 Yadana Zawtika Yetagun Andaman Sea Ban I Tong Ratchaburi Thailand Nakhon Sawan Wang Noi Tha Luang NBK Samut Prakan ESB Sin Phu Hom Nam Phong Nakhon Ratchasima Kaong Khoi BPK Chon Buri SBK Rayong Benchamas Tantawan Platong Platong 2 Khanom Sadao Erawan N.Pailin S.Pailin Bongkot South Bongkot Songkhla Arthit Thai-Malaysia (JDA) Natural gas fields Power plants Gas separation plant 1,2,3,5,6 in Rayong Gas separation unit 4 in Nakhon Si Thammarat Map Ta Phut LNG Terminal Existing pipeline Future pipeline

51 Energy Price Reform: Blessing in Disguise Dubai Petroleum Products USD/BBL New Gov. THB/Litre 50 Gasoline New Gov. Gasoline THB/Liter Diesel THB/Liter Diesel Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Sep-15 LPG 20 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Sep-15 NGV THB/Kg Industry Auto New Gov Adjusted 4 times 20 to be Single price since Dec 2014 Cooking Adjusted avg. pool price to link with market price 15 Aug-13 Feb-14 Aug-14 Feb-15 Sep-15 Aug-15 THB/Kg Private Car THB/Kg Public Car 8.50 THB/Kg New Gov Adjusted 4 times Total change Private Car THB/Kg Public Car THB/Kg 5 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Sep-15 50

52 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 51