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UOBKH Roadshow I Singapore
March 3-4, 2016
DISCLAIMER
This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. PTTGC has based these forward-looking statements on its views with respect to future events and financial performance. Actual financial performance of the entities described herein could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. Forward-looking statements represent estimates and assumptions only as of the date that they were made. The information contained in this presentation is subject to change without notice and PTTGC does not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.
2
Agenda
3
PTTGC’s Business Overview
Strategic Direction & Execution
Financial Results
2016 Outlook
Overview of PTTGC
PTT Group’s Chemical Flagship Thailand’s largest ethane-base cracker with integrated aromatics and refining business Highly competitive cost structure with pricing arrangement for gas feedstock based
upon equitable return on investment for both PTT and PTTGC Fully integrated petrochemical and refinery operations with diversified product
portfolio covering full hydrocarbon chain Committed to operational excellence targeting best in class/ first quartile business
efficiency Ranked in Dow Jones Sustainability Indices’ Chemicals Sector for the 3rd Consecutive
Year
PTTGC at a Glance
Strong footprint in fast growing regions with 6 operating countries
Historical Dividend Payment
Dividend Policy >=30% Foreign Limit <=37%
• Incorporated on October 19, 2011 from the amalgamation of PTTAR and PTTCH
• 2015 Sales : $11.7 bn; Adj. EBITDA: $1.5 bn
• Asset size: $11.0 bn (as of Dec 31, 15) • Number of employees:
6,113 persons
4,509 mil shares
4 Overview of PTTGC
4
Shareholding Structure
1.68 0.95 1.62 1.00 1.50
1.30 2.45 1.78 1.37
1.30
2.98 3.40 3.40 2.37
2.80
45% 45% 46%
71% 61%
0%10%20%30%40%50%60%70%80%
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2011 2012 2013 2014 2015
1st Half 2nd Half Payout Ratio
Our Business Structure 8 Business Units
LPG Light Naphtha Reformate Jet A1 Diesel Fuel Oil
Benzene Toluene Paraxylene Orthoxylene Mixed Xylenes Cyclohexane
Ethylene Propylene Mixed C4 Pyrolysis
Gasoline Butadiene Butene-1
HDPE LLDPE LDPE Polystyrene
Ethylene
Oxide Ethylene
Glycol Ethanolamines Ethoxylate
Methyl Ester Fatty Acid Fatty Alcohol Grycerin Specialty
Oleochemicals Bioplastics
Dilsocyanate
Hexamethylene Diisocynate and Derivatives
280 KBD (1) 2,259 KTA 2,988 KTA 1,590 KTA 498 KTA 743 KTA 136 KTA
Capacity* & Key Products
Aromatics Olefins Polymers EO-Based Performance
Green Chemicals
High Volume Specialties Refinery
Thailand’s Largest Petrochemical Player
8.71 (Million Tons per Annum)
Petrochemical Capacity 280 (Thousand Barrels per Day)
Petroleum Distillation Capacity (1)
(1) Refinery = 145 KBD, Condensate Splitter Units = 135 KBD
Aromatics Olefins Refinery
(1) Refinery = 145 KBD, Condensate Splitter Units = 135 KBD * Calculate proportionate by percent share
5
5
Phenol
Phenol Bisphenol A Acetone
474 KTA
Key Competitive Strengths
Fully Integrated Operations with Flexible Feedstock,
Enhanced Optimization and Diversified Product Portfolio
Strategic location creates proximity to suppliers and
customers
Experienced Management with Strong Track Record
Highly Competitive Cost Structure
Strategic Relationship with PTT with Secured Feedstock Position
and Offtake Agreements
1
2
3 4
5
6
6
Domestic / Export Volume Portion Flexible Feedstock and By-Product Enhancement
PTTGC's refinery is one of the most complex refineries in Thailand, with Nelson Index of 10.17 and refining capacity accounting for 13% of country’s total capacity
Value enhancement from by-product exchange among Olefins, Aromatics and Refinery units highlights operational integration and efficiency:
-CR from Aromatics units sent to Refinery to produce middle distillates
-Pygas from Olefins unit sent to Aromatics for BTX -Offgas from Refinery sent to Cracker for Olefins products
Feedstock Supply Product Marketing
Refinery
Aromatics
Olefins & Derivatives
Others
Condensate
Crude Oil
Others
Ethane, Propane, LPG
C5-C9
C10-C25
C2-C4
66%
(1)
46%
54%
Feedstock Supply Commercial Agreements Product Marketing Commercial Agreements
Customers
Others
70%
30%
(1) PTT owns 50%, PTTGC and IRPC each owns 25% in PTTPM
Others 34%
Captive Use EO Based
Polymers 79%
21%
Strategic Relationship with PTT with Flexible Feedstock and Secured Product Offtake
1
Domestic 70% Import 30%
7
7
Domestic 71%
Domestic 78%
Domestic 44%
Export 29%
Export 22%
Export 56%
Petroleum Aromatics Polymers
Highly Competitive Cost Structure & Performance driven by Olefins and Derivatives
Global Ethylene Cash Cost by Region in Oct 2015
Source: IHS (formerly CMAI) Note: MDE = Middle East, NAM = North America, NEA = Northeast Asia, SEA = Southeast Asia, WEP = Western Europe. MDE cash costs are average values of Iran and Saudi Arabia.
