opportunity day q1/2019 - listed companybcp.listedcompany.com/misc/presentation/20190522... ·...

Bangchak Corporation Plc.

Opportunity Day Q1/2019

22nd May 2019

Table of Content

Q1/19 Financial

Performance

02 03Appendices

04Q1/19

PerformanceUpdate

01BusinessUpdates

BCP Group Performance – Q1/2019 Key Takeaways

3

Marketing

• Total sales volume stable, Retail sales grew 4% YoY

• Net MKM at 71 st./litre soften following crude oil price upward trend

• Maintained 2nd rank (15.6%) retail sales market share as of 3M19

Refinery & Trading

• Crude run at 110 KBD

• Total GRM declined to 3.49 $/BBL from dropping crack spreads

• BCPT continue to increase trading volume

• Unexpected HCU gas compressor maintenance

Power Plant

• Electricity generation from solar power plant remained stable

• Irradiation rate stable YoY, but increased QoQ after winter season ended

• Ft rate recovering, leading electricity rate received to be on a rising trend

• Share of profit from operation of Geothermal & Wind power plant improved

Bio-Based Product

• Ethanol sales volume increased from capacity added from KGI (+100 KL/day)

• Decreasing price of both ethanol & B100 resulting in margin squeeze

Natural Resources

• Realize full quarter share of profit from OKEA at 8 MB, less than expected due to impairment loss on goodwill of Gjoa oil field acquisition from lowered gas price

• Production net to OKEA 19.5 kboe/d

• FX loss 99 MB from foreign currency loan to subsidiary

1,279

-1,419

517

735

465

612

694

570

736

304

66

194

68

94

-19

Natural Resources

Bio-Based Products

Power Plant

Marketing

Refinery & Trading

EBITDA Performance

1,959

3,023

-317

1Q/18 4Q/18 1Q/19

1,168

-1,546

214

Net Profit attributable to owners of the parent

1Q/18 4Q/18 1Q/19

BCP Group Portfolio – Refinery & Marketing Business

Bangchak Corporation Plc. 4

Refinery and Trading Business

Marketing Business

BCP Group Portfolio – Subsidiaries

BCP Group Portfolio Refinery & Marketing

Refinery Business


LPG

Gasoline

Jet

Diesel

Fuel Oil

UCO

Domestic

Middle East

9% 12% 7% 12% 14%3% 3%

5% 3% 3%

53% 53% 53% 53% 50%

12% 12% 14% 11% 12%

21% 17% 19% 18% 18%

3% 3% 2% 3% 2%

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

31% 29% 28% 24% 32%

12% 17% 20% 28% 12%

57% 49% 52% 48%56%

5% 1%

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

BCP Refinery Product Yield

BCP Refinery Crude Sourcing

109.4

66.8

118.8 114.3110.1

91%

56%

99% 95% 92%

-50%

-30%

-10%

10%

30%

50%

70%

90%

0.010.020.030.040.050.060.070.080.090.0

100.0110.0120.0130.0140.0

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Crude Run

Utilization

TAM = Turnaround Maintenance Period

Production Profile

Actual Crude Run Unit: KBD

TAM

• 4 months consecutive squeezed GRM for the first time in decade

• Price & Margin recover in March, but Hydrocracker went through maintenance

• Plan shutdown in July

Far East

Others

Refinery Business


Refinery EBITDAUnit: THB MillionUnit: THB Million

1,2

79 1

,92

9

2,1

40

-1,4

19

51

7

1,3

48

97

7

1,9

27

1,0

77

54

8

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Accounting Operating

6.718.81 7.59

5.943.43

-0.12-0.39 -0.21 -0.40

0.09

-0.22

4.39

0.66

-7.25

-0.03

6.37 12.82 8.05 -1.72 3.49

GRM Performance Unit: $/BBL

Inventory G/L

Oil Hedging

Market GRM

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Weaker GRM from global production over supply led to narrowed crack spreads

