Analyst Meeting FY 2016 - listed companyptt.listedcompany.com/misc/PRESN/20170222-ptt-am-fy2016...2017/02/22 · Analyst Meeting FY 2016 PTT Auditorium 22 Feb 2017 1 Safety and Sustainability:

Analyst MeetingFY 2016PTT Auditorium

22 Feb 2017

1

Safety and Sustainability:

Aspiration = Zero Accident

• Total Recordable Injury Rate• IOGP = International Association of Oil & Gas Producer

1

2016 Performance

Policy and Standard

Process and Platform

Technology and Innovation

People and Culture

0.95

0.25

0

1

2

3

4

2009 2010 2011 2012 2013 2014 2015 2016

Total Recorable Injury Rate (Injuries/Million hrs)

PTT: TRIR-employee PTT: TRIR-contractor

IOGP: TRIR employee IOGP: TRIR contractor

Domestics

• Enterprises of the Year 2016 (MOF)

• Thailand’s Most Admired Brand 2016/Thai Brand (BrandAge)

• Popular Stock (Kaohoon)

• The Prime Minister’s Industry Award 2016

(Department of industrial promotion)

• PTT Business Continuity Management System: BCMS (Management System Certification Institute, MASCI)

Rewards & Recognition

HPO

CG CSR

InternationalAsia’s Best CSR

Domestics

• CSR-DIW Award 2016

(Department of Industrial Works)

• EIT-CSR Awards 2016

(The Engineering institute of Thailand)

• Certified Greenhouse Gas Management Organization

Domestics

• Corporate Governance Report: CGR2016 (IOD)

• CG Award (NACC)

• Sustainability Report Award 2016

(Thai listed companies association)

International

• Corporate transparency

(Transparency International)

• Dow Jones Sustainability Indices (DJSI)

• Strongest Adherence to Corporate Governance & Best Annual Report in Thailand (Alpha Southeast Asia )

International

• CEO of the year/ Corporate Excellence Awards

• Most Organized Investor Relations/ Most Consistent Dividend Policy (Alpha Southeast Asia )

• Asia Best CEO/CFO /Best IR Professionals

2

2016 Year in Review

Q4 & FY16 Performance

Outlook 2017

Contents

3

Overview Performance Outlook

0

10

20

30

40

50

60

70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Dubai price$ / BBL

Dubai Price(2016 VS 2015)

2016 Year in Review: Global Economy & Energy Sector

Q3 Q4

• Global economic maintained growth momentum (IMF expects 3.1% GDP growth)

• Oil surplus still remain but declined significantly (0.4 MBD) higher demand growth

• OPEC agreed to 1st

oil cut in 8 years

• OPEC/Non-OPEC agreed to cut production 1.8 MBD

31 Dec’16 = US$53.9/bbl

20161 Jan’16 =

US$ 31.8/bbl

2015

4

Q2Q1


Iran sanction lifted

Vote for Brexit

26-29 Sep: OPEC plans to cut to 32.5 – 33 MMBD

30 Nov: OPEC agreed to cut production

Jun: OPEC meeting: failed to cut production

Aug: An attempt to rearrange oil freeze talk

Oct: OPEC/Non-OPEC meeting failed on production cut

4

Avg $50.9/bbl

Avg $41.3/bbl

Feb: Saudi & Russia agreed a tentative deal to freeze output

May: Supply disruption from Nigeria, Venezuela, Canada

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

1900


2016 Year in Review: Thailand

SET Index4 Jan

1,263.41

SET Index

30 Dec1,542.94

Politics

Economics

• Thailand GDP Y2016 growth 3.2% (better than previous year)

• Energy Reform: floated NGV prices

• Foreign Investors returns to Asian markets (SET net buy at 77 MB)

• SET index outperform major stock marketsSET 22% Down Jones 16%FTSE 16%Nikkei 4%Hang Seng 4% STI 2%

SET Index 2016

5

Net Sell Value (Mil.Baht)

Local Institutes Proprietary Trading Foreign Investors Local Investors Total Value

2015 79,054.64 -6,417.68 -154,345.54 81,708.57 9,997,371.75

2016 -8,656.77 25,371.96 77,927.17 -94,642.36 12,259,772.49

*Energy Policy Management Committee

EPMC* float NGV price with condition (21 Jan)

Thai New Constitution Approved in Referendum

(7 Aug)

FED keep rate unchanged, ranged

at 0.25-0.50%(21 Sep)

Brexit vote result(24 Jun)

ECB cuts rates to new low and expands QE (10 Mar)

Royal news

US Election, Trump victory

(9 Nov)

FED raise interest rate, ranged at 0.50 - 0.75%

(14 Dec)

2015

2016


Short term sharp decline in oil price & fear of FED’s rate hike

2016 Highlights:

Key Events Update (Q4)

• GSP – No major T/A with U-rate 100%

• Oil – BOD approved the restructuring of PTT oil BU

• Trading – Set up Trading London office

• LNG Terminal 2 of 7.5 MTA approved

• LNG contracts with Shell/BP/Petronas approved

Performance (YoY)

• PTTEP – successful in cost saving

• GAS – improved from lower feed cost

• Oil – increased from stock gain

• Trading – improved from lower domestic condensate

discount

• Refinery – better from stock gain

• Petchem – improved Aromatics margins

• Power – improved from sales volume, lower gas cost and

dividends received

• Coal – Better from lower depreciation & successful cost

reduction

Group productivity improvement ~ Bt 15.6 -17.4 Bn

Impairment Bt 7.2 Bn (100%)

• PTTEP: Yetagun/Natuna (1.7 Bn)

• PTTGC: Myriant (0.7 Bn)

• PTTER: EMG/Coal (4.3 Bn)

• PTTGE: FBP (0.5 Bn)

FinanceLoan drawdown ~ Bt 12 Bn (PTTGC & IRPC)

Repayment ~ Bt 47 Bn (PTT, PTTGC, IRPC & GPSC) and

Bond Buy back USD 177 MM (PTTEP)