48%
20%
21% 5%
5% 1%
Typical Adj. EBITDA Breakdown
16%
16%
56%
3% 3% 5%
Typical Revenue Breakdown
% Adj. EBITDA Margin
s
s
2 8
USD
/To
n
8
4 3
26
4 5 8 9
24
6 7
Refinery Aromatics Olefins andDerivatives
Green HVS
2014
2015
Natural Gas
Crude Palm Oil
Crude
Condensate
Cracker
Aromatics Plants
Refinery
Ethylene
HDPE
LLDPE
LDPE
MEG
Propylene
Oleochemicals
Paraxylene
Benzene
PTAPET Fiber / Resin
EO
Ethanolamine
Ethoxylate
Cyclohexane
CumenePhenol
Acetone
EB / SM
PS
BPA
Methyl Ester( B - 100 )
PC
Caprolactam Nylon 6
Fatty Alcohol
MMA PMMA
Epoxy Resins
ABS
SBR
PP
PTT Phenol
Petroleum Products- LPG- Reformate- Light Naptha- Jet Fuel- Diesel- Fuel Oil
Reformate , Heavy
Naphtha
Pygas
Condensate Residue ,
Hydrogen
Light Naphtha
C 3 ,C 4
OffGas Mixed C 4 Butadiene
PO
PUTDI / HDI
Toluene
Polyols
Orthoxylene
Cracker Bottom ,
Hydrogen
PA Plasticizer
REFINERY & SHARED FACILITIES
AROMATICS OLEFINS POLYMERS EO-BASED
PERFORMANCE GREEN CHEMICALS
HIGH VOLUME SPECIALTIES
Feedstock Upstream Intermediates Downstream
Proximity to Suppliers and Customers
Exchange Stream Products By-Products
1st Screen for Further Feasibility Study PTTGC does not currently produce these products
Not qualify for 1st Screen
PLA
Succinic Acid Succinic Acid Plant
PLA Plant Agricultural
Products
PTA
PA
EB/SM
Nylon 6
HDI
TDI
Nylon 6,6
PU
Polyester Fiber/ PET Resin
Plasticizer
Nylon 6 Caprolactam
Epoxy Resin
System House
Adipic Acid Phenol
HDMA
Oleochemicals
Fully Integrated Petrochemical and Refinery Operations with Diversified Product Portfolio
3 9
9
Strategic location of each plant in Map Ta Phut Industrial Complex creates proximity to suppliers and customers
4 10
10
SVP – Polymers Business
Unit
EVP – EO Based
Performance Business
Unit
SVP – Marketing, Commercial and Supply
EVP – Finance and Accounting
EVP – Corporate Strategy
EVP – Organizational Effectiveness
EVP – External Affairs
SVP – Corporate
Affairs
SVP – Science and Innovation
EVP – Project
Executive Director
EVP – GPC Olefins
SVP – GPC Refinery
and Shared Facilities
SVP – GPC Aromatics
SVP – CAPEX
Excellence
SVP – Quality, Safety,
Occupational Health and
Environment
Miss Duangkamol Settanung
SVP – Green
Chemicals Business
Unit
SVP - Phenol
Business Unit
EVP – International
Business Operations
Board of Directors
President and CEO
COU – Upstream Petrochemical Business
COD – Downstream Petrochemical Business
VP – Internal Audit
Audit Committee
Risk Management Committee
Nomination and Remuneration Committee
CG Committee
Mr. Patiparn Sukorndhaman
SVP – Technical
and Operations
SVP - High Volume Specialties
Business Unit
11
Experienced Management
Effective Nov 1, 2015
Effective Jan 1, 2016
5
Agenda
12
PTTGC’s Business Overview
Strategic Direction & Execution
Financial Results
2016 Outlook
Strategic Direction
13
Sustain Core
Accelerate Grow th levers
Balance Business & Social
Value
To be a Leading chemical company for Better living
Performance excellence
Maximize value creation
Map Ta Phut retrofit
International hub
Performance chemicals
Green business
Sustainable development
Effective CSR programs
Stakeholder management
Map Ta Phut Retrofit & Synergies through PTT group restructuring
14
Timeline : 2015 2018
Feasibility Study
2020
1Q/18 Construction
COD 1Q/20
2016
ITB
To study a new naphtha cracker for increasing flexibility of feedstock, especially in feedstock price volatile period, and secure downstream production along value chain as well as create value added to internal feedstock.
