Post on 22-Jun-2020
Hizmete Özel / Confidential
Q2 2019 Earnings Presentation
7 Agu 2019 Our energy never ends…
Hizmete Özel / Confidential
Disclaimer
www.tupras.com.tr07/08/2019Earnings Presentation 2
This presentation contains forward-looking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the expectations reflected in these statements are reasonable. They may be affected by a variety of variables and
changes in underlying assumptions that could cause actual results to differ materially.
Neither Tüpraş nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from use of this presentation.
Hizmete Özel / Confidential
Q2 2019 Tüpraş Highlights
www.tupras.com.tr 307/08/2019Earnings Presentation
In Q2 20196.9 1,4957.1
Million tons of
Total Production
RUP Maintenance Completed Ahead of Schedule
• Maintenance and improvement works were finalized 14 days earlier than the planned completion date
• All RUP units started production at full capacity on May the 13th
Million TL
EBITDA
Million tons of
Total Sales
Improvementin Working Capital Continues
• Working capital requirement decreased by 2.4 billion TL in Q2 2019 and showed a greater improvement since year end 2018
Expanding Our TradeCapabilities
• Transferring export business to Tupras Trading UK for a wider integration to global energy landscape
• First bitumen cargo went abroad; ~250 k tons were exported in H1 2019
4.70
1.61
-0.75
Dec-18 Mar-19 Jun-19
BillionTL
Hizmete Özel / Confidential
5.63
5.93 5.92
5.76
1/4 11/4 21/4 1/5 11/5 21/5 31/5 10/6 20/6 30/6
$/TL
Q2 2019 Key Market Highlights
www.tupras.com.tr07/08/2019Earnings Presentation 4
TL depreciation slowed down in Q2
Diesel-12.3%
Jet Fuel-21.6%
HS Fuel Oil+19.8%
Gasoline-17.5%
+0.30 TL -0.01 TL
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
Brent($/bbl)
-0.16 TL
Brent prices increased by 9% in Q2
Glo
bal
Oil
Mar
ket
Turk
ish
Mar
ket
Diesel demand contracted in the first 5M
Main product cracks underperformed except HSFO
63.1 $/bbl
68.9 $/bbl
Diesel
-7.4% +11.3%
Fuel Oil
+3.0%
Jet Fuel*
+1.1%
Gasoline
*Including transit flight consumption
Compared to Q2 2018
Hizmete Özel / Confidential
Market
Hizmete Özel / Confidential
Quarterly Crack Margin Comparison ($/bbl) in 2015 - 2019
www.tupras.com.tr07/08/2019Earnings Presentation 6
Compared to Q2 2018, Mid-distillate and Gasoline performed weaker in Q2 while HSFO cracks were stronger.
12.3
13.9 14.6
16.815.4
12.2
Q1 Q2 Q3 Q4
Diesel
13.3
13.8 13.4
15.9
13.8
10.8
Q1 Q2 Q3 Q4
Jet Fuel
Slow down in economic activities
High product flows from Asia & US to Europe
10.912.7 12.6
4.74.5
10.5
Q1 Q2 Q3 Q4
Gasoline
-12.6 -12.4
-10.0
-7.2
-5.8
-9.9
Q1 Q2 Q3 Q4
High Sulphur Fuel Oil
2019 2018 2019-2015 Min - Max
Lower Asian air traffic
Imports from Asia to Europe kept markets well supplied
Lighter shale gas processing leading to increase in gasoline yields globally
Lower naphtha demand due to decreased petrochemical driven consumption
Lower supply due to decreased heavy crude availability
Higher HSFO demand in power generation replacing crude oil
Hizmete Özel / Confidential
Crude Price Differentials to Brent ($/bbl)
www.tupras.com.tr 7
-12
-10
-8
-6
-4
-2
0
2
Q1
20
15
Q2
20
15
Q3
20
15
Q4
20
15
Q1
20
16
Q2
20
16
Q3
20
16
Q4
20
16
Q1
20
17
Q2
20
17
Q3
20
17
Q4
20
17
Q1
20
18
Q2
20
18
Q3
20
18
Q4
20
18
Q1
20
19
Q2
20
19
Arab Heavy Basrah Heavy CPC Kirkuk Kuwait Libya Ural Average*
OPEC Cut Decision
OPEC Cut Decision
Iran Sanctions
*Simple average of listed differentials
Heavy crude differentials continued narrowing in Q2 with lower availability mainly due to OPEC+ cuts, Iran
sanctions and limitations on Venezuelan supply. Ural and CPC differentials both widened in June due to ample oil
supplies in the European Market.
