irpc public company limitedirpc.listedcompany.com/misc/presn/20150819-irpc... · 8/19/2015 ·...
Post on 17-Jun-2020
0 Views
Preview:
TRANSCRIPT
2Q/2015 Opportunity Day
IRPC Public Company Limited
19 August 2015
Refinery Petrochemical Asset Management Port & Tank
Disclaimer
This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by
prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or
completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for
any representations (express or implied) contained in, or for any omissions from this presentation.
The information contained herein does not purport to be all-inclusive or to contain all of the information that may be material
to the recipient’s decision. Each recipient of the information and data contained herein should perform its own independent
investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shallinclude references to the Appendices (if any) hereto.
2
2Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
3
71,658 49,941 55,526
143,512 105,467
YoY 23%
QoQ 11%
Highlight: 2Q/15 PerformanceOverview of Business
Net Sales(net excise)
Dubai
Unit: USD/BBL
178
3,832 4,235
522
8,067
Net income
Unit: MB
Unit: MB
4
2Q/14 2Q/15 1H/15
YoY 2,279%
QoQ 11%
1. In 2Q/15, average Dubai price rose to $61.3/bbl from $51.9/bbl in 1Q/15, driven by the concern about the tight supply from Libya when the protestants attacked the crude pipeline.
2. Net sales were 55,526 MB in 2Q/15, increasing by 11% from 49,941 MB in 1Q/15 due to an increase of 8% in the product prices together with the increase of 3% in the sales volume.
In 1H/15, net sales were 105,467 MB, 27% lower than net sales of 143,512 MB in 1H/14. This was caused by a 38% decrease of the average price, while the sale volume increased by 11%.
3. Market GIM in 2Q/15 was $14.0/bbl, rising by $0.9/bbl compared to $13.1/bbl in 1Q/15 because of higher product spreads and Delta program. Supporting by the stock gain, consequent to the Accounting GIM of $17.3/bbl, up lifted from $12.5/bbl in 1Q/15.
In 1H/15, the Market GIM rose to $13.6/bbl from $6.6/bbl in 1H/14 and the Accounting GIM increased to $15.0/bbl from $8.8/bbl in 1H/14.
4. Net profit was 4,235 MB in 2Q/15, compared to 3,832 MB in 1Q/15. In 1H/15, net profit was 8,067 MB, compared to 522 MB in 1H/14.
1Q/15 1H/14
YoY 27%
Market GIM
Accounting GIM
Oil hedging
Unit: $/bbl
YoY 1,445%
YoY 89%
QoQ 38%
Stock gain/(loss)
YoY 68%
51.961.3
105.3
56.6
106.1
5.4
13.1 14.0
6.613.61.9
(0.5)
3.3
0.7
1.5
1.9
(0.02)
0.03
1.5
9.2
12.5
17.3
8.8
15.0
Operational Excellence
Commercial Excellence
Procurement & Human Resource Excellence
• VCM/LP Upgrade, Production Planning and Schedule Optimization
• Yield and Process Energy Optimization• Utility System Optimization• Reliability and Asset Integrity Enhancement • Overhead Cost Management• UHV Enhancement• Margin Improvement
• Petrochemical Marketing and Sales Excellence
• Petroleum Marketing / and Sales Excellence
• New upgraded LP (best-in-class standards tools), enabling optimum crude selection
• Optimized processing operations unit
• Optimized steam and power generation
• Minimized unplanned shutdown
• Shortened time required for turnaround
DELTA Benefit Summary
Highlight: Delta Project
* Include working capital benefit of $6.7 million 67.7
28.5
20.8
18.4
Actual
5
• Lower total costs of ownership
• More efficient procurement process
• Reduced non-moving inventory of spare parts
• Budget saving
• Reallocation of spot/term contracts for petroleum products
• Focus on higher margin and high potential customers, and maintained customer royalty for petrochemical products
• Procurement Best Practice & Sourcing Optimization
• Internal Organization Merger• Leadership Development• HR Operation Expenses Management
2014 1H/15
72.5
35.4
31.6
5.5
Unit: MUSD
*
Highlight: 2Q/15 Update
Fire Incident Update
UHV Project Progress: 96% as of July 2015, COD within 2015
• VGOHT Unit: COD on April 12, 2015
• Insurance Claim: Final Settlement (PD + BI) of THB 3,015 Million (USD 90 Million)
Received THB 460 Million in 2Q/15, accumulated claim at THB 2,170 Million
Expected receipt of remaining claim within 3Q/15
6
• Corporated with Wonderworld Products Co., Ltd , a big producer and sale wooden toys and joined to develop the product innovation, Wood Plastic Composite.
