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Operating Results for the Second Quarter and the First Six Months of 2020

IRPC Public Company Limited

Management Discussion and Analysis

Management Discussion and Analysis and Operating Results for the Second Quarter of 2020 and the First Six Months of 2020

2

Executive Summary Performance Financial Positions

Management Discussion and Analysis (MD&A)

IRPC Public Company Limited and its subsidiaries

Operating Results for the Second Quarter and the First Six Months of 2020

Executive Summary

Unit Quarter Change 1H

YoY

2Q20 2Q19 1Q20 YoY QoQ 2020 2019

Crude Intake Million bbl 17.18 18.78 17.11 (9%) 0.4% 34.29 36.75 (7%)

Sales[1] Million Baht 35,529 63,710 48,910 (44%) (27%) 84,439 123,430 (32%)

Net Sales [2] Million Baht 30,370 57,702 43,617 (47%) (30%) 73,987 111,976 (34%)

Market GIM Million Baht 4,669 5,429 3,665 (14%) 27% 8,334 10,387 (20%)

USD/bbl [3] 8.46 9.11 6.82 (7%) 24% 7.64 8.90 (14%)

Accounting GIM Million Baht 4,758 5,920 (3,146) (20%) 251% 1,612 11,598 (86%)

USD/bbl 8.63 9.94 (5.84) (13%) 248% 1.48 9.94 (85%)

EBITDA Million Baht 1,505 2,304 (6,436) (35%) 123% (4,932) 4,659 (206%)

Net Profit Million Baht (411) 507 (8,905) (181%) 95% (9,316) 660 n.a.

Note: [1] Sales includes (1) Petroleum Sales (2) Petrochemical Sales (3) Power and Utilities Sales (4) Sales of tank farm and port service, etc

[2] Net Sales includes (1) Petroleum Sales (excluding excise tax) (2) Petrochemical Sales (3) Power and Utilities Sales

[3] Market GIM per bbl : [(Market GIM / Crude Intake)/exchange rate]

The operating results in the second quarter of 2020 compared to those in the first

quarter: In the second quarter of 2020 (2Q20), the Company’s net sales was Baht 30,370 million,

decreasing 30% from the first quarter of 2020 (1Q20), QoQ, including a 27% decrease in average

selling price following a volatility of crude oil price and a 3% decrease in sales volume. The average

crude intake was 189,000 barrels per day, was similar to those of 1Q20.

The Market GIM was Baht

4,669 million (USD 8.46 per barrel),

jumped 27% thanks to the lower

crude premium amid the oil-price

war. Saudi Arabia announced a

significant reduction in the selling

price of crude oil (Official Selling

Price: ”OSP”) together with the

improving petrochemical products

spread especially the medical and

69%

29%

2%

1Q20

Net Sales

62%

35%

3%

2Q20

30,370 43,617

Unit: MB

30%

Petroleum Petrochemical Power & Utilities


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packaging product groups. On the contrary, most petroleum products spread remained under pressure

derived from weakening demand caused by the COVID-19 pandemic.

Crude oil price situation in 2Q20 seems highly volatile. At the beginning of the quarter, crude oil

price continued to decline from 1Q20. Dubai price was dropping to the lowest level of USD 13.55 per barrel

as the COVID-19 outbreak and recovering in May 2020. As a result, the Company had a net stock gain of

Baht 89 million or USD 0.17 per barrel, including the reversal of LCM amounting to Baht 2,835 million

and oil hedging gain of Baht 644 million offset with the stock loss of Baht 3,390 million against the net

stock loss of Baht 6,811 million in the prior quarter. These led to the Accounting GIM of Baht 4,758

million or USD 8.63 per barrel contrasted with the loss on Accounting GIM amounted to Baht 3,146

million in the last quarter.

The operating expenses of Baht 3,476 million, slightly increased by 2% was due mainly to the

higher maintenance cost and consulting expense. These resulted in the earning before interest, tax,

depreciation and amortization (EBITDA) of Baht 1,505 million, comparing with the 1Q20 loss on EBITDA

of Baht 6,436 million. The financial cost was Baht 457 million, down by 2%, QoQ. Meanwhile, there

were loss from financial derivatives amounting to Baht 26 million decreasing from the loss totaling Baht

558 million in the previous quarter comprising of loss from Interest Rate Swap contracts (IRS)

amounting to Baht 213 million and realized loss of Cross Currency Swap contracts (CCS) amounting to

Baht 346 million that unwinding in the preceding quarter.

In addition, the Company recorded foreign exchange gain on USD loan of Baht 353 million

owing to the Thai Baht appreciation against the foreign exchange loss of Baht 500 million in the previous

period. There was unrealized gain from oil hedging of Baht 359 million compared to unrealized loss

from oil hedging of Baht 993 million last quarter. Gain from Investments was Baht 68 million, was up

39%. There was corporate income tax benefit amounting to Baht 39 million against corporate income

tax benefit of Baht 2,246 million in the prior quarter. All mentioned above resulted to the 2Q20 net loss

of Baht 411 million, sharply improved from the net loss of Baht 8,905 million in 1Q20.

The operating results in the second quarter of 2020 compared to those in the second

quarter of 2019: The Company’s net sales dropped by Baht 27,332 million or 47%, attributed to 36%

decrease in average selling price as well as 11% decrease in sales volume. The average crude intake

was 189,000 barrels per day, declined by 9%. The Market GIM was down by Baht 760 million or 14%

(declined by USD 0.65 per barrel) due to the drop of products spread both petroleum and petrochemical

businesses amidst the COVID-19 outbreak. The net stock gain also decreased by Baht 402 million.

These led to the lower of Accounting GIM by Baht 1,162 million or 20%, YoY. On the other hand, the

operating expenses dropped by Baht 498 million or 13% consequent to the lower EBITDA by Baht 799

million or 35%, YoY.


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The financial cost was down by Baht 10 million or 2%. The loss from financial derivatives was

amounting to Baht 26 million whereas there was gain of Baht 490 million in 2Q19. While foreign

exchange gain was up by 140 million as a result of Thai Baht appreciation. These resulted in the net

loss of Baht 411 million in 2Q20 against the net profit of Baht 507 million at the same period last year.

The operating results in the first six months of 2020 (1H20) compared to those in

the first six months of 2019 (1H19): The Company reported net sales of Baht 73,987 million in

1H20, decreasing 34% from 1H19. This attributed to the 26% decrease in average selling price

following crude oil price together with the 8% decrease in sales volume. The crude intake was 188,000

barrels per day, down 7% because of the decline in products demand during the COVID-19 pandemic.