Readiness on location, supporting facilities & strategic partner e.g. Thai Tank Terminal
Fulfill downstream product portfolio via partnership e.g. PTT Group operating asset injection and position as a flagship in petrochemical
PO/Polyols Project Updates
2016 2017
Set up JV company
2019
2Q/17 Construction
COD 2Q/19
Timeline :
Isocyanate • TDI/HDI
EO
Polyols System House PO Propylene
PU Formulation PU Raw Materials Feedstock
Cumene
1
2
160 KTA
• MDI
Progress :
Kick off meeting with Foster Wheeler on Jan 04, 2016
Expect to complete FEED package by Jul 31, 2016
#1 Public participation meeting on Nov 26, 2015
#2 Public participation meeting on Mar 31, 2016
Polyols - Completed 1st tier market survey with partners in 6 target countries
more than 80 customers on Dec 15, 2015 and will continue in other countries
PO - Expect to complete market survey with partner in 3 target countries more than 25 customers by Mar 15, 2016
- Under developing offtake agreement with 3 offtakers with total volume covering 80% of total production capacity (incl. captive vol. for Polyols
Marketing & entry strategy will be completed by Jul 31, 2016
FEED
EIA
MARKET
Capacity 200 KTA PO
Licensor
Capacity 130 KTA Polyols
40 KTA PU System
Licensor
PO
Polyols/ System House
Majority Shareholder
Majority Shareholder
Project Scopes :
15
Mattresses, Bedding
Opportunity in New Geographies
World Scale Ethane Cracker • Utilize ethane from shale gas as feedstock • Capacity : 1 MTA Ethylene • Derivatives
• HDPE : 700 KTA • MEG : 500 KTA • EO : 100 KTA
• Location : Dilles Bottom, Ohio
US Petrochemical Complex Indonesia Project
• Investment cost justify investment return • Enough ethane capacity with capped price • Partner can distribute products in N. America
Key Criteria for FID
Indonesia remains deficit in PE with additional opportunity in AEC, especially CLMV countries
Project Update
• FEED : FEED progress is approximately at 31%. EPC termsheet has been issued
• Feedstock : Working with a major ethane provider to finalize contract term
• Marketing : Continue conducting market survey phase 2 as well as exploring logistic providers options
• Permit: Preparing air permit application
KTA
-
1,000
2,000
3,000
4,000
5,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
D&S in AEC Country
VN Supply PH Supply MY Supply TH Supply
VN Demand PH Demand MY Demand TH Demand 16
Existing Non Captive Upstream
and Downstream 8,948 KTA
HDI Deriv. 12 KTA
Phenol II 405 KTA Aromatics 170 KTA
HDI Monomer 70 KTA
mLLDPE 400 KTA
PO/Polyol 250 KTA
MTP Retrofit 761 KTA
8,000
8,500
9,000
9,500
10,000
10,500
11,000
2015A 2016F 2017F 2018F 2019F 2020F
Strategic Investment
17
Aromatics 2 Phenol2 HDI Thailand HDI France MLLDPE PO/Polyol MTP Retrofit
CAPEX 128.8 MUSD 345 MUSD 43 MUSD 18 MUSD 288.2 MUSD TBC TBC
Additional PetChem* (per year)
PX 115 KTA BZ 35 KTA OX 20 KTA
PH 250 KTA AC 155 KTA
HDI Derivative 12 KTA
HDI Monomer 70 KTA
MLLDPE 400 KTA Hexene-1 34 KTA
PO 200 KTA Polyol
130 KTA
Ethylene 500 KTA Propylene 261 KTA
Period Q1’16 Q2’16 Q2’16 Q2’16 2018 2019 2020 EBITDA Uplift/Year** 24 MUSD 63 MUSD 9 MUSD 24 MUSD 59 MUSD
• 100% stake of additional capacity
** Estimate EBITDA uplift with 100% stake at mid cycle price
8,948 KTA
10,677 KTA
17
Agenda
18
PTTGC’s Business Overview
Strategic Direction & Execution
Financial Results
2016 Outlook
45%
15%
30%
3% 7%
Sales Revenue
Overview of Business Unit’s Performance
FY2015 Revenue and Adjusted EBITDA Structure
400,128 MB
19
% Adj. EBITDA Margin 2014 2015 4Q/2015
Business Unit :
Refinery 4 8 15
Aromatics 3 9 11
Olefins and Derivative 26 24 22
Green 4 6 11
HVS 5 7 3
Average 10 13 16
27%
11% 55%
2% 4%
1%
Adjusted EBITDA
50,873 MB
(Unit: Million Baht) 2014 2015 YoY
% + /(-) 4Q/2015
Sales Revenue 550,909 400,128 -27% 96,088
EBITDA 34,220 44,740 31% 10,387
EBITDA Margin (%) 6% 11% 5% 11%
Net Profit 15,372 20,502 33% 4,690
EPS (Baht/Share) 3.41 4.55 33% 1.04
Adjusted EBITDA* 52,369 50,873 -3% 14,971
Adjusted EBITDA Margin (%) 10% 13% 3% 16% Note: * Adjusted EBITDA refers EBITDA excluding impact of inventory value (Inventory ,NRV and extra ordinary item)
20
Strong Financial Position
Repayment Profile
Interest Rate Currencies
55% Fixed 58% THB
45% Float 42% USD & Others
Loan Type
• Cost of long term debts ~ 4.20% (Include W/H Tax)
• Average loan life after refinancing - 5.03 Years
Treasury policy Net IBD to EBITDA ratio of ≤ 2.4x Net IBD to Equity ratio of ≤ 0.7x
THB Bn
* After Refinance
Key Financial Ratios
Statements of Financial Position
As of Dec 31, 2014 As of Dec 31, 2015
THB 381 Bn THB 378 Bn
Cash +ST Investment
CA
Non CA
PPE
Liab.
