1
Analyst Briefing Analyst Briefing –– Q2/2005Q2/200518 August 200518 August 2005
2
DisclaimerDisclaimer
The information contained in our presentation is intended solely
for your personal reference only. In addition, such information
contains projections and forward-looking statements that reflect
our current views with respect to future events and financial
performance. These views are based on assumptions subject to
various risks and uncertainties. No assurance is given that future
events will occur, that projections will be achieved, or that the
our assumptions are correct. Actual results may differ materially
from those projected.
3
•• Projects & InvestmentsProjects & Investments
•• Financial PerformanceFinancial Performance
•• Operational ResultsOperational Results
•• HighlightsHighlights
4
• Announcement of GSP#6 to support ethane cracker project, start up by Q4/08
• MOU signed for a merger of RRC and SPRC, which RRC serving as a core, expected to be listed on SET by year-end
• SPA signed on 1 Jun to invest in TPI; completing transaction by 4 Nov• NPC&TOC merger received full support from major shareholders; the new
company is to become PTT’s flagship in Olefins business
Recent Major Developments of PTT and AffiliatesRecent Major Developments of PTT and Affiliates
Gas BusinessGas Business
Refining BusinessRefining Business
Petrochemical BusinessPetrochemical Business
• 10-year bond issuance of Bt4,000m, rated AA+ by Fitch with swap into USD equivalent to approx. $100m
• 30-year bond issuance of $350m, rated A2/BBB+ by Moody’s and S&P• Several measures being implemented to address issue of water shortage
in Rayong
PTT GroupPTT Group
5
Q2/2005 Financial Snapshot : Another Solid QuarterQ2/2005 Financial Snapshot : Another Solid Quarter
Q2/2004Q2/2004 Q2/2005Q2/2005
32%
68%
Sales ~ 150,673 MB
46%
9%
45%
66%
22%
12%
Sales ~ 226,291 MB
EBITDA ~ 19,470 MB EBITDA ~ 28,334 MB
40%
5%
16%
39%
Note : Sales excluding all eliminations and EBITDA excluding others and all eliminations where RRC and BPE are grouped in Petrochem & Refinery.
+ 75,618 MB (+ 50%)
+ 8,864 MB (+ 46%)
: TM ~ 20%: Mkt/Dist ~ 9%: GSP ~ 16%
: TM ~ 14%: Mkt/Dist ~ 9%: GSP ~ 16%
Gas Group Gas Group
Oil GroupOil GroupPetrochem& Refinery
Petrochem & Refinery
GasGas
PTTEP PTTEP
Oil Group
Oil Group
6
Q2/2005 Financial Snapshot : Another Solid QuarterQ2/2005 Financial Snapshot : Another Solid Quarter
51%
33%
16%
14% 19%
44%23%
Q2/2004Q2/2004 Q2/2005Q2/2005
15%
44%
41%
Net Income ~ 14,083 MB
52%33%
15%
Net Income ~ 18,355 MB
Capital Employed* ~ 295,986 MB Capital Employed ~ 321,880 MB
+ 4,272 MB (+ 30%)
25,894 MB (+ 9%)
: Mkt/Dist/TM ~ 30%: GSP ~ 6%: PTTEP ~ 16%
PTTEP PTTEP
PTT
AssociatesAssociates
Associates
GasGas
OilOil
: Refinery ~ 15%: Petrochem ~ 26%
: Refinery ~ 16%: Petrochem ~ 8%
Associates
: Mkt/Dist/TM ~ 30%: GSP ~ 7%: PTTEP ~ 14%
RRC
* Capital employed as of 2004
PTT
7
1H/2005 Financial Snapshot1H/2005 Financial Snapshot
1H/20041H/2004 1H/20051H/2005
32%
68%
Sales ~ 287,816 MB
46%
9%
45%
65%
22%
13%
Sales ~ 417,453 MB
EBITDA ~ 37,277 MB EBITDA ~ 53,228 MB
39%
7%
15%
39%
Note : Sales excluding all eliminations and EBITDA excluding others and all eliminations where RRC and BPE are grouped in Petrochem & Refinery.
