20140813-pttgc-am-2q2014

8/11/2019 20140813-pttgc-am-2q2014

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2Q/14 Analyst Meeting Presentation

St. Regis Hotel, Bangkok August 13, 2014

Bowon Vongsinudom, President & CEO

Patiparn Sukorndhaman, EVP-Finance and Accounting

Saroj Putthammawong, VP-Supply Sourcing

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8/11/2019 20140813-pttgc-am-2q2014


Disclaimer

This presentation includes forward-looking statements that are subject to risks and

uncertainties, including those pertaining to the anticipated benefits to be realized fromthe proposals described herein. This presentation contains a number of forward-lookingstatements including, in particular, statements about future events, future financialperformance, plans, strategies, expectations, prospects, competitive environment,regulation and supply and demand.

PTTGC has based these forward-looking statements on its views with respect to futureevents and financial performance. Actual financial performance of the entities describedherein could differ materially from that projected in the forward-looking statements dueto the inherent uncertainty of estimates, forecasts and projections, and financialperformance may be better or worse than anticipated. Given these uncertainties, readersshould not put undue reliance on any forward-looking statements.

Forward-looking statements represent estimates and assumptions only as of the datethat they were made. The information contained in this presentation is subject to changewithout notice and PTTGC does not undertake any duty to update the forward-lookingstatements, and the estimates and assumptions associated with them, except to theextent required by applicable laws and regulations.

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Agenda

3

2Q/14 Business Highlights

Strategy and Excellence Programs Updates- Excellence Programs Updates

- International Business Directions

2Q/14 Operating Results

Market Outlook

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Agenda

4





Market Outlook

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Refinery• Improved performance from high CDU U-rate at

103%, better crude optimization, and increase indomestic sales, despite weak diesel and Fuel Oilcrack

Aromatics• Lower performance with BTX U-rate at 89%, while

PX spread decreased by -14% QoQ

Olefins and Derivatives• Improved Olefins U-Rate to 91%• Unstable gas flow from PTT, resulted in using

more NGL, which pressured EBITDA Margin

2Q/14 Business Environments and Operations

5

• Major economic recovery, GDP growth 0.2%. Economyexpanded for 4 consecutive quarters

• US GDP rebounded with growth of 4% in 2Q/14, mainly

driven by domestic consumption. Continuation of QEtapering.

Crude Oil

• Dubai price Increased to 106 $/bbl in 2Q/14

from 104 $/bbl in 1Q/14• Tension in oil producing countries : Ukraine,

Libya, and Iraq• Dubai price surge at the end quarter from

threat to Iraq crude supply

• Market sentiment / confidence picked up after coup.Signs of improvement are upside stock market, betterfund flow, and FX strengthening.

• China announced GDPgrowth at 7.5%, betterthan expectation at7.4%. PMI continuesto improve.

Operation QoQOil Market

Economic Petrochemical Market

• HDPE price remains strong from well balancedmarket with strong demand. Affirmed uptrendview of olefins chain

• Continuation of PX supply surplus pressured PXspread to decrease further in 2Q/14, but significantimprovement in PX price at the end of quarter fromshutdown/slowdown of high cost producers andpostpone of new capacities.

HDPE

PX

MEG• Soften spread from major surplus in co-

monomer while downstream demand lacked.

Petroleum Products

• Weak seasonal demand for petroleum product• Diesel crack spread soften from Chinese supply surplus and

export volume

Chinese PMI

50.550.2 50.3 50.4

50.851.0

51.7

50.0

50.5

51.0

51.5

52.0

1/14 2/14 3/14 4/14 5/14 6/14 7/14

Restructuring provision of Vencorex at 51% of THB 1,142 Mn

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2Q/14 Business HighlightsPerformance Soften from Weak Aromatics Market and Vencorex Restructuring

6

EBITDA Margins Revenue and Adjusted EBITDA Structure

(Unit: Million Baht) 2Q/13 1Q/14 2Q/14 YoY QoQ 6M/13 6M/14 YoY

Sale Revenue 111,887 146,366 152,401 36% 4% 253,195 298,767 18%

EBITDA 11,466 10,999 10,475 -9% -5% 27,885 21,474 -23%

EBITDA Margin (%) 10% 8% 7% -3% -1% 11% 7% -4%

Net Profit 4,172 6,296 6,085 46% -3% 16,247 12,381 -24%

Earnings Per Share (Baht/share) 0.93 1.40 1.35 46% -3% 3.60 2.75 -24%

Adjusted EBITDA * 12,888 11,574 11,534 -11% 0% 29,950 23,108 -23%

Adjusted EBITDA Margin (%) 12% 8% 8% -4% 0% 12% 8% -4%

* Note: Adjusted EBITDA = EBITDA – Stock Gain/(Loss) &NRV – Provision for Business Restructuring of Vencorex

% Adj. EBITDA Margin 2Q/13 1Q/14 2Q/14Business Unit :

Refinery 2 3 4

Aromatics 12 3 -2

Olefins and Derivative 28 24 25

Green 3 4 4

HVS -2 3 1

Average 12 8 8

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Agenda

7





Market Outlook

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Target

* Debottleneck EBITDA uplift includes1Q/14 BV project starts up3Q/15 TOCGC Plant Improvement Project4Q/15 PX Expansion starts up

Not Including PTTPE Cracker Debottlenecking and LLDPE Expansion

Excellence Programs Update2Q/14 EBITDA UPLIFT

(MUSD)

Excellence Programs(MUSD)

2014

Target

6M/14

Actual

Est.

