20 may 2020 - listed companyirpc.listedcompany.com/misc/presn/20200520-irpc... · abs expansion...
TRANSCRIPT
20 May 2020
2
AGENDA
IRPC Strategies
Financial Performance
Performance by Business
Achievement
Impact of the outbreak of COVID-19 and mitigation strategies
3
Spunbond
Face Shield
Alcohol
Key Actions for supporting the COVID-19 outbreak Our Survival Mode
Modular room
Negative-pressure Bed
Business Continuity Management (BCM)
Employees Protection
Social Contribution
Liquidity management
Production and marketing strategies alignment
Tighten Operating expenses (OPEX)
Capital spending plan (CAPEX) Reconsideration
Strengthen IRPC projects
CSR “The Fight Against COVID-19”
#Community Protection
1Q20 Achievement
Patient Transportation Chamber Cover
Signs the MOU with the Faculty of Medicine, Vajira Hospital, Navamindradhiraj University
for a laboratory to test the equipment, raising the product standard
Face Shield
For Hospitals & Government Agencies by
IRPC Volunteers
Alcohol
For IRPC Employees &
Hospitals
Spunbond
Non-Woven FabricTo Produce Personal
Protective Equipment : PPE
Modular Diagnosis Room/ ARI Clinic Room
One Stop Service Clinic
Designed by IRPC and Signs
the MOU with Rayong Hospitals
4
Innovation from IRPC Specialty Polymer and
5
Projects UpdatedFloating Solar Project with Electricity 12.5 MW ABS Expansion: Increasing ABS specialty by 6,000 MTA
Construction ProgressABS Expansion
Project Objective : Increase 6,000 MTA of Specialty
ABS Powder. Recovery Vapor Butadiene
278 MTA from Flare.
CAPEX : ~ 430 MB
IRR : ~ 17%Project Progressas of April 2020
: 80 % of Target
Installing equipment and
Piping work under
progression
MC : 3Q20
COD : 3Q20
Project Progressas of April 2020
Project Objective : To produce electricity 12.5 MW Floating Support material by
own HDPE BOI Privilege
Area: Reservoir in Industrial Park
Usage: Internal use at PP Plant
CAPEX : ~ 550 MB
IRR : ~ 17%
Floating Solar
: 99 % of Target
Construction Progress
MC : April 2020
COD : 2Q20
6
AGENDA
IRPC Strategies
Financial Performance
Performance by Business
Achievement
QoQ 24%
5.7
3.8 4.7
1Q19 4Q19 1Q20
30
31
32
33
7
Key DriversCrude oil price collapse amid Saudi Arabia – Russia price war & COVID-19 pandemic
30
40
50
60
70
80
Brent Dubai
Crude Oil Price (avg)
Gross Refining Margin (GRM)
Foreign Exchange (avg)
Product to Feed Margin (PTF)
Unit: $/bbl Unit : THB/USD
1.9 1.7
0.8
1Q19 4Q19 1Q20
Unit: $/bbl Unit: $/bbl
YoY 56%
QoQ 52%
YoY 18%
31.8
Dubai QoQ 18%
Dubai YoY 20%
QoQ depreciated 3%
YoY appreciated 1%
31.8
1Q19 2Q19 3Q19 4Q19 1Q20
Brent 63.2 68.8 61.9 63.2 50.3
Dubai 63.5 67.4 61.2 62.1 50.71Q19 2Q19 3Q19 4Q19 1Q20
30.9 30.5 31.5
8
Financial Highlight: 1Q20 PerformanceStock loss & dampened petroleum products spread led to lower performance
Overview of Business
Net Sales(net excise tax)
Dubai (Avg.)
Unit: $/bbl
Net IncomeUnit: MB
Unit: MB
EBITDA
Unit: MB
Market GIM ($/bbl)
Crude run KBD
Acct. GIM ($/bbl)
Net Stock G/(L)($/bbl)
Net Income
Operating NI (780)(2,330)
(43)
153
(513)
(8,905)
1Q19 4Q19 1Q20
54,274 50,337 43,617
2,355 543
(6,436)
QoQ , YoY – n.a.