• Launched the first product “Trix Track” , the smart toy on Jun 10, 2015
Above ground piping 400 KV Sub StationAtmospheric tank painting DCS in Control Room
Marketing
PPE&PPC Projects Update
• Long-lead equipment ordered since 1Q/15 - shorten EPC contract period
• EPC contract awarded to Sinopec and contract signed in June, 2015
• Reviewed front end engineering & detailed engineering design phase
2Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
7
Petroleum Performance
8
Dubai Crude Price & Petroleum Product Spreads
$/MT 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Fuel Oil(FO) 610 607 591 437 318 367
150BS - FO 600 628 657 776 720 740
500SN - FO 486 501 499 493 369 399
Asphalt - FO -68 -78 -66 85 23 20
Fuel Oil
($/MT)
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
$/bbl 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Dubai (DB) 104.5 106.1 101.5 74.4 51.9 61.3
NP - DB -1.5 -1.0 -1.6 -5.1 1.4 -0.5
ULG95 - DB 14.6 16.1 13.2 13.4 15.3 19.8
Gas Oil - DB 17.8 16.0 14.4 16.0 16.3 13.7
FO - DB -8.5 -10.6 -8.4 -5.6 -1.8 -3.5
Dubai Price
($/bbl)
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
FO Price & Lube Base Oil Product Spreads
104 105 104 105 106 108 106 102 9687
7660
4655 55 59 64 62
613 612 604 596 605 618 601 594 578502
456
353279
346 328 348390362
Lube spread rose from the tight supply due to themaintenance shutdown of refineries in Asia .
Asphalt spread was a little bit lower as the demandwas lower when the raining season came.
Global crude oil price was still volatile owingto a tight supply: the attack of theprotestants on crude pipelines and thecontinuous shutdown of Shale Oil rigs.
Naphtha spread declined due to the maintenanceshutdown of Cracker plants and the recession ofthe economy in China, together with the additionalsupply from Europe and India.
ULG95 spread improved because of thestockpiling demand from Indonesia and ME aheadof Ramadan and higher demand from China, plusdriving season in Europe and US.
Gas Oil spread declined because of the excesssupply from China, Taiwan and Korea when theoperations were resumed after a maintenanceshutdown including the pressure by the newrefiners in ME.
FO spread fell down because of high supply fromEurope and Persian Gulf, and pressure from lowerdemand of bunker oil in Europe due to the newspecification.
65% 60% 57% 65% 58%
6% 19% 19% 6% 19%18% 7% 10% 16% 8%11% 14% 15% 13% 14% Others
Domestic
Far East
Middle East
Petroleum Group : Production
Refinery
2.4 1.2 2.1 4.5 3.3
6.2 7.0 7.6
12.3 14.5 1.2 1.3
1.4
2.4 2.7
0.8 0.8 1.0
1.5 1.9
0.2 0.2 0.2
0.4 0.4
LPG&Others
Naphtha
Gasoline
Asphalt
Diesel
Fuel Oil
2Q/14 1Q/15 2Q/15 1H/14 1H/15
21.1 22.8
10.8 10.5 12.3
0.8 1.0 0.8 1.6 1.8
0.8 0.9 0.9
1.7 1.8
Lube Base Oil
1.6 1.9 1.7
3.3 3.6
2Q/14 1Q/15 2Q/15 1H/14 1H/15
Lube Base
Unit : M.bblUnit : M.bbl
2Q/14 1Q/15 2Q/15 1H/14 1H/15
80% 84% 89% 80% 86%
173 180 192 173 186
Crude Intake
2Q/15, the crude intake was 192 KBD (89% utilization), higher than the rate in 1Q/15 as the VGOHT unit started run on April 12, 2015 after shutdown from fire incident.
Domestic crude intake was 19 KBD, increasing 49% from the previous quarter.
The utilization rate of Lube Base Oil plant in 2Q/15 was 100%, declined by 3% compared to 1Q/15.
Crude Run (KBD)
%Utilization
Premium over Dubai($/bbl)
3.89 2.00 2.26 4.53 2.13
Remark : Excluding internal use quantity 9
0.6
5.2 3.8
1.0
4.5
1.1
1.8
2.2
1.4
2.0
1.7
7.0
6.0
2.4
6.5
2Q/14 1Q/15 2Q/15 1H/14 1H/15
Lube Base
Refinery
Local63%
Export37%
Petroleum Group : Sales & GRM
Market GRM
Sales Volume & Revenue
12.3 12.9 14.2
24.6 27.1 1.7 2.5 1.9
3.3
4.4
14.0 15.4 16.1
28.0
31.5
2Q/14 1Q/15 2Q/15 1H/14 1H/15
Lube
Refinery
Unit : Mbbl
15.7 16.2 17.5 31.3 33.6 Crude intake (M.bbl)
Unit : $/bbl
47,357 29,867 35,675 95,011 65,541 Refined
6,356 6,391 5,314 12,746 11,706 Lube Base
Local…
Export38%
2Q/15
Local63%
Export37%
Sales Distribution
Unit : MB 2Q/15 : Petroleum sales volume increased by
4% and the average product prices increased by 9% compared to 1Q/15
• The proportion of sales were 62% domestic and 38% export, to Singapore, Malaysia and Laos significantly.
• Market GRM was $6.0/bbl (3,499 MB), decreased by $0.95/bbl (233 MB) from 1Q/15 because of the lower spread.