9 MB Inventory Loss, as BCP crude feed reflect average crude oil cost in Q4/18 which has higher average price than Q1/19

BCP Trading EBITDA 39 MB increased from higher transactions after tapping to new products and new trade partners

-8

-3

2

7

12

17

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

GO/DB

UNL95/DB

IK/DB

FO/DB

AVG Crack spread movement ($/BBL)

52

57

62

67

72

77

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

DB

DTD

AVG Crude oil price movement ($/BBL)

* Operating EBITDA : exclude Inventory gain/loss, One-time items, Gain/loss from FX forward contracts

Distribution channel – Retail market sales continues to grow as our main priority


Total Sales Volume

Unit: % Portion of total sales volume in Q1/19

7%

26%

13%

RetailMarket

IndustrialMarket

Wholesales

Export

Marketing Business

54%

284

307

334 342 344

179190 184

167 163

51

86

5850 46

93

82

112 111

82

0

50

100

150

200

250

300

350Unit: Million Litre / Month (monthly AVG in the quarter)

Total Sales Volume

Retail Market

IndustrialMarket

Wholesales

Exports

997

517

151 199

1,032

489

138246

0

200

400

600

800

1000

1200

Retail Industrial Wholesales Export

Q1/18

Q1/19

Unit: Million Litres

(+4%)

(retail market portion

+1% from Q1/18)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2015 2016 2017 2018 2019

Marketing Performance – Retail market is the main priority


Marketing EBITDA

Unit: THB Million7

35

50

9

46

8

46

5

61

2

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Net Marketing Margin

Unit: Baht/Litre

0.830.75

0.70

0.85

0.71

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Total sales volume remained unchanged

Retail sales volume grows 4% YoY from customer base expansion, service station sales push, and B20 & Hi-Premium diesel promotion

Industrial sales volume reduced 5% YoY from the intensified competition and BCP sales channel management

Total Marketing Margin declined from the higher product cost following crude oil price upward trend, and price promotion

Bangchak Retail Revenue grew 31% YoY

14

7 16

1

17

0

20

1

19

3

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Bangchak Retail RevenueUnit: THB Million

Marketing Network – Increasing Market Share & Thruput per station


Market Share (Retail Channel)

Jan-Mar’18 Jan-Mar’19 change

40.9% 39.9%

15.5% 15.6%

12.8% 12.5%

11.9% 12.4%

9.3% 10.0%

4.4% 4.2%

1.8% 1.7%

1.7% 1.8%

1.7% 1.9%

+10 New ServiceStations

service stations as of Mar 20191,176

Standard Type 562 sites

(≈78% of Retail Sales Volume)

COOP Type 614 sites

(≈22% of Retail Sales Volume)

529 branches

Mar’19

+6 stores

47 stores

+2 stores

Mar’19

Supporting non-oil businesses

Service stations outlets

444 457 460 499 527 559

392

436

479

510496 485

416

450

464

451 446435

0

200

400

600

800

1000

1200

1400

1600

1800

2000

200

300

400

500

2014 2015 2016 2017 2018 Q1/2019

*AVG Major Oil : PTT, ESSO, SHELL, CALTEX

Thruput per station (K.Litre / Mo)

AVG Major Oil(excl. BCP)

Number of standard stations

BCP Standard


Power Plant Business

Bio-based Products Business Natural Resources

Business

BCP Group Portfolio – Refinery & Marketing BusinessBCP Group Portfolio – Subsidiaries

BCP Group Portfolio Subsidiaries

Power Plant Business – BCPG


130 130 139 139 13930 34 34 15 15

158 158 158158 158

14 14 1414 14

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Operating Capacity (MWac)

Solar

Solar

Geothermal

Wind

69

4

79

3

1,5

42

57

0 73

6

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Green Power Plant EBITDA

Unit: THB Million

332 336 345 326 326

66.0 66.7 64.2 73.0 71.9

9.214.9 13.9 3.9 4.1

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

JP

TH

75.2 81.6 78.1 76.9 76.0

Electricity Sales

Unit: Million kWh

Solar Electricity Sales remained at the same level mainly from:

• Increase from COD of War Veteran Organization Solar project in Jul’18 (9 MW) & Gotemba (4 MW)

• Decrease from the selling of Nikaho & Nagi project in Sep’18 (total 19 MW)

• Irradiation rate remained stable YoY but increased QoQdue to seasonal effect

Higher share of profit from associated companies:

• Geothermal power plant : 93 MB

• Wind power plant : 29 MB

Profit from Japan solar plant sold (793 MB)

Geothermal Plant Tax Provision (-84 MB)

Bio-Based Product Business – BBGI


Bio-Based Product EBITDA

Biodiesel Performance

Sales volume declined 2% YoY and 4% QoQ from higher competition, after Thailand B100 supply capacity increased, led to higher market competition

Gross margin soften 54% YoY, mainly the effect of higher competition and lower glycerin margin, but better 37% QoQfrom the better price situation

Ethanol Performance

Sales volume growth 37% YoY and 48% QoQ mainly from capacity increment from KGI plant (+100 KL/day)

Gross margin soften 26% YoY from ethanol price decline, but better QoQ as KSL plant finished its TAM in Q4/18

Unit: THB Million3

04

17

1

15

1

66

19

4

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

* Operating EBITDA : exclude Inventory gain/loss, One-time items, Gain/loss from FX forward contracts

35

35

46

32

48

73

68

66

74

71

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Ethanol B100

Biofuel Sales Volume

Unit: million litres

18

20

22

24

26

28

30

32

34

36

Jan-1

7

Feb-1

7

Mar-

17

Apr-

17

May-1

7

Jun-1

7

Jul-17

Aug-1

7

Sep-1

7

Oct

-17

Nov-1

7

Dec-

17

Jan-1

8

Feb-1

8

Mar-

18

Apr-

18

May-1

8

Jun-1

8

Jul-18

Aug-1

8

Sep-1

8

Oct

-18

Nov-1

8

Dec-

18

Jan-1

9

Feb-1

9

Mar-

19

Ethanol B100

Biofuel Price Movement Unit: Baht / litre

Source: EPPO

Natural Resource Business – Petroleum Exploration & Production


Full quarter share of profit from OKEA 8 MB

Profit contributed from OKEA was less than expected due to impairment loss on goodwill of Gjoa oil field acquisition from lowered gas price

FX loss 99 MB from foreign currency loan to subsidiary

Natural Resources EBITDA

Unit: THB Million

68

36

-81

94

-19

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

8.60

10.50

0.37

Q1/19 Production Volume (Net to OKEA)

Unit: kboe/d

Draugen Gjoa Ivar Assen

Table of Content

Q1/19 Financial

Performance

02BusinessUpdates

03Appendices

04Q1/19

PerformanceUpdate

01

Q1/2019 Highlights


• The performance was still affected by soften refinery market GRM and a maintenance of the Hydrocracking Unit’s Gas Compressor

• LAC: Related transactions

Additional loan to LAC 13 MUSD (414 MB)

Fair value on available-for-sale investment of LAC share price increased from CAD 4.31 as of 31 December 2018, to CAD 5.06 as of 31 March 2019

• OKEA AS: Record a share of profit 8 MB

Impairment loss on technical goodwill has been recognized for Gjøa oil field acquisition following the lower gas prices

• International Financial Reporting Standards 15, Revenue from Contract with Customers It has an effect in the sales of steam according to the Minimum take or pay contract of an associated company’s group in Indonesia which was enforced on the 1st of January

Statement of Income - Consolidated


Remark:(Unit: MB)