63.5 62.1 50.7
200 190 188
8.68 6.76 6.82
1.26 1.38 (12.66)
9.94 8.14 (5.84)
QoQ , YoY – n.a.
QoQ 13%
YoY 20%
QoQ 98%
YoY 94%
(107%) (95%)
102%
(83%)(20%)
3%
Net Sales(net excise tax)
EBITDA
Net income
5%
(20%)
115%
(93%)
(17%)
10%
72%
27%
1%
69%
29%
2%
Petroleum Petrochemical Utilities & Others
Total
4Q19 1Q20 4Q19 1Q204Q19 1Q20 4Q19 1Q20
4Q19 1Q20 4Q19 1Q204Q19 1Q20 4Q19 1Q20
4Q19 1Q20 4Q19 1Q204Q19 1Q20 4Q19 1Q20
(Unit: MB)
1Q19 4Q19 1Q20 QoQ YoY 1Q19 4Q19 1Q20
Net Sales 54,274 50,337 43,617 (13)% (20)% 95.04 94.41 81.06
Market GIM 4,958 3,605 3,665 2% (26)% 8.68 6.76 6.82
Stock Gain (Loss) (122) 526 (4,461) n.a. n.a. (0.21) 0.99 (8.29)
LCM 841 (163) (2,673) n.a. (418)% 1.47 (0.31) (4.97)
Oil Hedging Gain (Loss) 1 373 323 (13)% n.a. 0.00 0.70 0.60
Net Stock Gain (Loss) 720 736 (6,811) n.a. n.a. 1.26 1.38 (12.66)
Accounting GIM 5,678 4,341 (3,146) (172)% (155)% 9.94 8.14 (5.84)
OPEX + Selling Exp. (3,744) (4,313) (3,730) 14% 0% (6.56) (8.09) (6.93)
Other Incomes 422 515 439 (15)% 4% 0.74 0.97 0.82
EBITDA 2,355 543 (6,436) n.a. (373)% 4.12 1.02 (11.95)
Depreciation (2,016) (2,218) (2,227) (0)% (10)% (3.53) (4.16) (4.14)
Cost of Finance (473) (466) (464) 0% 2% (0.83) (0.87) (0.86)
Financial Derivatives Gain (Loss) 86 382 (558) (246)% (749)% 0.15 0.72 (1.04)
FX Gain (Loss) 127 88 (500) (668)% (493)% 0.22 0.17 (0.93)
Unrealized Oil Hedging Gain (Loss) - - (993) - - - - (1.85)
Impairment Gain (Loss) (8) 658 (4) (101)% 50% (0.01) 1.23 (0.01)
Investment Gain (Loss) 83 65 49 (25)% (41)% 0.14 0.12 0.09
Other Expenses (5) (3) (10) (233)% (116)% (0.01) (0.01) (0.02)
Income Tax 9 445 2,246 405% n.a. 0.02 0.83 4.17
Net Profit 153 (513) (8,905) n.a. n.a. 0.26 (0.97) (16.55)
Unit: $/bblUnit: MB % Change
9
Financial Highlight: 1Q20 performance
(83%)
(20%)
3%
(93%)
(17%)
10%
69%
29%
2%
(8,905) MB
Petroleum Petrochemical Utilities and Others
Net Sales(net excise tax)
EBITDA
Net Income
43,617 MB
(6,436) MB
1Q20
10
Net Profit: 1Q20 VS 4Q19Net Stock loss & unrealized loss on derivatives resulted in a drop of Net Profit
60
Net Loss 4Q19
Margin Net Stock loss
OPEX & Selling
Exp.