+ 129,637 MB (+ 45%)
+ 15,951 MB (+ 43%)
: TM ~ 21%: Mkt/Dist ~ 9%: GSP ~ 16%
: TM ~ 15%: Mkt/Dist ~ 7%: GSP ~ 17%
Gas Group Gas Group
Oil GroupOil GroupPetrochem& Refinery
Petrochem & Refinery
GasGas
PTTEP PTTEP
Oil Group
Oil Group
8
1H/2005 Financial Snapshot1H/2005 Financial Snapshot
9%
17%
14%
38%
22%
1H/20041H/2004 1H/20051H/2005
16%
48%
36%
Net Income ~ 26,357 MB
52%33%
15%
Net Income ~ 44,351 MB
Capital Employed* ~ 295,986 MB Capital Employed ~ 321,880 MB
+ 17,994 MB (+ 68%)
25,894 MB (+ 9%)
: Mkt/Dist/TM ~ 30%: GSP ~ 6%: PTTEP ~ 16%
PTTEP PTTEP
PTT
Associates
Associates
Associates Gas
Oil
: Refinery ~ 20%: Petrochem ~ 17%
: Refinery ~ 13%: Petrochem ~ 10%
RRC
* Capital employed as of 2004
PTT
RRC’s gain fromdebt restructuring
51%
33%
16%
Gas
Oil
Associates
: Mkt/Dist/TM ~ 30%: GSP ~ 7%: PTTEP ~ 14%
9
•• Projects & InvestmentsProjects & Investments
•• Financial PerformanceFinancial Performance
•• Operational ResultsOperational Results
•• HighlightsHighlights
10
Gas Business : Stable Income & Growing ContinuouslyGas Business : Stable Income & Growing Continuously
Gas Sales VolumeGas Sales Volume Customer ProfileCustomer Profile
2524
27062730
26592597
2784
28582850
30132970
2500
2600
2700
2800
2900
3000
3100
Q1 Q2 Q3 Q4
MMSCFD
1000 990 1038
742 820 839
419 416 426376 479 461247
265 249
0
500
1000
1500
2000
2500
3000
3500
4000
Q2/04 Q1/05 Q2/05
MMSCFD EGAT IPP SPP
GSP Industry
▪ Gas sales volume growing along with economic expansion
▪ Gas sales volume expected to grow by 7% in 2005 – 3rd pipeline startup in mid 2006
▪ Power producers remain major customers representing ~ 76% of total sales volume
▪ Sales volume to GSP up 23% yoy driven by more gas consumption from GSP#5
2,784 2,970 3,013
+ 8% yoy+ 1% qoq
Yr 2003 avg. = 2,655
Yr 2004 avg. = 2,773
Note : Sales volume including unstabilized NGL
34%
28%
14%
15%
8%
+ 8% yoy+ 1% qoq
+ 4%
11
Gas Separation Plants : Strategic Value CreatorsGas Separation Plants : Strategic Value Creators
Product Sales Volume : Strong contribution from GSP#5Product Sales Volume : Strong contribution from GSP#5
Product Prices : Floating at high levelProduct Prices : Floating at high level
836 847
1048 1106 1050 1015
865 851
1043 1098 1050 985
446
305 319 350430 372 411
160 160 160 160 162 163
434441402360348
0
300
600
900
1200
Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
$/Ton
PP
HDPE
Naphtha
LPG
COGS
Sources : PP (ICIS – Inject Grade), HDPE (ICIS – Film Grade), Naptha (MOP’Singapore),LPG (Saudi Aramco’s CP), COGS (estimated)
387 385 379 426 451 485
103 104 103 108 103 119138 131 139 139 190 17052 54 50 5059 40
0
300
600
900
Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
kTon
Propane
Ethane
NGL
LPG
680680 723723803803
5%21%15%
59%
674674 671671
%yoy %qoq
(26%) (32%)
30% (11%)
14% 16%
26% 8%
21% 1%21% 1%
%yoy %qoq
20% (3%)
16% (6%)
24% 3%
29% 10%
- -
• Ethane & propane linked to HDPE & PP through profit-sharing mechanism
• NGL linked to naphtha
814814
12
PTTEP : High Oil Price Driving Record PerformancePTTEP : High Oil Price Driving Record Performance66.48% owned by PTT 66.48% owned by PTT (as of 30 Jun 2005)(as of 30 Jun 2005)
Oil22%Gas
78%
1P Reserves1P Reserves~ 696 ~ 696 mmboemmboe
Leading producer in Thailand with 24.2% market share (Jun 2005)
Product mix by revenues (Q2/05): Gas 55%, Liquid 45%
Solid financial performance
Leadership position in Thailand with international growth potential
Arthit field expected to startup in Q1/07Source : Department of Mineral Resources (as of Dec 2004)
Financial HighlightsFinancial Highlights
PTTEP Reserve (Thailand only)PTTEP Reserve (Thailand only)
8,773 9,441 10,920
3,277 4,254 5,480
16,652 20,360
9,7356,655
133 143 139 131 141
0
5,000
10,000
15,000
20,000
25,000
Q2/04 Q1/05 Q2/05 1H/04 1H/05
MB
0
50
100
150
KBOEDEBITDA NI Sales Volume (RHS)
($/BOE) 22.86 25.42 28.14 22.32 26.77Avg. Sales Price
+7%+4% yoy(3%) qoq
13
Oil Business : Leadership Position & Expansion Capability Oil Business : Leadership Position & Expansion Capability
Oil Marketing : Dominant Position & Strong Brand with 36% MarketOil Marketing : Dominant Position & Strong Brand with 36% Market ShareShare
Oil Trading : Growth Platform Generating Extra Values at MarginaOil Trading : Growth Platform Generating Extra Values at Marginal Costl Cost