YoY 15% QoQ 4%
1H/151Q/15
Remark : Sales include products swap transaction with PTTGC /Lube include VGOHT sales during fire incident
10
11
Petrochemical Performance
$/Ton 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Naphtha (NP) 935 951 913 647 494 563
Ethylene-NP 507 496 565 567 533 823
HDPE- Ethylene 106 121 135 334 266 68
HDPE- NP 613 617 700 901 799 891
Propylene-NP 435 328 388 385 339 377
PP-Propylene 200 309 325 419 316 416
PP-NP 635 637 713 804 655 793
Olefins Product Price & Spreads
Aromatics & Styrenics Price & Spreads
$/Ton 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15
Naphtha (NP) 935 951 913 647 494 563
BZ - NP 364 341 392 318 179 234
TOL - NP 161 135 234 183 127 203
MX - NP 169 115 225 162 169 222
SM - NP 724 674 688 602 524 793
PS - NP 884 816 830 816 715 931
ABS - NP 979 975 1,033 1,114 1,069 1,095
• HDPE spread against Naphthaincreased due to the Naphtha crackers’maintenance shutdown and higherdemand from China.
• PP spread against Propylene andNaphtha improved due to a tight supplyas the plastic plants was shutdown for themaintenance during the regional naphthacrackers’ maintenance.
• Toluene and Mixed xylene spreadrose because of major production plantsin Korea and Japan reduced capacity,and used both of reformate and tolueneto blend gasoline for price benefit.
• PS spread increased following thehigher price of SM, and a tight supplyfrom plastic production plants’maintenance shutdown in Asia and ME.
• ABS spread rose continuously due tothe increasing demand.
Remark : revised Styrenics Prices calculated based on proportion of sales volume
Remark : Olefins Product Prices calculated based on proportion of sales volume
62 61 64 122 125
129 125 133
264 258
191 186 197
386 383
72 79 81
153 160 17 8 5
23 12
63 70 61
125 132
152 157 147
302 305
Styrenics
Aromatics
The utilization rate of Aromatics and Styrenics in 2Q/15
was 83%, decreasing by 5% compared to 1Q/15 because
EBSM plant was maintenance shutdown for 28 days. As a
result, ABS plant had to reduce the capacity due to the
shortage of the feedstock. Moreover, PS plant was
shutdown for yearly maintenance for 21 days.
In 2Q/15, the utilization rate of Olefins was 90%, increasing
by 2% compared to 88% in 1Q/15 as the Ethylene unit was
shutdown for the furnace cleaning in 1Q/15
Olefins
Polyolefins
Aromatics &StyrenicsOlefins
2Q/14 1Q/15 2Q/15 1H/14 1H/15
81% 87% 83% 84% 85% %Utilization
65% 88% 75% 67% 82% Polystyrenics
98% 95% 71% 97% 83% Styrenics
85% 83% 97% 90% 90% Aromatics
2Q/14 1Q/15 2Q/15 1H/14 1H/15
88% 88% 90% 93% 89% %Utilization
80% 84% 86% 88% 85% Polyolefins
95% 92% 94% 97% 93% Olefins
Polystyrenics
Petrochemical Group : Production
Unit : KMT Unit : KMT
Remark : revised Utilization rate calculated based on the main products
Petrochemical Group : Sales & PTF
39 91
180
53 138
137
258
302
147
281 94
187
251
105
220
2Q/14 1Q/15 2Q/15 1H/14 1H/15
Unit : $/MT
Olefins &Polyolefins
Aromatics &Styrenics0.4 1.0
2.1 0.7 1.6
2.1
4.0
4.8
2.3
4.4 2.5
5.0
6.9
3.0
6.0
2Q/14 1Q/15 2Q/15 1H/14 1H/15
Unit : $/bbl
Olefins &Polyolefins
Aromatics &Styrenics
156 156 146
302 303
191 205 197
388 401
347 361 343
690 704
2Q/14 1Q/15 2Q/15 1H/14 1H/15
Olefins &Polyolefins
Aromatics &Styrenics
Unit : KMT
Market PTFMarket PTF
Crude intake (Mbbl)
Feed intake (KMT)
235 251 278 493 529 Olefins
189 188 202 391 390 Aromatics
Sales Volume and Revenue
15.7 16.2 17.5 31.3 33.6
Local59%
Export41% Local
60%
Export40%
Sales Distribution
9,480 7,541 8,285 19,198 15,826 Olefins
7,632 5,355 5,466 14,851 10,800Aromatic & Styrenics
Unit : MB
2Q/15 1H/15
Local61%
Export39%
1Q/15
Remark : Sales include imported intermediate products such as Propylene, Benzene
7.8 5.4 6.7
10.4 13.1 14.0
-
6.6
13.6
-0.5
1.9
-4.5 -16.0-0.5
3.3
0.7
1.5
1.1 1.9 0.8
-0.4
-0.02
1.5 8.5 9.2
3.0 -6.0
12.5
17.3
8.8
15.0
Oil Hedging Stock G/(L) & LCM Market GIM
0.03
3.1 1.7 2.2 4.7
7.0 6.0 2.4
6.5 3.4
2.5 3.3
4.6
5.0 6.9
3.0
6.0
1.3
1.2 1.2
1.1
1.1 1.1
1.2
1.1
7.8
5.46.7
10.4
13.1 14.0
6.6
13.6
Power & Utility Petrochem Petroleum
Gross Integrated Margin (GIM)
Market GIM
$/bbl
Accounting GIM
14
$/bbl
• In 1H/15, Market GIM was $13.6/bbl, rising by $7.0/bbl compared to $6.6/bbl in 1H/14.