Shares resold after treasury stock Bt 32.56 MM (PTTGC)6


Business Performance

Upstream PTTEP

Coal

Midstream Gas

Downstream Oil

Trading

Petchem

Refinery

Infrastructure Power

7

Group Productivity Improvement 2016 ~ Baht 15.6 -17.4 Bn

cost -300 MB

cost -547 MB

cost -637 MB

cost -250 to -300 MMUSD

cost -246 MB

cost -527 MBmargin +257 MB

cost -50 MMUSD (~20%)

EBIT +2,311 MB

• Procurement Synergy• GSP Debottleneck• GTM Strategic Sourcing Management

• SAVE to be SAFE & SPEND SMART

• Project MAX

• Orchestra• Transcendence

• Productivity Improvement Program

• Everest


7

Program

0

5

10

15

Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

LNG (JLC) JKM Spot Avg. Pooled Gas10

50

90


31

32

33

34

35

36

37


100

300

500

700

900

1100


HDPE-Naphtha Spread PX-Naphtha Spread

NG Prices ($/MMBTU)

* JLC = Japan LNG Cocktail : Landed LNG price in Japan

Key Business Drivers: Oil price started to pick up while NG continued to fall

Note: Figures are average

741

Dubai vs FO ($/BBL)

HDPE and PX spreads($/Ton) FX (USD/THB)

Dubai

FO

HDPE

341

PX

JLC*

56.6

55.9Avg. Pooled

43.0

36.6

720

346

11.4

8.1

JKM

8.2

33.1

35.9

8

Depreciated

1.07 THB/USD (3.1%)

759

8* Naphtha (MOPJ)

9.2

7.4

7.5

30.4

25.8

6.2

7.6

6.5

407

Depreciate

0.6 THB/USD (1.7%)

35.8

43.2 43.2

35.239.8

743 753

394421

35.535.0

Avg. 2015 = 34.4 THB/USD

Avg. 2016 = 35.47 THB/USD


684

365

48.3

47.7

2015 2016

Dubai 50.9 41.3 -19%

FO 47.4 37.1 -22%

2015 2016

HDPE 739 735 -1%

PX 345 397 15%

35.6

2015 2016

JLC* 10.3 6.9 -33%

JKM 7.8 5.6 -28%

Avg. Pooled 7.5 5.6 -25%

6.06.7

7.3

4.45.3

6.2

5.8

5.6

5.4

30,316

53,227

9,785

8,607

18,869

28,590

3,232 6,898

9,268

(49,164)

(5,083)

2015 2016

PTTEP

PTT

Others Affi.

P&R

BCP & SPRC

TradingMargin increased from domestic condensateVol. decreased from out-out/import

OilVol. increased from demand due to lower retail prices Margin improved from stock gain

Gas

GSP & Industrial customer margin improved from lower feed cost Increased TM performance NGV loss decreased Decreased sales volume from power customers

PTTEPLower ASP from the slump in oil & gas priceImproved NI from cost saving & less impairment

Margin

FX & Derivatives

OPEX* Depre & Amortiza-

tion

Other Income

Int. & CIT exp.& Other**Impair17,778 8,534

14,602

65,670

4,255

24,410

FY2016 Performance: Improved performance in most PTT Group Businesses

9* including petroleum exploration expenses and royalties** including profit from discontinued operation

19,936

MMTHB

94,609

Net Income

69,100

Operating Performance

99,692

Extra Items

Petrochem & Refining

Aromatics improved from spreads margin and volume increase Stock gains despite soften Market GRM

Lower Impairment on E&P & mining assets

Extra Items


3,246

90%

76%

34%

12%

29%

PTTER : Improved coal performance

Others Affi

10

ContentsOverview Performance Outlook

2016 Overview


Outlook 2017

81

(139) (94)

75123

718

(1,572)

466

43.1546.80

50.05

41.17

36.32 35.65

45.29

35.91

Q3/16 Q4/16 2015 2016

E&P : Improved NI by successful cost reduction effort

Product Prices

Net Income (100%)

Sales Volume

Key Highlights

Liquid ($/BBL)

Gas($/MMBTU)

Weighted Avg.

($/BOE)

MMUSD

217 222 224 221

94 94 98 98

Q3/16 Q4/16 2015 2016

Liquid

Gas

KBOED

11

311

372156

(16)

*** 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.

2% QoQ

Non-recurring***

Recurring NI

7% QoQ

22% YoY

119

2% QoQ

21% YoY

316 322 319

(854)

144% YoY

Q3/16 Q4/16 2015 2016

E & P Gas Oil & Trading P&R Others

8% QoQ

18% YoY

1% YoY

QoQ

• ASP remained low from the declining in gas price

• Sales volume increased mainly from Zawtika

• NI dropped from FX loss and impairment of 47 M$

YoY

• ASP drop significantly from slump in oil & gas prices

• Sales volume decreased from divestment Oman project

• NI improved from less impairment and cost saving program


5.565.15

7.20

5.60

110% QoQ

12

E&P Strategy:Overview Performance Outlook

Financial Outlook

12

Path to re-tendering of expiring concessions in the Gulf of Thailand


Legislation of Petroleum Act and associated laws

Tendering Process (preliminary expectation)

Terms of Reference (TOR)

Process: Indicative target for dataroomin August concession award within 2017

TOR: under drafting by the MoE and approval process by the Cabinet

Associated Laws: under drafting by MoE

Petroleum Act & PITA: Under the National Legislative Assembly’s review

2017

Exploration Portfolio• Known area• Acceptable risk• Quick Commercialization

Interest Production Expected Start-up

Mozambique Area 1

8.5% 12 MMTPA 2022/23

Contract 4 (Ubon)

60% 25-30 KBPD 2021

Algeria HBR 24.5% 50 KBPD 2023

Growth Opportunities

Q1’17 FY2017

Avg. Sales Vol. (KBOED)

~310 ~312

Avg. Gas Price ($/MMBTU)

~5.1 ~5.3

Unit Cost(USD/BOE)

~31 ~30-31

EBITDA margin (% of Sale Rev.)