Note : Sales excluding supply sales, Source : Ministry of Energy
4,295 3,856 4,390 3,6706,117 5,903
816 916 859 972
934 878344 511 516 500
514 528828 1,170 1,154
895
457 612
0
3,000
6,000
9,000
Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
ML
Refined Products
Petrochemicals
Condensate
Crude
6,283 6,037
8,022
876 951 804 728 857 1,083
1,350 1,239 1,261 1,400 1,467 1,587318 311 288 307 303 264505 485 462 470 470 494533 528 538 584 613
634
0
1,000
2,000
3,000
4,000
Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
ML
LPG
Gasoline
Jet/IK
Diesel
Fuel Oil
3,582 3,489 3,71016%12%6%
39%
27%
8%7%11%
74%
3,514 3,353
%yoy %qoq
20% 3%
2% 5%
(15%) (13%)
14% (26%)
28% 8%
16% 9%16% 9%
6,453 6,919%yoy %qoq
(48%) 34%
3% 3%
(4%) (6%)
53% (3%)
23% (1%)23% (1%)
# of gas stations PTT : Total = 1,327 (as of Jun 2005)
7,921
4,062
14
Petrochemical Associates : OlefinsPetrochemical Associates : Olefins
836 847
1048
1106
10501015
865 851
1043
10981050
985
769
826
1073 1062 1054
793
711745
945
998 994
926
348 360402
441 434 446
300
400
500
600
700
800
900
1000
1100
1200
Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
$/Ton PPHDPEEthylenePropyleneNaphtha
Olefins PricesOlefins Prices NPCNPC
TOCTOC
1272
2890 2467 2350
5357
912 2496 1789 16514285
9791
10295 96
0
2500
5000
7500
10000
2Q04 1Q05 2Q05 1H04 1H05
MB
020406080100120
%Utl
Sources : Naphtha (MOP Singapore), Ethylene & Propylene (ICIS – SEA SP),PP (ICIS – Inject Grade), HDPE (ICIS – Film Grade) EBITDA Net Income %Utilization
1512 1634800
3067 2434
734 1102 508 1688 1610
9486
51
97
69
0
2500
5000
7500
10000
2Q04 1Q05 2Q05 1H04 1H05
MB
020406080100120
%Utl
15
Petrochemical Associates : AromaticsPetrochemical Associates : Aromatics
724
828
546
691
1,089
949 973
842
283 309355 375 385
434
841700
973953
200
400
600
800
1000
1200
1400
Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05
$/Ton
PX
BZ
Condensate
Aromatics PricesAromatics Prices ATCATC
Sources : PX & BZ (CMAI – SEA SP), Condensate (ATC)
EBITDA Net Income %Utilization
● Solid financial increasing capability to compete in unfavorable environment and to facilitate investments
● One of the lowest-cost producers in the industry
● ATC-II expected to startup in Q3/08
24733120
1877
37234996
1612 2698 931 2532 3629
116 114 118 113 116
0
2500
5000
7500
10000
2Q04 1Q05 2Q05 1H04 1H05
MB
020406080100120
%Utl
16
Refining Affiliates : Record Oil Prices Driving PerformanceRefining Affiliates : Record Oil Prices Driving Performance
TOPTOP RRCRRC
BCPBCP
EBITDA Net Income %Utilization
SPRCSPRC
3426
1108 7501647 2191 2402
648 438 1317 1295 1755
7663 59
81
61
0
2500
5000
7500
10000
2Q04 1Q05 2Q05 1H04 1H05
MB
020406080100120
%Utl
5521 63388126
11238
14464
2636 3691 35316633 7222
10595
110 105 102
0
5000
10000
15000
2Q04 1Q05 2Q05 1H04 1H05
MB
020406080100120
%Utl
28383708
47575803
8465
1397 3167 3298 39356465
95 99 95 98 97
0
4000
8000
12000
2Q04 1Q05 2Q05 1H04 1H05
MB
020406080100120
%Utl
2741 29084335
55677243
2187 2110
11249
-39
9062
98 102 98 102 100
-4000
0
4000
8000
12000
2Q04 1Q05 2Q05 1H04 1H05
MB
0
20
40
60
80
100
120%Utl
Note : All figures after restatement
17
•• Projects & InvestmentsProjects & Investments
•• Financial PerformanceFinancial Performance
•• Operational ResultsOperational Results
•• HighlightsHighlights
18
Consolidated Income Statement : Q2/2005Consolidated Income Statement : Q2/2005
Note : All quarterly data after restatement, EBT = Earning before taxes and minority interests
(29.4)
-
0.6
(29.4)
-
0.5
1.8
12.7
3.6
3.0
(21.8)
(8.3)
17.1
16.5
20.5
18.4
%QoQ
9.42
-
9.42
26,357
-
26,357
4,803
4,141
8,946
37,719
9,564
3,784
30,097
37,277
7,637
287,816
1H/04
15.85
2.77
13.08
44,351
7,738
36,612
6,534
4,342
12,821
52,837
10,275
4,316
45,391
53,228
11,458
417,453
1H/05
68.3
38.9
68.3
38.9
36.0
4.9
43.3
40.1
7.4
14.1
50.8
42.8
50.0
45.0
%Chg
30.46.569.295.03EPS
--2.77-EPS (from extra items)
30.46.566.525.03EPS (excl. extra items)
30.318,35525,99614,083NI
--7,738-- Extraordinary items
30.318,35518,25814,083NI (excl. extra items)
24.63,2963,2382,645- PTTEP
1.12,3012,0422,277- PTT
32.66,5246,2974,921Taxation
32.726,81126,02620,207EBT
(22.4)4,5095,7665,812Share of Inv. Inc.
9.72,0652,2511,882Interest Exp.
52.224,17320,64115,879EBIT
45.528,33424,31619,470EBITDA
62.76,7855,6314,169S&A Exp.