Oil Hedging
Unrealized
Financial Derivatives
FX Tax & Others
Net Loss 1Q20
Operating Income 98%
Net Income – n.a.(513) (8,905)
(2,330) (43)
Unit: MB
ST Loan21%
LT Loan (USD)10%LT Loan (THB)
59%
Bond (THB)10%
Leasing0.4%
5,694 6,443 6,942 6,765 12,652 1,957 - 1,305 1,305
1,957
-6,889
- -
-
7,652
13,332
8,247 8,070
14,609
2020 2021 2022 2023 >2023
THB Bond
USD Loan
THB Loan
11
Financial PositionSecuring liquidity in response to COVID-19
121,991 121,362
12,212 14,523
40,611 32,681
3,036 12,273
83,402 73,008
4,860 5,217
52,071 51,910
37,517 50,705
Maturity of Long-term Borrowing
Debt ProfileStatements of Financial Position
Cash Flow
Unit : MB
Remark: Long-term debt as at 31 March 2020
Unit: MB
PP&E(incl.
investment properties and ROU)
Other Non-CA
Cash
Other CurrentLiabilities
LT Borrowing incl. current port.
Shareholders’Equity
Mar. 2020Dec. 2019
Other CA
Other Non-CurrentLiabilities
Beginning Cash
1 Jan 2020
Ending Cash31 Mar 2020
Cash Flow from
Operating
Unit: MB
Cash Flow from
Investing
Cash Flow from
Financing
Net Debt = 53,589 MB
Ex. Rate = 32.83 Baht/$
Financial Ratios
< 1.0x
Net D/E CA/CL
177,850 180,839Interest Rate Currency
Float 80% THB 90%
Fixed 20% USD 10%
2%
0.66 0.67 0.74
1Q19 4Q19 1Q20
0.96 0.95 0.77
1Q19 4Q19 1Q20
12
AGENDA
IRPC Strategies
Financial Performance
Performance by Business
Achievement
13
Petroleum Spread
12.8 12.415.4 14.3
11.0
1Q19 2Q19 3Q19 4Q19 1Q20
3.77.5
11.7 12.96.7
1Q19 2Q19 3Q19 4Q19 1Q20
0.6
(2.3)
0.9
(18.7)
(7.4)
1Q19 2Q19 3Q19 4Q19 1Q20
500SN – FO 180 3.5%S Spread
150 BS – FO 180 3.5%S Spread
Asphalt – FO 180 3.5%S Spread
$/bbl
$/bbl
$/bbl
Lube Base SpreadRefinery Spread
Gas Oil - Dubai
ULG 95 - Dubai
HSFO - Dubai
(40)(4) (2)
98
27
1Q19 2Q19 3Q19 4Q19 1Q20
482 473 451 553 536
1Q19 2Q19 3Q19 4Q19 1Q20
330 287 283 384 370
1Q19 2Q19 3Q19 4Q19 1Q20
QoQ 48%
%
%
%
QoQ 23%
QoQ 60%
QoQ 4%
QoQ 3%
QoQ 72% $/TON
$/TON
$/TON
93% 89% 87% % U-Rate
200 190 188
0.4 0.1 0.4
0.9 0.3
8.4 8.1 7.9
2.0 2.3 2.4
1.0 0.5 0.5 0.5 0.5 0.4
1.8 1.8 1.6
14.1 14.0 13.6
1Q19 4Q19 1Q20
Lube
LPG&Other
Naphtha &ReformateGasoline
Diesel & Jet Oil
LSFO 0.5%
HSFO
14
Petroleum GroupFalling Gasoline & Diesel spreads plus high crude premium led to negative refinery margin
