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11th November 2019
Tipco Asphalt Public Company Limited (TASCO)
4-2019 Analyst Meeting(Q3 2019 Operational Results)
Disclaimer
This presentation material has been prepared solely for informational purposes only. TASCO is furnishing it solelyfor use by prospective investors / analysts in the proposed event. TASCO makes no representations or warrantiesas to the accuracy or completeness of such information. By accepting this material each recipient agrees thatTASCO shall not have any liability for any representations (express or implied) contained in, or for any omissionsfrom this presentation.
The information contained herein does not purport to be all-inclusive or to contain all of the information that maybe material to the recipient’s decision. Each recipient of the information and data contained herein should performits own independent investigation and analysis of the transaction and the creditworthiness of TASCO. Reference inthis Disclaimer to this shall include references to the Appendices (if any) hereto.
Agenda
Q3 2019 Financial Performance
Q3 2019 Highlights
Outlook
Q&A
1
2
3
4
Sales & Services Revenue & Sales VolumeSales & Services RevenueUnit: Mil. THB
0.40 0.65 0.620.32 0.34 0.38 0.49
1.54
Q1 Q2 Q3 Q4 Year
2019 2018
7,091 10,784 9,449 5,263 5,766 7,032
9,571
27,632
Q1 Q2 Q3 Q4 Year
2019 2018
Sales VolumeUnit: Mil. Ton
• Sales and services stood at Baht 9,449.3 million, reflecting anincrease of 34.38% from the corresponding period of 2018attributed to consistent asphalt demand from Q2 2019
• The significant increase in sales volume during Q3 2019 from thecorresponding period of 2018, especially for the internationalmarket, as a result of continuous supply together with steadyproduction reliability at our refinery in this quarter
1,168 916 1,076 607 518
808 431
2,364
Q1 Q2 Q3 Q4 Year
2019 2018
Operating Gross ProfitOperating Gross ProfitUnit: Mil. THB
Gross profit margin (%)
Q1 Q2 Q3 Q4 FY
2019 16.5%2/ 8.5% 11.4%
2018 11.5% 9.0% 11.5% 4.5%1/ 8.6%
• Gross profit in Q3 2019 increased to Baht 1,076 millioncompared to Baht 808 million in corresponding period Q3 2018due to increase in sales volume and a hedging gain of Baht140.4 million in this quarter attributable to the reduction of ICEBrent market price from 66.55 USD/bbl to 59.62 USD/bbl
• The increase in gross margin was mainly due to the differentproducts sales mixed and lower crude cost as compared to Q22019.
1/: Additional provision for impairment of stocks net realizable value at Baht 782 million2/: Reversal of impairment of stocks net realizable value at Baht 791 million
718 1,053
712 304 344 6 132
564
Q1 Q2 Q3 Q4 Year
474 1,195 939
162 588 538
1,169
2,457
Q1 Q2 Q3 Q4 Year
2019 2018
EBITDA & Net Profit
EBITDAUnit: Mil. THB
Net Profit After TaxUnit: Mil. THB
• The Group’s cashflow generated from operations stood at Baht 938.7 million compared to Baht 537.7 million in corresponding period in 2018 due to the better operation performance in Q3 2019 as compared to corresponding period of 2018
• The Net Profit After Tax of Baht 712.1 million for Q3 2019 represented earning per share of Baht 0.452 (par value of Baht 1 each) as compared to Baht 0.004 per share in corresponding quarter of 2018
0.91 1.13 0.95
0.02 0.004 0.004
Q3 2018 Q2 2019 Q3 2019
Total liabilities/Total equity LT debt/Total equity
Debt to Equity Ratio
Debt/Equity Ratio
• The Group’s consolidated debt to equity ratio (D/E ratio) reached 0.95 comparing to 0.91 in corresponding period of 2018 due to increase in working capital financing for higher inventory
6.610.3
13.59.1 8.5
6.2 4.5
Q1 Q2 Q3 Q4
2019 2018
7.715.4
21.112.3 11.2 8.1
4.5
Q1 Q2 Q3 Q4
2019 2018
Key Ratios and Historical DividendReturn on Equity1/
Unit: %Return on Asset2/
Unit: %
Historical DividendUnit: Baht per share
2/ Return is based on sum of last 12 months net profit Return is based on profit before interest and tax
0.13 0.00 0.10 0.20
0.90 0.901.20
0.30 0.40
2011 2012 2013 2014 2015 2016 2017 2018 9M2019
Payout ratio
1/ Return is based on sum of last 12 months net profit
Dividend PolicyThe Company has a policy to pay dividends of not less than 60% of its consolidated net profit of each fiscal year.