- Product spreads $5.5/bbl
- Delta project $1.5/bbl
• Oil hedging gain were 5 MB, decreasing by $1.5/bbl compared to $1.5/bbl in 1H/14
• Stock losses and gain from reversal LCM were $1.5/bbl (1,633 MB), rising by $0.8/bbl compared to Stock gain and provision for LCM of $0.7/bbl in 1H/14 (734MB).
• Accounting GIM was $15.0/bbl (16,829 MB) higher by $6.2/bbl from $8.8/bbl ( 9,032 MB) in 1H/14.
1H/15 vs 1H/142Q/15 vs 1Q/15
• In 2Q/15, Market GIM was $14.0/bbl, rising by $0.9/bbl compared to $13.1 /bbl in 1Q/15.
- Product spreads $0.1/bbl
- Delta project $0.8/bbl
• Oil hedging gain was $0.03/bbl (15 MB), increasing by $0.05/bblcompared to $-0.02/bbl in 1Q/15
• Stock gain and provision for LCM $3.3/bbl (1,915 MB), rising by $3.8/bbl compared to Stock losses and gain from reversal LCM of $-0.5/bbl in 1Q/15 (-282MB).
• Accounting GIM was $17.3/bbl (10,107 MB) higher by $4.8/bblfrom $12.5/bbl ( 6,722 MB) in 1Q/15.
3,832 4,235
228 408
663
2,220
2,823 293
Unit: MB
Financial Highlight: 2Q/15 VS 1Q/15
Net Profit1Q/15
Net Profit2Q/15
Volume Increase
Margin Increase
Net Stock gain(Loss )
LCM &
Oil Hedging
Doubtful A/C reversed
(TPI Aromatic)
OthersDelta
• Crude intake of 17.5 M.bbl (192 KBD), increased from 1Q/15 by 1.3 M.bbl (12 KBD) or 8%
• Market GIM $14.0/bbl, increased by $0.9/bbl or 7%
• Delta increased from Op-Ex 310 MB, Com-Ex 244 MB and Proc Ex & HR Ex 109 MB
• Stock gain and provision for LCM $3.3/bbl (1,915 MB), rising by $3.8/bbl compared to
Stock losses and gain from reversal LCM of $-0.5/bbl in 1Q/15 (-282MB) and
oil hedging gain increased by $0.05/bbl (25 MB).
• Others decreased: loss from exchange rate increased by 690 MB and an offset of
the receipts of insurance compensation of 460 MB
Exchange rate (THB/USD)As at AverageMar 31 32.70 1Q/15 = 32.79Jun 30 33.93 2Q/15 = 33.41
Average Dubai price 1Q/15 = $51.89/bbl2Q/15 = $61.30/bbl
522
8,067
778
5,969
1,704
652
460
2,830
3,544
Financial Highlight: 1H/15 VS 1H/14
• Crude intake of 33.6 M.bbl (186 KBD) increased from 1H/14 by 2.4 M.bbl or 8%
• MKT GIM $13.6/bbl, increased by $7.0/bbl or 106%
• Delta increased from Op-Ex 877 MB, Com-Ex 763 MB, Proc Ex & HR Ex 64 MB
• Stock losses and gain from reversal LCM were $1.5/bbl (1,633 MB), rising by $0.8/bbl
compared to Stock gain and provision for LCM of $0.7/bbl in 1H/14 (734MB) but
Oil hedging decreased by 1,550 MB
• Others decreased: donation 370 MB, loss from exchange rate increased by 492 MB
and Income Tax increased by 2,004 MB
Exchange rate (THB/USD)As at AverageJun 30,14 32.60 1H/14 = 32.70Jun 30,15 33.93 1H/15 = 33.10
Average Dubai price 1H/14 = $105.29/bbl1H/15 = $56.59/bbl
Net Profit1H/14
Net Profit1H/15
Volume Increase
Margin Increase
Claim frm. VGOHT
OthersDelta Doubtful A/C reversed
(TPI Aormatic)
Unit: MB
Net Stock gain(Loss )
LCM &
Oil Hedging
Financial Highlight: Quarterly Results
Unit : MBQuarter %Change
2Q/15 2Q/14 1Q/15 YoY QoQ
Net sales 55,526 71,658 49,941 (23)% 11%
Market GIM 8,177 2,773 7,014 195% 17%
Stock Gain/(Loss) 1,915 944 (3,541) 103% 154%
LCM - 18 3,259 (100)% (100)%
Oil Hedging Gain/(Loss) 15 975 (10) (98)% 250%
Accounting GIM 10,107 4,710 6,722 115% 50%
OPEX & Selling Exp. (3,440) (3,113) (3,329) (11)% (3)%
Other Income 805 364 321 121% 151%
EBITDA 7,472 1,961 3,714 281% 101%
Cost of Finance (232) (403) (507) (42)% (54)%
FX Gain/(Loss) (515) (5) 174 n.a. (396)%
Impairment Gain/(Loss) 1 (51) 24 102% (96)%
Investment Gain/(Loss) (13) 7 (85) (286)% 85%
Reversal of doubtful debt 6 (1) 2,824 700% (100)%
Income Tax (1,114) (35) (992) (3,083)% (12)%
Net Profit 4,235 178 3,832 2,279% 11%17
Remark
Net SalesYoY: 12% from volume, price 35%QoQ: 3% from volume, price 8%--------------------------------------------------------------------------------
Market GIMYoY: $8.61 /bbl (Prod. spread $6.87/bbl , Delta $1.74/bbl)
QoQ: $0.95/bbl (Prod. spread $0.16/bbl , Delta $0.79/bbl)
--------------------------------------------------------------------------------
Stock Gain (Loss) & LCM YoY: 953 MB QoQ: 2,197 MB -----------------------------------------------------------------------Oil Hedging 2Q/15 Hedging 14% of production volume (2Q/14 = 45%, 1Q/15 = 13%)--------------------------------------------------------------------------------