The Market GIM was Baht 8,334 million (USD 7.64 per barrel), decreasing 20% as a falling of

both petroleum and petrochemical products spread amid the COVID-19 pandemic. The pandemic also

caused the plummeting of crude oil price and brought to the net stock loss of Baht 6,722 million or USD

6.16 per barrel, including the stock loss of Baht 7,851 million opposed to the reversal of LCM of Baht

162 million and oil hedging gain of Baht 967 million. While there was the net stock gain of Baht 1,211

million in 1H19. Hence, the Accounting GIM was Baht 1,612 million (USD 1.48 per barrel) against the

Accounting GIM amounting to Baht 11,598 million or USD 9.94 per barrel in 1H19. The other incomes

were Baht 1,022 million, down by 11%. The operating expenses were Baht 6,871 million, decreasing

7% mostly from the implementation of cost reduction initiatives. These caused the loss on EBITDA of

Baht 4,932 million comparing to the EBITDA of Baht 4,659 million in 1H19.

The net financial cost was Baht 921 million, decreasing 2%. There was loss from financial

derivatives amounting to Baht 584 million, mainly from the realized loss of CCS amounting to Baht 346

million as well as the loss of IRS amounting to Baht 239 million against the gain from financial

derivatives amounting to Baht 576 million in 1H19. Likewise, there was foreign exchange loss of Baht

147 million as the Thai Baht depreciation while there was foreign exchange gain of Baht 340 million at

the same period last year and 1H20 unrealized loss from oil hedging amounting to Baht 634 million.

Gain from investments was Baht 117 million, declined by 40% owing to a weakening performance from

associates and joint ventures. The Company had the corporate income tax benefit of Baht 2,285 million

compared to 1H19 corporate income tax benefit of Baht 4 million because of the decreasing operating

results. All previously mentioned resulting the net loss of Baht 9,316 million in 1H20 against the net

profit of Baht 660 million in 1H19.



5

Operating Performance

1. Operating Performance by Business Units

1.1. Petroleum business unit

1.1.1 Petroleum Market Overview

Crude oil situation in the second quarter of 2020 (2Q20): The global oil consumption was

84 million barrels per day, further declined by 10 million barrels per day from 1Q20. The Dubai price

had moved between USD 13.55 per barrel and USD 43.35 per barrel, an average of USD 30.55 per

barrel, dropping by USD 20.19 per barrel from an average of USD 50.74 per barrel in 1Q20. The collapse

of crude oil price was mainly from

the demand for transportation

fuel has continued to decline as

countries maintaining travel

restrictions (Lockdown) both

local and international travel to

curb the spread of the COVID-19

pandemic. This caused the falling

of crude oil price to the lowest in

April at USD 13.55 per barrel.

However, crude price began to pick up after OPEC and its allies announced production cuts in May-July

by more than 9 million barrel per day along with the countries easing of the lockdown measures causing

the increase in oil demand. These contributed to the recovering of crude oil price.

Crude oil outlook in the third quarter of 2020: Crude oil demand continued to improve,

moving within the range of USD 38 – 45 per barrel. The favorable factors include the easing of lockdown

measures and the recovering of tourism sector supported by the government's economic stimulus

packages through a discounts program and an additional long weekend. Additionally, crude oil

producers have cut production of more than 9 million barrels per day through July and will maintain

the production cuts by 7.7 million barrels per day starting from August till December. The major oil

producers are closely monitoring the situation and stand ready to act if needed to keep crude oil in

equilibrium. There are also factors to watch, if the global crude oil price is higher than USD 40 per

barrel, the high-cost producers in the U.S. are likely to increase later in 2020 and the “phase two” trade

deal between the U.S. and China is looking less likely, are the factors that continue to pressure the

market.

10

20

30

40

50

60

70

80

90

Dubai Price

43.35

13.55

2Q20 AVG price

30.55

1Q20 AVG price

50.74

Unit : USD/BBL


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1.1.2 Crude Intake and Capacity

Petroleum Quarter % Change 1H

YoY 2Q20 2Q19 1Q20 YoY QoQ 2020 2019

Crude Intake

Million barrels 17.18 18.78 17.11 (9%) 0.4% 34.29 36.75 (7%)

KBD 189 206 188 (9%) 0.4% 188 203 (7%)

Utilization Rate

Refinery 88% 96% 87% (8%) 1% 88% 94% (6%)

RDCC 79% 114% 93% (35%) (14%) 86% 92% (6%)

Lube Base Oil 87% 82% 79% 5% 8% 83% 83% 0%

In 2Q20, crude intake was 17.18 million barrels or

189,000 barrels per day. The utilization rate was 88%, was similar

to that of 188,000 barrels per day in 1Q20. When compared with

2Q19 of crude intake of 206,000 barrels per day, it decreased by

9%.

The utilization rate of RDCC plant in 2Q20 was 79%, decreasing by 14% from 1Q20 of 93%

utilization rate, mainly due to the optimization of production along with the market situation. When

compared to 114% utilization rate in 2Q19, it was down by 35%.

Lube base oil plant’s utilization rate in 2Q20 was 87%, increasing by 8%when compared to

1Q20 of 79% utilization rate. Likewise, it increased by 5% when compared to 2Q19 of 82% utilization

rate. This caused by an increase in demand after lockdown easing.

1.1.3 Petroleum Sales

Products

Sales Volume (Million Barrel)

Sales Value (Million Baht)

Quarter 1H Quarter 1H

2Q20 2Q19 1Q20 2020 2019

2Q20 2Q19 1Q20 2020 2019

Refinery 12.72 14.92 13.42 26.13 29.08

16,066 37,005 26,384 42,450 70,341

Lube Base Oil 1.73 1.71 1.74 3.48 3.52

2,716 4,462 3,860 6,576 8,899

Total 14.45 16.63 15.16 29.61 32.60

18,782 41,467 30,244 49,026 79,240

In 2Q20, crude intake was

17.18 million barrels (189 KBD)

was similar to that of 1Q20


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In 2Q20, net sales of petroleum businesses were

Baht 18,782 million, decreasing by Baht 11,462

million or 38% from 1Q20. This caused by 33%

decrease in average products prices toward the

falling crude oil price as well as 5% decrease in sales

volume from 15.16 million barrels to 14.45 million

barrels owing to the impact of COVID-19. The

decreased sales volume was mainly from Diesel and Gasoline while sales volume of Naphtha and Asphalt

increased.

When compared with 2Q19, the net sales were down by Baht 22,685 million or 55%, mainly

from 42% decrease in average products prices following the crude oil price and 13% decrease in sales

volume as the lockdown measures to contain the COVID-19 outbreak. The decline in sales volume was

mainly from Diesel and Gasoline while sales volume of Naphtha and Asphalt increased.

For 1H20, net sales of petroleum businesses were Baht 49,026 million, fell by Baht 30,214

million or 38% from 1H19. This resulted from 29% decline in average products prices following the

decreased crude oil price as well as 9% decrease in sales volume from 32.60 million barrels to 29.61

million barrels as a result of the COVID-19 outbreak. The decreased sales volume was mainly from

Diesel and Naphtha though Fuel Oil sales volume increased.