~70

*Based on FY2017 Dubai oil price at 49 $/BBL

M&A• Thailand, SEA, Middle East• Focus on producing or

near-producing

LNG Value Chain• Corporation with PTT in

LNG opportunities

FID Candidates

12

13


PTT EBITDA Breakdown by BU’s:

Business Unit Q3/16 Q4/16 QoQ 2015 2016 YoY

Gas- EBITDA 20,072 20,472 2% 47,832 72,082 51%

• S&M 3,458 2,277 (34%) 9,286 9,128 (2%)

• TM 8,154 7,717 (5%) 25,096 32,666 30%

• GSP 6,454 8,301 29% 15,233 23,134 52%

• NGV (1,173) (935) 20% (10,175) (3,954) 61%

• Others 3,179 3,112 (2%) 8,392 11,108 32%

Oil- EBITDA 6,413 4,448 (31%) 15,133 23,677 56%

Trading*- EBITDA 1,026 348 (66%) 4,405 5,677 29%

Total** 27,511 25,268 (8%) 67,370 101,436 51%

(Unit:MMTHB)

*MIS** Included subsidiaries from all BUs 13

8.6 9.2

8.6 8.5 8.5

7.9 7.3

6.6 6.2 5.8 5.6

5.4

610 607591

437

318377

265

217

160

219247

296

-

100

200

300

400

500

600

700

5

7

9

11

13

15

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16

%QoQ %YoY

FO 20% 22%PooledPrice 4% 25%

11.7 11.712.3 11.9

7.47 7.30

8.45 7.68

Q3/16 Q4/16 2015 2016

875 873 1,151 975

1,000 912995 972

902 905740 869

1,000 1,017 961 946

732 714 669 715279 281 312 285

Q3/16 Q4/16 2015 2016

Gas BU: Pooled gas cost continued to fall, though NG volume slightly declined

NG Price VS FO NG Customer Breakdown

$/MMBTU

EGAT (21%)

IPP (20%)

SPP (18%)

GSP (20%)

Industry (15%)NGV (6%)

MMSCFD

4,702

NGV Price/Sales Volume

QoQ

• Pooled gas cost continued to decline, while F/O price surged

• NG sales volume dropped from seasonal low demand in Q4, despite GSP’s higher U-rate (100%)

• Lower NGV volume, though NGV prices slightly drop, due to demand switching to persistently-low-price gasoline

YoY

• Overall NG sales declined from power customers and NGV

• NGV volume decreased, as a result of lower demand

Key Highlights

4,762

ที่เพ่ิมข้ึนเป็นของ

K.Ton/Day

14

9% YoY


4,788

$/Ton

Fuel Oil*

* MOPS HSFO 180 CST

Avg. Pooled gas price

LHS

RHS

1% YoY

•

THB/KG

NGV Avg. price

1% QoQ 3% YoY

4,828

2% QoQ

2% QoQ


1,556 1,569 1,604

1,449 1,188

1,375

1,234 1,153 1,103

1,153 1,139

1,134

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16

333 333 333 333

443 497

470 440 431

427 420

378

389 394 391 382380

359352

310 309 297 288 247

3,458 2,277

9,286 9,128 8,154

7,717

25,096 32,666

6,454 8,301

15,233

23,134

(1,173) (935) (10,175)(3,954)

3,179 3,112

8,392

11,108

Q3/16 Q4/16 2015 2016

Propane (13%)

Gas - EBITDA

MMTHB

Others

TM

GSP

47,832

20,472

S&M

NGV

730 723

2,738 2,794190 187

695 721

552 610

2,199 2,059

237 246

765 856

9 6

26 25

Q3/16 Q4/16 2015 2016

GSP Sales Volume

LPG (43%)

kTon

1,772

3% QoQ

1% YoY

Gas BU: Performance improved from almost segments

NGL (11%)

Ethane (32%)

Key Highlights

GSP Feed Cost vs Petchem price

USD/Ton

Feed Cost**

LPG Ex-GSP*

* Effective on February 2, 2015** Revised feed cost calculation from per sale volume to per GSP production volume

Pentane (1%)

1,718

20,072

15

HDPE

51% YoYQoQ

• S&M margin decreased from extra expenses in Q4/16 and declining gas price while industrial sales up following rising F/O price

• GSP margin improved from lowered feed cost with higher U-rate

• Gas BU’s EBITDA raised mainly from GSP, Industrial customers, and NGV

YoY

• Gas price dropped decreased S&M margin, though Industrial customers improved

• GSP’s margin increased from feed cost decline more than selling price

• TM performance increased from higher TDC volume

• Subsidies on LPG & NGV removed

• Gas BU’s EBITDA improved in almost all segments, despite S&M

6,423

2% QoQ

6,455

72,082



%QoQ %YoY

HDPE -0.4% -8%

LPG Ex-GSP -10% -10%

Feed Cost -14% -19%

16

Gas Business Roadmap

LNG ProjectsNG Country Demand



16

LNG Terminal 1 Phase 2 :

- Construction completed 99.03%

- COD : 2H2017

New LNG projects :

1) LNG Terminal 1 phase 2 Extension :

(Capacities expansion from 10 MTA to 11.5 MTA)

- Approved by Cabinet 12 Jul 2016

- Expansion capacity: 1.5 MTA

- COD : 2019

2) LNG Terminal 2 (Onshore LNG Terminal No.2)

- Approved by National Energy Policy Council

(NEPC) 8 Dec 2016

- Capacity: 7.5 MTA

- COD : 2022

Additional LNG projects needed for further

studies before submitting for CEPA and

NEPC to consider

− Myanmar-Thailand LNG Terminal

− FSRUs (domestic)

− Onshore LNG Terminal 3

New Project

LNG Ph#2

MajorProject

COD

LNGCapacity

(MTA)

10 10

• Offshore Comp.