OPEX & Selling Exp.YoY: increased by insurance expense and donation--------------------------------------------------------------------------------
Other IncomeIncreased by insurance compensation of VGOHT 460 MB--------------------------------------------------------------------------------
Cost of FinanceDecreased by capitalizing interest exp. to the asset under construction increasingly--------------------------------------------------------------------------------
FX Gain/(Loss)Ex.rate Jun 30,15 = 33.93 THB/USD, Mar 31,15 = 32.70 THB/USD--------------------------------------------------------------------------------
Investment: lower of dividend received
--------------------------------------------------------------------------------Reversal of doubful debtIn 1Q/15, reversing doubtful account of TPI Aromatics Plc.
Financial Highlight: Half Year results
Unit : MB1H %Change
2015 2014 YoY
Net sales 105,467 143,512 (27)%
Market GIM 15,191 6,743 125%
Stock Gain/(Loss) (1,626) 737 (321)%
LCM 3,259 (3) n.a.
Oil Hedging Gain/(Loss) 5 1,555 (100)%
Accounting GIM 16,829 9,032 86%
OPEX & Selling Exp. (6,769) (5,873) (15)%
Other Income 1,126 670 68%
EBITDA 11,186 3,829 192%
Cost of Finance (739) (768) 4%
FX Gain/(Loss) (341) 151 (326)%
Impairment Gain/(Loss) 25 (51) 149%
Investment Gain/(Loss) (98) 42 (333)%
Reversal of doubtful debt 2,830 (7) n.a.
Income Tax (2,106) (102) (1,965)%
Net Profit 8,067 522 1,445%18
Remark
Net SalesSales volume 11%, product prices 38%-----------------------------------------------------------------------------------------------
Market GIM $6.97/bbl = 8,448 MB Increased in spread products $5.49/bblGain from Delta project $1.48/bbl------------------------------------------------------------------------------------Stock GainStock Gain & LCM 1,633 MB or $1.46/bblCrude oil price at the year end $52.89/bbl VS Average crude oil price 1H/15 $56.59/bbl-----------------------------------------------------------------------------------------------
Oil HedgingHedging 13% of production volume ------------------------------------------------------------------------------------OPEX & Selling Exp.Increased by staff costs, insurance expense and donation------------------------------------------------------------------------------------Other IncomeIncreased by insurance compensation of VGOHT 460 MB------------------------------------------------------------------------------------Cost of FinanceDecreased by capitalizing interest exp. to the asset under construction increasingly offset by the decrease of gain from CCS/IRS
------------------------------------------------------------------------------------FX Gain/(Loss)Ex.rate Jun 30, 15 = 33.93 THB/USD, Dec31, 14 = 33.11 THB/USD
------------------------------------------------------------------------------------Investment: decreased by the lower of dividend received
------------------------------------------------------------------------------------Reversal of doubful debtIn 1H/15, reversing doubtful account of TPI Aromatics Plc.
ST Debt2% LT Debt
31%
Bond (USD)15%
Bond (THB)52%
ST Loan 888
LT Loan 16,601
Bond (USD) 8,066
Bond (THB) 27,620
Total 53,175
Debt (MB)
Debt StructureDebt Profile
Debt Portfolio
Float 31 THB 59
Fixed 69 USD 41
Currency (%) Interest Rate (%)
Net Debt = 51,663 MB Ex. Rate = 33.93 THB/USD56,725
51,780 52,287
177 4,752 888
56,902 56,532 53,175
16,144
1,964 1,512 -
10,000
20,000
30,000
40,000
50,000
60,000
2Q/14 1Q/15 2Q/15
L/T Debt S/T Debt Cash
40,758 54,568 51,663
Financial Ratios
1.26
0.85 0.96
2Q/14 1Q/15 2Q/15
0.55 0.76 0.69
2Q/14 1Q/15 2Q/15
< 1.0x
Net D/E CA/CL
2Q/14 1Q/15 2Q/15
Cost of Debt 3.97% 3.91% 4.06%
Unit : MBNet Debt
Maturity of Financing Debt
2,370 2,740 3,040 2,340 3,340
6,870 339 679 679 3,223 679
339
5,000
-
7,386 5,000
3,364
6,890
8,075 -
7,709
3,419
19,179
10,563
7,383
14,099
2015 2016 2017 2018 2019 2020-22
Unit : MB
USD Bond
THB Bond
USD Loan
THB Loan
As of Jun 30, 2015
As of Jun 30, 2015
19
2Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
20
Challenging Crude Oil Market: Volatile Crude Oil Price
21
22
Oil Demand
Strong world oil demand growth by 1.6 mb/d YoY, almost twice the average growth rate achieved in the last four years in 1H/15. Undoubtedly, sharply lower oil price are positively impacting demand.