1.1.4 Petroleum Sales Breakdown

Products

Quarter

1H

2Q20 2Q19 1Q20 2020 2019

Local Export Local Export Local Export

Local Export Local Export

Refinery 60% 40% 61% 39% 64% 36%

63% 37% 59% 41%

Lube Base Oil 40% 60% 40% 60% 34% 66% 36% 64% 41% 59%

Total 57% 43% 59% 41% 60% 40% 59% 41% 57% 43%

For 2Q20, the percentage of domestic and export of petroleum product was 57% and 43%

accordingly. The percentage of domestic sales decreased by 3% from 1Q20, mainly from Diesel and

Gasoline. When compared with 2Q19, the percentage of domestic decreased by 2%, mainly from Diesel.

The export products in 2Q20 mostly shipped to Singapore, Cambodia and Malaysia, respectively.

For 1H20, the percentage of domestic and export of petroleum product was 59% and 41%

accordingly. The percentage of domestic rose by 2% compared with the same period last year, mainly

from Fuel Oil.

In 2Q20, net sales of petroleum businesses

decreased by 38% from last quarter due to

lower average products prices following the

crude oil price and a decrease in sales volume


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1.1.5 Petroleum Products Spread

Average price

Quarter % Change 1H

YoY

2Q20 2Q19 1Q20 YoY QoQ 2020 2019

Dubai Crude Oil (USD/bbl) 30.55 67.36 50.74 (55%) (40%) 40.64 65.45 (38%)

Petroleum (USD/bbl)

Naphtha – Dubai (3.0) (9.1) (2.9) 67% (3%) (3.0) (8.3) 64%

ULG95 – Dubai 2.6 7.5 6.7 (65%) (61%) 4.6 5.6 (18%)

Gas Oil 0.05%S - Dubai 5.7 12.4 11.0 (54%) (48%) 8.4 12.6 (33%)

FO 180 3.5%S - Dubai (1.6) (2.3) (7.4) 30% 78% (4.5) (0.9) n.a.

Lube Base Oil (USD/MT)

500SN - FO 180 3.5%S 372 287 370 30% 1% 371 308 20%

150BS - FO 180 3.5%S 524 473 536 11% (2%) 529 478 11%

Asphalt - FO 180 3.5%S 42 (4) 27 n.a. 56% 34 (22) 255%

The spread between Petroleum products and raw material in 2Q20

The spread between Petroleum products and Dubai

Naphtha Spread - Lower: Naphtha-Dubai spread in 2Q20 was USD –3.0 per barrel,

decreased by 3% from USD -2.9 per barrel of 1Q20. This caused by a pressure from lower demand for

Gasoline blending while the demand for Olefin Plants (Naphtha Cracker) remained stable. When

compared to 2Q19 of USD -9.1 per barrel, it increased by 67%.

ULG95 Spread - Lower: ULG95 - Dubai spread in 2Q20 was USD 2.6 per barrel, falling

61% when compared to 1Q20 of USD 6.7 per barrel. It continued to decline from the last quarter. This

resulted from the countries lockdown measures in order to control a global pandemic of COVID-19,

especially India, Malaysia and Vietnam, brought about the pressure in Asian market. When compared

with 2Q19 of USD 7.5 per barrel, it decreased by 65%.

Gas Oil Spread - Lower: Gasoil-Dubai spread was USD 5.7 per barrel, fell by 48% from

USD 11.0 per barrel of 1Q20. This was because of the lockdown measures and the lower operating rate

of industrial sector caused by the coronavirus pandemic. These led to the decline in Gas Oil and Jet

demand. Though the refineries had cut their operating rates, it could not settle with the demand

collapse consequence to the increasing inventory level. When compared with 2Q19 of USD 12.4 per

barrel, it declined by 54%.


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Fuel Oil Spread - Higher: High Sulphur Fuel Oil (HSFO) - Dubai spread was USD -1.6 per

barrel, increasing by 78% from USD -7.4 per barrel of 1Q20 as the refineries used less crude from

OPEC according to its cut run. This resulted to the decrease in fuel oil products. The higher demand of

electricity during the summer in the Middle East also supported fuel oil market. When compared with

2Q19 of USD -2.3 per barrel, it increased by 30%.

The spread between Lube Base Oil products and FO 180 3.5%S

500 SN Spread - Unchanged: Lube base 500SN - Fuel Oil spread was USD 372 per ton,

being stable from USD 370 per ton in 1Q20 due to an increase demand from travel and transportation

activities after the easing of lockdown measures. When compared with 2Q19 of USD 287 per ton, it

increased by 30%.

Asphalt Spread- Higher: Asphalt - Fuel oil spread was USD 42 per ton, up by 56% when compared to 1Q20 of USD 27 per ton, caused by high demand from the accelerating of road

construction which was delayed in 1Q20. When compared with 2Q19 of USD -4 per ton, it increased by

USD 46 per ton.

1.1.6 Gross Refinery Margin

708 877 (458) 249 1,346 Refinery

707 733 907 1,615 1,349 Lube Base Oil

1,415 1,610 449 1,864 2,695 Market GRM

1.29 1.47 (0.85) 0.23 1.15 Refinery

1.28 1.23 1.69 1.48 1.16 Lube Base Oil

2.57 2.70 0.84 1.71 2.31 Market GRM

Market GRM in 2Q20 was Baht 1,415 million or USD

2.57 per barrel, increased by Baht 966 million or USD 1.73

per barrel from 1Q20.This caused by sharply decrease in

crude premium while the drop in almost all petroleum

products spread owing to the COVID-19 outbreak. When

compared with 2Q19, Market GRM decreased by Baht 195

million or USD 0.13 per barrel, mainly from lower products

spread, especially Diesel and Gasoline as a consequence of the COVID-19 outbreak, whereas the lower

crude premium supported margin.

1,415 1,610 449

1,864 2,695

765 368

(4,928)(4,163)

1,389 2,180 1,978

(4,479)

(2,299)

4,084

2Q20 2Q19 1Q20 1H20 1H19

AccountingGRM

Net StockGain/(Loss)

Market GRM

2.57 2.70 0.84 1.71

2.31

1.39 0.62

(9.16)

(3.81)

1.20

3.96 3.32

(8.32)

(2.10)

3.51

2Q20 2Q19 1Q20 1H20 1H19

AccountingGRM


Market GRM

Unit: MB

Unit: USD/bbl

In 2Q20, Market GRM increased by

Baht 966 million from last quarter

due to sharply decrease in crude

premium


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In 2Q20, there was the net stock gain of Baht 765 million or USD 1.39 per barrel, comprising

of stock loss of Baht 2,063 million versus gain from reversal of LCM by Baht 2,184 million and oil

hedging gain of Baht 644 million. This led to the Accounting GRM of Baht 2,180 million or USD 3.96 per

barrel. Accounting GRM rose by Baht 6,659 million or USD 12.28 per barrel from loss on Accounting

GRM of Baht 4,479 million in 1Q20. Furthermore, there was the profit increased by Baht 202 million or

USD 0.64 per barrel from 2Q19.