4,437 3,823 3,860
33,336 32,193 26,384 Refinery
37,773 36,016 30,244
14.2 14.0 13.4
1.8 1.7
1.7
16.0 15.7 15.2
1Q19 4Q19 1Q20
Lube Base
Refinery
2.0 5.1 5.3
0.8
0.1 (0.9)
1.1 1.6 1.7
1.9 1.7 0.8
1Q19 4Q19 1Q20
Lube Base
Refinery1Q19 4Q19 1Q20
Crude Intake
GRMSales Volume & Revenue
Production
66% 68% 72%
34% 32% 28%
1Q19 4Q19 1Q20
Sweet Crude
Sour Crude
Premium over Dubai ($/bbl)
64% 68% 71%
22% 16% 16%6% 6% 5%
8% 10% 8% Others
Domestic
Far East
Middle East
Crude Run (KBD)
YoY 5%
QoQ 4%
YoY 20%
QoQ 16% Revenue
Petroleum
Lube Base
Crude intake (Mbbl)
Unit : $/bbl
Unit : Mbbl
Unit : Mbbl
18.0 17.5 17.1Sales Volume
Unit : MB
YoY 6%
QoQ 2%
YoY 4%
QoQ 3%
89%
84%
112%
YoY 56%
QoQ 52%
% Utilization
Lube Base
RDCC
93%
84%
70%
87%
79%
93%
15
Petrochemical Spread
788 763 721 622 678
1Q19 2Q19 3Q19 4Q19 1Q20
1,000 955 932 848 892
1Q19 2Q19 3Q19 4Q19 1Q20
93 108 163
120 123
1Q19 2Q19 3Q19 4Q19 1Q20
409 283 307 203 240
262 395 282 254 315
671 678 589 457 555
1Q19 2Q19 3Q19 4Q19 1Q20
Ethylene-NP HDPE-Ethylene
154 164 209
149 148
1Q19 2Q19 3Q19 4Q19 1Q20
320 255 368 321 347
291 337 218 178 180
611 592 586 499 527
1Q19 2Q19 3Q19 4Q19 1Q20
Propylene-NP PP-Propylene
HDPE-Ethylene –Naphtha Spread
PP-Propylene –Naphtha Spread
MX – Naphtha SpreadToluene – Naphtha Spread
PS –Naphtha SpreadABS –Naphtha Spread
Ole
fin
sS
tyre
nic
sA
rom
ati
cs
QoQ 21% QoQ 6%
QoQ 3%
QoQ 9% QoQ 5%
QoQ 1%
$/TON
$/TON
$/TON$/TON
$/TON
$/TON
16
Petrochemical GroupSharp fall in Naphtha price support Petrochemical product spread
107 91 92 8
50 88 81 68 53 60
186 199 209
411 431 450
1Q19 4Q19 1Q20
Polyolefin
Olefin
Polystyrenic
Styrenic
Aromatic
1.5 1.3 1.2
4.22.5 3.4
5.7
3.84.7
1Q19 4Q19 1Q20
Olefins
Aromatics &Styrenics
Production
PTF
Sales Volume and Revenue
181 168 155
282 266 274
463 434 429
1Q19 4Q19 1Q20
Olefins &Polyolefins
Aromatics &Styrenics
QoQ 1%
QoQ 7% Revenue
1Q19 4Q19 1Q20
YoY 7%
YoY 20%
15,629 13,427 12,497
9,987 8,277 8,090
5,642 5,150 4,407
Petrochem
Olefins
Aromaitcs &Styrenics
Unit : KMT
1Q20 : Petrochemical revenue was Bt 12 bn
QoQ : 7% decrease from 6% price decrease & 1% vol. decrease
YoY : 20% decrease from 13% price decrease & 7% vol.