07/08/2019Earnings Presentation
Hizmete Özel / Confidential
Operations
Hizmete Özel / Confidential
Capacity Utilization and Quarterly Production Volume
www.tupras.com.tr07/08/2019Earnings Presentation 9
5.2
6.2
6.76.9
Q1 Q2 Q3 Q4
Quarterly Production (Million Tons)
2015 2016 2017 2018 2019
98
10
1
10
1
87
67
85
10
7
89 89 91
4 4 7
9
11
7
7
9 4 5
103 105 108
96
78
92
115
9994 97
2015 2016 2017 2018 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19
Capacity Utilization (%)
Crude Oil Semi Product Feedstock Total
*Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards.
• 96.5% capacity utilization was achieved in Q2 2019 despite RUP maintenance.
• Our year-end guidance for capacity utilization and production remains unchanged.
Hizmete Özel / Confidential
Sales in Q2 (Million Tons)
www.tupras.com.tr 10
We generated 7.1 million tons of total sales in Q2 2019.
5.46.4 6.6 6.7
5.5
1.9
1.31.4
0.7
1.6
7.37.7
8.1
7.4 7.1
Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019
Total Sales
Domestic Sales Exports
2.22.7 2.9 3.1 2.7
1.3
1.2 1.21.3
1.0
0.5
0.5 0.60.6
0.60.6
0.9 0.90.9
0.4
Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019
Domestic Sales of Selected Products
Diesel Jet Fuel Gasoline Bitumen
07/08/2019Earnings Presentation
Hizmete Özel / Confidential
Financials
Hizmete Özel / Confidential
Tüpraş Net Margin and Med Complex Margin Comparison ($/bbl)
www.tupras.com.tr07/08/2019Earnings Presentation 12
7.5
5.2
7.8
12.3
2.8
4.9
3.2
5.8
4.4
1.7
Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019
Q2 Margins
Tüpraş Net Med Margin
• Tüpraş’ 2.8 $/bbl Net Refining Margin in Q2 2019 was 1.1 $/bbl higher than Med Margin.
• Weaker oil macro conditions and RUP maintenance were the main factors of decrease in net margin compared to Q2 2018.
• Our year-end guidance for refining margin remains unchanged.
Effect of hedging operations excluded from above calculations.
Hizmete Özel / Confidential
Income Statement (Million TL)
www.tupras.com.tr07/08/2019Earnings Presentation 13
We generated 1.5 bn TL EBITDA and 870 mn TL net income in Q2 2019.
Q2 2019
Q2 2018
%6M
20196M
2018%
Net sales 23,953 20,081 19% 44,661 33,502 33%
COGS -22,282 -17,860 25% -41,998 -30,212 39%
Gross Profit 1,671 2,221 -25% 2,662 3,290 -19%
Operating Expenses -420 -277 52% -793 -545 46%
Income/Loss from other operations 82 -877 -309 -988
Operating Profit 1,333 1,066 25% 1,561 1,756 -11%
Income/Loss from equity investment 47 86 -45% 110 138 -20%
Operating Profit before financial income/loss 1,379 1,152 20% 1,671 1,894 -12%
Financial income/expense -796 -227 -1,397 -497
Profit Before Tax 584 925 -37% 274 1,397 -80%
Net Profit (excluding minority interest) 870 1,027 -15% 495 1,405 -65%
EBITDA* 1,495 2,210 -32% 2,346 3,243 -28%
Inventory Gain/Loss 675 1,016 -34% 976 1,283 -24%
EBITDA CCS* 820 1,194 -31% 1,370 1,960 -30%
*On CMB reports. EBIT includes extra items such as FX impacts of trade receivables and payables. In our EBITDA calculation. FX related items are excluded from EBIT as customary in international practices.
Hizmete Özel / Confidential
Q2 Profit Before Tax Bridge (2018-2019, Million TL)
www.tupras.com.tr07/08/2019Earnings Presentation 14
Decline in profit before tax was driven by weaker cracks, narrower differentials and RUP maintenance.