For 1H20, Market GRM was Baht 1,864 million or USD 1.71 per barrel, declining by Baht 831

million or USD 0.60 per barrel. This resulted from a decrease in almost all petroleum products spread

especially Diesel and Gasoline affected by the COVID-19 pandemic. The net stock loss was Baht 4,163

million or USD 3.81 per barrel including stock loss of Baht 5,130 million versus oil hedging gain of Baht

967 million. Thus, Loss on Accounting GRM was Baht 2,299 million or USD 2.10 per barrel. The

Accounting GRM declined by Baht 6,383 million or USD 5.61 per barrel from the same period last year.

1.2 Petrochemical business units

1.2.1 Petrochemical Market Overview

Petrochemical market situation in 2Q20: The petrochemical products demand improved

from 1Q20. The demand in April slumped to the lowest level and picked up after the COVID-19 outbreak

in China and the ASEAN could be controlled. These led to the country’s lockdown easing since May.

The businesses were gradually re-open, especially the downstream manufacturers that have restarted

their operations. In addition, the government has rolled out the stimulus packages, such as the money

injection through the Mega Project, financial support for consumers to increase their purchasing power,

government bond issuing to raise funds and lend to entrepreneurs with low interest rates, etc.

Furthermore, the low product price also encouraged manufacturers to increase inventory.

Petrochemical market situation in 3Q20: The petrochemical products demand growth is

expected to further increase. The market projected that polyolefins demand will increase from 2019,

contrasted with 2020 global economic growth (GDP) rate of -3%, according to the International Money

Fund (IMF) report. This will be driven by the increasing productions in China and the ASEAN, especially

the medical product group and packaging for the Food Delivery business. Besides, the return of the

automotive industry, electronics and electrical appliances, home appliances and construction industry

in 3Q20 as well as the delay of addition capacities due to the insufficient cost and the international

travel restrictions to prevent the spread of the COVID-19 will be the other factors to support the

petrochemical market.


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1.2.2 Petrochemical Capacity

Quarter % Change 1H

YoY 2Q20 2Q19 1Q20 YoY QoQ 2020 2019

Utilization Rate

Olefins Group 91% 99% 95% (8%) (4%) 93% 94% (1%)

Aromatics and Styrenics Group 95% 99% 94% (4%) 1% 95% 91% 4%

In 2Q20, the utilization rate of Olefins was 91%, decreasing by 4% from 1Q20 of 95% utilization

rate. When compared with 2Q19 of 99% utilization rate, it decreased by 8%. The main reason was that

PP plant reduced its utilization rate in order to balance feedstock in 2Q20.

The utilization rate of Aromatics and Styrenics in 2Q20 was 95%, being the same level as 1Q20.

When compared with 2Q19 of 99% utilization rate, it decreased by 4% for inventory management.

1.2.3 Petrochemical Sales

Products

Sales Volume (KMT)

Sales Value (Million Baht)


2Q20 2Q19 1Q20 2020 2019

2Q20 2Q19 1Q20 2020 2019

Olefins Group 262 270 274 535 553

6,597 9,536 8,090 14,687 19,523

Aromatics and Styrenics Group

188 178 155 344 359

4,136 5,813 4,407 8,543 11,456

Total 450 449 429 879 912

10,733 15,349 12,497 23,230 30,979

Net sales of petrochemical businesses in 2Q20 were

Baht 10,733 million, declining by Baht 1,764 million or 14%

from the previous quarter. The main reasons were 19%

decrease in average selling price following lower raw material

prices versus 5% increase in sales volume by 21,000 Tons,

mainly from ABS and PS products in Aromatics and Styrenics

Group, as the increasing demand after the lockdown easing.

Compared with 2Q19, net sales decreased by Baht 4,616 million or 30%, due to 30% decrease

in average selling price according to lower raw material prices.

For 1H20, net sales of petrochemical businesses were Baht 23,230 million, dropping by Baht

7,749 million or 25% from the same period last year. This caused by 21% decline in average selling

price following lower raw material and 4% decrease in sales volume by 33,000 Tons, impacted by

COVID-19. The drop in sale volume was mainly from Mixed Xylene product in Aromatics Group.

In 2Q20, net sales of petrochemical

businesses declined by 14%, QoQ,

owing to 19% decrease in average

selling price while 5% increase in

sales volume


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1.2.4 Petrochemical Sales Breakdown

Products

Quarter 1H

2Q20 2Q19 1Q20 2020 2019

Local Local Local Export Local Export Local Export Local Export

Olefins Group 62% 38% 59% 41% 63% 37%

62% 38% 61% 39%

Aromatics and Styrenics Group

31% 69% 47% 53% 44% 56% 38% 62% 49% 51%

Total 50% 50% 54% 46% 56% 44% 53% 47% 56% 44%

For 2Q20, the proportion of Petrochemical sales were 50% domestic and 50% export. The

domestic sales decreased by 6% from last quarter, mostly from ABS and Polystyrenics (PS) in Styrenics

group. When compared with 2Q19, domestic sales decreased by 4%, mainly from PP in Olefins group

and Mixed Xylene in Aromatics group. The petrochemical exported products in 2Q20 mostly shipped to

Hong Kong, Singapore and Vietnam, respectively.

For 1H20, the proportion of Petrochemical sales were 53% domestic and 47% export. The

domestic sales decreased by 3% from the same period last year, mostly from PP product in Olefins

group and Mixed Xylene in Aromatics group.


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1.2.5 The spread between key petrochemical products and raw material

Average Price

(USD/MT)

Quarter % Change 1H

YoY

2Q20 2Q19 1Q20 YoY QoQ 2020 2019

Naphtha 274 541 440 (49%) (38%) 357 530 (33%)

Olefins

Ethylene - Naphtha 283 283 240 0% 18% 261 346 (25%)

HDPE – Ethylene 346 395 315 (12%) 10% 331 329 1%

HDPE – Naphtha 629 678 555 (7%) 13% 592 675 (12%)

Propylene – Naphtha 370 255 347 45% 7% 359 287 25%

PP – Propylene 215 337 180 (36%) 19% 197 314 (37%)

PP – Naphtha 585 592 527 (1%) 11% 556 601 (7%)

Aromatics

BZ - Naphtha 97 84 174 15% (44%) 136 77 77%

TOL - Naphtha 76 108 123 (30%) (38%) 100 101 (1%)

MX – Naphtha 124 164 148 (24%) (16%) 136 159 (14%)

Styrenics

SM - Naphtha 347 523 367 (34%) (5%) 357 523 (32%)

ABS - Naphtha 919 955 892 (4%) 3% 905 977 (7%)

PS (GPPS) - Naphtha 649 763 678 (15%) (4%) 663 775 (14%)

The spread between Petrochemical products and raw material in 2Q20

The spread between Polyolefins (HDPE/PP) and Naphtha in 2Q20

HDPE Spread - Higher: HDPE - Naphtha spread was USD 629 per ton, increased by 13%

from USD 555 per ton in 1Q20. It was owing to the increasing demand of construction and higher

demand for water pipes to ease drought. Furthermore, the demand in medical sector continued to

increase. When compared with 2Q19 of USD 678 per ton, it declined by 7%.