IBD
Share Holder’s Equity
THB 106 Bn
ST Bank Loan, 0%
LT Bank Loan, 50%
Debenture, 49%
20
1.59 1.28
1.72
1.30
0.23 0.21 0.26 0.25
31 Mar 15 30 Jun 15 30 Sep 15 31 Dec 15
Net IBD/EBITDANET IBD/Equity
6.40% 7.57% 4.80%
8.99%
4.92% 6.10% 4.27% 7.36%
31 Mar 15 30 Jun 15 30 Sep 15 31 Dec 15
ROE ROA
9.7
15.8 15.0
8.8 13.2 12.4
1.2 1.3 1.4 1.4
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
USD Bond
THB Bond
EUR Loan
USD Loan
THB Loan
39.1
21
Agenda
PTTGC’s Business Overview
Strategic Direction & Execution
Financial Results
2016 Outlook
2016 Outlook
22
KEY ASSUMPTIONS
• Projected to see correction in dubai price to be around $30-40/bbl on average.
• Demand & Supply balance is expected to be in 2H16 from less production from non-OPEC but will have some disruption from Iran volume.
AROMATICS
• Although, market is in oversupply situation but the product spread is expected to be improved from having low feedstock cost as low crude price.
• Capacity outage in 1H/16 will ease up oversupply situation
• Utilization rate is expected to increase from 74% to 88% with expanded capacity of 170 KTA of aromatics product.
REFINERY
• Demand growth over supply growth for refinery product both in gasoline and middle distillate. This help to ease market situation.
• Utilization rate drop from 100% to 84% due to planned shutdown in 2Q/16. GRM is expected to slightly decrease to approx. $ 5/bbl
OLEFINS & DERIVATIVES
• Improve in internal factor from expecting more gas flow to increase u rate of olefins and inventory management to ease effect from PTTPE turnaround. HDPE – MOPJ spread is maintain at more than $700/T.
23
Agenda
Appendix
• 2015 Performance
• Market Outlook
Average and Ending Dubai Crude Price: USD/BBL
Average and Closing FX : THB/USD
24
Business Environment & Operations Recap
24
2014 2015
YoY +/(-)
CDU Utilization Rate 102% 100% -1%
ULG95 - Dubai 14.3 18.3 28%
Jet - Dubai 15.9 13.9 -13%
Diesel - Dubai 16.1 13.7 -15%
Fuel Oil - Dubai -8.3 -5.0 40%
GRM on CDU (USD/bbl) 5.6 7.1 27%
BTX Utilization Rate 81% 74% -9%
PX- Condensate 400 383 -4%
BZ- Condensate 375 238 -36%
Market P2F (USD/Ton) 174 217 25%
Olefins Utilization Rate 91% 94% 3%
Polyethylene Utilization Rate 105% 104% -1%
MEG Utilization Rate 95% 96% 1%
HDPE Price 1,544 1,237 -20%
MEG – 0.65 Ethylene 206 230 12%
% Adj. EBITDA Margin 26 24 -2
o Surplus crude and weak demand pressured Dubai crude to decline from average at 51.9 USD/BBL in 1Q/15 to average at 40.7 USD/BBL in 4Q/15 (2015 year end closing at 31.8 USD/BBL). As a result, PTTGC reported Stock Loss & NRV totaling 3,602 M.THB for the year.
o FX Loss amounting to 2,288 M.THB, resulting from depreciation in THB against USD from average at 32.65 THB/USD in 1Q/15 to average at 35.84 in 4Q/15.