• 4th

onshore Midline Comp.

7

• Comp Wangnoi

• Nakhon Ratchasima

LNG Ph#2(Early Sent

Out)

11.5 11.5

LNG Terminal#1 - Extension

11.5

• 5th

Pipeline

Gas Facilities Expansion

20.00

50.00

80.00

Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Oct-16 Nov-16 Dec-16

0.96

0.71

0.98

0.78

6,621 6,608

25,268 26,464

Q3/16 Q4/16 2015 2016

956 955 3,243 3,757

5,457 3,493

11,890

19,920

Q3/16 Q4/16 2015 2016

QoQ YoY

Oil 36% 68%

Non-oil 0.1% 16%

Oil BU : Better overall performance mainly from stock gain

MMTHB

THB/Liter

17

Oil

Non-Oil*

* EBITDA from Operating

Gross margin1/Sales volume2

MM Liter

1/Excluded Non-oil, stock gain/loss, non-recurring item 2/PTT only

20% YoY

5% YoY

42 1,382 (4,770) 5,682

Petroleum Prices

Stock Gain/Loss(MMTHB)

26% QoQ

0.2% QoQ

Oil - EBITDA

USD/BBL

(Average Prices)

Key Highlights

Gasoline

Diesel

Dubai

QoQ

• Lower margin mainly

- aviation fuel (pricing structure: Buy M, sell M-1)

- diesel intense competition in Q4 2016

• EBITDA decreased mainly from

- absence of refund of oil fund in Q4 2016

- lower aviation & diesel margins as abovementioned

YoY• Sales volume increased mainly from higher demand following

lower product prices

• Lower gross margins mainly from

- higher diesel imports during PTTGC T/A in 1H’16

- aviation & diesel margins as abovementioned

• Higher EBITDA mainly from stock gains & higher sales volumes

4,4486,413

15,133

23,677



Aviation

19,463 19,375

81,367 74,627

Q3/16 Q4/16 2015 2016

QoQ

• Gross margin and EBITDA declined mainly from lower domestic condensate margin

YoY• Gross margin improved mainly from higher domestic condensate

margin following higher demands

• Sales volume declined from less

- out-out trading volume supplied to Indonesia (policy change)

- crude import as PTTGC shutdown in May-June'16

- LPG import from lower demand & increased domestic refinery

production

- Higher EBITDA from better domestic condensate margins

0.10

0.05 0.06

0.08

Q3/16 Q4/16 2015 2016

*FX Adjusted

1,026

348

4,405

5,677

Q3/16 Q4/16 2015 2016

Trading BU: Performance improved from better domestic condensate margin

Gross Margin*

Trading - EBITDA*

Sales Volume

Key Highlights

MMTHB

MM Liter

18

* PTT only : FX Adjusted

29% YoY

Gross Margin (THB/Liter) 8% YoY

66% QoQ

33% YoY50% QoQ

0.5% QoQ



TRADING BU & PTTT: KEY ACHIEVEMENTS in Q4 – 2016

“A BIG STEP TOWARDS WESTERN CORRIDOR”

“1st Term Supply Petroleum Products to LATAM”

Awarded 1 year term (2017) tender cargoes of Gasoline & Gasoil to LATAM

Total Volume approx. 4,300 KBBL

“The 1st Storage Tank in ARA area”

Period: 2 Year (Jan’17 - Dec’18)

Total Capacity : approx. 75,000 MT

“1st Term Supply of Sulfuric Acid to PTT Asahi ”

Successfully secure 3 - year (2017 – 2019) term supply Sulfuric Acid for PTT Asahi

Total Volume 90,000 MT

“ GROWTH ”



19

2,941 5,802

12,181 21,222

1,307 1,694

9,402

9,721

6,225 9,745

20,503

25,602

1,557

1,072

4,592

5,281

640

(73) (1,646)

239

8,356 1,933

Q3/16 Q4/16 Y2015 Y2016

253 288

238 262

402 358 383 395

Q3/16 Q4/16 Y2015 Y2016

75%82%

74%82%

20

Net Income (100%)

P&R BU : Improve performance from stock gain and Aromatics margins

55,321

12,67018,240

IRPC

TOP

SPRCBCP

Unit : MMTHB

20

62,065

44%

QoQ YoY12%

Aromatics

BZ-Cond

PX-Cond

USD/Ton

14%

3%

10%

QoQ YoY



PTTGC

HMC

Others

11%

181 211 217 185AromaticsMKT P2F

15%

BTXU-Rate

17%

3.62

5.60 6.34

4.49 3.37

6.97 4.87

5.13 6.92

10.04

7.42 8.86

Q3/16 Q4/16 2015 2016

43.2 48.3 50.9 41.3

GRM/GIM

USD/BBL

A/C GRM*

A/C GIM*

Mkt GRM

Dubai

-0.03 2.62 -1.81 1.26StockGain/Loss

*A/C GRM and A/C GIM include effect from hedging gain/(loss)

QoQ YoY

A/C GIM45% A/C GIM

19%

1,139 1,134

1,238

1,132 1,090 1,085

1,155

1,046

Q3/16 Q4/16 Y2015 Y2016

Olefins

Olefins U-Rate 93%

100% 94%

90%

USD/Ton

HDPEPrice

PPPrice

0.4%

0.5%

8%

9%

QoQ YoY

P&R : Key Achievement and project update

Linear Alkyl Benzene (LAB)

• Successfully COD on 25 Feb 2016

TOP SPP (2blocks of SPP)

• Successfully COD 1st block on 1 April 16

• Successfully COD 2nd block on 1 June 16

21



UHV project

• RDCC COD in Q2/2016

• Propylene +320 KTA

Everest Project

• Incremental Margin Organization Health

Fully integrated PP

• Expected COD: 2017

• PP Expansion +160KTA

• PP compounding +140KTA

Orchestra

• Cost Management

Transcendence

• Process Improvement

Sustain Core

Project MTP retrofit

Project MAX

Project Asset Injection

Accelerate Growth Levers

International hub

Performance chemicals

Green business

Balance Business & Social Value

• Sustainable development

http://www.thaioilgroup.com/

http://www.thaioilgroup.com/

7 11 20

(5) (5)

47

5454

47

36

34

45

36

67

95

59 66

Q3/16 Q4/16 2015 2016

Other Businesses : Coal - SAR Better performance from lower impairment, depreciation and cost, despite lower coal price

Net income

Sales Volume

Key Highlights

MMUSD

USD/Ton

2,040 2,233

5,417

7,872

384 527

1,848

1,942

2,760

7,265

Q3/16 Q4/16 2015 2016

kTon

Jembayan

SebukuAvg.

