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GC Opportunity Day FY2018 Performance Presentation
The Stock Exchange of Thailand
26 February 2019
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This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
Disclaimer
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Vision and Mission
3
PTTGC Sustainable Development
4
Agenda
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02
01 2018 Financial Result
2018 Key Achievement
Overview of business unit performance
Operating rate FY18 net profit at 40,069 MB, +2% yoy, because of • Increasing in sale volume from having high operating rate
and new capacity of LLDPE II, 400KTA, which COD in March
• Average HDPE price, $1,330/T, increase by +14% yoy, meanwhile improving in phenol performance and increasing in share of profit of investment as full year realize the benefit from asset injection project. This mainly support from upside of acrylonitrile business.
• These partial offset by effect to stock loss in Q4, from dropping of oil price at the end of the year. 6
39,298 4,714
1,894 469 4,394
2,516 40,069
2017 2018
Performance comparison YoY
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Stock Gain/(Loss) & NRV&Commodity Hedge
2018 = (3,331) 2017 = 1,383
FX Gain/(Loss)
2018 = 407 2017 = 2,301
Unit : MB
Operating Profit from main BUs
Others
Sharing from Subsidiaries,
JV & Associate 2018 = 7,209 2017 = 2,816
Extra Item 2018 = 374
Gain on bargain purchase = 1,355 Gain from sales API (net CIT) = 291
Loss from GGC’s inventory (72.29%) net DTA = (1,272) 2017 = (2,131)
MLPI Plant = (1,839) Project Study = (292)
• Comparing with previous year, the main operation was improved especially from increasing in volume as a result of improving in operating rate and additional capacity of LLDPE II since March 2018. Phenol performance is also improve from tight supply in the market. Sharing from JV & Associate was increased mainly from PTTAC which AN was increased as well as improving in performance from NatureWorks because of accessing to high value product market. In 2018, GC has fully realize the benefit from asset injection project, which was completed in July 2017.
• Nevertheless, the soften in oil price, impact from US-China trade war and geopolitical have impact to product price and demand growth, which lead to softening in polyethylene price and stock loss, especially in the last quarter. Refinery GRM is also impact from decreasing in ULG and Naphtha spread and Aromatic BTX margin is slightly decrease from pressure of expecting new capacity in 1H but recovery after gaining support from PX downstream demand and less than expectation of new volume to the market in 2H.
12,793 2,153
529 7,327
85 1,191 4,060
Q3-18 Q4-18
Performance comparison QoQ
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Stock Gain/(Loss) & NRV&Commodity Hedge
Q4’18 = (6,749) Q3’18 = 578
FX Gain/(Loss) Q4’18 = 252 Q3’18 = 167
Unit : MB
Operating Profit from main BUs Others
Sharing from Subsidiaries,
JV & Associate Q4’18 = 1,580 Q3’18 = 2,108
• Overall operating profit from main BUs in Q4’18 was lower than previous quarter as a consequence of
o Mainly from dropping in oil price and polyethylene price in the period, while there are S/D of 3 polymer plants in the
period, which leads to high selling volume of ethylene that facing downward trend in this quarter. This quarter is also
has impact from stock loss from decreasing of oil price.
o Sharing from JV & Associate was decreased from decreasing of product spread of main product i.e. PP, AN.
Extra Item Q4’18 = 1,471
Gain on bargain purchase = 1,355 DTA from GGC’s inventory loss = 116
Q3’18 = 291 Gain from sales API (net CIT) = 291
Strong Financial Position
Cash Flow
THB Bn
Statements of Financial Position
Cash +ST Investment
CA
PPE
Liab.
IBD
Share Holder’s Equity
Dec 31,2018
469 Bn
Dec 31,2017
435 Bn
• Cash & ST Investment (54 billionTHB) and private fund
and inhouse management of 6.8 billion THB at the end
of 2018.