o Modest Refinery GRM, declined Aromatics P2F, yet, strong Olefins margin
32.48
34.25
32.66 32.45 32.10 32.71 32.65 33.26 35.25 35.84
32.58 32.60 32.52 33.11 32.70
33.93
36.53 36.25
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Average FX Closing FX
96.6
50.9
104.5 106.1 101.5 74.4 51.9 61.3 49.7 40.7
104.8 109.2
94.6
52.9 53.4 60.2
43.5
31.8
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Average Price Closing Price
147.5 145.3 146.5 148.6 148.2 146.6 147.8 145.0 146.7 143.1
56.2 60.0 52.4 59.4 61.0 52.0 60.3 66.1 49.5 62.9
203.7 205.3 198.9 208.0 209.2 198.6 208.1 211.1 196.2 206.0
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Crude Condenstate Residue & Others102% 100%
25
Refinery Performance Production optimization supported decent GRM
ULG
95
- DB
JET
- DB
Dies
el -
DB
FO -
DB
Petroleum Products - Dubai Spread (USD/BBL) +39% YoY -3% QoQ
-20% YoY +29% QoQ
-14% YoY +27% QoQ
-17% YoY +19% QoQ
Gross Refinery Margin (USD/BBL)
Total Intake (KBD)
Sales Volume (KBD)
CDU U-Rate
+1% YoY +4% QoQ
+4% YoY +5% QoQ
25
101% 103% 102% 101% 102% 100% 101% 99%
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Market GRM 4.41 5.45 4.48 4.44 3.83 4.91 5.98 5.40 4.16 6.23
GRM on CDU 5.61 7.13 5.52 5.74 4.81 6.30 7.97 7.27 5.11 8.25
GRM on CRS 2.77 2.95 2.85 2.76 2.82 2.57 2.58 2.69 3.16 3.39
4.41 5.45 4.48 4.44 3.83 4.91 5.98 5.40 4.16 6.23
(4.36) (1.25) (0.69)
0.73
(2.92)
(14.68)
(1.50)
2.22
(3.22) (2.47)
0.94 0.93
0.33 0.66 0.70
2.08
(0.31) (0.04) (0.03)
3.86
0.98
5.13 4.12
5.83 1.61
(7.69)
4.17 7.59
0.91
7.63
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Market GRM Stock Gain/(Loss) Net NRVHedging Gain/(Loss) Accounting GRM
14.3 18.3 14.6 16.1 13.2 13.4 15.3 19.8 19.3 18.7
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
15.9 13.9 17.0 14.3 14.5 17.7 17.1 13.5 10.9 14.1
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
16.1 13.7 17.8 16.0 14.4 16.0 16.3 13.7 10.8 13.8
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
(8.3) (5.0)
(8.5) (10.7) (8.4) (5.6) (1.9) (3.6)
(8.1) (6.5)
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
8% 9% 5% 8% 9% 9% 9% 10% 9% 9% 14% 13% 14% 13% 14% 14% 12% 14% 15% 13%
50% 49% 52% 51% 54% 45% 46% 51% 49% 51%
13% 11% 13% 13% 12% 15% 17% 10% 9% 10% 15% 16% 16% 16% 10% 16% 16% 15% 17% 17%
185 186 185 188 179 186 184 194 180 188
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Others Fuel Oil Diesel Jet Naphtha+Ref.
+28% YoY
-13% YoY
-15% YoY
+40% YoY
+1% YoY
+1% YoY
25 44 18 29 42 13 41 31 34 69
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
400 383 386 334 479 401 333 391 397 410
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
375 238 380 370 430 320 217 271 235 230
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
26
Aromatics Performance Second half margin impacted by Aromatics 2 plant shutdown
Pri
ces
PX
FEC
P -
Co
nd
B
Z S
po
t -
Co
nd
Aromatics Products Prices and Spread (USD/Ton)
+2% YoY +3% QoQ
-28% YoY -2% QoQ Products to Feed Margin (USD/Ton BTX)
BTX U-Rate and Sales Volume (KTons)
BTX U-Rate
+19% YoY +44% QoQ
Nap
hth
a -
Co
nd
+454% YoY +103% QoQ
26
81% 74% 91% 89% 82% 63% 88% 85% 57% 66%
836
447
917 922 872
634 453 533
427 375
1,236
829
1,303 1,256 1,350
1,035
785 924
823 786 1,211
685
1,297 1,293 1,301
954 670 804
661 606
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Condensate Erawan PX FECP BZ Spot Korea
11% 11% 12% 12% 9% 11% 2% 13% 10% 17%
