Thai Oil (TOP) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw lower gross refining and integrated margins due to softer product spreads, but higher aromatics and LAB contributions.

• Net profit for Q2 2024 was 5,547 MB, down slightly from Q1 2024, but up significantly year-over-year.

• High refinery utilization at 111% in Q2 2024, with strong domestic sales and competitive cash costs.

• Strategic progress includes advancing the Clean Fuel Project (CFP) and acquisition of Shell's Singapore assets.

• Interim consolidated financial statements cover the three- and six-month periods ended 30 June 2024, prepared in accordance with Thai Accounting Standard No. 34 and consistent with prior periods.

Financial highlights

• Q2 2024 sales revenue reached 119,639 MB, up 5,400 MB from Q1 2024 and 11,172 MB year-over-year.

• EBITDA for Q2 2024 was 8,873 MB, down 2,076 MB sequentially but up 4,255 MB year-over-year.

• Net profit for 1H 2024 was 11,410 MB, nearly double 1H 2023.

• Revenue from sales to external customers for the six months ended 30 June 2024 was Baht 233,877 million, up from Baht 224,410 million year-over-year.

• Segment profit before income tax for the six months ended 30 June 2024 was Baht 14,085 million, compared to Baht 7,022 million for the same period last year.

Outlook and guidance

• Refining margins expected to recover in 2H 2024 due to seasonal demand, despite new capacity and potential Chinese exports.

• Oil prices may soften as OPEC+ unwinds cuts and non-OPEC supply rises, but demand is expected to improve with anticipated Fed rate cuts.

• The Clean Fuel Project (CFP) remains a major ongoing investment, with a total project value not exceeding USD 4,825 million (Baht 160,279 million), including an Energy Recovery Unit.

• Aromatics margins to remain strong as PX demand outpaces capacity; olefins market remains challenging due to high new capacity.

• Base oil market to soften slightly with more Gr.2/3 supply; bitumen demand to recover post-rainy season.