Selling Price

Total Cash Costs

14% QoQ

Avg. Selling Price* & Cash cost*

New Castle

35% YoY

108% YoY

42%

6%

13%

12%

20%

22

QoQ YoY

QoQ

• Selling price increased following the rise in market coal price as a result of China coal capacity control

• Sales volume increased mainly from improve marketing strategy

• Performance improved mainly from the price increase

YoY

• Cash cost from productivity improvement program, including successful negotiation with mining contractor

• Sales vol. increased following the increase in coal production, improved marketing strategy and improved market condition

• Performance improved mainly from

- successfully implementing productivity improvement program

- decreasing in extraordinary items i.e. impairment

- improving coal market condition

*Calorific value ~ 5,500 kcal/ton


15%

14% QoQ


Q3/16 Q4/16 2015 2016

(179)

(149)

(30)Impairment

Operating NI

NI 1567

2,424

9,814

0

http://www.straitsasia.com/


Combine Cycle : IPP

65.9%

Cogen : SPP

31.1%

Renewable2.7%

Combined heat : VSPP

0.4%

599 581

2,099 2,3771,492 1,467

4,802

5,754

Q3/16 Q4/16 2015 2016

Hydro Electricity

64%

Cogen: SPP 32%

Renewable4%

724419

1,906

2,700

Q3/16 Q4/16 2015 2016

Net Income (100%)Sales Volume

Key Highlights

MMBahtGWh

Other Businesses : Power - GPSC Outstanding performance supported by dividend income from its affiliates

‘000 Ton

Committed Capacity

Power

Steam

23

QoQ YoY

Operating1,381 MW

Underconstruction

541 MW


QoQ

• Lower electricity sales vol. from both IPP & SPP due to lower vol. dispatched to EGAT and industrial customers.

• Lower NI mainly due to an impairment of fixed assets of SPP for 100 MB and no dividend income from RPCL in Q4’16.

YoY

• Higher sales vol. due to increase in demand of electricity & steam from industrial customers also, COD of IRPC-CP in Q4/15.

• Higher NI due higher sales of SPP, more efficient production cost management and full operating year of IRPC-CP Phase 1 and COD of NNEG in Jun’16.

2% 13%

20%

42% YoY

42% QoQ

Present 2019


3%





Other Businesses : Power – GPSC



Project Type Capacity SCOD Construction Progress

as of Q4/16

CHPP Solar Cooperatives(VSPP) Solar • Electricity: 5 MW Successfully COD in Dec’16

Bangpa-In Cogeneration Company Limited (BIC) Phase 2(SPP)

Gas-Fired Power Plant

• Electricity: 117 MW• Steam: 20 T/h

Jun’17 84%

IRPC-CP phase 2 (SPP) Gas-Fired

Power Plant • Electricity: 240 MW• Steam: 180-300 T/H

Q4’17 92%

Ichinoseki Solar Power 1GK (ISP1) Solar • Electricity: 20.8 MW Q4’17 15%

Project Highlight: 4 Projects to COD in 2017

24

9%

55%

31%

5%

26,974 19,087 19,936

94,609

26,44624,544

69,100

99,692

Q3/16 Q4/16 2015* 2016

43.1648.31 50.91

41.27

PTT Consolidated Performance: FY2016

Avg. Dubai (USD/BBL)

FY16FY15

435,172 476,857

2,025,552

1,718,846

Q3/16 Q4/16 2015* 2016

PTT

P&R

Others PTTEP

Net Income

Unit : MMTHB

EBITDA

Net Income/Operating Performance

Revenue Revenue

EBITDA

75,701 83,469

286,214 312,526

Q3/16 Q4/16 2015* 2016

25

15% YoY

* Restated **Included gain on BCP divestment and IRPC reverse allowance for doubtful debt

34%

23%8%

33%

2%

EBITDA

P&R

PTT - Gas

Others

PTTEP

PTT - Oil

& Trading

Net Income


10% QoQ

9% YoY

12% QoQ

YoY>100%44%

19% YoY

6%

17%

46%

30%

1%

Revenue

PTT - Oil

& Trading

PTT - Gas

Others PTTEP

P&R

6%

18%

47%

28%

1%

46%

17%

6%

30%

1%

-104

142%

119%

-57%

QoQ29%7%

10% QoQ

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 (BBB+)

MMTHB

Statement of Financial Position

26


0.290.19

1.09

0.71

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

(0.1)

0.1

0.3

0.5

0.7

0.9

YE15 YE16

Net Debt/EBITDA ≤ 2.0

Net Debt/Equity ≤ 1.0

Assets/Liabilities slightly increased :

• Increase in Cash and S/T investment mainly from

effective cost saving program within PTT group

• Increase in inventory from higher avg. product

prices

Other Liabilities

PPE

Others Non-

currentAssets

OtherCurrentAssets

L/TLiabilities(incl. due within 1 yr)

TotalEquity

MMTHB

Cash & S/T Invest

31 Dec 13 30 Sep 14

1,805,041 1,818,746

1,118,677 1,098,230

375,617 392,610

332,977 349,111

346,725392,380

1,087,687 1,171,597

632,834583,323

453,475477,411

1 2 3 4 5

3%

2,173,996 2,232,331

31 Dec 1631 Dec 15

Free Cash flow

160,295 91,520

InvestingY2015

(133,043)Y2016

(178,915)