• In 2018, the interest bearing debt is 61% on fixed rate
and 39% is float rate. THB debt is a major portion of
57% of our debt profile, while 43% is in USD, mainly
from US Bond.
• 2018 CAPEX still based our core investment from
ongoing projects, including ORP, PO (GCO) ,Polyols
(GCP).
• The repayment profile is around 10 billion THB per
year on average but 2021 will increase from THB bond
retirement (4-yr, 3.05%), as well as 2022 will increase
from USD bond maturity.
• The average loan life is ~3.43 years with average cost of
long term debt ~3.85%. Note : Private Fund and In house management around 6,800MB
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Non CA 80 75
245 220
90 85
54 55
303 280
97 98
69 57
55 54
54 28
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Beginning Cash +S/T Investment
Operating CashFlow
CAPEX Financing Ending Cash +S/T Investment
Agenda
10
02
01 2018 Financial Result
2018 Key Achievement
2018 Key achievement
2018 Achievement
Another record year of net profit of 40,069 Million bath
Maintain high operating rate in all major units
REF 102% (103% in 2017)
ARO 93%
(80% in 2017 )
OLE 101% (96% in 2017 )
POL 100%
(113% in 2017)
Execution of downstream integration
• Acquisition of PTA 970KTA and PET 147KTA • Acquisition of Rotomolding Compound 61KTA
Achieved sale target in CLMV
Achieved polymer sale volume > 250KT
DPS
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34,…
33,…
15,…
20,…
25,…
39,…
40,…
3.40 3.40 2.37 2.80 2.85
4.25 4.25
-
2.00
4.00
6.00
-
20,000
40,000
60,000
• JV in PA9T and HSBC business
• Full year benefit from realizing JV performance from asset injection deal, which closed in July 2017. • Enhance performance from surging in
Phenol, Acrylonitrile and PP chain.
Achieved polymer sale volume through JV in Myanmar ~3KT in the past year
Sustainable Growth
Strengthen production home base
• Joint venture in Myanmar with strategic partner • Establish sale office in Myanmar and Vietnam • Establish logistic business in Vietnam
• Achieved MAX target of 10,800MB • Kick off digitalization module • Establish GC Treasury Center for fx management
and USD fund raising • Production flexibility of LLDPE/HDPE in 1H19
• Establish Customer Solution Center to support marketing strategy to grow as a partner with customer
3Rs Concept (Reduce / Reuse / Recycle)
Efficiency enhancement
Market Strategy & Intelligence
Expand market portfolio in high growth region
Sustainable development
Bio-packaging
Fashion Items
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Long term strategic execution
• Constructing new 1.1MTA of new capacity • Project progress
• ORP ~32% (COD 2H20) • Propylene oxide ~36% (COD 2H20) • Polyols ~41% (COD 2H20) • KRR COD 2022
• Considering investment opportunity through Joint venture, Green field and M&A
Strategic investment through the value chain
Opportunity to strengthen investment base
• Explore opportunity in EEC and alignment with policy
• Resource preparation for investment roadmap i.e. GC Estate for land preparation
International strategic investment
Future opportunity in green business
• Explore opportunity in international strategic investment in the region that can support existing value chain or new market opportunity in both green field and M&A
• Opportunity in bio complex in Thailand
• Balance portfolio and align with global trend i.e. potential investment in recycle plant, COD of ME II in Q1’19 13
Thank You 1 Thitipong Jurapornsiridee VP-Corporate Finance & IR [email protected] +662-265-8574
2 Jittasak Soonthornpan IR Manager [email protected] +662-265-8172
3 Nattchanon Chawinsittangkul IR Analyst [email protected] +662-265-8364
4 Pantaree Nantanakom IR Analyst [email protected] +662-140-8714
5 Jinthip Prakobwit IR Analyst [email protected] +662-265-8361
6 Preeyapa Asarangchai IR Analyst [email protected] +662-265-8213
7 Pavena Thongpan Coordinator [email protected] +662-265-8421
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