2014

Synergy Excellence

83 16.8 58

-Heavy Gas (Offgas)

-Pure H2 via PSA

-C3/C4 Stream

-3 Streams (Heavy Gasoline, LCB, CB)

-Heavy Aromatics

Marketing Excellence

80 47.2 80-Customer Portfolio Management

-Product Development

-Pricing Excellence

Operational Excellence

31.0 15.9 36

-Total 47 projects in 2014

-34 Energy Saving Projects

-7 Plant Reliability Projects

-6 Cost Reduction/Optimization

Projects

Total 194 79.9 174

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Excellence Programs UpdatesExecution of Core Uplift Projects According to Target

9

Synergy Projects

• Construction Progress at 99%, butpartially start up.

• Slight delay to Aug from the delaydelivery of re-specification tail gascompressor

• Fully Operate in mid-Aug

Pure H2 via New PSA

Progress

Off Gas upgrading at Olefins • Construction Progress at 66%

Target COD

2Q/14

4Q/14

Debottlenecking &Expansion Projects

• Construction Progress at 37%TOCGC PlantImprovement Project

Progress

Phenol 2 Project• Construction Progress at 60%

Target COD

3Q/15

3Q/15PX Expansion Project • Construction Progress at 24% 4Q/15

PTTPE Cracker Debottlenecking • BEP (Basic Engineering Package) 2016

LLDPE Expansion • BEP (Basic Engineering Package 2017

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Brazil, China, France, Germany, India, Italy, Korea, NetherlandsPoland, Russia, Spain, Taiwan, Thailand, Turkey, USA

PTTGC International Business DirectionUpdates

10

Second PLA

Plant inSoutheast Asia

HDIDerivative

Sales andMarketingOffices /

Representatives

Brazil, Germany, Hong Kong, Japan, Korea, Malaysia, UK, USA

Australia, Belgium, Brazil, Chile, China, Colombia, France, Germany, Hong Kong,India, Italy, Israel, Japan, Korea, Mexico, Netherlands, New Zealand, Peru,

Philippines, Poland, Russia, South Africa, Spain, Taiwan, Thailand, Turkey, USA

Global Operating Location

http://www.vencorex.com/

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Vencorex Business DirectionsBusiness Restructuring

11

M a n u f a c t u r i n g S i t e

ASIA

Pont-de-Claix

Freeport,Texas

Rayong

TDI Reactor

125 KTA

New HDIReactor70 KTABy 2016

HDIDerivatives

24 KTA

Restructuring of Vencorex

HDIDerivatives

11 KTA

New HDIDerivatives

HDI Monomer

New HDIDerivatives

12 KTA

• Construction SiteProgress at 11%

• Target Commissioningby 3Q/15

IntegratedPU

Complex

• Restructuring Provision at 51%of 1,142 M. Baht

• HDI Derivatives in Thailand • Investment: EUR 40 million• Expected IRR: >15%

• Integrated PU Complex in Asia

HDIMonomer&Derivatives

HDIMonomer

TDI

Transaction:• Investment transaction completed on May 31,

2012• 51% stake – Investment capital to ₤121 million

Objective: • To step into HVS (PU Chain) by using the

technology and knowhow (TDI & HDI) from

Vencorex• To maintain existing business and expand

business in Asia• To Forward integration into downstream

51% 49%

Rationale of Investment

Business Directions

1. Expand and enhance HDI Business

2. Continue R&D for TDI and HDI ProcessImprovement

3. Vencorex’s France operations base will becomeHDI Monomer Hub and Center of HighTechnology Product Development

4. Conversion of TDI to HDI Monomer in Francewhile sustaining strong TDI customer base inEurope

5. Seek for Business Partner of Isocyanates & PU toexpand the Business in Asia

F l e x i b l e

F o a m

C A S E

TDI Major Applications

HDI Major Applications

H i g h v a l u e c o a t i n g

http://www.vencorex.com/wp-content/uploads/2012/10/perstorp1.jpg

http://www.vencorex.com/

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Way Forward:

• To expand PLA sales and application

• To grow sales volume by approximately 10-15% p.a. in the next 3 year

• Focus Growth on Oil Field Service Application

• To be bio plastic hub in Southeast Asia

• R&D for new application

• To built second Plant in Southeast Asia

• In the process of front end engineering

• Jacobs Engineering has been awarded the engineering design contract.