30% 31% 25% 28% 33% 35% 28%
30% 30% 35%
36% 36% 38% 37% 36% 33% 45%
36% 36% 29%
23% 22% 24% 23% 22% 21% 25% 21% 25% 19%
3,156 2,921 806 860 822 668 707 866 552 796
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
BZ Group
PX Group
Naphtha Group
Other By-Products
174 217 166 86
290 164 219 216 183 251
(85.91) (8.57)
-
(7.90)
40.44
(68.54) (398.22) (27.63)
54.93
(48.94) (27.79) (0.02)
(0.37)
- 2.54
88
209 158 127
222
(235)
191 271
134 226
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Market P2F Stock Gain/(Loss) Net NRVHedging Gain/(Loss) Accounting P2F
-36% YoY
-4% YoY
+74% YoY
-7% YoY
27
Olefins and Derivatives Performance Margin stayed strong at 22%
Pric
es
MEG
AC
P –
0.65
Ethy
lene
H
DPE
- N
apht
ha
Olefins Derivatives Prices and Spread (USD/Ton)
-33% YoY -58% QoQ
-12% YoY -8% QoQ
Adjusted EBITDA Margin
U-Rate (%)
GAS : NAPHTHA Intake %
HDPE Price -20% YoY -7% QoQ
Sales Volume (KTons)
KTons
27
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15HDPE (FILM) SEA 1,544 1,237 1,554 1,569 1,604 1,448 1,188 1,375 1,234 1,153 LLDPE CFR SEA 1,543 1,234 1,560 1,578 1,601 1,431 1,181 1,375 1,224 1,158 LDPE CFR SE Asia 1,571 1,249 1,639 1,605 1,601 1,440 1,192 1,401 1,244 1,158 MEG ACP 1,113 948 1,182 1,093 1,143 1,035 903 1,027 1,025 837 Naphtha MOPJ 861 491 935 951 913 647 494 563 461 445
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 Olefins 91% 94% 77% 91% 94% 101% 96% 89% 93% 97%
HDPE 107% 108% 93% 107% 114% 115% 109% 97% 109% 115% LLDPE 100% 91% 99% 112% 84% 105% 110% 61% 113% 79% LDPE 105% 111% 115% 93% 104% 106% 99% 119% 124% 104%
Total PE 105% 104% 99% 106% 104% 111% 107% 92% 113% 103% MEG 95% 96% 65% 99% 112% 104% 108% 106% 51% 117%
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 Olefins 708 760 134 168 182 224 196 173 189 203
HDPE 873 868 202 218 210 243 219 195 219 233 LLDPE 407 365 98 105 85 120 108 69 99 89 LDPE 323 333 72 92 75 83 80 80 83 90
Total PE 1,603 1,566 373 415 369 446 407 344 402 411 MEG 382 420 71 95 110 107 102 108 80 130
1,544 1,237
1,554 1,569 1,604 1,448 1,188 1,375
1,234 1,153
1,543 1,234
1,560 1,578 1,601 1,431 1,181
1,375
1,224 1,158
1,571
1,249
1,639 1,605 1,601 1,440 1,192
1,401 1,244 1,158
1,113
948 1,182 1,093 1,143
1,035 903
1,027 1,025 837 861
491
935 951 913 647
494 563 461 445
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
HDPE (FILM) SEA LLDPE CFR SEA LDPE CFR SE AsiaMEG ACP Naphtha MOPJ
682 747 620 618 691 802 694 812 774 708
2014 2015 1Q/142Q/143Q/144Q/141Q/152Q/153Q/154Q/15
206 230 245 152 182 246 236 126 394
165
2014 2015 1Q/142Q/143Q/144Q/141Q/152Q/153Q/154Q/15
57% 57% 60% 54% 56% 59% 56% 54% 57% 60%
35% 35% 26% 35% 40% 36% 37% 38% 35% 31%
8% 8% 13% 11% 4% 6% 7% 8% 8% 9% 3,727 3,899 799 932 965 1,032 991 932 964 1,012
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Ethane Other Gas Naphtha
26% 24% 24% 25% 28% 25% 19%
28% 24% 22%
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
+9% YoY
+12% YoY
216 201 126 164
291 282 240 175 221 170
2014 2015 1Q/142Q/143Q/144Q/141Q/152Q/153Q/154Q/15
268 269 214 197 302 360 454 355
154 114
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Phenol and BPA Performance Lower Margin from Soften Product Spread
Pric
es
BP
A-P
hen
ol
Ph
eno
l-B
Z
Phenol/ BPA Prices and Spread (USD/Ton) U-Rate and Sales Volume (KTons)
Sales Volume (KTons)
Adjusted EBITDA Margin
+1% YoY -1% QoQ
-40% YoY -23% QoQ
28
-68% YoY -26% QoQ
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15Phenol (CMP) 1,427 886 1,424 1,456 1,592 1,235 909 979 882 775 BPA (CMP) 1,695 1,156 1,638 1,653 1,894 1,595 1,364 1,334 1,036 889 Benzene 1,211 685 1,297 1,293 1,301 954 670 804 661 606
433 274 Phenol Mkt
P2F 358 389 528 456 347 236 285 227
BPA Mkt P2F
186 242 103 112 228 299 402 318 137 112
U-Rate 2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Phenol 118% 130% 78% 131% 132% 132% 131% 121% 132% 134% BPA 99% 103% 70% 107% 104% 116% 114% 85% 107% 104%
1,211
685
1,297 1,293 1,301
954 670 804
661 606
1,427
886
1,424 1,456 1,592
1,235 909 979 882 775
1,695
1,156
1,638 1,653 1,894
1,595 1,364 1,334
1,036 889
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
Benzene Phenol BPA
56% 55% 60% 58% 52% 60% 59% 48% 57% 53%
44% 45% 40% 42% 48% 40% 41% 52% 43% 47%
187 212 48 66 73 70 74 66 72 71
2014 2015 1Q/142Q/143Q/144Q/141Q/152Q/153Q/154Q/15
Phenol
BPA
11% 9% 4% 7%
16% 13% 19%
7% 6% 1%
2014 2015 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15
-7% YoY
0% YoY
+13% YoY
29
FY2015 Income Statements Consolidated
***
29
‘ 2014** 2015 YoY 4Q/2015
MB % MB % MB % MB %
Sales Revenue 550,909 100 400,128 100 (150,781) (27) 96,088 100
Feedstock Cost (449,497) (82) (304,672) (76) (144,825) (32) (71,547) (74)
Product to Feed Margin 101,412 18 95,456 24 (5,956) (6) 24,541 26
1 Variable Cost (28,433) (5) (25,752) (6) (2,681) (9) (6,585) (7)
2 Fixed Cost (16,389) (3) (16,143) (4) (246) (2) (4,652) (5)
3 Stock Gain/(Loss) & NRV (15,910) (3) (3,602) (1) 12,308 77 (2,053) (2)
4 Gain/(Loss) Commodity Hedging 2,249 0 2,645 1 396 18 2,853 3
5 Other Income 4,353 1 5,023 1 670 15 1,847 2
6 SG&A (10,823) (2) (10,356) (3) (467) (4) (3,033) (3)
7 รายการพิเศษ
คา่เผ่ือการปรบัโครงสรา้งธรุกิจ (2,239) (0) 0 0 (2,239) N/A 0 0
ขาดทนุจากการดอ้ยคา่ 0 0 (2,531) (1) 2,531 N/A (2,531) (3)
EBITDA 34,220 6 44,740 11 10,520 31 10,387 11
Depreciation & Amortization (15,890) (3) (16,382) (4) 492 3 (4,209) (4)
EBIT 18,330 3 28,358 7 10,028 55 6,178 6
8 Finance Cost (4,452) (1) (3,967) (1) (485) (11) (937) (1)
9 FX Gain/(Loss) 618 0 (2,338) (1) (2,956) (478) 510 1
10 Shares of profit/(loss) from investments 177 0 711 0 534 302 (210) (0)
11 Income Tax Expense (581) (0) (1,984) (0) 1,403 241 (769) (1)
Net Profit 14,092 3 20,780 5 6,688 47 4,772 5
Profit/(loss) attributable to:
Owners of the Company 15,372 3 20,502 5 5,130 33 4,690 5
Non-controlling interests (1,280) (0) 278 0 1,558 122 82 0
Adjusted EBITDA* 52,369 10 50,873 13 (1,496) (3) 14,971 16
Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (excludes Inventory gain/(loss) and NRV) ** Restated FY2014 Financial Statements from the implementation of new accounting standards (Pack 5) and purchasing PTTPM and PTTPL shares under
common control
30
Agenda
Appendix
• 2015 Performance
• Market Outlook
GROWING DEMAND BRING MORE CRUDE BALANCE IN 2nd HALF 2016
MARKET HIGHLIGHT
• US crude oil export trend
• Pace of Iran export ramp up
• Meeting between Saudi & Russia
• Non-OPEC & Shale oil production decline
• OPEC meeting in June 2016
• Fewer US Oil Hedging placing more pressure on US crude production
Unit : MBD
CRUDE PRICE TREND 2016
GLOBAL OIL SUPPLY vs DEMAND Non-OPEC Supply Growth Drop
92.0
93.0
94.0
95.0
96.0
97.0
1Q16 2Q16 3Q16 4Q16 2016
Global Demand
Global Supply
Unit : MBD
2016 Growth (MBD)
Demand +1.2
Supply +0.2
Source : JBC Dec’15
Non-OPEC output is projected to decline by 0.6 MBD in 2016.
Source : IEA Jan’16
31.3
37.0
37.0
40.0
40.0
42.5
45.0
46.0
49.0
0 10 20 30 40 50 60 70
JP Morgan
Barclays
BNP Paribas
Citigroup
T. Reuters
UBS
Macquarie
BofA
MSBRENT CRUDE
42.5 $/BBL
Brent Oil Poll as 29 January 2016
$/BBL
PRISM DUBAI PRICE FORECAST
52
61
50
41
28
34
10
20
30
40
50
60
70
1Q15 2Q15 3Q15 4Q15 1Q16 2016
40
30
$/BBL
31
32
MARKET HIGHLIGHT PRICE TREND & FORECAST
ASIA DEMAND REMAINS STRONG THAILAND DEMAND IS STILL GROWING
• High middle distillate inventory
• High diesel export quota from China
• Strong demand benefiting from low oil price
• Asia emerging market consumption e.g. Indonesia & Vietnam
• Q2 Asia Refinery Maintenance 5.5 MBD
2016 ASIA SUPPLY-DEMAND GROWTH
-1.8 -3.5
-8.1 -6.5 -4.7
-6.2
15.3
19.8 19.3 18.7 19.6 18.0
16.3 13.7
10.8 13.8
9.6 10.7
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
1Q15 2Q15 3Q15 4Q15 1Q16 2016
USD/BBL
Diesel – Dubai
ULG95 – Dubai
Fuel Oil – Dubai
269
195
9
229
138
-65 -150
-50
50
150
250
350
Gasoline MiddleDistillate
Fuel Oil
Demand Growth
Supply Growth
Unit : KBD 2016 China demand growth
• Gasoline 8.0% • Distillate 0.8%
0
500
1,000
1,500
2,000
2,500
3,000
Gasoline Diesel JetGasoline Diesel Jet
Unit : million liter/month
+13%
+6%
+9%
REFINERY : SOFTER MARGIN PRESSURED FROM INVENTORY GLUT
Source : JBC, IEA
THAILAND CONSUMPTION (Q4 Monthly Average)
Q4/14 Q4/15 Q4/14 Q4/15 Q4/14 Q4/15
32
AROMATICS: 2016 MARGIN SLIGHTLY IMPROVE FROM LAST YEAR PHENOL /BPA : PRODUCERS CUT PRODUCTION TO CONTROL BALANCE
AROMATICS HIGHLIGHTS
PHENOL & BPA : MARGINS BOTTOM OUT
AROMATICS: MARGINS GRADUALLY RECOVER
PHENOL/BPA HIGHLIGHTS
PX
• Potential delay of Indian producer makes no new PX capacity in 1H
• Peak of turnaround in 2Q16 while having new PTA plant start up in China (Hanbang PC PTA 2,200 KTA)
BZ
• Growing of US and China ’s import.
• Strong gasoline demand may limit feedstock to aromatics
Phenol
• China producers reduce operating rate to nearly 60%
• Delay start-up of new capacity (275 KTA of Rabigh to 1Q17)
BPA
• Global utilization will increase to 74.5% in 2016 from 72.1% in 2015.
• Sinopec & SABIC reconsider to invest BPA-PC project led to only 100 KTA BPA from total plan 340 KTA in 2016 Source: PTTGC’s estimate,
333 372 360 348 400
385
176 240 200
161 220 225
0
100
200
300
400
500
1Q15 2Q15 3Q15 4Q15 1Q16 2016
$/M
T
PX-Naphtha BZ-Naphtha
347
236
285 227 211
265
397
318
137 112
142 185
0
100
200
300
400
500
1Q15 2Q15 3Q15 4Q15 1Q16 2016
$/M
T
Phenol P2F BPA P2F
Source: PTTGC’s estimate,
33
OLEFINS AND DERIVATIVES : STRONG MARGINS OWING TO CRACKER CLOSURE AND OUTAGE MEG : INVENTORY GLUT LIMIT PRICE INCREASE
PROPYLENE PRICE IS STILL PRESSURED FROM ON-PURPOSE
OLEFINS AND DERIVATIVES HIGHLIGHTS HIGH ETHYLENE PRICES WILL SUPPORT THEIR DERIVATIVES
PROPYLENE MARKET HIGHLIGHTS
Polyethylene • Peak crackers T/A during Mar-Jun (capacity lost 1.1 mill
tons) • Tight ethylene supply resulting from cracker
rationalization in NEA and long outage of Singapore’s Shell Bukom (Ethylene 960 KTA) since Nov15 - Aug16
• 2016 HDPE spread over naphtha are expected 720 $/MT
MEG • Projected growing of China inventory nearly 1 million
ton in 2016 may limit prices increase • Long outage of Shell Bukom (MEG 720 KTA)
• Asia Propylene price will be pressure from new capacity about 4.5 mill ton mainly from PDH and MTO/CTO.
• Asia operating rate will decrease from 86% in 2015 to 82.5% in 2016.
• Asia PP price will be depressed from low feedstock price (propylene) and capacity additions in NEA about 4 million tons in 2016. Asia PP operating rate is expected to decrease to 87.5% in 2016 from 89.2% in 2015.
339 376 275 142 327 265
833 940
736 587 651 625
1,149 1,344 1,134
995 895 905
0
500
1000
1500
1Q15 2Q15 3Q15 4Q15 1Q16 2016
$/M
T
Propylene-Naphtha Propylene Price PP Price
1188 1375 1234 1153 1082 1085
780 943
765 606 590 610
0
500
1000
1500
1Q15 2Q15 3Q15 4Q15 1Q16 2016
$/M
T
HDPE Price MEG Price
Source: PTTGC’s estimate,
Source: PTTGC’s estimate,
34
For further information & enquiries, please contact our Investor Relations Team at [email protected]
Thank You
35
1 Thitipong Jurapornsiridee VP-Corporate Finance & IR [email protected] +662-265-85742 Jittasak Soonthornpan IR Manager [email protected] +662-265-81723 Prang Chudasring IR Analyst [email protected] +662-265-83274 Supika Charudhanes IR Analyst [email protected] +662-265-85335 Nattchanon Chawinsittangkul IR Analyst [email protected] +662-265-83646 Chutima Jarikasem IR Coordinator [email protected] +662-140-8713