decrease
1Q20 Market PTF was $4.7/bbl:
QoQ : $0.9/bbl increase as higher products spread
YoY : $1.0/bbl decrease as lower products spread
Crude intake (Mbbl)
Unit : $/bbl
Unit : KMTSales Volume
Unit : MB
YoY 9%
QoQ 4%
YoY 18%
QoQ 24%
90%
88%
92%
82%
69%
57%
107%
% Utilization
Polyolefins
Olefins
% Utilization
Polystyrenics
Styrenics
Aromatics
18.0 17.5 17.1
89%
83%
97%
95%
92%
99%
94%
88%
105%
93%
96%
95%
104%
92%
17
Power & Utility Increasing margin due to higher steam u-rate
534 531 505
277 303 308
61 60 63
872 894 876
1Q19 4Q19 1Q20
Other
Steam
Electricity
Utilization Rate
GIM
Revenue
QoQ 2%
YoY 0.5%
1Q20 U-Rate of Steam was 66%; 6% QoQ, 7% YoY
QoQ & YoY : increase after industrial area customers return to normal
operations
1Q20 U-Rate of Electricity was 71%; Unchanged QoQ, 4% YoY
QoQ & YoY : increase owing to planned shutdown of RDCC plant in 1Q19
1Q20 : Power & Utility revenue was 876 MB
QoQ : 2% decrease from lower electricity sales vol. to EGAT VS higher steam
vol. to IRPC industrial area customers
YoY : 0.5% increase from higher steam sales vol. VS lower electricity sales vol.
1.10 1.24 1.32
1Q19 4Q19 1Q20
Power & Utility
Unit : $/bbl
Unit : MB
67% 71% 71%
1Q19 4Q19 1Q20
Electricity
59% 60% 66%
1Q19 4Q19 1Q20
Steam
YoY 20%
QoQ 6%
YoY 7%
QoQ 6%
YoY 4%
QoQ - Unchanged
Accounting GIM
1Q20 Acct GIM was $-5.8/bbl,
QoQ: $14.0/bbl due to $12.7/bbl net stock loss compared to
$1.4/bbl net stock gain in 4Q19
YoY: $15.8/bbl due to $12.7/bbl net stock loss compared to net
stock gain of $1.3/bbl in 1Q19 and $1.9/bbl lower market GIM
18
Market & Accounting Gross Integrated MarginThe COVID-19 outbreak affected to stock loss
8.7 6.8 6.8
1.3 0.7
(13.3)
0.7 0.6 9.9
8.1
(5.8)
Market GIM Stk G/(L) & LCM Hedging
1.9 1.7 0.8
5.7 3.8 4.7
1.1 1.2 1.3
8.7 6.76 6.82
Petroleum Petrochem Power & Utility
1,084 931
449
3,247 2,014 2,503
627 660 713
4,958 3,605 3,665
1Q19 4Q19 1Q20
4,958 3,605 3,665
719 363
(7,134)
1 373 323
5,678 4,341
(3,146)
1Q19 4Q19 1Q20
Market GIM
Unit: $/bbl
Accounting GIM
Unit: $/bbl
Unit: MB
Market GIM by business
Unit: $/bblPetrochemical
Petroleum
Unit: MB
YoY 22%
QoQ 1%
YoY 159%
QoQ 172%
YoY 26%
QoQ 2%
YoY 155%
QoQ 172%
Market GIM
1Q20 Market GIM was $ 6.8/bbl,
QoQ: $0.1/bbl from higher petrochemical spreads versus lower
petroleum spreads
YoY: $1.9/bbl due to lower spread & higher crude premium
0.8 0.1
(0.9)
1.1 1.6 1.7
1.9 1.7 0.8
1Q19 4Q19 1Q20
Refinery Lube Base
1.5 1.3 1.2
4.2 2.5 3.4
5.7
3.8 4.7
Aromatics&Styrenics Olefins
19
AGENDA
IRPC Strategies
Financial Performance
Performance by Business
Achievement
20
Survival Mode
1. Maintain Market Position
2. CAPEX & OPEX Reduction
3. Strengthen IRPC
21
1. Maintain Market PositionRelationship-based strategies and Portfolio management
Key challenges and mitigation: Protect domestic market share and search for new territories
Petrochemical ProductsPetroleum Products
-1.0 -0.5 0.0
Diesel
Gasoline
Jet
Lube
IRPC MKT
-30%
-20%
Overall reduction in demand, decline across Petroleum products portfolio especially gasoline and jet
-100%
-50%
-40%
-30%
-10%
Impact across petrochemical, some sectors harder hit especially automotive, electronic and industrial while packaging and consumer remains strong
Key challenges and mitigation: Closely monitor customer’s inventory & adjust proportion export
%Market demand decline (2Q20F)
▪ Keep contract of domestic demand based on market decline to maintain market share
▪ Export sales to countries those are not lockdown or partial lockdown
▪ Jet is only 4-5% of refinery portfolio, swap to diesel pool
▪ Lube products group : maintain South East Asia and China customers
▪ Demand decline both domestic and export
▪ Demand decline both domestic and export
Key challenges Mitigation Key challenges Mitigation
No impact
▪ Secure order with contract customer
▪ Review and negotiate with strategic partner to ensure order
▪ Spot order move to focus area
▪ Closely monitor and follow up customer’s inventory to immediate response after lock down
-0.5 -0.3 0.0
Polystyrenics
Polyolefins
IRPC MKT
-30%
-20%
-30%
-25%
%Market demand decline (2Q20F)
Stress case Stress case
22
2. CAPEX & OPEX ReductionTotal 5 years CAPEX plan decreased ̴ 48% and OPEX decreased ̴ 13% after review
41,598
15,009
12,355
10,870
2,176
2020-2024Plan
2020-2024Review
53,953
28,055
-48%
Strengthen IRPC
General CAPEX
4,010 2,159
2,952
2,367
254
2020 Plan
6,962
254
2020 Review
4,780-31%
CAPEX Reduction 2020-2024 (MB)
CAPEX 2020 (MB)
OPEX Reduction 2020 (MB)
2020 Plan 2020 Review2020 Plan 2020 Review
Projects
-13%
23
3. Strengthen IRPCDriven performance by “Strengthen IRPC” program to deliver benefit
Significant EBITDA impact (total value estimated at 4,600+ MB)
▪ “Strengthen core business IRPC”
▪ Cross functional team from Operation , Commercial , Business development , ISC M&R and RD to
– Safety
– Reliability
– Productivity
– Increase specialties products
– Conversion cost reduction
– Enhance value of idle asset
– Inventory management
– Increase distribution channel
▪ Project governance by IRPC ourselves
Benefit Forecasted for 2020 ≈ 1,904 MB (Off PL 640 MB)
MB
Overview of impact and capital required
254
1,530
392
2,1761,904
7731,069
855
4,600
20222020 2021 2023 total
CAPEX
Benefit
886
1,904
329
E4E
Breakthrough Project
IRPC 4.0
total
MB
689
24
3.1 Inventory ManagementMinimize inventory and keep less
Spare Part Management:Minimize stock and more cooperation with partner / supplier
Total Spare Part2,200 MB
Fast Move200 MB
Min - Max500 MB
Non/Slow Move1,500 MB
Method
Challenge reason to stock
Co-develop strategy with supplier
Co-develop strategy with group
Crude & Product Inventory:Reduce product and intermediate
2020 2021 2022
200
400 400
3 Phases development during 2020 – 2022
Targetsaving ~ 1,000 MB
11.010.6
0.0
5.0
10.0
0.0
5.0
10.0
15.0
Existing Target Y20
Reduce product & intermediate inventory ~400K Barrels
-4%
Million bbl
25
3.2 STARGATE
Project description :
Provide strategic gateway for domestic market via pipeline system
supporting UCF project
Scope:
Margin improvement
increase competitive advantage in domestic oil market
CAPEX : Minimal or none
Margin Improvement : 500 - 600 MB
COD : 2Q2023
STARGATE
Future Opportunity
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.
Investor Relations Contact: [email protected]
Tel. +662-765-7380, Fax. +662-765-7379
Thank You
Disclaimers