• Location to be finalized by 1Q/15

NatureworksExpanding PLA Sales and Application

12

Sales Volume Growth at 16% p.a. in the past 5 Year

Varieties of New Products Application

Note: U-Rate base on Effective Capacity for the year

Capacity: 2009 at 125 KTA, 2012 at 140 KTA, 2013 at 150 KTA

• Manufacturing facility, located in Blair, Nebraska, USA• Nameplate capacity of 150 KTA of PLA

Rationale of Investment

Transaction:• Investment transaction completed on May 31, 2012• 50% stake – Investment capital to USD 150 million

Objective: • To build second plant potentially in Asia• Capture Mega trend i.e. environment and resource scarcity.• To Produce PLA from diversified feedstock

Unit: KTA

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EmeryOleochemical

13

Way Forward:• To strengthen Basic Oleochemical and explore

specialties oleo chemical• Two main strategies going forward

• Oleo Basic Chemical : strengthened cost competitiveposition

• Specialties Oleo Chemical : High value added productportfolio via growth Projects

Strengthened Oleo Basics Business and Grow into Specialties Oleochemical Business

• SulfactantsThickeners

• Ethoxylates

• Sodium Lauryl

Sulfate (SLS)

• New Bio- Polyols andRecycled Polyols

New specialtiesProducts

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MyriantWorld Class Biotechnology R&D Center

14

“Synergy and Collaboration”

Di-acids Market

Downstream Products from Bio-based FeedstockR&D Technology and Knowhow Transfer

•

Di-acids products provider• Linkage to PU Chain

• Linkage to Nylon Chain from

Bio-based

• Joint marketing activities and

share customer base

information

• Execute Strategic IPs

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JV with Pertamina Updates“Indo Thai Trading”

15

49% 51%

HDPE, LDPELLDPE, MEG

ITT Office Grand Opening in Jakarta

ITT Organization

Nominated by Pertamina

Nominated by PTTGC

Pertamina, PTTGCor local new hire

Customers

JV Marketing & Trading Holding Structure

Supply Chain in Indonesia

PP

Product Source

Annual Volume Sales TargetUnit : KTA

Others Others

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ASEAN: Pertamina

CHINA: Sinochem

Strategic Direction

Debottlenecking

Synergy Excellence

Marketing Excellence

Operational Excellence

NEW GEOGRAPHIES NEW PRODUCTS

System House:Compounding:

PC, PU,Nylon 6-6

1-STEP ADJACENCIES

E

X ELLEN E

E

XE UTION

Oleochemicals

PLA

Succinic Acid

PLA/PBS Compound

KNOWHOW

CORE UPLIFT PROJECTS

GREEN

+R&D

Center

AUTOMOTIVE E&E CONSTRUCTION

EBITDAUplift

15-30%(2012-2017)

1st QuartilePerformanceROIC > 14%

Listed inGlobally

SustainabilityIndex

16

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Agenda

17





Market Outlook

B i E i d O i R

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Business Environment and Operations Recap

18

Dubai crude increased from average at 104.5 $/BBL in 1Q/14 to

average 106.1 $/BBL in 2Q/14 from unrests stiuation in oil

producing countries. As a result , PTTGC reported Stock Gain (Net

NRV) of 1,180 MB for the quarter

FX Gain amounting to 71 MB, from foreign currency forward

contract despite a slight depreciation in Baht from end 1Q/14 at

32.58 Baht/USD to end 2Q/14 at 32.60 Baht/USD

Aromatics & Refinery price dropped while HDPE remained strong

Diesel-Dubai 16.0 USD/BBL -5% YoY -10% QoQ

FO – Dubai -10.7 USD/BBL -190% YoY -25% QoQ

PX-Cond 333 USD/Ton -38% YoY -14% QoQ BZ-Cond 369 USD/Ton - 11% YoY -3% QoQ

HDPE 1,569 USD/Ton +9% YoY +1% QoQ

MEG 1,093 USD/Ton -7% YoY -8% QoQ

Overall utilization rate of major businesses

*Source: BOT Selling Rate

Average Dubai Crude Price

USD/BBL

Average and Closing FX : THB/USD*

109.1

105.5

116.1

106.4 106.3107.4 108.2

100.8

106.3 106.8

104.5106.1

90

95

100

105

110

115

120

2012 2013 1Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

31.22 30.86 31.14 31.43 31.50 30.82 29.94 30.03 31.62 31.87 32.80 32.59

30.99

31.9730.97

30.78

29.45

31.2731.53

32.9532.58 32.60

2012 2013 1Q/12 2Q/12 3Q/12 4Q/12 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Average FX Closing FX

R fi P f

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16.515.3

18.4

14.6 12.49.2

14.6 16.1

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Refinery PerformanceSlight Decline of Mkt GRM

19

U L G 9 5

- D B

J E T - D B

D i e s e l - D B

F O - D B

Petroleum Product Spread (USD/BBL)

+10% YoY+10% QoQ

-7% YoY-16% QoQ

-5% YoY

-10% QoQ

-190% YoY-25% QoQ

Gross Refinery Margin (USD/BBL)

Total Intake (KBD)

82% 102% 101% 63% 98% 103% 101% 103%

Sales Volume (KBD)

+63% YoY+5% QoQ

CDUU-Rate

+70% YoY+2% QoQ

Note: In 2Q/13, Refinery had Planned Turnaround of 38 days

17.8 15.6 20.315.3 17.0 17.3 17.0 14.3

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

18.216.9 19.6 16.8 17.3 17.7 17.8 16.0

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

(5.5)(9.6) (7.4)

(3.7)

(10.7)(10.5) (8.5)

(10.7)

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

3.594.46 4.37

2.383.48 3.42

4.48 4.44

(1.51) (0.91) (2.45)

4.21

1.11

(0.69)