50.2226,291191,161150,673Sales
%YoYQ2/05Q1/05Q2/04Unit : million Baht except EPS (Baht/share) and percentages
19
Share of Net Income from AssociatesShare of Net Income from AssociatesIncome from Associates of 4,509 MB (~ 25% of Total Net Income)Income from Associates of 4,509 MB (~ 25% of Total Net Income)
Q2/04 : Net Income ~ 14,083 MBQ2/04 : Net Income ~ 14,083 MB Q2/05 : Net Income ~ 18,355 MBQ2/05 : Net Income ~ 18,355 MB
19%
23%
44%
14%
Refineries ~ 2,141Refineries ~ 2,141
TOP ~ 1,481 / SPRC ~ 510TLB ~ 150
Refineries ~ 3,003Refineries ~ 3,003
TOP ~ 1,825 / SPRC ~ 1,178
Petrochemicals ~ 3,608Petrochemicals ~ 3,608
NPC ~ 423 / TOC ~ 391,ATC ~ 2,905 / TPX ~ (111)
Petrochemicals ~ 1,475Petrochemicals ~ 1,475
NPC ~ 210 / TOC ~ 840ATC ~ 429 / PTT Phenol ~ (4)
44%
15%
41%
5,812 MB5,812 MB
: Refinery 15%: Petrochem 26%
(FX loss ~ 1,221 MB)
4,509 MB4,509 MB
: Refinery 16%: Petrochem 8%
(FX loss ~ 1,481 MB)
Unit : million Baht except percentages
Contribution to Net Income from Major AssociatesContribution to Net Income from Major Associates
-- 2,133 (2,133 (--59%)59%)
+ 862 (+40%)+ 862 (+40%)
-22%
PTT
PTTEP
Associates*
PTT
PTTEP
Associates*
RRC
* Incomes from associates also include 63 MB (Q2/04) and 31 MB (Q2/05).
20
Share of Net Income from AssociatesShare of Net Income from AssociatesIncome from Associates of 10,275 MB (~ 23% of Total Net Income)Income from Associates of 10,275 MB (~ 23% of Total Net Income)
1H/04 : Net Income ~ 26,357 MB1H/04 : Net Income ~ 26,357 MB 1H/05 : Net Income ~ 44,351 MB1H/05 : Net Income ~ 44,351 MB
14%
22%
38%
9%
17%
Refineries ~ 5,413Refineries ~ 5,413
TOP ~ 3,643 / SPRC ~ 1,430TLB ~ 340
Refineries ~ 5,837Refineries ~ 5,837
TOP ~ 3,607 / SPRC ~ 2,230
Petrochemicals ~ 4,616Petrochemicals ~ 4,616
NPC ~ 783 / TOC ~ 705,ATC ~ 3,330 / TPX ~ (202)
Petrochemicals ~ 4,373Petrochemicals ~ 4,373
NPC ~ 683 / TOC ~ 2,023ATC ~ 1,672 / PTT Phenol ~ (5)
48%
16%
36%
9,564 MB9,564 MB
: Refinery 20%: Petrochem 17%
(FX loss ~ 1,000 MB)
10,275 MB10,275 MB
: Refinery 13%: Petrochem 10%
(FX loss ~ 1,357 MB)
Unit : million Baht except percentages
Contribution to Net Income from Major AssociatesContribution to Net Income from Major Associates
-- 243 (243 (--5%)5%)
+ 424 (+8%)+ 424 (+8%)
+7%
PTT
PTTEP
Associates*
PTT
PTTEP
Associates*
RRC
Gain from debt restructuring
* Incomes from associates also include -465 MB (1H/04) and 65 MB (1H/05).