On 6th September 2019, the Company paid an interim dividend of 0.40 Baht/share for the year 2019
27% 45% 74% 84% 36%
Interim dividend
Expense relating to fire incident and insurance claim
Loss/(Gain) from the fire incident (Unit: Mil. THB) 2018 Q1 2019 Q2 2019 Q3 2019
Damaged Assets 289.92/ - (378)3/ -
Related expenses to the incident1/ 68.2 143 (44.5) 67.9
Total 358.1 143 (422.5) 67.91/ include cost of floating storage unit rental, demurrage, tanks repair and other expenses2/ carrying value of damaged assets-written off to Profit & Lost statement3/ partial insurance claim based on replacement cost of damaged assets
• In May 2019, the subsidiary received a partial payment pursuant to its insurance claim to MYR 60 million or approximately Baht 450 million
• During the nine-month period ended 30 September 2019, the subsidiary had recorded additional net other operating income for crude storage, logistic handling and other related expenses amounted to Baht 212 million. Some of these expenses will be recurring until the damaged crude tanks are back in service.
• In October 2019, the subsidiary received the second insurance claim amounted to MYR 20 million or approximately Baht 146 million. This insurance payment will be recorded in the fourth quarter result of 2019.
Status of crude storage of KBC refinery
2 repaired tanks 2 damaged tanks
Floating Storage Unit Refinery crude storage
• 2 repaired tanks will resume normal operation in late-Nov 2019• New construction of 2 damaged tanks are underway according
to plan in Q1 2020
• Rental period from mid-February 2019 to February 2020
Q3 2019 - Highlights
• Refinery was processing at high reliability rate• New construction and repair of crude storage tanks are underway according to plan
Refinery
Domestic Market• Despite low working season, Q3 2019 sales volume stood at 105,000 tons slightly below 4%
from Q2 2019
• Government issued additional maintenance budget for flooding damage
International Market
• International sales volume remained strong especially in China, Indonesia and Vietnam
Asphalt Selling Price vs. Ice Brent PriceUnit: USD/barrel
80.1
70.1
60.0 57.3
45.8
38.0 37.4 38.5
53.845.3 48.2
57.962.2 63.6
71.2
63.3
65.371.4 68.9
55.263.5
51.2
44.734.7
46.9 47.1 51.1 54.7 50.9 52.2
61.567.2
74.9 76.0
68.1
63.8 68.362.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Avg. asphalt selling price Avg. Ice Brent price
Highlights : Asphalt Volume & Asphalt Revenue Structure
Main International Markets
China
Vietnam
Australia
Asphalt sales volume by market Unit: %
Asphalt Revenue (Exc. Non asphalt & service income)Unit: %
27% 22% 23%
73% 78% 77%
Q3 2018 Q2 2019 Q3 2019
Domestic International
24% 17% 17%
76% 83% 83%
Q3 2018 Q2 2019 Q3 2019
Domestic International
Indonesia
Malaysia
0.650.38 0.62
Q3 2018 Q2 2019 Q3 2019
Million tons
6.01 9.21 8.43Billion Baht
Q3 2018 Q2 2019 Q3 2019
Outlook
Refinery• 2 repaired tanks will be resumed operation in Q4 2019• Renewal of Floating Storage Unit until Feb 2020• 2 new tanks construction will be scheduled to be completed in Q1 2020
Domestic Market
International Market
• Peak season in Indonesia and Vietnam in Q4 2019
• 2020 fiscal government budget delay from Q4 2019 to Q1 2020
www.tipcoasphalt.com
THANK YOU