Hizmete Özel / Confidential
Financial Highlights
www.tupras.com.tr07/08/2019Earnings Presentation 15
495 mn TL Net Income recorded in H1 2019.
367 3351,575 1,033 851
1,080 688
1,542 2,2101,4951,144
867
1,528
3,778
1,2081,505
1,237
1,887
2015 2016 2017 2018 2019
EBITDA (mn TL)
Q1 Q2 Q3 Q4
3,799
275 79869
378-375
710331
1,457
1,027870
750
581
992
542815
803
493
1,766
2015 2016 2017 2018 2019
Net Income* (mn TL)
Q1 Q2 Q3 Q4
1.8 1.8
1.1
1.3
1.3
1.01.1 1.2
1.3
1.1
2015 2016 2017 2018 Q2 2019
Current Ratio & Net Debt / R. EBITDA
Net Debt / R. EBITDA Current Ratio
35%
22%
41%37%
27%
2015 2016 2017 2018 Q2 2019
Return on Average Equity**
*Excluding minority interest **Calculation based on rolling net income
3,396
5,882
8,908
2,346
2,550
1,793
3,812 3,713
495
Hizmete Özel / Confidential
Balance Sheet Analysis (Billion TL)
www.tupras.com.tr07/08/2019Earnings Presentation 16
Tight balance sheet management improved working capital.
4.0
7.5
1.6 1.5 1.0
4.4
1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years
Redemption Schedule (Billion TL)
Loan Eurobond TL bond
0.8
-0.2
2.1
4.7
1.6
-0.7
Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19
Working Capital Requirements (Billion TL)
6.96.1 6.2
12.010.6 10.1
Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19
Net Debt (Billion TL)
Proactive Financial Management • Ensured diverse funding base with
favorable rates
• Working Capital continues to improve with better payable terms
Hizmete Özel / Confidential
FX Exposure Management (30 June 2019)
www.tupras.com.tr07/08/2019Earnings Presentation 17
Cash
1,057
Forward & CFH2,082
Stock1,406
Receivables & Other Assets
97
Payables2,193
ST Financial Loans528
• RUP: 179• Other: 349
LT Financial Loans1,919
• RUP: 688• Eurobond: 700• Other Loans: 531
Consolidated Assets Consolidated Liabilities
Million $
+2 mn $
Tüpraş continues to employ strict FX
policies to mitigate currency risks
stemming from volatility.
* Cash flow hedge accounting : 899 mn $
Hizmete Özel / Confidential
Outlook for 2019
Hizmete Özel / Confidential
H1 2019 Results
www.tupras.com.tr07/08/2019Earnings Presentation 19
3.5
2.7
0 1 2 3 4 5 6 7 8
H1
Refining Margins ($/bbl)
Med Margin Tüpraş Net Margin
95% total capacity utilization in H1 2019.
13.7
28
14.4
30
H1 2019 Target
Operationals
Production Sales 14.4 mn tons of sales and 13.7 m tons of production in H1 2019.
70
200
H1 2019 Target
Capex (mn $)
70 mn$ CAPEX in H1 2019.
95.0
0 20 40 60 80 100
H1
Capacity utilization (%)
+3.5 $/bbl net refining margin in H1 2019.