2H/15 demand growth is forecasted to grow by over 1.9 mb/d yoy.
World oil demand is expected to grow by 1.75 mb/d in 2015.
In 2016, rising by 1.34 mb/d from 2015 levels to average around 93.94 mb/d.
Oil Supply
1H/15, Global supply growths surpass a strong demand increase, causing another large global inventory increase in US, Western Europe and Japan.
In 2015, Non-OPEC has been revised up by 0.18 mb/d to stand at 0.86 mb/d, mainly driven by US output. In 1H/15, OPEC production increased by 0.91 mb/d to average 30.69 mb/d.
Crude Oil will Face the Over Supply Situation
Iranian oil will hit the market in 2016
23
The IEA calculates Iran’s spare capacity at 800 thousand
b/d as of June 2015
Allows time for us:
90 days for the UN Security Council resolution toendorse JCPOA (the Joint Comprehensive Planof Action) so called adoption day.
12 days (max) for President Obama to veto. 10 days (max) for US Congress to override. The timing for Iran to comply, sanctions could
be lifted within the next 4-6 months.
Export volume could increase by 0.7 mb/d
The IEA estimates Iran’s total crude productioncapacity at 3.6 mb/d and calculates spare capacityat 0.8 mb/d as of June 2015.
Looking at the breakdown by field and factoringdecline rates, it is possible that production goes upby 0.65 mb/d once sanctions are lifted, with aramp-up period of about six months.
Oil rig count continuously declined
24
US oil rig count: 29th straight week for declining, dropping
from 1,871 to 628 in late June afterreaching a peak in the week ended October10, 2014.
Continuing slow down from US shale boomby 48% during the full 12 months ending on26 Jun in reaction to the drop in oil pricessince mid-2014.
US annual liquid production and annual growth
Production : 1st time of US liquid production in 2Q/15
breaching 14 mb/d, led entirely by NGLoutput, jumped from 0.39 mb/d to 3.3 mb/dmainly from unconventional sources, suchas shale gas.
Additional supply from US projected to besharply lower from 2016 onward due tosustained crude oil price at low level.
Short-Term Crude Oil and Petroleum Products Outlook
Driving Determinants
25
KeyProducts
Price2Q/15
Spread2Q/15
3Q/15vs.
2Q/15
4Q/15vs.
3Q/15
Refinery ($/bbl) ($/bbl) Outlook Outlook
Dubai 61.3 -
ULG95 81.1 19.8
GAS OIL 0.05% 75.0 13.7
FO 57.8 -3.5
Lube Base Oil ($/T) ($/T) Outlook Outlook
500 SN 766 399
150 BS 1,107 740
• Gasoline cracks should maintain due to healthy demand from Europe and USD from low gasoline price but return of refinery after the 2Q refinery MTA and ME and Indonesia import less gasoline due to the latest refinery expansions and additions cap the gain.
• Gas oil cracks will ease, with new refinery startups in the Middle East, Turkey, and Latin America ramping up and supplies increasing ahead of timid demand in China during fishing ban period.
• Fuel oil cracks soften as steadily arbitrage inflows from the West and Asian runs increasingly rise post-turnaround amid a demand profile is not picking up seasoning in 3Q due to mild summer weather in Middle East
• Crude price is pressured by the lower seasoning demand and the potential additional supply from Iran. In the same time OPEC and Saudi Arabia have no intention to lower their production in near term.
• Price trend is side way against slow demand from monsoon season but spot supply limited from refiners who try to increase squeezed margins when comparing base oil revenues against vacuum gas oil (VGO) prices.
• Region demand peak up in 4Q after monsoon season
Short-Term Petrochemical Products Outlook
26
KeyProducts
Price2Q/15
Spread2Q/15
3Q/15vs.
2Q/15
4Q/15vs.
3Q/15
Olefins ($/T) ($/T) Outlook Outlook
Ethylene 1,386 823
HDPE 1,454 891
Propylene 940 377
PP 1,356 793
Styrenics ($/T) ($/T) Outlook Outlook
PS 1,494 931
ABS 1,658 1,095
Driving Determinants
• Spread is seen to be stable to soft as the supply tightness is easing. Plants came back from seasoning turnaround
• Downstream demand is expected to robust by manufacturing activities improvement in 3Q as well as spread outlook could be better from the lowering of feedstock price.
• Overall spread is expected to be soft as supply increases from new capacity in China and plants in NEA which restart from turnaround.
• Supply is expected to be tight in short period as there is Force majeure on HDPE in Indonesia (Chandra Asri and Titan). However, demand from end users is expected to be stable.
2Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
27
Delta Program
Operational Excellence
Commercial Excellence
Procurement & HR Excellence
118
70.7
26.4
20.9
Improve overall performance under the Delta Program
Unit: M.USD
28
72.5
35.4
31.6
5.5
Total
Target
2015
Actual
1H15
Achieved 61% of Target
High Value Added and Specialty Products
Increase High Value Added and
Specialty Products Volume Ratio
2011
2012
2013
2014
2015
Beyond
22%
31%
33%
34%
2010
35%
38%
40%- 60%
ABS Powder
AMSAN
Anti-dripping
Nano
HDPE-Pipe
Green ABS
Market with Blue Light Industrial
luggages “ CAGGIONI” brand
Nano chemical plant grand opening
Antibacterial chemical substance Joint “king” brand, produce bathroom
shelves
Change from commodities
PE product to PE-Pipe grade
Natural Color Compound
Corporate with Picnic Plastics
Launching Natural ColorCompound plastic
Wood Plastic Composite
Market with Wonderworld
ProductsLaunched “Trix Track” the smart
toy
EPC contract awarded to Sinopec
Long-lead equipment ordered 140 KTA PP compound specialty in 2017
ABS -JV
More collaboration with Nippon A&L
Increase market share of ABS and ABS Color Compound Products for the
automotive industry
Polypropylene Compound
UHMW-PE
Innovative hi-end polyolefin product
Using IRPC own developed R&D and innovation
Polyurethane
JV with PCC Rokita
Technology transfer of high value specialty products
29
UHV Cost Competitiveness
30
UHV
Upstream Project for Hygiene & Value-added Products (UHV): Upgrading low value product (Fuel Oil) to be high value-added product for petrochemical feedstock: Propylene 320 KTA and Heavy
Aromatic Naphtha 250 KTA
UHV Project
Source: IHS Chemical: June 9, 2015
23%
8%
14%
10%
40%
38%
5%
10%
16%
21%
2%
5%6%
2%
0%
20%
40%
60%
80%
100%
IRPC IRPC+UHV
Ethylene
Propylene
LPG
Naphtha +
Reformate
Gasoline
Diesel/ Jet
Fuel
Lube Oil
Fuel Oil
• Focus on propylene & polypropylene chain due to solid
competitive advantage.
• To shelter from downward propylene price pressure, all
propylene from UHV consumed to polypropylene production.
IRPC Petrochemical Business Analysis
PP Existing475 KTA
PPE
160 KTA
PP line 1
140 KTA
PP Expansion(PPE)
PP Inline Compound (PPC)
Random PP
Specialty PP
Block-CO PP
HOMO PP
• Pipe grade• Hygiene
• Container box
• Household Material
• Heavy-duty
• Film application
• Fiber grade
PP Compound
• Frozen food packaging• Lamination• Health care• Automotive
Total PP Capacity 775 KTA
PPE & PPC Projects
31
Source : Nexant July 14
PPE&PPC Projects Progress
• EPC contract awarded to Sinopec, contract signed in Jun 15
• Long-lead equipment ordered in 1Q/15
• 2 Year Construction period
• Expected COD in 2H/17
32
IRPC Strategic Roadmap to 2020
• DELTA Initiative Implementation • Assets Management (Bankai/EIZ)
Para-Xylene(PX)
Acrylic Acid(AA)
• Specialty focus and Moving away from heavy-asset company
• CHP I: Electricity +220MW, Steam +420T/hr• PRP +100KTA of Propylene
• EURO IV: Gasoline 15KBD, Diesel 10KBD, Jet 15KBD
• TDAE +28KTA, 150BS +25KTA• Lube Blending +60m.Ltrs./year
• EBSM +60KTA, ABS/SAN +60KTA
Completed Project during 2011-13
2013 Crude Run 181 KBD Nelson Complexity Index
Portfolio of Revenue:
Petroleum/Petrochemical & Others
2
2015: UHV Completion
Crude Run 215 KBD
Nelson Complexity Index More stable portfolio of Revenue:
Petroleum/Petrochemical & Others
76% / 24%
59% / 41%6.6
8.684%
100%
1
Super Absorbent Polymer
(SAP)
Quick Win Initiatives
New investments through JV
2013
2014
2015
2017
PP Derivatives• PP Expansion 160 KTA
• PP Compounding 140 KTA
3
Phoenix
DELTA
Functional Excellence
The future begins now creating shared value
Q & A
Environment
Social
Education & Sports
Labor & Human Rights
Religion
Public Health
33
Thank You
Investor Relations Contact: ir@irpc.co.th
Tel. 02-649-7380, Fax. 02-649-7379
Presentation is available at
www.irpc.co.th
Click “Presentations”
This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in
the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each
recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation.
The information contained herein does not purport to be all-inclusive or to contain all of the Information that may be material to the recipient’s decision. Each
recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto.
2Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
35
Lube Base
DCC
Vacuum Gas Oil
(VGO)
PP
PS
ABS/SAN
EPS
BTX
UHV
CCM
Acetylene Black
HDPEEthylene
Acetylene
Propylene
Ethylene
Olefins Plant
Benzene
Toluene Mixed Xylene
Acetylene
Ethylene
Propylene
Butadiene
Butadiene
CD1
Ethylene
EBSM
PRP
Long Residue(LS)
Long Residue
6 KTA
360 KTA
180 KTA
56 KTA
100 KTA
4 KTA
140 KTA
475 KTA
Ethylene Rich Gas
Pyrolysis Gasoline Raffinate
Propylene 132 KTA
Atmospheric Distillation Unit
(ADU) 1, 2 215 KBD
Naphtha
Reformate
Ethylene
Propylene73 KTA
320 KTA
Lube Base Oil
Asphalt
320 KTA
600 KTA
Polyol 25 KTA
Power Plant
Benzene
Toluene
Mixed Xylene
Long Residue
114 KTA
132 KTA
121 KTA
31 KTA
57 KTA
177 KTA
100 KTA
30 KTA
260 KTA
Styrene Monomer
Electricity
Steam
108 MW/220 MW (CHPI)
200 T/h/420 T/h (CHP I)
Propylene
Highly Integrated and Optimized Configuration
36
Feed (Crude Oil / Condensate)
Propylene Oxide
For Sale
Transportation Fuel
Gasoline, Jet, Diesel
Backup
Deferred Tax Assets
Expiry yearLoss carry
forward
Deferred Tax Assets BookingTax loss not yet
recognized as
Deferred Tax
AssetsTax loss Tax rate
Deferred Tax
Assets
2017 10,210 6,115 20% 1,223 4,095
2019 7,985 7,985 20% 1,597 -
Total 18,195 14,100 20% 2,820 4,095
Unit: MB
(1)
Note: (1) Tax losses that will expire in 2017 include losses caused by the release of debt involving the three companies
related to the previous owners, amounting to 7,873 MB, 4,095 MB of which has not been recognized as
deferred tax assets.
(2) Expected tax shield from liquidation of subsidiaries under liquidation process within 2015 – 2019, amounts to
9,600 MB, 4,700 MB of which was recognized as deferred tax assets and the financial performance in 2012
was restated accordingly.
(3) The remaining tax loss not yet recognized as deferred tax assets was 8,995 MB or about 1,799 MB of
potential tax shield.
Expected tax shield
from liquidation of
subsidiaries
2015 – 2019
9,600 4,700 20% 940 4,900
Total 27,795 18,800 20% 3,760 8,995
(2)
(3)
38
Gain from Reversing Doubtful Account
Received debt repayment 3,878 MB
Balance after offsetting of assets and liabilities 1,055 MB
Gain from Reversing Doubtful Account 2,823 MB
The Board of Directors approved a land purchasing from TPI Aromatics Plc.
IRPC and Official Receiver entered into a land purchasing agreement
IRPC received debt repayment of 3,878 MB, net gains 2,823 MB
December 2014
February 2015
April 2015
39
70.7
36.0 35.4
26.4
13.2 31.6
20.9
10.5
5.5
118.0
59.7
72.5
OP EX Com EX HR EX
Target1H15
Delta Program
Improve overall performance under the Delta Program
40
Operational Excellence
Commercial Excellence
Procurement & Human Resource Excellence
• New upgraded LP (best-in-class standards tools), enabling optimum crude selection
• Optimized processing operations unit
• Optimized steam and power generation
• Minimized unplanned shutdown
• Shortened time required for turnaround
• Lower total costs of ownership
• More efficient procurement process
• Reduced non-moving inventory of spare parts
• Budget saving
• Reallocation of spot/term contracts for petroleum products
• Focus on higher margin and high potential customers, and maintained customer royalty for petrochemical products
Actual 1H15
Target2015
61% Achievement from 2015 Target
41
UHV and PPC&PPE Project
ADU
UHV
DCC
Lube Base
Refinery
Olefins
Aromatics
Propylene
Petrochemical
Others
PPC
Polypropylene
Polyethylene
Styrenics
2016 onward 2017 onward
23%8%
14%
10%
40%
38%
5%
10%
16%
21%
2%
5%6%2%
IRPC IRPC+UHV
Ethylene
Propylene
LPG
Naphtha +
ReformateGasoline
Diesel/ Jet Fuel
Lube Oil
Fuel Oil
Upstream Project for Hygiene & Value-added Products (UHV):Upgrading low value product (Fuel Oil) to be high value-added product for
petrochemical feedstock: Propylene 320 KTA and Heavy Aromatic Naphtha 250 KTA
IRPC FX Exposure Illustration
42
843
238
90
75
248
USD 843 Million
USD 651 Million
LT Loan Mizuho
LT Loan SMBC
USD Bond
IRPC 2017s
Market GIM:
12.35 $/BBL at
187 KBD
CCS on
THB Bond
2015E: USD Exposure
Remark:
1)USD Liabilities absorb effect from THB appreciation/
depreciation at year begin/end , i.e. the exposure is a full of
actual USD Liabilities.
THB
FX Gain/(Loss)
USD MarginUSD
Liability
Strong Loss Gain
Weak Gain Loss
FX Natural Hedge Concept
Impact
“THB Margin
Gain/Loss”
in PL statement
Impact
“FX Gain/Loss”
in PL statement
USD Margin USD
Liabilities 1)
top related