PP Spread - Higher: PP - Naphtha was USD 585 per ton, increasing by 11% from USD

527 per ton in 1Q20. This caused by an increasing demand due to higher utilization of downstream

producers after the lockdown easing, stock building ahead of scheduled maintenance of petrochemicals

as well as increasing inventory owing to the higher price trend. When compared with 2Q19 of USD 592

per ton, its spread slightly decreased.


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The spread between Aromatics (Toluene and Mixed Xylene) and Naphtha

TOL and MX Spread –Lower: Toluene - Naphtha spread and Mixed Xylene - Naphtha

spread were USD 76 per ton and USD 124 per ton respectively, down by 38% and 16% when compared

with 1Q20. This was owing to an increase of new integrated Paraxylene capacity in China as well as

the lower Paraxylene demand due to the COVID-19 outbreak.Therefore, the demand in Toluene and

Mixed Xylene which were the Paraxylene raw materials also decreased. When compared with 2Q19,

Toluene and Mixed Xylene spreads decreased by 30% and 24% respectively.

The spread between Polystyrenics (ABS/PS) and Naphtha

ABS Spread - Higher: ABS - Naphtha spread was USD 919 per ton, increasing by 3% from

USD 892 per ton of 1Q20. This was driven by an increasing demand of household appliances such as

air fryer and air purifier, thanks to the speed up of Work-From-Home trends. In addition, an increase

production of helmets for small electrical motorcycles, including seat belts in accordance with the

“China's One Helmet One Belt” campaign as well as the resuming of automobile productions in China

had supported ABS market. When compared with 2Q19 of USD 955 per ton, spread declined by 4%.

PS Spread - Lower: PS – Naphtha spread was USD 649 per ton, decreasing by 4%, from

USD 678 per ton in 1Q20, due to the weaker PS demand in electronics device and electrical appliances

sectors influenced by the COVID-19 outbreak. When compared with 2Q19 of USD 763 per ton, spread

declined by 15%.

1.2.6 Product to Feed Margin (Product to Feed : PTF)

1,897 2,090 1,847

3,744 4,510 Olefins Group

680 1,000 656

1,336 1,826 Aro & Styrenics

2,577 3,090 2,503

5,080 6,336 Market PTF

3.43 3.51 3.44

3.43 3.87 Olefins Group

1.23 1.68 1.22

1.22 1.56 Aro & Styrenics

4.66 5.19 4.66

4.65 5.43 Market PTF

In 2Q20, Market PTF of Baht 2,577 million or USD 4.66

per barrel was similar to 1Q20 Market PTF of Baht 2,503 million

or USD 4.66 per barrel because Olefins products spread

improved due to higher demand in medical and packaging

products amid the COVID-19 pandemic while lower Aromatics product spread. When compared with

2,577 3,090 2,503 5,080 6,336

(676)

123

(1,883) (2,559)(178)

1,901 3,213 620

2,521 6,158

2Q20 2Q19 1Q20 1H20 1H19

AccountingPTF


Market PTF

4.66 5.19 4.66 4.65 5.43

(1.22)

0.21

(3.50) (2.35)(0.16)

3.44 5.40 1.16 2.30 5.27

2Q20 2Q19 1Q20 1H20 1H19

AccountingPTF


Market PTF

Unit: MB Unit: USD/bbl

In 2Q20, Market PTF of Baht 2,577

million was similar to last quarter


15


2Q19, Market PTF dropped by Baht 513 million or USD 0.53 per barrel owing to lower petrochemical

products spread.

The net stock loss of Baht 676 million in 2Q20, including stock loss of Baht 1,327 million versus

gain from a reversal of LCM of Baht 651 million. Therefore, the Company had Accounting PTF of Baht

1,901 million or USD 3.44 per barrel. When compared with last quarter, it rose by Baht 1,281 million

or USD 2.28 per barrel while it fell by Baht 1,312 million or USD 1.96 per barrel from the Accounting

PTF of Baht 3,213 million in 2Q19.

For 1H20, Market PTF was Baht 5,080 million or USD 4.65 per barrel, declining by Baht 1,256

million or USD 0.78 per barrel from the same period last year. The main reason was the extremely

decline in petrochemical products spread through the outbreak of COVID-19. Meanwhile, the Company

reported the net stock loss of Baht 2,559 million attributed to the stock loss of Baht 2,721 million but

there was gain from the reversal of LCM amounting to Baht 162 million. As such, the Accounting PTF

was Baht 2,521 million or USD 2.30 per barrel. It was down by Baht 3,637 million or USD 2.97 per

barrel when compared to the same period last year.


16


1.3 Power Plant and Utility business units

1.3.1 Power Plant Capacity and Sales

Quarter % Change 1H

YoY 2Q20 2Q19 1Q20 YoY QoQ 2020 2019

Utilization Rate

Electricity 70% 74% 71% (4%) (1%) 70% 71% (1%)

Steam 63% 63% 66% 0% (3%) 65% 61% 4%

Sales (Baht million)

Electricity 505 511 505 (1%) 0% 1,010 1,045 (3%)

Steam 295 311 308 (5%) (4%) 603 587 3%

Others 55 64 63 (14%) (13%) 118 126 (6%)

Total 855 886 876 (3%) (2%) 1,731 1,758 (2%)

In 2Q20, the utilization rate of Electricity was 70%, similar to that of 1Q20. When compared

with 2Q19, the utilization rate of Electricity was lower by 4%, following the reduction of refinery

utilization.

The utilization rate of Steam in 2Q20 was 63%, down by 3%, QoQ. This resulted from planned

maintenance shutdown of the industrial area customers. And it was similar rate to 2Q19.

In 2Q20, the net sales of power and utility businesses were Baht 855 million, decreasing by

Baht 21 million or 2% QoQ. When compared with 2Q19, it decreased by Baht 31 million or 3% YoY.

This was due mainly to lower selling price of steam and electricity following lower fuel price.

In 1H20, the net sales of power and utility businesses were Baht 1,731 million, slightly

decreased by 2% from 1H19.


17


2. Total Operating Performance

Total Operating Performance of IRPC and its subsidiaries for 2Q20 and 1H20 are as follow;

Note : [1] Average market prices of crude used in the production process

[2] Sales includes (1) Petroleum Sales (2) Petrochemical Sales (3) Power and Utilities Sales (4) Sales of tank farm and port service, etc.

[3] Net Sales includes (1) Petroleum Sales (excluding excise tax) (2) Petrochemical Sales (3) Power and Utilities Sales

[4] Including port, tank farm and service etc.