21
Balance Sheets & Financial RatiosBalance Sheets & Financial Ratios
Balance SheetsBalance Sheets Financial RatiosFinancial Ratios
128,942184,915 211,696
195,389
302,311 268,549
0
100,000
200,000
300,000
400,000
500,000
600,000
2003 2004 1H05
MB Liabilities
Equities
● Changes since year-end 2004
− Total assets down 6,981 MB (-1.4%)
− Total equities up 26,781 MB (+14.5%)
324,331
487,226 480,245
0.5 0.6 0.5
1.01.2
1.0
1.4
1.0
0.7
7.7
9.4
12.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2003 2004 1H050
2
4
6
8
10
12
14
Net Debt/E
ICR (RHS)
Net Debt/EBITDA
IBD/E
● Treasury Policy is strictly followed
− Net Debt/E <= 1.0
− Net Debt/EBITDA <= 2.0
22
Debt Profile : Cost Control & Risk ManagementDebt Profile : Cost Control & Risk Management
LongLong--term Debts term Debts –– by Currencyby Currency LongLong--term Debts term Debts –– by Companyby Company
* Data as of 30 Jun 2005 (THB/USD = 41.4091)
91,730108,048 106,472
22,152
93,477
51,31611,193
0
50,000
100,000
150,000
200,000
250,000
2003 2004 1H05
MB JPYUSDTHB
201,525201,525
54%
46%
● Debt portfolio designed to match revenue structure● Total debt repayment (for PTT only) ~ 46,165 MB for the next 5 years
157,788157,788
67%
33%
6.026.02157,788157,78851,31651,316106,472106,472TotalTotal
4.74636636-TTM(M)
4.739,1519,151-TTM(T)
4.00366-366DCAP
3.93107-107PTTNGD
4.501,7171,348369BPE
7.3318,78416,2842,500PTTEP
5.95127,02723,897103,130PTT
Cost %TotalUSDTHBMB Equivalent
Average loan life Average loan life –– Consolidated (6.4 years) / PTT Only (6.0 years)Consolidated (6.4 years) / PTT Only (6.0 years)
(22%)(22%)
125,075125,075
73%
18%
9%
RRC’s debt repayment of $1,135mn, reducing LT debts
RRC (PTT on lend) 28,572 L+2.RRC (PTT on lend) 28,572 L+2.55
23
•• Projects & InvestmentsProjects & Investments
•• Financial PerformanceFinancial Performance
•• Operational ResultsOperational Results
•• HighlightsHighlights
24
CAPEX & Investments : Building Infrastructure to GrowCAPEX & Investments : Building Infrastructure to Grow
CAPEX & JV Investments : 2005 CAPEX & JV Investments : 2005 –– 2009 to serve growing gas demand2009 to serve growing gas demand
Total Capex ~ 212,266 MB ($5.6bn) which 91% invested in gas business group
13,516
40,895
49,093
26,777 28,796
10,669
1,627
5,371
3,392
2,9823,041
2,645
10,988
17,104 5,263
6,405 4,549
3,018
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2004 2005 2006 2007 2008 2009
MB
Others
JV
Oil
Gas
64,35164,35158,06858,068
36,47136,471 36,70836,708
16,66916,669
26,29526,295
PTTEP - 30,365 38,790 19,739 14,317 8,521 111,732
Sources : PTT, 1 USD = 38.00 THB, PTTEP (Analyst Meeting – Q2/2005 Financial Results)
25
Strategic Roadmap : Core Gas BusinessStrategic Roadmap : Core Gas Business
* Excluding onshore pipeline to Namphong field
0
1,000
2,000
3,000
4,000
5,000
2004 2005 2006 2007 2008 2009
MMSCFD
Serving as a growth platform to capture more opportunities alongServing as a growth platform to capture more opportunities along the gas value chainthe gas value chain
Tran
smis
sion
Gas
se
para
tion
pl
ant
Completed Projects
2005 2006 2007 2008 2009
Pipeline Capacity(Q1/05: 3,310 mmcf/d)
Completed Projects
Production Capacity (Q1/05: 2.7mta)
BV7 Comp.
3,410
GSP#5
3.9 mta
3rd Pipeline #1
4,110
GSP#1 revamp
4.0 mta
4,110
4.4 mta
3rd Pipeline #2Offshore Comp.
5,270
Ethane PlantGSP#2,3
5.0 mta
5,270
GSP#6
6.6 mta
Existing
Power
IndustryGSP
Total Demand Growth (CAGR 2005-2009 ~ 12%)
Total Gas Demand~ 4,691 mmscfd
26
Strategic Roadmap : Value EnhancersStrategic Roadmap : Value Enhancers
Existing - 2005 2006 2007 2008 2009
TOC (PTT 48.97%)
Ethylene 685 ktaPropylene 190 kta
NPC (PTT 37.99%)Ethylene 461 ktaPropylene 127 kta
HDPE 250 kta
Joint Ventures(PTT 40%, TOC 20%,NPC 20%, ATC 20%)
EO/EG #1MEG 220 kta
EO 80 ktaEthylene from expansion
Debot Plant #1Ethylene 130 ktaPropylene 120 kta
NGL from GSP, Naphta from PTT
EO/EG #2MEG 220 kta
Ethylene from debotplant #2
Debot #2Ethylene 100 ktaPropylene 50 kta
LPG from PTT
Ethane Cracker 1mtaLDPE 300 ktaLLDPE 400 kta
Ethane from GSP
ATC (PTT 45.94%)PX 495 ktaBZ 467 kta
CyclohexaneCHX 150 kta
Benzene as feedstock
Aromatics IIPX 565 ktaBZ 297 kta
Condensate from PTT
Utilities #1Power 48 MWSteam 45 T/hrNG from PTT
PhenolPhenol 200 kta
Acetone 125 ktaPropylene from NPC&TOC, BZ from ATC
DebotCapacity + 50,000 bpd
TOP (PTT 49.54%)~ 220,000 bpd
RRC (PTT 100.00%)~ 145,000 bpd
SPRC (PTT 36.00%)~ 150,000 bpd
27
ConclusionsConclusions
• Q2/05 was another strong quarter driven by solid performance on the core businesses – gas, PTTEP, and GSP.
• High quality assets, stable cash flow, and strong financial position helped PTT to outperform the overall market in the quarter.
• Oil prices are hovering at record high and likely to stay buoyant throughout this year, which is in favor of PTTEP, GSP, and refineries.
• All major associates are strong financially and operationally and continue to make important contribution to the bottom line.
• Investments are gearing toward expanding gas business to ensure high level of profitability and predictability.
• Group restructure is on progress, focusing on enhancing competitiveness, growing platform for growth, and capturing gas values over the long term.
• Entering to 2H/05, the year 2005 is expected to be another excellent year for PTT Group.
