Thai Oil (TOP) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw lower gross refining and integrated margins due to softer product spreads, despite 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.

• Recognized for ESG leadership, with multiple awards and continued DJSI membership.

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.

• Market GRM dropped to $3.8/bbl in Q2 2024 from $9.0/bbl in Q1 2024; accounting GRM at $5.2/bbl.

• Stock gain and inventory write-up contributed positively to Q2 2024 results.

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.

• 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.