Med FY Exp
Tüpraş FY Target
Hizmete Özel / Confidential
2019 Refinery Maintenance Schedule
www.tupras.com.tr07/08/2019Earnings Presentation 20
Unit QuarterDuration(weeks)
Reason Status
İzmir
Plt 100 CDU Q4 2-3 Periodic
Plt 9200 CCR Q1 3 Completed
İzmit
RUP Q1&Q2 11 Completed
Plt 2 Crude Oil & Vacuum Q4 7-8 Periodic
Plt 7 FCC Q4 5-6 Periodic
Kırıkkale
BatmanPlt 100/1100 Crude Oil &
VacuumQ1 10 Completed
RUP Maintenance Preparation and Planning Phase: 2018
Maintenance Start: Feb 26• Catalyst changes• Checks on distillation
columns, heat exchangers and furnaces
• Detailed planned maintenance
Completed at May 13th
Hizmete Özel / Confidential
2019 Expectations
www.tupras.com.tr07/08/2019Earnings Presentation 21
Med Complex
• Med Complex Margin expectation is around 3.75-4.25 $/bbl in 2019
Tüpraş
• Net Tüpraş refinery margin expectation is around 6.0-7.0 $/bbl in 2019
• Capacity utilization expectation is around 95-100%
• Production: ~28 million tons
• Total sales: ~30 million tons
Investments
• Refining investments expectation is revised as ~200 million $
Hizmete Özel / Confidential www.tupras.com.tr07/08/2019Earnings Presentation 22
Appendix
Hizmete Özel / Confidential
Turkish Market, Jan-May (Million tons)
www.tupras.com.tr07/08/2019Earnings Presentation 23
10.03
9.28
0 2 4 6 8 10 12
5M 2018
5M 2019
Diesel
-7.4%
0.90
0.91
0.0 0.5 1.0 1.5 2.0
5M 2018
5M 2019
Gasoline
1.80
1.86
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
5M 2018
5M 2019
Jet Fuel*
0.19
0.21
0.0 0.1 0.2 0.3 0.4 0.5 0.6
5M 2018
5M 2019
Fuel Oil**
* Including transit flight consumption **Excluding bunker
+3.0%
+1.1% +11.3%
Hizmete Özel / Confidential
OPET
www.tupras.com.tr07/08/2019Earnings Presentation 24
Opet has 1,635 stations as of June 2019.
885 915 938 966 1,009 1,073 1,126 1,152 1,169
394 410 418 427435
431434 463 4661,325 1,325 1,356 1,393
1,4441,504
1,5601,615 1,635
2011 2012 2013 2014 2015 2016 2017 2018 Jun-19
Opet Sunpet
Market Shareas of May 2019
18.6 %
White Product
28.5 %
Black Product
Hizmete Özel / Confidential
Crack Margin Effect on Tüpraş in Q2 (FOB Italy Prices)
www.tupras.com.tr07/08/2019Earnings Presentation 25
ProductProduct Price ($/ton) Tüpraş 2019
Production YieldsCrack Margin ($/bbl)
2019 Q2 2018 Q2 2019 Q2 2018 Q2
LPG 431 488 3.4% -30,5 -30,9
Gasoline 644 707 19.6% 10,5 12,7
Naphtha 504 618 1.6% -11,9 -4,6
Jet Fuel 626 693 16.5% 10,8 13,8
Diesel 603 657 31.4% 12,2 13,9
Diesel 1000 588 643 0.5% 10,2 12,1
Fuel Oil 1% 412 414 1.1% -5,2 -10,6
Fuel Oil 3.5% 382 401 13.9% -9,9 -12,4
Others 336 358 7.3% -12,8 -14,6
Dated Brent ($/bbl) 68.8 74.4 95.3%
Total Crack Margin ($/bbl) Total Processed2019 Q2 (mn bbl)
Total Effect (mn $) Total Effect (mn TL)2019 Q2 2018 Q2 Difference
4.1 5.1 -1.03 51.5 -53.1 -311.3
Hizmete Özel / Confidential
LPG4%
Gasoline20%
Naphtha1%
Jet16%
Gasoil36%
Other1.6%
Kok2%
Fuel Oil10
Asphalt10%
Q2 Product Yields
www.tupras.com.tr07/08/2019Earnings Presentation 26
LPG4%
Gasoline20%
Naphtha1%
Jet20%
Gasoil32%
Other3%
Kok3%
Fuel Oil3%
Asphalt14%
Light Distil.23.7%
Mid. Distil
.52.2%
Other 3.2%
Black Prod.20.9%
2018 Q2
White Product Yield (%) 78.0%
Production 6.2 mn tons
API 30.98
2019 Q2
Light Distil.25.1%
Mid. Distil
.51.5%
Other 1.6%
Black Prod.21.7%
White Product Yield (%) 77.4%
Production 6.9 mn tons
API 32.39
Hizmete Özel / Confidential
Yield Breakdown (%)
www.tupras.com.tr07/08/2019Earnings Presentation 27
15.519.0 17.5
14.3 15.8 16.7 18.916.0
19.4 20.1 18.6 17.4 17.4 15.8
29.9
32.4 34.1 38.5 36.0 34.4 31.9
31.0
34.2 32.132.2 35.4 33.5 35.8
45.4
51.4 51.6 52.8 51.7 51.1 50.8
47.0
53.652.2
50.852.8
50.9 51.5
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Middle Distillates
Jet Diesel
1.5 2.7 2.5 3.1 3.2 3.1 3.2 2.53.9 3.2 2.6 3.1 2.1 2.1
9.4
12.6 14.3 13.1
5.5
11.7
15.3 16.4
9.6
14.513.3
8.8
4.6
9.8
15.2 5.44.7 5
12.2
6.7
4.76.3
6.9
3.2 7.2
9
14.9
9.8
26.1
20.721.6 21.2 20.9 21.4
23.2
25.2
20.4 20.9
23.1
21 21.6 21.7
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Heavy Distillates
Coke Bitumen Fuel Oil
Hizmete Özel / Confidential
Tüpraş Balance Sheet (Million TL)
www.tupras.com.tr07/08/2019Earnings Presentation 28
30.06.2019 31.12.2018 Diff. Diff. (%)Current Assets 29,731 20,962 8,769 42
Cash & C. Equivalents 9,889 5,983 3,907 65Receivables 8,700 5,429 3,271 60Derivatives 270 176 95 54Inventories 8,384 6,765 1,620 24
Pre-paid expenses 256 109 148 136Other Current Assets 2,230 2,502 -271 -11
Long Term Assets 26,550 19,074 7,477 39Financial Assets & Subsidiaries 1,308 1,271 37 3
Fixed Assets 20,260 12,397 7,863 63Derivatives 140 168 -28 -17
Pre-paid expenses 257 378 -121 -32Deferred Tax 3,131 3,566 -435 -12
Other Long Term Assets 1,455 1,293 162 13
Total Assets 56,281 40,036 16,245 41
Short Term Liabilities 26,992 15,950 11,042 69Financial Loans 4,063 4,113 -50 -1
Payables 17,949 7,663 10,286 134Derivatives 193 236 -43 -18Provisions 206 80 126 156
Other ST Liabilities 4,581 3,857 724 19Long Term Liabilities 16,264 14,140 5,203 15
Financial Loans 15,968 13,836 2,132 15Payables & Provisions 259 257 2 1
Derivatives 28 42 -14 -34Other LT Liabilities 9 5 4 91
Total equity attributable to equity holders of the parent 12,885 9,825 3,060 31Minority Interests 140 121 19 16
Total Liabilities & Equity 56,281 40,036 16,245 41
Hizmete Özel / Confidential
Tüpraş and Med Margins ($/bbl)
www.tupras.com.tr 29
Gross Margin Inventory Effect Clean Gross Margin Clean NET Margin Med Margin
2019 Q2 8.1 0.4 7.7 2.5 1.7
2019 H1 8.9 0.7 8.3 2.8 2.7
2018 Q2 17.9 3.3 14.6 9 4.4
2018 H1 15.0 2.0 12.9 6.8 4.2
6.2
4.0
8.28.9
3.5
5.4
3.5
5.4
4.2
2.7
2015 2016 2017 2018 2019
H1 Margins
Tüpraş Net Med Margin
07/08/2019Earnings Presentation
Hizmete Özel / Confidential
Finished Product and Semi Product Imports
07/08/2019Earnings Presentation 30
281 332
603
1,438
95
HS Diesel ULSD Jet Fuel
Product Imports (Thousand Tons)
H1 2019 H1 2018
239216
330
40
273
738
222
2041
HVGO ASR F. Oil LSFO Naphtha MTBE
Intermediate Imports (Thousand Tons)
H1 2019 H1 2018
www.tupras.com.tr
Hizmete Özel / Confidential
Tüpraş: Growing, Resilient, Profitable
www.tupras.com.tr07/08/2019Earnings Presentation 31
• Operating in a diesel short market (supplies 45% of the market) along with strong jet growth.
• Well poised to capture future opportunities including IMO 2020 with its output complexity.
• Continuous investment in logistics,infrastructure and trading capabilities.
• Strong balance sheet with no immediate rollover requirement.
• Secure receivables portfolio andtight working capital management
• Pricing mechanism in place to address commodity and FX fluctuations.
• Benefits from full system optimization given high complexity,procurement and logistics flexibility.
• Prudent hedging practices to ensure stable earnings outlook.
• High dividend pay-out ratio annually.
Growing Resilient Profitable
Tüpraş is a compelling investment case with strong sales growth, resilient and profitable operational and financial structure.
Hizmete Özel / Confidential www.tupras.com.tr07/08/2019Earnings Presentation 32
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