CAPEX (PP&E, Intangible asset) (162,487) (109,199)

Investment (Sub. &Affiliates) 30,893 (7,136)

Current investment (24,202) (68,185)

Dividend/Interest Received 17,498 10,580

Others 5,255 (4,975)

OperatingY2015

293,338Y2016

270,435

Net Income 19,936 94,609

Changes in assets & liabilities 34,706 (13,147)

Income Tax (42,137) (30,609)

Non-Cash Adjustment 280,833 219,582

Ending Cash & Cash Equivalents

239,978 215,566

Ending cash incl. S/T investment

346,725 392,380

Beginning Cash and Cash Equivalents

234,212 239,978

Cash In/(Out)

5,766 (24,412)

Adjustment

9,284 271

Financing (163,813) (116,203)

Repayment Loans (135,646) (70,943)

Interest paid (35,303) (32,618)

Dividend paid (43,811) (44,590)

Received from share issue 10,208 102

Received from loans/Bonds 42,843 26,684

Others (2,104) 5,162

Statements of Consolidated Cash Flows : Y2016

27


2017 2018 2019 2020 2021

4,556 3,887 2,382 2,066 2,304

10,376 9,036 7,265 7,785 6,736

817 510 556 597 620

47,265 51,975

14,313 13,944 7,551

20,647 36,874

35,970

9,935 40,882

Infrastructure

Investment in JV andits subs

Head Office andOthers

Oil and InternationalTrading

Natural Gas

Infrastructure, 43%

Gas, 4%Oil & Trading, 12%

Other Sub. & JV, 4%

Capital Restructuring,

22%

LNG, 14%

Others, 1%

PTT: CAPEX (PTT and Wholly Owned Subsidiaries) PTT plans to invest ~Bt 339bn ($8bn) during 2017-2021

By Business Unit

JV &

Investment in

Subsidiaries

40%

102,282

34,327

58,093

83,661

60,486

* 2017-2021 budget approved by BOD on 16 Dec 16

5th pipeline & extension

JV & Investment in 100% owned subsidiaries

Unit: MMTHB

PTT 5-Years CAPEX Plan ̴Bt 339 bn

Energy Infrastructure

55%

Green, 1%

By Strategy


Value-added 44%

28

29

Contents

2016 Overview


Outlook 2017


Bull : - Continue stimulus policy support growth

Bull : - Strong labor market Rising household spending

- Expansionary fiscal policy boost growth

30

Global Economic Outlook : Greater Growth Momentum amid Wider Dispersion of Risks

US economy : Growth Picking Up Pace

Bear : - Higher borrowing cost weigh on economic activity

Euro Area economy: Gradually Improving GrowthBull : - QE and low interest rate support growth

Bear : - Unsettled Brexit’s terms slowdown growth

Thai economy: Growth to Proceed at a Moderate PaceBull : - Strong government spending & Tourism Growth

- Rising commodity price & better global economy Goods exports recovering

Bear : - Private investment remains weak slowdown growth- High household debt weigh on private consumption

Bear : - Renew housing restrictions weigh on growth- Slow progress in addressing rising corporate debt risk of a sharper slowdown

China economy: Steady Slowdown in Growth to a More Sustainable Path

30


- Protectionism threat to growth

- New Elections in EU Policy risks following US Election

Summary: Outlook 2017

Business 2016 2017 (Forecast)

Reason

Gas Price ($/mmbtu)- Henry Hub- JKM

2.555.72

Range 3.2 – 3.86.3 – 7.0

• Increase in US LNG export capacity & domestic consumption (coal-to-gas switching)

• Higher Oil Price & Strong LNG demand from Southeast & South Asia.

Oil Price ($/bbl)Dubai Price 41

Range50-55

• OPEC and Russia’s attempts to comply with an output-cut agreement

• A price-response of U.S. shale oil producers in ramping up output

Refinery Margin ($/bbl)Singapore GRM 6.12

Range6.3-7.0

• Gasoline: Higher regional refineries T/A (most postponed from last year) lower supply

• FO: lower arbitrage from the West & Russia (as most refineries will upgrade FO into lighter components)

- higher bunker demands

Petrochemical ($/ton) - Olefins (HDPE, PP)

- Aromatics (PX, BZ)

HDPE-Naphtha =734

PP –Naphtha = 627

PX-Naphtha = 396BZ-Naphtha = 242

HDPE-Naphtha = 640-650PP –Naphtha = 590-600

PX-Naphtha = 365-375BZ-Naphtha = 280-290

Olefin• New PE capacity from US & Saudi• New PP capacity from China (PP)• High naphtha price squeezed

Aromatics• PX New capacity from India & Saudi • BZ healthy downstream derivative

demand (SM, MEG).

31


Y2016

Improved performance in most PTT Group Businesses

• Oil price started to pick up while NG continued

to fall

• Gas – lower feed costs improved in almost

segments

• Oil –Better performance mainly from stock gain

• Trading – Improved domestic condensate

margin

• P&R - Improve performance from stock gain

offset lower GRM with better Aromatics margins

• Power - improved from sales volume & dividend

income

• PTT Group- successful productivity improvement

Looking Forward (2017)

• Global growth slightly increase

• Oil price gradually improve to be 50-55 $/bbl

• Approval of Petroleum Act and Oil fund Act

• Re-tendering of expiring concessions in the

Gulf of Thailand

• Feed gas cost expected to slightly increase

• Major T/A for IRPC

• Petrochemical prices tend to be weaken

Key Takeaways

32

Thank youPTT Public Company Limited – Investor Relations Department

Tel. +66 2 537-3518, Fax. +66 2 537-3948, E-mail: [email protected] Website: http://www.pttplc.com

Disclaimer

The information contained in our presentation is intended solely for your personal reference only. Please do not circulate this material. If you are not an intended recipient,

you must not read, disclose, copy, retain, distribute or take any action in reliance upon it. In addition, such information contains projections and forward-looking statements

that reflect our current views with respect to future events, financial performance and result of PTT’s activities. 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.