0.730.64

0.49 0.27

1.23

0.98

0.78 0.330.66

2.72

4.993.73

1.16

8.67

5.304.12

5.83

(10.00)

(8.00)

(6.00)

(4.00)

(2.00)

-

2.00

4.00

6.00

8.00

(3.00)

(1.00)

1.00

3.00

5.00

7.00

9.00

11.00

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Market GRM Stock Gain/(Loss) Net NRV

Hedging Gain/(Loss) Accounting GRM

119.0147.6 146.4

91.8142.4 149.1 146.5 148.6

46.8

55.9 57.8

36.0

55.569.4 52.5 59.3

165.8

203.5 204.2

127.8

197.8218.4

198.9 208.0

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Crude Condenstate Residue & Others

8% 7% 9%5%

9% 8%5%

8%

14% 13% 15%13% 15% 13% 14% 13%

52% 52% 51% 54% 52% 49% 52% 51%

11% 13% 11% 10% 12%15% 13% 13%

15% 16% 14% 16% 12% 15% 16% 16%

147 187 183 111 176 196 185 188

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Naphtha +Ref.Jet

Diesel

Fuel Oil

A i P f

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Aromatics PerformanceSoften PX hitting hard on Aromatic Business

P r i c e s

P X F E C P - C o n d

B Z S p o t - C o n d

Aromatics Products Prices and Spread (USD/Ton)

-38% YoY-14% QoQ

-11% YoY

-3% QoQ

Products to Feed Margin (USD/Ton BTX)

BTX U-Rate and Sales Volume (KTons)

88% 90% 92% 84% 91% 93% 91% 89%BTXU-Rate

20

910 920 948871

930 937 917 924

1,514

1,280

1,618

1,409 1,440 1,440

1,3031,2561,332

1,295 1,379

1,286 1,258 1,283

1,297

1,293

800

1000

1200

1400

1600

1800

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Condensate Erawan PX FECP BZ Spot Korea

423 375 430 415328 346 380 369

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

604

360

669539 510 502

386 333

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

7% 7% 8% 5% 4% 3% 7% 6%

26% 26% 26% 26% 31% 30% 25% 28%

43% 43% 43%42%

43% 43% 43% 43%

24% 24% 22% 26% 22% 24% 24% 23%

1,634 1,666 824 810 876 836 806 860

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

BZ Group

PX Group

Naphtha Group

Other By-Products

359

125

394325

260 222165

86

(0.81)

(24.41)

16.52

(1.45)(45.97)

84.10

26.94

(7.90)

40.44

335

142

393

278

344

249

157 127

(100)

-

100

200

300

400

(100)

-

100

200

300

400

500

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Market P2F Hedging Gain/(Loss)

Stock Gain/(Loss) Net NRV Accounting P2F

6% YoY7% QoQ

Ol fi d D i ti P f

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Olefins and Derivatives PerformanceStrong HDPE Price

P r i c e s

M E G A C P – 0 . 6

5 E t h y l e n e

H D P E

- N a p h t h a

Olefins Derivatives Prices and Spread (USD/Ton)

-57% YoY-38% QoQ

+6% YoY+0% QoQ

Adjusted EBITDA Margin

U-Rate (%)

GAS : NAPHTHA Intake %

HDPE Price+9% YoY

+1% QoQ

21

Sales Volume (KTon)

1,4631,561 1,482 1,443 1,489

1,536 1,554 1,5691,4551,569 1,477 1,433 1,490 1,549 1,560 1,578

1,452

1,622

1,459 1,444

1,5691,664 1,639 1,605

1,2281,137

1,2821,173 1,143

1,208 1,182 1,093

910943

961 858 920 946 935 951

700

900

1,100

1,300

1,500

1,700

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

HDPE (FILM) SEA LLDPE CFR SEA LDPE CFR SE AsiaMEG ACP Naphtha MOPJ

553

619

521

585568

590620 618

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

363

198

375 351284 281 245

152

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

29%25%

30% 28% 26%24% 24% 25%

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

HDPE (FILM) SE A 1,463 1,561 1,482 1,443 1,489 1,536 1,554 1,569

LLDPE CFR SEA 1,455 1,569 1,477 1,433 1,490 1,549 1,560 1,578

LDPE CFR SE As ia 1, 452 1,622 1,459 1,444 1,569 1,664 1,639 1,605

MEG ACP 1,228 1,137 1,282 1,173 1,143 1,208 1,182 1,093

Naphtha MOPJ 910 943 961 858 920 946 935 951

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Olefins 419 302 200 218 147 190 134 168

HDPE 410 420 216 193 208 217 202 218

LLDPE 172 203 102 70 119 107 98 105

LDPE 146 164 75 71 25 47 72 92

Total PE 727 788 393 334 352 371 373 415

MEG 187 166 83 104 95 89 71 95

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Olefins 95% 84% 97% 93% 75% 93% 77% 91%

HDPE 103% 100% 109% 96% 106% 113% 93% 107%

LLDPE 93% 105% 113% 72% 113% 114% 99% 112%

LDPE 100% 104% 101% 99% 5% 101% 115% 93%

Total PE 99% 102% 109% 89% 88% 111% 99% 106%

MEG 99% 82% 97% 100% 92% 86% 65% 99%

54% 57% 55% 54%65%

53% 61% 54%

35% 31% 33% 36% 31%35% 25% 35%

11% 12% 12% 10% 4% 12% 14% 11%

1,984 1,715 1,012 972 756 969 790 925

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Ethane Other Gas Naphtha

Kton

Ph l d BPA P f

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Phenol and BPA PerformanceImproved U-rate and Margin

P r i c e s

B P A - P h e n o l

P h e n o l - B Z

Phenol/ BPA Prices and Spread (USD/Ton) U-Rate and Sales Volume (KTons)

Phenol 126% 104% 126% 127% 124% 130% 78% 131%

BPA 90% 88% 64% 116% 116% 104% 70% 107%

U-Rate

22

Sales Volume (Kton)

1,332 1,2951,379

1,286 1,258 1,283 1,297 1,293

1,463 1,4401,523

1,402 1,352 1,387 1,424 1,456

1,799 1,645

1,880

1,7191,630 1,605 1,638

1,653

800

1000

1200

1400

1600

1800

2000

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Benzene Phenol BPA

130 145 145 116 95 104 126164

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

48%59%

40%55%

65%54% 60% 58%

52%41%

60%45%

35%46% 40% 42%

139 114 63 76 69 69 48 66

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Phenol

BPA

+41% YoY+29% QoQ

-38% YoY-8% QoQ337

205

356 317277

218 214 197

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14Phenol (CMP) 1,463 1,440 1,523 1,402 1,352 1,387 1,424 1,456

BPA (CMP) 1,799 1,645 1,880 1,719 1,630 1,605 1,638 1,653

Benzene 1,332 1,295 1,379 1,286 1,258 1,283 1,297 1,293

2%6%

1% 4% 5% 4% 4%

7%

6M/13 6M/14 1Q/13 2Q/13 3Q/13 4Q/13 1Q/14 2Q/14

Adjusted EBITDA Margin

-13% YoY38% QoQ

O i f B i U it ’ P f

8/11/2019 20140813-pttgc-am-2q2014


Overview of Business Units’ PerformanceMargin soften from unstable gas flow and change in feed mix

23

2Q/14 Change in Olefins and Derivatives adj. EBITDA

Unit: MBRevenue and Adjusted EBITDA Structure

EBITDA Margins

AdjustedEBITDA

Margin at30%

AdjustedEBITDA

Margin at

25%

% Adj. EBITDA Margin 2Q/13 1Q/14 2Q/14

Business Unit :

Refinery 2 3 4

Aromatics 12 3 -2

Olefins and Derivative 28 24 25

Green 3 4 4

HVS -2 3 1

Average 12 8 8

I St t t

8/11/2019 20140813-pttgc-am-2q2014


Income StatementSoften from Lower PX Spreads and Vencorex Restructuring

24

Note: * Adjusted EBITDA = EBITDA – Stock Gain/(Loss) &NRV – Provision for Business Restructuring of Vencorex

** Vencorex business restructuring provision at 100% share

*** Vencorex business restructuring provision portion of 49% for non-controlling interests or Baht 1,097 million

2Q/13 1Q/14 2Q/14 YoY QoQ MB % MB % MB % MB % MB %

1 Sales Revenue 111,887 100 146,366 100 152,401 100 40,514 36 6,035 4

2 Feedstock Cost (87,594) (78) (121,151) (83) (126,966) (83) 39,372 45 5,815 53 Product to Feed Margin 24,293 22 25,215 17 25,435 17 1,142 5 220 14 Variable Cost (6,204) (6) (7,416) (5) (7,601) (5) 1,397 23 185 2

5 Fixed Cost (4,163) (4) (4,633) (3) (4,904) (3) 741 18 271 6

6 Stock Gain/(Loss) &

NRV (1,422) (1) (575) 0 1,180 1 2,602 183 1,755 305

7 Gain/(Loss)

Commodity Hedging 419 0 194 0 411 0 (8) (2) 217 112

8 Other Income 1,362 1 1,318 1 1,249 1 (113) (8) (69) (5)

9 SG&A (2,820) (3) (3,104) (2) (3,056) (2) 237 8 (48) (2)

Extraordinary Item

10 Provision for Business Restructuring ** (2,239) (1) (2,239) 100 (2,239) 100

11 EBITDA 11,466 10 10,999 8 10,475 7 (991) (9) (524) (5)

12 Depreciation & Amortization (4,187) (4) (4,202) (3) (4,415) (3) 228 5 213 5

13 EBIT 7,279 7 6,797 5 6,060 4 (1,219) (17) (737) (11)

14 Finance Cost (1,120) (1) (1,141) (1) (1,097) (1) (23) (2) (44) (4)

15 FX Gain/(Loss) (2,726) (2) 602 0 71 0 2,797 103 (531) (88)

16 Shares of Profit/(Loss) from Investments (22) (0) 240 0 290 0 312 1,423 50 21

17 Income Tax Expense 509 0 (373) 0 (599) (0) 1,108 218 226 61

18 Net Profit 3,919 4 6,126 4 4,725 3 806 21 (1,401) (23)

19 Profit/(loss) attributable to:

20 Owners of the Company 4,172 4 6,296 4 6,085 4 1,913 46 (211) (3)

21 Non-controlling interests (252) (0) (170) 0 (1,360) (1) (1,108) (440) (1,190) (700)

22 Adjusted EBITDA * 12,888 12 11,574 8 11,534 8 (1,354) (11) (40) (0)

***

Income Statement

8/11/2019 20140813-pttgc-am-2q2014


Income StatementSoften from Lower PX Spreads and Vencorex Restructuring

25

6M/13 6M/14 YoY MB % MB % MB %

1 Sales Revenue 253,195 100 298,767 100 45,572 18

2 Feedstock Cost (199,940) (79) (248,117) (83) 48,177 243 Product to Feed Margin 53,256 21 50,650 17 (2,606) (5)

4 Variable Cost (12,992) (5) (15,017) (5) 2,025 16

5 Fixed Cost (8,178) (3) (9,537) (3) 1,359 17

6 Stock Gain/(Loss) &

NRV (2,065) (1) 605 0 2,670 129

7 Gain/(Loss) Commodity Hedging 567 0 605 0 38 7

8 Other Income 2,687 1 2,567 1 (120) (4)

9 SG&A (5,389) (2) (6,160) (2) 771 14

Extraordinary Item 0 0 0 0 0 0

10 Provision for Business Restructuring ** 0 0 (2,239) (1) (2,239) 100

11 EBITDA 27,885 11 21,474 7 (6,411) (23)

12 Depreciation & Amortization (8,140) (3) (8,617) (3) 477 6

13 EBIT 19,745 8 12,857 4 (6,888) (35)

14 Finance Cost (2,235) (1) (2,238) (1) 3 0

15 FX Gain/(Loss) (741) (0) 673 0 1,414 191

16 Shares of Profit/(Loss) from Investments (40) (0) 530 0 570 1,440

17 Income Tax Expense (711) (0) (972) (0) 261 37

18 Net Profit 16,019 6 10,850 4 (5,169) (32)

19 Profit/(loss) attributable to:

20 Owners of the Company 16,247 6 12,381 4 (3,866) (24)

21 Non-controlling interests (228) (0) (1,530) (1) (1,302) (572)

22 Adjusted EBITDA * 29,950 12 23,108 8 (6,842) (23)

Note: * Adjusted EBITDA = EBITDA – Stock Gain/(Loss) &NRV – Provision for Business Restructuring of Vencorex

** Vencorex business restructuring provision at 100% share

*** Vencorex business restructuring provision portion of 49% for non-controlling interests or Baht 1,097 million

***

Strong Financial Position

8/11/2019 20140813-pttgc-am-2q2014


Strong Financial Position

26

Interest Rate Currencies

58 % Fixed 45 % THB

42 % Float 55 % USD & Others

Loan Type

• Cost of long term debts ~ 4.58% (Include

W/H Tax)

• Average loan life after refinancing - 5.31

Years

Treasury policyNet IBD to Equity ratio of ≤ 0.7x

Net IBD to EBITDA ratio of ≤ 2.4x

THB 106 Bn

THB Bn

* After Refinance, including New THB Bond of 10,000 million THB

Maturity of Financial Debt* as at Jun. 30, 2014 Key Financial Ratios

1.30 1.34 1.41

0.31 0.28 0.30

0

0.3

0.6

0.9

1.2

1.5

31 Dec. 13 31 Mar. 14 30 Jun. 14

Net IBD/EBITDA NET IBD/Equity

14.44%

11.51%12.51%

9.42%

7.97%8.64%

5%

10%

15%

20%

31 Dec. 13 31 Mar. 14 30 Jun. 14

ROE ROA

Success in Issuing new unsubordinated, unsecured debentures of THB 10,000 Mn• Interest at 4.50%, Tenor 7 years

• Purpose to support investment and for general purpose

• Maintaining customer base.

New Baht Bond

Agenda

8/11/2019 20140813-pttgc-am-2q2014


Agenda

27





Market Outlook

C d Oil G liti d G d l E i

8/11/2019 20140813-pttgc-am-2q2014


Q 1 / 1 3

Q 2 / 1 3

Q 3 / 1 3

Q 4 / 1 3

Q 1 / 1 4

Q 2 / 1 4

Q 3 / 1 4

Q 4 / 1 4

2 0 1 5

Crude Oil – Geopolitics and Gradual EconomicRecovery Keep Oil Price High

• Global geopolitics:

• Ukraine: Leading to sanction on Russia which may affectglobal economy and Russia’s oil supply in future

• Libya: Export only 230 kbd in Q2/14

• Iraq: No impact to oil export so far (3.08 mbd in July)

• Impact after QE ends in October 2014

• China’s economy

• Manufacturing PMI reached 51.7 in July, highest in 2014

• Diesel demand was back to normal at 3.58 mbd in June

IEA Forecasts oil Demand Growth 1.23 MBD This Yearfrom Economic Recovery

Supply from Non-OPEC Keeps Growing

Geopolitics Keep Oil Price at High Level Factors to be Watched in H2/14

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

Source: IEA, July 2014

2013 2014 2015

Non-

OPEC

OPEC*

GDP Growth

(%)

2013

(A)

2014

(F)

U.S. 1.9 1.7

Euro -0.4 1.1

China 7.7 7.4

World 3.2 3.4

• Thanks to shale oil, U.S. will beno.1 oil producer at 11.44mbd, followed by Russia at10.92 mbd

• Saudi Arabia plays a balancerrole to maintain oil price overUSD 100/bbl

• Supply disruption fromgeopolitics is inevitable

0.07

108.2

100.8

106.3 106.8

104.5

106.1 106.2 105.7

103.0

UNIT: USD/BBL

54.86

36.7636.35 36.56

56.32

57.52

Source: PRISM, July 2014

Average 2013 (A) 2014 (F) 2015 (F)

Dubai 105.5 105.6 103.0

28

UNIT: MBD

90.3

91.9

93.4

• Oil demand usuallygrows in Q3 and Q4due to seasonality

Source: IEA, July 2014 *OPEC Supply includes crude and NGL

93.9

92.7

90.8

92.192.4

91.4

R fi M i Will B R d i Q4 f

8/11/2019 20140813-pttgc-am-2q2014


-12

-8

-4

0

4

8

12

16

20

24

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

Diesel

Gasoiline

Fuel Oil

Refinery – Margin Will Be Recovered in Q4 fromRising Demand and Refinery Turnaround

New Capacity Has Been Rationally Cancelled or Delayed U.S. Refiners Tend to Run Lower Rate in Q4/14

Refinery Maintenance in H2/14 Will Boost Margin Asian Middle Distillates Demand Will Pull Q4 Margin


GRM 2013 (A) = $6.7/bbl GRM 2014 (F) = $5.9/bbl

29

Apr May Jun Jul Aug Sep Oct Nov Dec

UNIT: KBD

Source: JBC, August 2014

6,8786,350

4,830

3,508

2,030

3,242

UNIT: USD/BBL

U.S. refiners take advantage of low-price domestic crudes to run highO/R for exporting to Europe,pressuring Asian refining margin.

In last three months, there aresignificant drops in additionalrefining capacity, mostly in China.

16.72

11.79

-9.36

PTTGC has 30% hedging in H2/14

U.S. O/R will bereduced after end ofgasoline season.

4,309

4,943

3,207

Heavy turnaround inAsia Pacific andNorth America

during Oct – Nov.

19.61

16.81 17.32 17.73 17.8016.04

18.39

14.62

12.41

9.22

14.5616.06

13.99

12.27

-7.31

-3.62

-10.66 -10.40-8.46

-10.60 -10.35

17.40

13.10

-8.30

A ti P l t B i D C l

8/11/2019 20140813-pttgc-am-2q2014


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

PX-MOPJ BZ-MOPJ

• JX Nippon Oil announced running at 60-65% for Q3

• TPPI remains offline with no plan to restart

•Dragon Aromatics’ PX plant (800 KTA) maintenance inAug

• Guandong Refinery to be shut down late Aug for twomonths, impacting its 820-KTA PX plant

• Zhenhai Refinery to be shut down in Sep for one month,impacting its 620-KTA PX plant

• Mizushima’s (370 KTA) and Idemitsu Kosan’s (270 KTA) PXplants shutdown in Sep and Oct

Capacity Loss in Q3 to Support PX Price

BZ to Support Aromatics Margin

Aromatics – Paraxylene to Be in Down CycleBenzene to Be an Unsung Hero

Capacity Loss in Q3 to Support BZ Price

Production Cutbacks Ease an Impact of New PX Capacity

30

Source: IHS

Source: IHS

USD/MT Source: PRISM, July 2014

1,379

1,635

1,443 1,485 1,432

1,284 1,2591,349 1,303

1,286 1,258 1,283 1,297 1,293 1,338 1,313

674

417

585

428

565

337

486

338 350 363 307 341402 387 375366

1,270

1,275

365360

Eth l /PE W ll B l d D d/S l d

8/11/2019 20140813-pttgc-am-2q2014


0

200

400

600

800

1,000

1,200

1,400

1,600

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

HDPE-Ethylene Ethylene-MOPJ

HDPE Ethylene

Ethylene/PE – Well Balanced Demand/Supply andSeasonal Demand Support Margin

31

Ethylene and PE Margins Continue Strong

Ethylene Capacity Loss to Supports PricesChina’s PE Demand Continued Growing,Resulting in Increasing Import in H1/14

0%

5%

10%

15%

20%

Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14

Source : Argus Dewitt

• Seasonal demand for agricultural season and formanufacturing before New Year will support ethylene/PEprices

• Together with ethylene tight supply due to upcomingturnaround in Asia• Taiwan’s FPCC 1,200 KTA (Aug for 1.5 months)• Japan’s Tonen 515 KTA (Sep for 1 month)• Singapore’s Shell 800 KTA (Oct for 3 months)

• Operating rates of PE are higher than 82% throughout 2015

• Possible delay of ethane cracker projects in U.S. could extendup-cycle period of ethylene/PE

Seasonal Demand, Tight Supply and Delayed U.S. CrackersSupport Prices

USD/MT Source: PRISM, July 2014

Source: IHS

0

2

4

6

8

1012

T

o t a l

D e

m a n d

C h

i n a

P r o d u c t i o n

I m p o r t

E

x p o r t

M E

N E A

S E A

N

A F T A

E U

2013 2014

+12%

+6%

+9%

22%

-3%10% 33%

Sources : Global Trade Information Services, Chemease Production Data

+20%

28%

UNIT: MT

1,483 1,443 1,4891,536 1,554 1,569 1,598

1,557

1,512

1,3951,265

1,322 1,4271,441 1,447 1,463 1,435

1,415

521585 568 591 620 617 659 619 605

434 407 402 481 507 496 524 497 508

P l Still Aff t d b O C it

8/11/2019 20140813-pttgc-am-2q2014


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

Propylene-MOPJ BD-MOPJ

Butadiene Propylene

Propylene – Still Affected by On-purpose CapacityButadiene – T/A & Increasing Car Sales Support ST Margin

32

Expect to See Recovery from Q2/14

USD/MT

Propylene Capacity Loss to Supports Price in Q3 Another Seasonal BD Turnaround during Sep - Nov

0%

2%

4%

6%

8%

10%

12%

Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14

Source : Argus Dewitt

• 1,500 KTA of new propylene supply from PDH in China islikely to be delayed on-spec production until late Aug or Sep

• Scheduled BD capacity offline in Asia during Sep-Nov willtighten market and lessen export from region

• 2.3 million of global light vehicle sales this year will increaseBD demand, although BD price will be capped by reducedoperating rate of synthetic rubber as a result of squeezemargin

• Natural rubber stock in China is expected to decline more inQ3 due to reduced demand for loan collateral

Propylene and Butadiene Outlook

Source: PRISM, July 20141,731

1,306 1,297

1,344

1,129

1,336

1,367

1,524

1,369

1,373

1,279

1,246

1,479

1,327 1,308 1,320

1,4321,330

345

770

439486

415

209

421

579

434439

328 294387

539

370

494413 423

MEG A Series of T/A in H2 and Well Balanced

8/11/2019 20140813-pttgc-am-2q2014


0

200

400

600

800

1,000

1,200

1,400

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

MEG-(0.63 x Ethylene) MEG

MEG – A Series of T/A in H2 and Well BalancedDemand/Supply Make Margin Rebound

33

Expect to See Recovery from Q2/14

USD/MT

Demand Outpaces Capacity in 2014-15 A Series of Turnaround Will Tighten Market in H2

• Heavy turnaround in Saudi Arabia during H2/14

• Textile manufacturing peak season during Sep-Oct

• Global operating rate sustains above 80%• China still needs to import 7.2 million tons during

2014-15

• Coal-based-MEG plants still run at low operatingrate as well as new capacity might be delayed

Positive Outlook for MEG


1,134

979

1,064

1,045 963 9411,027

1,1571,226

Thousand MT

0

20

40

60

80

100

0.0

0.5

1.0

1.5

2.0

2011 2012 2013 2014 2015

Global Additional Capacity Global Additional Demand % OR

Million MT

255182

232159

55 29105

252334

0.30

0.42

1.58

1.25

1.45

Phenol/Acetone/BPA Struggle for Survival

8/11/2019 20140813-pttgc-am-2q2014


0

250

500

750

1,000

1,250

1,500

1,750

2,000

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 2015

BPA Margin Phenol Margin BPA

Phenol Acetone

0

200

400

600

800

1,000

2013 2014 2015 2016 2017 2018

Phenol New Capacity BPA New Capacity

Phenol Additional Demand BPA Additional Demand

Turnaround in Q4/2014Delays of New Supply Relieve Mkt Sentiment

Phenol/Acetone/BPA – Struggle for Survival

34

New Capacity Still Pressures Margin

Effective Capacity

0

20

40

60

80

100

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

PH BPA

UNIT: KTA

• Market sentiment is relieved by delays of new capacity from

2014 to 2015

• FCFC Ningbo’s new phenol plant (300 KTA)

• Nan Ya Plastics’ new BPA plant (150 KTA) and• Changchun Plastics’ new BPA plant (135 KTA)

• Despite of heavy expansion, maintenance shutdowns and

delayed commissioning still make market tightened

• Changshu Changchun Chemical (300 KTA) to shut down in

Oct

• Shanghai Sinopec Mitsui Chemicals (250 KTA) postpones

start-up in Aug for more than one month

Better Sentiment from Project Delays and Capacity Loss

USD/MT Source: PRISM

UNIT: KTA

373

643

325

547

287

466

329

428

358

461

287

399

443

587

327

462

322

456

1,645

1,385

1,133

1,648

1,421

1,102

1,767

1,542

1,129

1,653

1,456

1,095

1,638

1,424

1,171

1,605

1,387

1,181

1,630

1,352

1,136

1,719

1,402

1,105

1,880

1,523

1,154

8/11/2019 20140813-pttgc-am-2q2014


For further information & enquiries, please contact our Investor Relations Team at [email protected]

Thank You

1 Thitipong Jurapornsiridee VP - Corporate Finance & IR [email protected] +662-265-8574

2 Puvadol Vasudhara IR Manager [email protected] +662-140-8712

3 Panugorn Puengpradit IR Analyst [email protected] +662-140-8714

4 Prang Chudasring IR Analyst [email protected] +662-265-8327

5 Supika Charudhanes IR Analyst [email protected] +662-265-8533

6 Chutima Jarikasem IR Coordinator [email protected] +662-140-8713

mailto:[email protected]

mailto:[email protected]

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