[5] Net Financial Cost excludes gain (loss) from financial derivatives

2Q20 2Q19 1Q20 2020 2019 2Q20 2Q19 1Q20 2020 2019

Average FX (THB/USD) 32.12 31.76 31.45 31.78 31.77

Total Crude Intake (Mbbl) 17.18 18.78 17.11 34.29 36.75

Average Crude (USD/bbl) (1) 29.74 70.15 56.05 42.73 67.90

Sales (2) 35,529 63,710 48,910 84,439 123,430 64.39 106.81 90.89 77.49 105.72

Net Sales (3) 30,370 57,702 43,617 73,987 111,976 55.04 96.74 81.06 67.89 95.91

Cost of Feedstock (Market Price) (25,701) (52,273) (39,952) (65,653) (101,589) (46.58) (87.63) (74.24) (60.25) (87.01)

Market GIM 4,669 5,429 3,665 8,334 10,387 8.46 9.11 6.82 7.64 8.90

Stock Gain (Loss) (3,390) 176 (4,461) (7,851) 54 (6.14) 0.30 (8.29) (7.20) 0.05

Lower of Cost or Market 2,835 (148) (2,673) 162 693 5.14 (0.25) (4.97) 0.15 0.59

Oil Hedging Gain (Loss) 644 463 323 967 464 1.17 0.78 0.60 0.89 0.40

Accounting GIM 4,758 5,920 (3,146) 1,612 11,598 8.63 9.94 (5.84) 1.48 9.94

Other Incomes (4) 583 723 439 1,022 1,145 1.06 1.21 0.82 0.94 0.98

Selling Expenses (359) (366) (335) (694) (731) (0.65) (0.61) (0.62) (0.64) (0.63)

Accounting GIM and Other Incomes 4,982 6,278 (3,041) 1,940 12,012 9.04 10.54 (5.64) 1.78 10.29

OPEX (3,476) (3,974) (3,395) (6,871) (7,353) (6.29) (6.67) (6.31) (6.31) (6.30)

EBITDA 1,505 2,304 (6,436) (4,932) 4,659 2.75 3.87 (11.95) (4.53) 3.99

Depreciation (2,224) (2,135) (2,227) (4,451) (4,151) (4.03) (3.58) (4.14) (4.08) (3.56)

EBIT (719) 169 (8,663) (9,383) 508 (1.28) 0.29 (16.09) (8.61) 0.43

Net Financial Cost(5) (457) (467) (464) (921) (940) (0.83) (0.78) (0.86) (0.85) (0.81)

Gain (Loss) from Financial Derivatives (26) 490 (558) (584) 576 (0.05) 0.82 (1.04) (0.54) 0.49

Gain (Loss) from Foreign Exchange 353 213 (500) (147) 340 0.64 0.36 (0.93) (0.13) 0.29

Unrealized Gain (Loss) from Oil Hedging 359 - (993) (634) - 0.65 - (1.85) (0.58) -

Gain (Loss) from impairment and disposal of fixed assets (35) (2) (4) (39) (10) (0.06) - (0.01) (0.04) (0.01)

Gain (Loss) from Investment 68 112 49 117 195 0.12 0.19 0.09 0.11 0.17

Other Expenses 11 5 (10) 1 - 0.02 0.01 (0.02) - -

Net Profit (Loss) before Income Tax (447) 520 (11,143) (11,590) 669 (0.79) 0.89 (20.71) (10.64) 0.57

Income Tax 39 (5) 2,246 2,285 4 0.07 (0.01) 4.17 2.10 -

Gain (Loss) from non-controlling interests (3) (8) (8) (11) (13) (0.01) (0.01) (0.01) (0.01) (0.01)

Net Profit (Loss) (411) 507 (8,905) (9,316) 660 (0.73) 0.87 (16.55) (8.55) 0.56

Earning per share (EPS) (Baht/share) (0.02) 0.02 (0.44) (0.46) 0.03


Unit : Million Baht Unit : USD per barrel


18


2.1 Market Gross Integrated Margin (Market GIM)

In 2Q20, Market GIM of Baht 4,669 million or USD 8.46 per barrel increased by Baht 1,004

million or USD 1.64 per barrel from last quarter. It caused by the greatly falling crude premium

amounting to USD 6.12 per barrel. However, almost all the petroleum products spread sharply dropped,

especially Diesel and Gasoline, while the petrochemical products spread especially medical and

packaging products improved.

When compared with 2Q19 Market GIM of Baht 5,429 million dropped by Baht 760 million or

USD 0.65 per barrel owing to the decline in most petroleum and petrochemical products spread amid

the COVID-19 outbreak while a drop in crude premium by USD 3.60 per barrel.

For 1H20, Market GIM was Baht 8,334 million or USD 7.64 per barrel, decreasing by Baht 2,053

million or USD 1.26 per barrel from 1H19. This was because of the sharply decline in petroleum and

petrochemical products spread as a result of the COVID-19 outbreak.

MB USD/bbl

1,415 1,610 449

1,864 2,695

2,577 3,090

2,503

5,080

6,336

677 729

713

1,390

1,356

4,669 5,429

3,665

8,334

10,387

2.57 2.70

0.84 1.71 2.31

4.66 5.19

4.66 4.65

5.43

1.23 1.22

1.32 1.28

1.16

8.46 9.11

6.82 7.64

8.90

-

5

10

15

-

5,000

10,000

15,000

2Q20 2Q19 1Q20 1H20 1H19 2Q20 2Q19 1Q20 1H20 1H19

Market GIM

GRM PTF Power & Utilities


19


2.2 Accounting Gross Integrated Margin (Accounting GIM)

In 2Q20, Accounting GIM of Baht 4,758 million or USD 8.63 per barrel rose by Baht 7,904

million or USD 14.47 per barrel compared with last quarter. This resulted from an increase in Market

GIM amounting Baht 1,004 million or USD 1.64 per barrel and a rise in net stock gain amounting Baht

6,900 million or USD 12.83 per barrel. In 2Q20, there was net stock gain of Baht 89 million or USD 0.17

per barrel, comprising of gain from Realized Oil Hedging amounting Baht 644 million or USD 1.17 per

barrel versus stock loss & reversal of LCM amounting Baht 555 million or USD 1.00 per barrel whereas

there was net stock loss of Baht 6,811 million or USD 12.66 per barrel in 1Q20.

When compared with 2Q19 Accounting GIM decreased by Baht 1,162 million or USD 1.31 per

barrel because of a decrease in Market GIM of Baht 760 million or USD 0.65 per barrel plus a decline

in net stock gain of Baht 402 million or USD 0.66 per barrel.

For 1H20, Accounting GIM was Baht 1,612 million or USD 1.48 per barrel. It declined by Baht

9,986 million or USD 8.46 per barrel from the same period last year. This caused by a decrease in

Market GIM of Baht 2,053 million or USD 1.26 per barrel together with 1H20 net stock loss of Baht

6,722 million or USD 6.16 per barrel despite 1H19 net stock gain of Baht 1,211 million or USD 1.04 per

barrel.

2.3 Other incomes

Other incomes consist of port and tank farm services and other services. In 2Q20, the Company

had other incomes amounting to Baht 583 million, increased by Baht 144 million from last quarter

because of an increase in tank farm services. When compared with 2Q19, other incomes dropped by

Baht 140 million due to a warranty claim of UHV project in 2Q19.

For 1H20, the Company had other incomes amounting Baht 1,022 million, decreasing by Baht

123 million from the same period last year owing to a decrease in warranty claim of UHV project.

MB USD/bbl

4,669 5,429 3,665 8,334

10,387

(555)

28

(7,134) (7,689)

747

644 463 323 967

464

4,758 5,920

(3,146)

1,612

11,598

8.46 9.11 6.82 7.64 8.90

(1.00)

0.05

(13.26)

(7.05)

0.64 1.17 0.78

0.60 0.89

0.40 8.63 9.94

(5.84)

1.48 9.94

(20)

(15)

(10)

(5)

-

5

10

15

20

(20,000)

(15,000)

(10,000)

(5,000)

-

5,000

10,000

15,000

20,000

2Q20 2Q19 1Q20 1H20 1H19 2Q20 2Q19 1Q20 1H20 1H19

Accounting GIM

Market GIM Stock Gain/(Loss)+LCM Oil Hedging


20


2.4 Operating Expenses

In 2Q20, the operating expenses of Baht 3,476 million increased by Baht 81 million or 2% QoQ,

mainly from an increase in maintenance expense versus a decline in other expenses as a result of cost

control measures. When compared with 2Q19, the operating expenses fell by Baht 498 million due

mainly to the recording of employee benefit expense in 2Q19 in accordance with the new Labor

Protection Act.

For 1H20, there were the operating expenses of Baht 6,871 million, fell by Baht 482 million or

7% from 1H19, mainly because of a decline in employee benefit expense and other expenses as a

result of cost control measures.

2.5 Depreciation and Amortization Expenses

In 2Q20, the depreciation of Baht 2,224 million was similar to last quarter while it increased by

Baht 89 million or 4% from 2Q19. For 1H20, the depreciation of Baht 4,451 million, increased by Baht

300 million or 7% from the same period last year. The main reason was the completion of the expansion

and efficiency improvement projects such as the Catalyst Cooler project and Floating Solar project that

started commercial operation since June 5, 2020.

2.6 Net Financial cost

In 2Q20, net financing cost was Baht 457 million, declining by Baht 7 million or 2% QoQ, and

Baht 10 million or 2% YoY. For 1H20, financial costs of Baht 921 million decreased by Baht 19 million

or 2% from the same period last year. It was because of a decrease in interest rate.

2.7 Gain (Loss) from Financial Derivatives

In 2Q20, there were loss from financial derivatives amounting to Baht 26 million, mainly

attributing to realized loss from Interest Rate Swap (IRS) of Baht 15 million and unrealized loss from

IRS of Baht 11 million. When compared with 1Q20, there were loss from financial derivatives of Baht

558 million, the loss declined by Baht 532 million. When compared with 2Q19 there were gain from

financial derivatives of Baht 490 million, the gain decreased by Baht 516 million.

For 1H20, there were loss from financial derivatives amounting to Baht 584 million, mainly

attributing to realized loss from Cross Currency Swap (CCS) of Baht 346 million and loss from IRS of

Baht 239 million. When compared with 1H19 there were gain from financial derivatives of Baht 576

million, the gain declined by Baht 1,160 million, mainly owing to gain from CCS of Baht 571 million in

1H19 while loss from CCS of Baht 346 million in 1H20 due to the foreign exchange fluctuation.

2.8 Gain (Loss) from Foreign Exchange

In 2Q20, the Company recorded gain from foreign exchange of Baht 353 million, mainly

unrealized gain from foreign exchange due to Thai Baht appreciation from Baht 32.83 per USD at the

end of 1Q20 to Baht 31.07 per USD at the end of 2Q20. When compared with 1Q20 loss from foreign


21


exchange of Baht 500 million, the gain increased by Baht 853 million. While there was gain from foreign

exchange of Baht 213 million in 2Q19. The Company has outstanding USD debt of USD 170 million at

the end of 2Q20.

For 1H20, there was loss from foreign exchange of Baht 147 million, mainly unrealized loss

from foreign exchange, while there was gain from foreign exchange of Baht 340 million in 1H19, mainly

unrealized gain from foreign exchange, due to Thai Baht depreciation.

2.9 Unrealized Gain (Loss) from Oil Hedging

In 2Q20, the Company had unrealized gain from oil hedging of Baht 359 million following the

price risk management. When compared with 1Q20, there was unrealized loss from oil hedging

amounting to Baht 993 million. For 1H20, there was unrealized loss from oil hedging amounting to Baht

634 million.

2.10 Gain (Loss) from Impairment and disposal of fixed assets

In 2Q20, the Company had loss from impairment and disposal of fixed assets of Baht 35 million,

while loss of Baht 4 million and loss of Baht 2 million in 1Q20 and 2Q19, respectively.

For 1H20, there was loss from impairment and disposal of fixed assets of Baht 39 million, when

compared with 1H19 loss from impairment and disposal of fixed assets of Baht 10 million. This caused

by the write-off of intangible assets – dredging in 2Q20.

2.11 Gain (Loss) from Investments

In 2Q20, there was gain from investments of Baht 68 million, increased by Baht 19 million from

1Q20 owing to higher equity values in associates. However, it declined by Baht 44 million from 2Q19

due to lower equity values in associates.

For 1H20, there was gain from investments of Baht 117 million, declined by Baht 78 million

from 1H19, mainly from lower equity values in associates.

2.12 Corporate Income Tax

In 2Q20, the Company recorded the corporate income tax benefit amounting to Baht 39 million,

compared with 1Q20 income tax benefit of Baht 2,246 million. This was owing to improving

performance. When compared with 2Q19, there was the corporate income tax expense amounting to

Baht 5 million. For 1H20, there was the corporate income tax benefit amounting to Baht 2,285 million,

compared with 1H19 the corporate income tax benefit amounting to Baht 4 million. This mainly caused

by the decline in operating results.


22


Financial Positions as of 30 June 2020 (Unit: Million Baht)

Assets

As of June 30, 2020, the Company had total assets of Baht 167,484 million, decreased by

Baht 10,366 million or 6% from December 31, 2019. It was due to the following reasons:

• Account receivables: decreased by Baht 3,328 million or 33% from the end of 2019, due

mainly to a decrease in selling price and sales volume. As of June 30, 2020, there were overdue more

than 3-months account receivables amounting to Baht 50 million or only 0.74% of the total account

receivables which incorporated in the provision for doubtful debt of Baht 31 million. The average

collection period for 2Q20 was 18 days, increased by 1 day from the end of 2019.

• Inventory: decreased by Baht 6,650 million or 26% mainly due to a decrease in crude oil price

and products price following the market prices while an increase in inventory volume. The average

inventory period was 44 days, increased by 3 days from the end of 2019.

Other current assets: decreased by Baht 304 million or 4%. This was mainly attributed to a

decrease in refundable value-added-tax of Baht 1,094 million whereas cash and cash equivalents

increased by Baht 628 million.

Non-current assets decreased by Baht 83 million due to a decrease in fixed assets and

investment properties of Baht 2,702 million which mostly declined by an increase of the accumulated

depreciation. While deferred tax asset increased by Baht 2,156 million, due to the corporate income tax

credit, right-of-use assets increased by Baht 257 million and intangible assets rose by Baht 198 million.

134,120 134,203

7,247 7,551

19,345 25,995

6,772 10,100

72,582 83,402

5,291 4,860

54,728 52,071

7,273 5,745

17,410 24,871 10,200 6,900

167,484

Account receivables S/T loans

Other current assets

177,850

Non-current assets

Other non-current liabilities

Shareholders’ Equity

As of 31 Dec 19 As of 30 Jun 20

L/T Borrowing (incl. due within 1 yr)

6%

Inventory Account payables

Other current liabilities


23


Liabilities

As of June 30, 2020, the Company had total liabilities of Baht 94,902 million, increasing by Baht

454 million compared to the end of 2019. It was due to the following reasons:

Short-terms loans from financial institutions: rose by Baht 3,300 million or 48% for

cash flow used in operating activities as well as liquidity management during the COVID-19 crisis.

Account payables: decreased by Baht 7,461 million or 30%. It was mainly due to a decrease in

crude oil price while an increase in crude oil payable volume. The average payment period was 41 days,

increased by 2 days from the end of 2019.

Other current liabilities: increased

by Baht 1,528 million or 27% due to an

increase in short-term loan and interest

payables from related parties of Baht

2,002 million, an increase in other

payables of Baht 653 million while a

decrease in accrued bonus expense of

Baht 1,290 million.

Long-term borrowing including

current portion within one year:

increased by Baht 2,657 million, mainly

due to long-term loans drawdown by Baht 6,050 and recording of unrealized foreign exchange loss by

Baht 145 million while there was long-term loans repayment to financial institutions by Baht 3,550

million.

The details of long-terms borrowing are shown below;

(Unit: Million Baht)

Jun 30, 2020 Dec 31, 2019 Change

Thai Baht Bonds 6,889 6,888 1

USD Loan 5,249 6,021 (772)

Thai Baht Loan 42,590 39,162 3,428

Total 54,728 52,071 2,657

less current portion of long-terms borrowing

(15,309) (8,190) (7,119)

Net Outstanding Borrowing 39,419 43,881 (4,462)

Other non-current liabilities: were up by Baht 431 million.This resulted from an increase in

financial derivatives liabilities by Baht 201 million and lease liabilities by Baht 129 million following the

3,747 6,444 6,943 7,369

18,087

926 -

1,235 1,235

1,852

-

6,889 - -

-

4,673

13,333

8,178 8,604

19,940

2020 2021 2022 2023 >2023

Maturity of long-term borrowing

THB Bond

USD Loan

THB Loan

(Unit : Million Baht)

Note : Long-term borrowing as of 30 June 2020


24


recording of leasing transactions in accordance with Thai Financial Reporting Standard No.16 Leases which

effective on 1 January 2020.

Shareholders’ Equity

As of 30 June 2020, shareholders’ equity was amounted to Baht 72,582 million, which was

lower than what was stated as at 31 December 2019 by Baht 10,820 million. This was mainly from net

loss amounted to Baht 9,316 million, dividend paid by Baht 2,041 million. However, there was retained

earnings adjustment by Baht 546 million owing to the recognition of unrealized gain from derivatives

contracts, in accordance with Thai Financial Reporting Standards No.9 Financial Instruments.

Statement of Cash Flow

(Unit : Million Baht)

Jan.-Jun. 2020 Jan.-Jun. 2019

1 EBITDA (4,932) 4,659

2 Change in operating assets and liabilities 3,631 619

3 Net cash flows from (used in) operating activities (1,301) 5,278

4 Net cash flows from (used in) investing activities (2,435) (2,831)

5 Net cash flows from (used in) financing activities 4,364 (2,870)

6 Net increase (decrease) 628 (423)

7 Cash at beginning 3,036 2,338

8 Cash at ending 3,664 1,915

As of 30 June 2020, the ending cash was Baht 3,664 million. Net cash flow increased by Baht

628 million, which was mainly contributed from the following items;

Net cash outflow from operating activities of Baht 1,301 million. The cash outflow from

loss on EBITDA of Baht 4,932 million and a decrease in account payables of Baht 7,458 million.

Nevertheless, the cash inflow from a decrease in inventory of Baht 6,714 million, a decrease in account

receivable of Baht 3,306 million and a decrease in refundable value-added-tax of Baht 1,094 million.

Net cash outflow from investing activities of Baht 2,435 million, mainly from disbursement

for projects such as Floating Solar project, RDCC Catalyst Cooler project amounting to Baht 2,071

million and payment for increasing capital of ordinary shares in IRPC Clean Power Co.,Ltd. by Baht 137

million.

Net cash inflow from financing activities of Baht 4,364 million, cash inflow were mainly

from long-term loans drawdown of Baht 6,050 million and short-term loans drawdown of Baht 5,300


25


million. Nevertheless, there were cash outflow included long-term loans repayment of Baht 3,550

million, dividend payment of Baht 2,041 million, interest payment of Baht 953 million and loss from

financial derivatives contracts of Baht 354 million.

Key Financial Ratios

Unit Quarter

2Q20 2Q19 1Q20

Profitability Ratios

EBITDA Margin % 4.24 3.62 (13.16)

Net Profit Margin % (1.16) 0.80 (18.21)

Earnings per share Baht/share (0.02) 0.02 (0.44)

Return on Equity* % (23.93) 1.52 (45.63)

Liquidity Ratios

Current Ratio time 0.66 0.91 0.77

Quick Ratio time 0.21 0.27 0.35

Financial Policy Ratios

Net IBD to Equity time 0.88 0.63 0.74

Net IBD to EBITDA* time (6.05) 5.88 (2.13)

Note: *Annualized

Liquidity and Capital structure

In 2Q20, current ratio was 0.66 times, decreasing by 0.11 times compared with 1Q20 of 0.77

times. This was due to a decrease in cash and account receivable. The Company has sufficient liquidity

for its operations.

At the end of 2Q20, net interest bearing debt to equity ratio was 0.88 times, increasing by 0.14

times from 1Q20 of 0.74 times. This was mainly due to a decrease in cash. The Company could complete

all payments on due date and comply with all of the Financial Covenants.


26


Note:

Account receivable turnover = Sales / Average account receivable before doubtful account

Collection period = 360 / Account receivable turnover

Inventory turnover = Cost of Goods Sold / Average Inventory

Inventory period = 360 / Inventory turnover

Account payable turnover = Cost of sales / Average account payable

Payment period = 360 / Account payable turnover

EBITDA margin = EBITDA / Revenue from Sales

Profit margin = Net Profit / Revenue from Sales

Return on equity = Net Profit / Average shareholders’ equity

Current ratio = Current assets / Current liabilities

Quick ratio = (Cash + Marketable Securities + Account Receivable) / Current Liabilities

Net Interest bearing Debt to Equity = (Interest bearing Debt – Cash) / Total Equity

Net Interest bearing Debt to EBITDA = (Interest bearing Debt – Cash) / EBITDA

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