The information contained in this presentation is subject to change without notice and PTT 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.

33

33

mailto:[email protected]

http://www.pttplc.com/

3434

PTT Group Performance : 2016 (YoY)

*SPRC before disposed = 36%, **BCP divested in April 2015 34

Unit : MMTHBPerformance 100%

% PTT holding

Equity Method % PTT

Y2015* Y2016 YoY Y2015* Y2016 YoY

PTT Net operating Income 28,285 52,307 85% 28,285 52,307 85%

E&P - PTTEP -31,590 12,860 141% 65.3% -20,618 8,391 141%

Petrochemical 23,449 31,122 33% 10,879 14,870 37%

- PTTGC 20,503 25,602 25% 49.3% 9,710 12,443 28%

- HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 2,946 5,520 87% 1,169 2,427 108%

Refining 31,872 30,943 -3% 12,764 14,022 10%

Refining (Excluded SPRC & BCP) 21,583 30,943 43% 9,532 14,022 47%

- TOP 12,181 21,222 74% 49.1% 6,123 10,162 66%

- IRPC 9,402 9,721 3% 38.5% 3,409 3,860 13%

- SPRC 8,356 - N/A 5.41%* 2,679 - N/A

- BCP 1,933 - N/A 0%** 553 - N/A

Others Business -7,437 10,491 241% -11,375 5,019 144%

Inter - PTTER, PTTGE -22,433 -4,969 78% 100% -22,729 -4,986 78%

Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 6,073 6,042 -1% 5,146 5,236 2%

Utilities -GPSC/ TP/ DCAP 3,175 4,361 37% 878 1,070 22%

Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 5,748 5,057 -12% 5,331 3,699 -31%

Shared of Net Income from Affiliates

16,294 85,416 424% -8,349 42,302 607%

PTT Conso. Net Income 44,579 137,723 209% 19,936 94,609 375%

PTT Group Performance : Q4/2016 (QoQ)

*SPRC before disposed = 36%, **BCP divested in April 2015 35

Unit : MMTHBPerformance 100%

% PTT holding

Equity Method % PTT

Q3/16 Q4/16 QoQ Q3/16 Q4/16 QoQ

PTT Net operating Income 14,985 12,240 -18% 14,985 12,240 -18%

E&P - PTTEP 5,446 -872 -116% 65.3% 3,558 -572 -116%

Petrochemical 8,422 10,744 28% 4,030 5,206 29%

- PTTGC 6,225 9,745 57% 49.3% 3,074 4,674 52%

- HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 2,197 999 -55% 956 532 -44%

Refining 4,248 7,496 76% 2,092 3,421 64%

Refining (Excluded SPRC & BCP) 4,248 7,496 76% 2,092 3,421 64%

- TOP 2,941 5,802 97% 49.1% 1,537 2,793 82%

- IRPC 1,307 1,694 30% 38.5% 555 628 13%

Others Business 3,833 -2 -100% 2,309 -1,208 -152%

Inter - PTTER, PTTGE -158 -4,109 -2701% 100% -157 -4,110 -2518%

Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 1,601 1,798 12% 1,277 1,587 24%

Utilities -GPSC/ TP/ DCAP 1,173 819 -30% 322 167 -48%

Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 1,217 1,490 22% 867 1,148 32%

Shared of Net Income from Affiliates 21,949 17,366 -21% 11,989 6,847 -43%

PTT Conso. Net Income 36,934 29,606 -20% 26,974 19,087 -29%

Statements of Cash Flows (PTT Only) : Y2016

36

OperatingY2015 Y2016

81,812 97,063

Net Income 9,555 70,808

Changes in assets & liabilities 27,819 15,688

Income Tax (5,036) (5,388)

Non-Cash Adjustment 49,474 15,955

InvestingY2015 Y2016

4,971 (21,848)

CAPEX (PP&E, Intangible asset) (35,398) (23,807)

Investment (Sub. &Affiliates) 25,064 (550)

Current investment (15,058) (24,558)

Dividend/Interest Received 27,939 27,513

Others 2,424 (446)

Free Cash Flow

86,783 75,214

Financing (77,272) (79,785)

Repayment Loans (35,157) (37,045)

Interest paid (13,765) (14,432)

Dividend paid (31,402) (28,561)

Received from share issue

- -

Received from loans/Bonds

3,052 253

Others - -Adjustment

(4) (306)

Beginning Cash and Cash Equivalents

58,018 67,524

Cash In/(Out)

9,507 (4,876)

Ending Cash & Cash Equivalents

67,525 62,648

Ending cash incl. S/T investment

102,433 121,841

37

Debt Profile : Control Cost & Manage Risk

Debt Portfolio

Managed debt according to financial risk and policy

ConsolidatedPTT OnlyUnit : MMTHB

: Cost of debts ~ 4.72%: % fixed-rate ~ 69%: Avg. debt life ~ 8.64 years

: Cost of debts ~ 4.5%: % fixed-rate ~ 68%: Avg. debt life ~ 7.28 years

204,560 184,091147,592

384,548 368,733325,524

83,98581,154

81,245

305,127256,588

250,968

288,545265,245

228,837

689,675

625,321576,492

31 Dec 14 31 Dec 15 31 Dec 16 31 Dec 14 31 Dec 15 31 Dec 16

USD&Other

THB

(29%)

(71%)

(36%)

(64%)

(44%)

(56%)

(44%)

(56%)

Note : Data as of 31 Dec 16 (THB/USD = 36.0025 THB/JPY = 0. 311335) Excluding liabilities from finance leases; Cost of debts includes withholding tax.

37Cost of debts, % fixed rate, and avg. debt life took into account the derivative transactions. Debt outstanding is reconciled with accounting.