Revenue

Revenue portion from subsidiaries increased by 6% YoY, 7% QoQ

Other Income +37% YoY, -37% QoQ

Increased YoY from

- BCR: Recorded purchase rebate 11 MB in Q1/2019

Decreased QoQ from

- E&P: Realized profit from the provision of working capital settlement following the share disposal in Nido Production (Galoc) Pty. Ltd. of 10 MB in Q1/2019, while recorded 69 MB in Q4/2018

Gross Profit -34% YoY, +415% QoQ

Unit: MBStatement of Income Q1/2018 Q4/2018 Q1/2019

(Restated)

Revenue 44,226 48,781 45,535

Cost of goods sold (40,897) (48,357) (43,355)

Gross Profit 3,328 424 2,181

Investment income and dividend income 16 16 37

Other income 59 129 81

Selling and administrative expenses (1,669) (2,163) (1,725)

Gain (loss) from oil hedging contract (73) (138) 29

Gain (loss) from FX forward contracts - 95 (11)

Gain (loss) on foreign exchange 172 52 57

Loss from impairment of assets - (15) -

Share of profit of associate and JV 123 21 157

EBIT 1,956 (1,579) 806

Finance costs (365) (405) (443)

Income tax expense (223) (509) 32

Profit for the period 1,368 (1,475) 395

Owners of the Company 1,168 (1,546) 214

Non-controlling interests 200 71 181

Earnings per share (Baht per Share) 0.85 (1.12) 0.16

(Unit: MB)

(Unit: $/BBL) Q1/2018 Q4/2018 Q1/2019

Market GRM 6.71 5.94 3.43

Inv G/L & Hedging (0.34) (7.65) 0.06

Total GRM 6.37 (1.72) 3.49

Statement of Income - Consolidated


Remark:(Unit: MB)

Selling and administrative expense +3% YoY, -20% QoQ

- YoY increased from depreciation and amortization from BCP and BCPRbusiness expansion

- QoQ decreased mainly from Q4 normally incur in higher expenses disbursement

Unit: MB(Unit: MB)

Share of profit of associate and JV 157 MB

- Star Energy Group Holdings Pte. Ltd 93 MB

- Petrowind Energy Inc. 29 MB

- Ubon Bioethanol Plc. 18 MB

- Bongkot Marine Services 10 MB

- OKEA AS 8 MB

Finance Costs +21% YoY, +9% QoQ

- Mainly from BCP bond issuance 11,000 MB in 2H2018

Income Tax 32 MB

- In Q1/2019 the company recorded revenue from income tax expense item.

A result of deferred income tax liability from a reversal of LCM in Q1/2019

(Unit: MB)Unit: MBStatement of Income Q1/2018 Q4/2018 Q1/2019

(Restated)

Revenue 44,226 48,781 45,535

Cost of goods sold (40,897) (48,357) (43,355)

Gross Profit 3,328 424 2,181

Investment income and dividend income 16 16 37

Other income 59 129 81

Selling and administrative expenses (1,669) (2,163) (1,725)

Gain (loss) from oil hedging contract (73) (138) 29

Gain (loss) from FX forward contracts - 95 (11)

Gain (loss) on foreign exchange 172 52 57

Loss from impairment of assets - (15) -

Share of profit of associate and JV 123 21 157

EBIT 1,956 (1,579) 806

Finance costs (365) (405) (443)

Income tax expense (223) (509) 32

Profit for the period 1,368 (1,475) 395

Owners of the Company 1,168 (1,546) 214

Non-controlling interests 200 71 181

Earnings per share (Baht per Share) 0.85 (1.12) 0.16

(Unit: MB)

Financial Position - Consolidated


Unit: THB Million

Current Liabilities

Long Term Debt

Total Equity

Other Non Current Liabilities

(Including current portion of L/T debt)

49,538 49,875

3,083 3,062

45,460 45,228

7,603 6,075

6,680 12,9785,004

4,797

31 DEC 18 31 MAR 19

Liabilities & Equity

31 Dec 18 31 Mar 19

30,896 31,374

48,877 49,977

3,680 2,940

15,13519,600

6,9697,856

11,81310,268

31 DEC 18 31 MAR 19

Cash and Equivalents & Short term Investment

Other Current Assets

Inventory

PP&E

Other Non Current Assets

117,369

Assets

31 Dec 18 31 Mar 19

Account Receivable

122,016

Account Payable

Short term loan117,369

122,016



3,680 2,940

15,13519,600

6,969

7,856

11,813

10,268

Inventory 4,465 MB mainly from inventory volume increase

Account Receivables 887 MB

- mainly from higher oil product sales volume of BCPT in Mar’19 compared to Dec’18

Cash and Equivalents & Short term Investment

Other Current Assets

Inventory

40,665

Current Assets

31 Dec 18 31 Mar 19

Account Receivable

37,596

7,603 6,075

6,680 12,978

5,004

4,797

31 DEC 18 31 MAR 1931 Dec 18 31 Mar 19

23,851

19,288

Other Current Liabilities

Account Payable

Short term loan

Current Liabilities

Account Payable 6,298 MB mainly from higher crude oil purchase volume of Bangchak refinery and higher oil product trading transactions of BCPT

Other Current Liabilities 1,528 MB

Decreased mainly from

- Excise tax and oil fund expense payable decreased by 847 MB

- Other payables decreased by 646 MB (mainly from accrued expenses 533 MB)

Short term loan mainly from BCP 3,195 MB (100 MUSD) and BBGI 1,352 MB

31 Dec 18 31 Mar 19

Crude Vol. 3.2 MBBL Vol. 4.7 MBBL

Product Vol. 281 ML Vol. 320 ML



30,896 31,374

48,877 49,977

PP&E 1,100 MB

Increased mainly from refinery and power plant assets 2,058 MB

Depreciation for Q1/2019 of 1,093 MB

PP&E

Other NonCurrent Assets

81,351

Non-Current Assets

31 Dec 18 31 Mar 19

79,773

3,083 3,062

45,460 45,228

31 DEC 18 31 MAR 1931 Dec 18 31 Mar 19

49,87549,538

Long Term Debt

Other Non CurrentLiabilities

(Including current portion of L/T debt)

Long-term debt 232 MB

Decreased as Long-term loans from financial institutions 234 MB

Non-Current Liabilities

Other Non Current Assets 478 MB

Increased mainly from Other long-term investments

- Change in net fair value of available-for-sale investment (LAC) 267 MB

- Investment in new start up 95 MB

Long-term loans to related parties

- Loan to LAC 414 MB



6,823 6,987

27,607 27,783

15,273 15,274

31 DEC 18 31 MAR 19

Equities increased 338 MB (+1% YoY) mainly from

Retained Earnings

• Q1/2019 Net Profit of 395 MB

Other component of equity

• Net fair value change in available-for-sale investment (LAC) increased by 267 MB

• Loss in foreign currency conversion of financial statement 271 MB

Effect from IFRS15

Equity: Retained Earnings 38 MBNon-controlling interests 16 MB

Equity

31 Dec 18 31 Mar 19

49,53849,875

Other Components

Non-Controlling Interests

Retained Earnings

Paid up capital, Share premium

and capital surplus

-169-165

Cash Flow - Consolidated

Bangchak Corporation Plc.

Beginning Cash11,551 MB

Change in Cash-1,376 MB

Ending Cash10,036 MB

FX adjustment-139 MB

Q1/2019 Sources and Uses of Cash

Unit: THB Million

22

1,193

279

884

36 2,154 844

570 120

Cash From Operation

Funding

2,353

Sources of Cash Uses of Cash

3,728

Change in Working Capital

Debt Service - Repayment

Investment in PPE

Tax Paid

Selling of PPE, Selling of investments and others

Investment in intangible assets and others

Table of Content

Q1/19 Financial

Performance

02BusinessUpdates

03Appendices

04Q1/19

PerformanceUpdate

01

Refinery Business Group – Refinery Upgrading Project Updates


Status ProgressExpected

Completion

Continuous Catalyst Regeneration Unit (CCR) (CCR: Higher Capacity & maintenance cycle extension)

Construction 71% 2020

Debottlenecking

#1: Hydrocracker Unit (HCU) Revamping (Higher Optimal Crude Run: Distillate)

Construction 71% 2020

#2: Debottlenecking CDU & NPU & ISOU & KTU(Higher Optimal Crude Run: Light & Middle Distillate)

Still yet to be decide whether to divide into smaller improvement projects

On hold On hold

3E Project Updates

Overall CCR Construction Area Piling work

Marketing Business Group – 2019 Highlight


Continue to increase market share in Retail Sales

2019 Network Expansion

+70New StationsMostly Standard size

Non-oil (BCR)Supporting business2019 Target

SPAR: +20 storesInthanin: +200 stores

+65 Standard

+5 COOP

#Diesel B20 Alternative fuel

for better environment

#GDI technology fuel

in Thailand

#Hi Premium diesel &

E20 EURO5 standard

#Green Experience #Green Coffee #Green Campaign

#บรกิารมาตรฐานดว้ยความใสใ่จ#บางจากมากกวา่สถานบีรกิาร

Bio-Based Products Business – On-going projects updates


KGI-NP II Ethanol

66 ML/Yr

200,000 L/DExpected COD 2H/20

BBF Biodiesel

330 ML/Yr

1,000,000 L/DExpected Q3/19

Additional plant

Kanchanaburi

Khonkaen

Ayudhaya

Chachoengsao

Bangkok

KGI-NP I Ethanol

49.5 ML/Yr

150,000 L/DBBGI holds 100%BBF Biodiesel

290 ML/Yr

930,000 L/DBBGI holds 70%

KGI-BP Ethanol

99 ML/Yr


Ubonratchathani

UBE Ethanol

120 ML/Yr400,000 L/D(Associated company)

BBE Ethanol

45 ML/Yr


+Capacity increment in existing plant

Additional plant

Glycerin

28,000 Ton/Yr

Expected COD 2H/20

IPO plan to be in 2020currently waiting for clarification in high

value bio-based investment projects

OKEA – 2019 Highlight


OKEA prepares for drilling operation to target further upside potential within and surrounding the Draugen field

• The drilling operation is expected to commence in Q4/19

• The project aims to enhanced oil recovery and prolonged production from the Draugen platform

• No additional fund raising needed for the drilling project

• There are several potential follow-up targets identified in the area that might be drilled over the next years to further increase the volume in the Draugen area

20

40

60kboe/d

Potential Production Profile (net to OKEA)

(Producing Assets)

(Developing Assets)

(Identified Upsides)

OKEA IPO targeted to be in June 2019Currently in roadshow process

THANK [email protected] Tel. +662 335 4370, 4390, 8518

www.bangchak.co.th

click Investor Relations

Disclaimer : The information contained herein is being furnished on a confidential basis for discussion purposes only and only for the use of the recipient, and may be subject to

completion or amendment through the delivery of additional documentation. Except as otherwise provided herein, this document does not constitute an offer to sell or purchase any

security or engage in any transaction. The information contained herein has been obtained from sources that Bangchak Corporation Public Company Limited (“BCP”) considers to be

reliable; however, BCP makes no representation as to, and accepts no responsibility or liability for, the accuracy or completeness of the information contained herein. Any projections,

valuations and statistical analyses contained herein have been provided to assist the recipient in the evaluation of the matters described herein; such projections, valuations and analyses

may be based on subjective assessments and assumptions and may utilize one among alternative methodologies that produce differing results; accordingly, such projections, valuations

and statistical analyses are not to be viewed as facts and should not be relied upon as an accurate representation of future events. The recipient should make an independent evaluation

and judgment with respect to the matters contained herein.

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