28
Thank you.Thank you.
PTT Public Company Limited – Investor Relations DepartmentTel. (+66 2) 537-2787 Email: [email protected] http://www.pttplc.com/
29
AppendixAppendix
30
PTT : The Only Integrated Gas Company in ThailandPTT : The Only Integrated Gas Company in ThailandMinistry of Finance 52%, Public 48%Ministry of Finance 52%, Public 48%
Largest Thai Public CompanyLargest Thai Public Company Global RecognitionGlobal Recognition
14%
12%
74%
0.416,770Other Affil.0.835,960NPC
0.942,822ATC
1.049,268TOC
2.6121,382TOP
6.0282,857PTTEP
14.0660,150PTT
25.61,207,208PTT Group100.04,714,917SET
%Market Cap. (Bt mn)
6,576
0
1000
2000
3000
4000
5000
6000
7000
Bt bn
Note : All data as of 11 Aug 2005 except GDP (as of 2004, NESDB); SET=681.95 (P/E=8.90), PTT=236 (P/E=8.64)
PTT Group 18.4%
PTT 10.0%GDP
SET 71.7%
1st : Best Managed Companies in Thailand
Asia’s Best Companies 2005• 1st : Best Managed Company in Thailand• 1st : Best Corporate Governance in Thailand
1st : Best in Corporate Governance in Thailand
A-A2LocalBBB+A2ForeignS&PMoody’s
Sovereign Ratings
PTTPTT
OthersOthers
AffiliatesAffiliates
PTT Group representslarge portion of
Thai economy
373rd : World’s Largest Corporations
425th : World’s 2,000 Leading Companies
31
PTT VisionPTT Vision : To be a high-performance energy company with reasonable return to stakeholders
PTT Group StrategyPTT Group Strategy
Business GroupBusiness Group StrategyStrategy
CoreCoreValue CreatorsValue Creators
IntegratedIntegratedValue EnhancersValue Enhancers
E & PE & PE & P
GasGasGas
Grow in Thailand and beyondGrow in Thailand and beyond
Pursue growth vigorously & Add valuesPursue growth vigorously & Add values
RefiningRefiningRefining
PetrochemicalPetrochemicalPetrochemical
MarketingMarketingMarketing
TradingTradingTrading
Restructure & ConsolidateRestructure & Consolidate
Expand Expand ““cautiouslycautiously””
Increase efficiency, Segment & Add valuesIncrease efficiency, Segment & Add values
Build capabilities, Expand & LeverageBuild capabilities, Expand & Leverage
32
Corporate StructureCorporate Structure
PTTPTT
Gas Business GroupGas Business Group Petrochemical & RefiningPetrochemical & Refining
• Exploration and production• Transmission and distribution• Processing• Supply and marketing
• Gas-based petrochemicals• Refineries
• PTT Exploration & Production Plc. (PTTEP) 66.48%
• Trans Thai-Malaysia (Thailand) Co.,Ltd. 50.00%
• Trans Thai-Malaysia (Malaysia) Sdn. Bhd. 50.00%
• PTT Natural Gas Distribution Co.,Ltd. 58.00%
• PTT Utility Co.,Ltd. (PTTUT) 40.00%
• District Cooling System and Power Plant 35.00%
• Independent Power (Thailand) Co.,Ltd. (IPT) 20.00%
• Ratchaburi Power Co.,Ltd. (RPCL) 15.00%
• PTT LNG Co.,Ltd. (PTTLNG) 100.00%
Petrochemical• Thai Olefins Plc. (TOC) 48.97%
• Aromatics (Thailand) Plc. (ATC) 45.94%
• National Petrochemical Plc. (NPC) 37.99%
• Bangkok Polyethylene Plc. (BPE) 50.00%
• PTT Phenol Co.,Ltd. (PPCL) 40.00%
• PTT Polyethyelene Co.,Ltd. (PTTPE) 50.00%
• PTT Polymer Marketing Co.,Ltd. (PTTPM) 50.00%
Refining• Thaioil Plc. (TOP) 49.54%
• Rayong Refinery Plc. (RRC) 100.00%
• Star Petroleum Refining Co.,Ltd. (SPRC) 36.00%
• Bangchak Petroleum Plc. (BCP) 7.88%
Note : Corporate structure as of 30 Jun 2005
Oil Business GroupOil Business Group
MarketingMarketing• Commercial• Retails• Resellers• International
TradingTrading• Crude and
condensate• Refined products• Petrochemicals
• PTT International Trading Pte. (PTTT) 100.00%
• PTT (Cambodia) Co.,Ltd. (PTTCL) 100.00%
• Subic Bay Energy Co.,Ltd. (SBECL) 100.00%
• Retail Business Alliance Co.,Ltd. (RBA) 49.00%
• Thai Lube Blending Co.,Ltd. (TLBC) 48.95%
• Vietnam LPG Co.,Ltd. (VLPG) 45.00%
• Keloil PTT LPG Sdn.Bhd. (KPL) 40.00%
• PetroAsia (Thailand) Co.,Ltd. 35.00%
• PetroAsia (Sanshui) Co.,Ltd. 25.00%
• Thai Petroleum Pipeline Co.,Ltd. 30.60%
• Intoplane Services Co.,Ltd. (IPS) 16.67%
• Bangkok Aviation Fuel Services Plc. (BAFS) 7.06%
• Fuel Pipeline Transportation Co.,Ltd. (FPT) 2.76%Others
• Energy Complex Co.,Ltd. (EnCo) 50.00%
• Dhipaya Insurance Plc. (TIP) 13.33%
33
ThailandThailand’’s Energy Consumptions Energy Consumption(Include Petrochemical Feedstock)(Include Petrochemical Feedstock)
Source : EPPO
0
500
1000
1500
2000
2500
3000
3500
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
KBOED
6565%%
2020%%
5%5%
1010%%
325325
20042004ActualActual ProjectionProjection
5454%%
3131%%
2%2%
1313%%
1,6771,677
4949%%
3636%%
1%1%
1414%%
3,2003,200
OilOil
Gas/LNGGas/LNG
CAGR (1985CAGR (1985--2004) ~ 9%
2004) ~ 9%CAGR (2004CAGR (2004--2015) ~ 6%
2015) ~ 6%
• Current energy consumption is around 1,677 kboed and is expected to grow by 6% annually during 2004-2015.
• Oil and gas are major sources of energy and will remain so for many years;PTT has a very strong presence in both markets.
Hydro/OthersHydro/Others
Coal/LigniteCoal/Lignite
34
Gas Demand Outlook in Thailand : Growing ConstantlyGas Demand Outlook in Thailand : Growing Constantly
Source : PTT ( based on PDP 2004)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
MMSCFD
• Based on Power Development Plan (PDP) 2004, there will be new capacity of 8,078 MW during 2005-2010, of which 5,660 MW or around 70% are gas-fired expected to consume natural gas of ~ 800 MMSCFD.
• 2011 – 2015, there will be new capacity of new IPP 12,600 MW (18 x 700 MW , plus Renewable Portfolio Standard or RPS 630 MW), projection assuming 40% of new IPP are gas-fired.
PowerPower
GSPGSP
ActualActual ProjectionProjection
CAGR (1998
CAGR (1998--2004) ~ 9%2004) ~ 9%
CAGR (2004
CAGR (2004--2015) ~ 7%2015) ~ 7%
1212%%
64%64%
24%24%99%%
77%77%14%14%
5,9005,900
IndustryIndustry
2,7802,780
20042004
35
GSPsGSPs : Increase Gas Consumption & Enhance Gas Value: Increase Gas Consumption & Enhance Gas ValueExtracting valuable components from natural gas to produce highExtracting valuable components from natural gas to produce high--value productsvalue products
0
100
200
300
400
500
600
700
800
900
1,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
MMSCFD
Gas DemandGas Demand Product UsageProduct Usage
Stab NGL
#5
#4
#3
#2
#10
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
kTPA
Fuel
• Currently, five GSPs are consuming gas of ~ 490 mmscfd• Additional gas volume after the completion of the 3rd pipeline will be primarily
used for petrochemical feedstock.
Petrochemical feedstock
Export
Source : PTT, include LPG purchase from ATC, BST
# 6
Ethane Plant
CAGR (1999-2009) ~ 13%
CAGR (1999-2009) ~ 12%
36
Natural Gas Sales Structure : Stable & Fixed ReturnNatural Gas Sales Structure : Stable & Fixed Return
CustomersCustomersSales Price StructureSales Price Structure
Gas Pool Price
Power Producers (75%)
Supply Margins Pipeline Tariffs
: EGAT (33%)
: IPP (28%)
: SPP (14%)
Average PurchasedGas Price
1.75%
1.75%
9.33%
~ 19.4 Bt/mmbtuReflecting18% IRROE
++ ++
Industrial Users (9%) Charged at the price of alternative fuel oil
GSP (16%) Charged at the same price structure of power producers
Petrochemicals
LPG
Profit-sharing mechanism based on market prices of petrochemicals
Reference to Saudi Aramco’s contract price
• Sales prices with volatility pass-through ensure stable returns• Contract periods ranging between 25-30 years or until depletion of gas fields or
expiration of concession
37
TakeTake--oror--pay Contract : Extra Cash from Makepay Contract : Extra Cash from Make--up Gasup Gas
0
100
200
300
400
500
600
700
800
900
1,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
MMSCFD
Make-up Gas
DCQ
Actual gas takenActual gas taken
Advanced paymentAdvanced payment
•• $830mn booked as advanced payment for gas$830mn booked as advanced payment for gasin 2001in 2001
•• Gas taken exceeding DCQ since 2001Gas taken exceeding DCQ since 2001
•• MakeMake--up gas expected to be fully taken by 2009up gas expected to be fully taken by 2009
•• Additional cash contribution from takingAdditional cash contribution from takingmakemake--up gas approx. $100mn per yearup gas approx. $100mn per year
•• During 1H/05, makeDuring 1H/05, make--up gas ~ Bt2,203mup gas ~ Bt2,203m
38
Major Projects UpdateMajor Projects Update
Ban I
Tong
S
B
K
Karnchanaburi
Taluang Kaeng Koi
Wang NoiYadana
Yetagun
Bangpakong
RayongRatchaburi
Tabsake
Kanom
3rd pipeline BenjamasTantawanPlatong
Erawan
PailinBongkot
JDA
Arthit
1st pipeline
2nd pipeline
Power PlantGas Field
Trans Thai-MalaysiaGas Piepline (TTM)
PTTPTT’’s Natural Gas Pipeline Networks Natural Gas Pipeline Network
All projects are proceeding on schedule within budget to capture demand growth
according to PTT’s strategic plan.
● 3rd Offshore Pipeline: EPC contract awarded in 2004: Scheduled to startup by 1H/2006
● Sainoi to N&S BKK Power Plants(capacity ~ 480 mmcfd)Purchasing and construction contracts awarded in 2004-2005
● GSP#6: Conducting feasibility study: Completing basic design by 2005
● Ethane Plant ProjectCompleting basic engineering design and awarding contracts by mid 2005
39
Petrochemical Assets : Strategic GasPetrochemical Assets : Strategic Gas--based Operationsbased Operations
Note : All data as of 30 Jun 2005 (THB/USD = 41.4091) except market cap. (as of 11 Aug 2005)
1,366453874Total
CyclohexaneCompletion: Q2/2006
Capacity: 150,000 TPAAromatics II
Completion: Q2/2008Capacity: PX 565,000 TPA
BZ 297,000 TPA
45343203PX: 495,000BZ: 467,000
ATC(PTT 45.94%)
Ethane CrackerCompletion: Q1/2009
Capacity: Ethylene 1,000,000 TPALDPE 300,000 TPA
LLDPE 400,000 TPA
330134157Ethylene: 461,000Propylene: 127,000
HDPE: 250,000
NPC(PTT 37.99%)
EO/EG #ICompletion: Q2/2006Project cost ~ $210m
Capacity: MEG 220,000 TPAEO 80,000 TPA
Debot Plant #1Completion: Q3/2006Project cost ~ $140m
Capacity: Ethylene 130,000 TPAPropylene 120,000 TPA
583276514Ethylene: 685,000Propylene: 190,000
TOC(PTT 48.97%)
HighlightsMarket Cap.PTT’s Portion
(USD mil)
PTT’sBook Value
(USD mil)
Debt Oustanding
(USD mil)
Key Products(TPA)
Company(PTT ownership)
40
Refining Assets : Integrating Oil OperationsRefining Assets : Integrating Oil Operations
Debt restructuring completed-266326ComplexRFCCU
~ 150,000
SPRC(PTT 36.00%)
1,4697012,167Total
Product Quality ImprovementCompletion: Q4/2007Project cost ~ $250m
173298Hydro Skimming~ 120,000
BCP(PTT 7.88%)
Debt restructuring completed--650ComplexHCU, VBU~ 145,000
RRC(PTT 100.00%)
ExpansionCompletion: Q4/2006Project cost ~ $100m
Capacity: + 50,000 bpd
1,452432893ComplexFCCU, HCU~ 220,000
TOP(PTT 49.54%)
HighlightsMarket Cap.PTT’s Portion
(USD mil)
PTT’sBook Value
(USD mil)
Debt Oustanding
(USD mil)
Refining Process(Capacity in bpd)
Company(PTT ownership)
Note : All data as of 30 Jun 2005 (THB/USD = 41.4091) except market cap. (as of 11 Aug 2005)
41
Refineries in ThailandRefineries in Thailand
TOP (220 TOP (220 kbpdkbpd))(PTT 49.54%)(PTT 49.54%)
BCP (120 BCP (120 kbpdkbpd))(PTT 7.91%)(PTT 7.91%)
RPC (17 RPC (17 kbpdkbpd))
ESSO (145 ESSO (145 kbpdkbpd))
TPI (215 TPI (215 kbpdkbpd))
RRC (145 RRC (145 kbpdkbpd))(PTT 100.00%)(PTT 100.00%)
SPRC (150 SPRC (150 kbpdkbpd))(PTT 36.00%)(PTT 36.00%)
Note : Data as of 30 Jun 2005
Leading position in the market with ~ 31% of ThailandLeading position in the market with ~ 31% of Thailand’’s total refining capacity (PTT equity portion)s total refining capacity (PTT equity portion)
TOP22%
RRC14%
SPRC15%
BCP12%
TPI21%
ESSO14%
RPC2%
● Total refining capacity ~ 1,012 kbpd- PTT Group accounting for 63%
● TOP/RRC/SPRC, complex refineries with potential for upgrade and expansion
● BCP, currently undertaking “Product Quality Improvement Project”
42
Gross Refining MarginsGross Refining Margins
3.56
11.63
5.69
12.07
3.95
7.938.048.50
-2
0
2
4
6
8
10
12
14
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$/bbl
Note : Data using monthly average GRMs of three major refineries (TOP, RRC, and SPRC)
Yr 2003
Yr 2004Q1/05
Q2/05
43
Dividend Policy & Historical PaymentsDividend Policy & Historical Payments
2.50 2.85
4.00
6.75
32.4% 32.6%
28.4%30.1%
25.0%
0
2
4
6
8
10
12
14
2001 2002 2003 2004
Baht/share
0%
5%
10%
15%
20%
25%
30%
35%
% of Net Income
Dividend payment at no less than 25% of Net Income
44
ENDEND