(31%)

(69%)

(41%)

(59%)

Subsidiaries ConsolidatePTT (Cambodia) Co., Ltd. PTTCL 100.00%PTT Oil & Retail Business Co., Ltd. PTTOR 100.00%Thai Lube Blending Co., Ltd. TLBC** 48.95%PTT Tank Terminal Co., Ltd. PTTTANK 100.00%PTT Oil Myanmar Co., Ltd. PTTOM 100.00%

Associates EquityKeloil-PTT LPG Sdn. Bhd. KPL 40.00%Thai Petroleum Pipeline Co., Ltd.THAPPLINE 40.40%PetroAsia (Thailand) Co., Ltd. PA(Thailand) 35.00%

Others CostPetroAsia (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 0.0000090%

Others Fair ValueBangkok Aviation Fuel Services Plc. BAFS 7.06%

Others

Subsidiaries ConsolidatePTT Exploration & Production Plc. PTTEP 65.29%PTT Natural Gas Distribution Co., Ltd. PTTNGD 58.00%PTT LNG Co., Ltd. PTTLNG 100.00%Thai Oil Power Co., Ltd.* TP 26.00%Global Power Synergy Co., Ltd* GPSC 22.58%

Joint Ventures EquityTrans 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%

Petrochemical Subsidiaries ConsolidatePTT Polymer Marketing Co., Ltd. PTTPM 50.00%PTT Polymer Logistics Co., Ltd. PTTPL**50.00%PTT PMMA Co., Ltd. PTTPMMA 100.00%PTT Global Chemical Plc.* PTTGC 49.42%PTT Maintenance and Engineering* PTTME 40.00%PTT Energy Solutions Co., Ltd.* PTTES 40.00%

Joint Ventures EquityHMC Polymers Co., Ltd. HMC 41.44%PTT Asahi Chemical Co., Ltd. PTTAC 48.50%PTT MCC Biochem Co., Ltd. PTTMCC 50.00%

Refining Subsidiaries ConsolidateThai Oil Plc.* TOP 49.10%IRPC Plc.* IRPC 38.51%

Others Fair ValueStar Petroleum Refining Co., Ltd. SPRC 5.41%

Others Fair ValueDhipaya Insurance Plc. TIP 13.33%

Subsidiaries ConsolidateEnergy Complex Co., Ltd. EnCo 50.00%Business Service Alliance Co., Ltd. BSA * 100.00%PTT Regional Treasury Center Pte. Ltd. PTTRTC 100.00%PTT ICT Solutions Co., Ltd.* PTTICT 20.00%

International Trading Business Group

Subsidiaries ConsolidatePTT International Trading Pte. PTTT 100.00%PTT International Trading London Ltd PTTTLDN 100.00%

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.

Petrochemicals & Refining Business GroupE&P and Gas Business Group Oil Business Group

Data as of 31 Dec 2016

International Investment

Subsidiaries ConsolidatePTT Energy Resources Co., Ltd. PTTER 100.00%PTT Green Energy Pte. Ltd PTTGE 100.00%

38

3939

Natural Gas Price Structure : Jan-Dec 2016

CustomersSales Price Structure

Gas Pool Price Supply Margins Pipeline Tariffs+ +

Average Purchased Gas Price

1.75%

1.75%

9.33%

21.9 Bt/MMBtu

Charged at the same price structure of power producers

Reference to Saudi Aramco’s contract price

Charged at prices comparable to fuel oil

Gas prices are mostly agreed under long-term contracts and volatility pass-through to ensure stable returns.

Profit-sharing mechanism based on market prices of petrochemicals

Reference to Naphtha market price

At GSPs cost (adjusted every 3 months)

• Contract periods are ~ 25-30 years or until depletion of gas fields or the expiration of concessions

*

*

*

GSP 20%

Petrochemicals Feedstocks

Industry 15%

Ethane, Propane, LPG

NGL

Local Cooking Gas

Export Cooking Gas

Power Producers 59%

: EGAT 21%

: IPP 20%

: SPP 18% * EGAT IPP and SPP Supply Margins not more than 2.1525 and 11.4759 respectively

• 21 Jan -15 Jul 2016: Capped at 13.50 Baht/Kg. If cost is less than 13.50 Baht/Kg, retail price will be set to reflect the cost.

• Since 16 Jul 2016 : The retail price is set to reflect the cost.• NGV retail Price as of 31 Dec,16 = 12.54 Baht/Kg.

NGV 6%

39

Power

GSP

Industry

78%

21%

8%

2,635

14%

19%

15%

60% 63%

14%

NGV3%

5%

5,770

MMscfd

4,345

Business Plan

Thailand Gas DemandReplace :coal (3,340 MW), AE and EE 30%

PTT Gas demand forecast (CAGR during 2017-2031): Total ~ -1%: Power ~ -1%: GSP ~ -3%: Industry ~ 1%: NGV ~ -5%

Thailand Gas demand forecast: Total ~ 1%: Power ~ 2%: GSP ~ -3%: Industry ~ 1%: NGV ~ -5%

Natural Gas : Growth of natural gas upon Government fuel diversification policy for power generation

40

Thailand’s Projected Energy Demand

41

Primary Energy Consumption

Sources : Ministry of Energy (Thailand Energy Outlook 2016)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

KBD

Oil

Natural Gas

Coal/Lignite

Hydro/Import

Renewable

28%

34%

16%

3%

18%

3,853

2,812

33%

44%

11%

10%

2%

2,714

32%

46%

11%

9%2%

0.7%

0.3%

4.6%

2.9%

3.6%

Gas Business Generates Stable Returns

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 25-30 years

6 Gas Separation Plants; Total

production 6.7 MTA; are on

petrochemical market price-linked

profit sharing basis

42

Overview Gas transmission pipeline capacity

Documents

Analyst Meeting FY 2016 - listed companyptt.listedcompany.com/misc/PRESN/20170222-ptt-am-fy2016...2017/02/22 · Analyst Meeting FY 2016 PTT Auditorium 22 Feb 2017 1 Safety and Sustainability: