PTTGC announces its operating results for 2017 with its highest-ever net profit of 39,298 million baht

Continues to take a substantial approach to further enhancing investment in projects in both domestic and international markets

BANGKOK, Feb. 22, 2018 /PRNewswire/ — PTT Global Chemical Public Company Limited (PTTGC), Thailand’s largest integrated petrochemical and refining business, today announced it earned a net profit of 39,298 million baht in 2017, the highest ever for the company since it was established. PTTGC’s higher profit is due to several factors including an increase in sales, more efficient production, higher product margins, and benefits resulting from the company’s Project Max. PTTGC continues to move ahead with its investment plans for mega projects in Thailand’s Eastern Economic Corridor (EEC) and a petrochemical complex in the United States, as well as market expansion for plastics in the high-potential CLMV markets, particularly Myanmar and Vietnam.

Outstanding operating results in 2017

Mr. Supattanapong Punmeechaow, President and CEO of PTT Global Chemical Public Company Limited (PTTGC), announced the company’s dramatically-increased operating results for 2017. PTTGC’s sales revenue for 2017 reached 436,745 million baht, a 24% increase compared to 2016; with an adjusted EBITDA of 60,622 million baht for 2017, a 35% increase compared to 2016, and a net profit of 39,298 million baht for 2017 (earnings per share of 8.79 baht), up 53% compared to the previous year.

For the company’s turnover in Q4/2017, operating profit increased due to greater production and higher product prices, in line with the rise in oil prices. PTTGC’s olefins business and derivative products generated the company’s Q4/2017 net profit of 9,559 million baht (earnings per share of 2.02 baht).

In 2017, the company realized an operating profit of 2,919 million baht from Project Max, a wide-ranging initiative to improve organizational efficiency that began at the end of 2016. PTTGC also gained profits of 3,360 million baht from its investments in associated companies and joint ventures. Much of this was due to the transfer of shares for six companies in industry sectors including petrochemicals, propylene, biochemicals, and related services from PTT PLC.

Key milestones in 2017

• For the petroleum market in 2017, the price of crude oil increased by 29% to USD53.18 per barrel. This increase was the result of greater cooperation among OPEC and non-OPEC producers to more tightly control production capacity. The price of crude oil is expected to be at around USD 55 per barrel in 2018.
• Utilization rate for PTTGC’s refineries increased 103% in 2017, compared to an increase of 19% in 2016.
• Utilization rate for PTTGC’s aromatics business increased 80% in 2017.
• Utilization rate for PTTGC’solefins and derivatives; Olefins increased 96% and Polyethylene increased 113% in 2017. The price of ethylene increased 5% to USD 1,091 per ton during 2017, while the price of polyethylene increased 4% to USD 1,207 per ton last year.

PTTGC’s achievements in 2017 and business direction for 2018

1)     Project Max: The savings generated by this initiative to increase company-wide operating efficiency, which started in late 2016, contributed 2,919 million baht to PTTGC’s operating profits.

2)    Update on investments

2.1) EEC: Investments in the Eastern Economic Corridor (EEC)

• Olefins Reconfiguration Project (ORP) PTTGC signed a memorandum of understanding (MoU) with Samsung Engineering Co., Ltd. (SECL); Samsung Engineering (Thailand) Co., Ltd. (SETT); and TTCL Public Company Limited for a major contract to provide engineering and procurement services and construct a new olefins plant as part of PTTGC’s Olefins Reconfiguration Project. The new olefins plant will mainly use naphtha and liquefied petroleum gas (LPG) as raw materials.
• The SOFTANOL Project
  
  PTTGC signed a memorandum of understanding (MoU) with NIPPON SHOKUBAI Co., Ltd.; and MITSUI & Co., Ltd. to evaluate opportunities for a project to manufacture and distribute secondary alcohol ethoxylates (SOFTANOL) in Thailand. The investment decision is expected to be complete within March 2019, with commercial production of raw materials for various products such as household detergents and industrial cleaning products commencing within 2022.
• PO/Polyol Project: Integrated Investment in Polyurethane
  
  The PO & Polyols and PU System projects are an integrated investment in the category of performance materials and chemicals for the performance chemicals group of PTTGC’s polyurethane business. This means the PO & Polyols and PU System projects can be considered as a fully-integrated investment in polyurethane.
• LLDPE 2 Project: Metallocene Linear Low-density Polyethylene (mLLDPE)
  
  Commercial production for this project, with a capacity of 400,000 tons/year, started in Q1/2018. The project is valued at USD 288 million.

2.2) US Petrochemical Complex Project

PTTGC America LLC (PTTGCA) signed a Heads of Agreement (HOA) with Daelim Industrial Co., Ltd., a leading Korean company in construction and chemicals, to evaluate project opportunities and handle Front-End Engineering Design (FEED) and procurement, and find sources of investment funds, for a plant in Belmont County, Ohio, United States, which will produce and distribute ethylene and derivatives.

2.3) Progress in the CLMV markets

• A service company was established to provide services for PTTGC’s polymers business in Yangon, Myanmar.
• Polymer Marketing Vietnam was established to provide services in distribution, sales, and logistics for PTTGC’s polymers business in Ho Chi Minh City, Vietnam, starting in April 2018.
• S.P. Petpack Inter Group (Myanmar) started commercial production in January 2018, manufacturing and distributinga wide range of plastic packaging and items such as engine oil buckets.

2.4) Embracing the Circular Economy and Operating a Green Business

Upcycling the Oceans, Thailand (UTO): The first-ever fashion collection resulting from this project to upcycle plastic waste was unveiled in Koh Samet, Rayong. The fashionable collection includes swimwear that was showcased at the “Waste Side Story by PTTGC” pavilion during the Bangkok Design Week 2018 event.

Green Business: Global Green Chemical Public Company Limited (GGC), green flagship of PTTGC, and Kaset Thai International Sugar Corporation (KTIS) signed a memorandum of understanding (MoU) to invest in a biocomplex to help drive the development of a bioeconomy. The agreement includes the construction of the Nakhon Sawan Biocomplex (NBC), located on over 2,000 rai of land in Taklee District, Nakhon Sawan. The investment is expected to total around 30,000 to 35,000 million baht.

2.5) Sales and Marketing Restructuring 

Customer Solution Center (CSC): PTTGC aims to implement strategic plans in closer collaboration with its customers in the plastics industry by establishing the Customer Solution Center (CSC), to more closely support customer requirements. The CSC will promote, support, and channel developments and transactions with PTTGC’s customers, as well as startups, to help them grow and become more competitive. The CSC is due to open within Q2/2018.

PTTGC has set goals and the direction of its business operation for 2018 to move into the digital era in a more substantial manner. This coincides with initiating models to adopt advanced technologies and innovations to facilitate its current operations. PTTGC is also committed to cultivating innovative ideas among its employees that support digitalization to maximize the efficiency of the company’s business operations.

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SOURCE PTT Global Chemical Public Company Limited (PTTGC)