Management Discussion and Analysis - First Quarter 2021 Esso (Thailand) Public Company Limited
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Esso (Thailand) Public Company Limited Management Discussion and Analysis First Quarter 2021
Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
Management’s Discussion and Analysis (MD&A) for the First Quarter of 2021
1. Financial and Operating Highlights
1Q 2021 1Q 2020
Crude intake (Kbpd) 130 122
Paraxylene production (Ktons) 40 53
Average forex rate (Baht/US$) 30.3 31.3
Gross refining margin (US$/Bbl) 11.8 (19.3)
Revenue from sales (million Baht) 39,258 39,386
Gross profit (million Baht) 4,718 (6,444)
EBITDA (million Baht) 4,159 (7,314)
Profit (loss) for the period (million Baht) 2,788 (6,307)
Earnings (loss) per share (Baht) (1) 0.81 (1.82)
(1)
Based on current number of shares: 3,461 million shares
1Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
2. Benchmark Prices for Crude Oil and Refined Petroleum Products
Average Platts Singapore quoted prices for crude oil and refined products
Unit: US$/Bbl 1Q 2021 1Q 2020 4Q 2020
Dubai 60.0 50.7 44.6
Gasoline (95 Ron) 67.1 57.4 48.7
Jet fuel / kerosene 63.3 59.2 47.0
Diesel (50 ppmS) 65.7 62.4 48.8
Fuel oil (180 cs) 55.3 42.4 43.1
LPG 50.8 46.4 37.4
Paraxylene - US$/Ton 766 707 560
Gasoline (95 Ron) – US$/Ton (1) 570 488 414
Source: Mean of Platts Singapore and PCI
(1)
Converted to US$/Ton using 1 Ton = 8.5 Barrels
Dubai prices in the first quarter of 2021 averaged $60.0/Bbl. Crude prices rose $9.3/Bbl compared
to the first quarter last year, and an increase of $15.4/Bbl compared to the fourth quarter of 2020. Crude
prices continued to recover as a result of COVID-19 vaccine rollout in many countries, with support from
OPEC and its allies’ production cut extension. The average monthly price for Dubai in March 2021 was
$64.4/Bbl, significantly improved from March 2020 average price of $33.7/Bbl by $30.7/Bbl and from
December 2020 average price of $49.8/Bbl by $14.6/Bbl.
In tandem with crude oil prices, all product prices improved in the first quarter of 2021 when
compared with the previous quarter from demand recovery as a result of COVID-19 vaccine rollout in many
countries, and even higher than the same period of last year.
The Paraxylene Asian Contract Price (ACP) in the first quarter of 2021 was $766/Ton, an increase
of $59/Ton compared to the same period last year, but an increase of $206/Ton from previous quarter as
a result of temporary tight supply caused by paraxylene plants in the region under maintenance shutdown.
2Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
3. Production and Gross Margin
1Q 2021 1Q 2020 +/-
Refining capacity (Kbpd) 174 174 0
Crude intake (Kbpd) 130 122 +8
Paraxylene production (Ktons) 40 53 -13
Gross Refining Margin (US$/Bbl) 11.8 (19.3) +31.1
Total Fuel Product Sales (KBbl) 12,073 12,433 -360
- LPG 706 541 +165
- Gasoline 3,030 2,981 +49
- Naphtha 496 370 +126
- Jet Fuel/Kerosene 464 1,210 -746
- Diesel 5,942 6,003 -61
- Fuel Oil 903 1,107 -204
- Asphalt 532 221 +311
Refinery crude intake for the first quarter of 2021 was 130 KBD, higher than the same period last
year by 8 KBD. Paraxylene production in the first quarter of 2021 was 40 Ktons, lower than the same period
of 2020 as the plant continued to run at the minimum turndown rate in response to weak market
environment.
Gross Refining Margin (GRM) in the first quarter of 2021 was $11.8/Bbl, up by $31.1/Bbl from the
same period of last year largely contributed from favorable inventory effects and slightly improved industry
gross refining margin.
Refinery production yields in the first quarter of 2021
Refinery Production (%)
reflected continued production adjustment in response to
28.1%
30.1% demand during COVID-19 pandemic. Comparing to the same
period last year, lower middle distillates yields resulted from
42.5% 45.4%
significant drop in jet fuel production due to demand collapse
11.4% 10.0% from travel restriction, partially offset by an increase in diesel as
16.0% 16.5%
a result of jet fuel upgrading. Heavy production yields in the first
1Q21 1Q20
Feedstock Heavy quarter of 2021 were contributed by an increase in asphalt
Middle Light production to capture strong margin and demand increase.
Total fuel product sales volume in the first quarter of
Sales Channel (%)
2021 was 3% lower than the same period last year mainly due to
the decrease in jet fuel demand as a result of the COVID-19
Commercial
pandemic and lesser fuel oil export. However, Retails sales 56% 57%
Retail
Export
volume increased approximately 3% from network growth. In
addition, asphalt sales volume was more than doubled from the 41% 38%
first quarter of 2020 to continue capturing demand and margin 3% 5%
opportunity as mentioned earlier. In the first quarter of 2021, 1Q21 1Q20
Asphalt sales reached its record high in a decade.
3Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
4. Financial Performance
Unit: million Baht 1Q 2021 1Q 2020 +/-
Revenue from sales 39,258 39,386 -128
Cost of sales (34,540) (45,830) +11,290
Gross profit 4,718 (6,444) +11,162
Selling expenses (1,193) (1,409) +216
Administrative expenses (58) (69) +11
Profit (loss) from sales 3,467 (7,922) +11,389
Other income 9 5 +4
Finance costs, net (82) (93) +11
Share of profit (loss) from an
70 99 -29
associate
Profit (loss) before income tax 3,464 (7,911) +11,375
Income tax (expense) credit (676) 1,604 -2,280
Profit (loss) for the period 2,788 (6,307) +9,095
Other comprehensive income 117 (400) +517
Total comprehensive income
2,905 (6,707) +9,612
(loss) for the period
Revenue from sales for the first quarter of 2021 was lower than the same period last year, mainly
due to lower fuels demand from COVID-19 pandemic, partially offset by higher price.
In response to COVID-19 impact to economics, the company continued to focus on cost saving
and still managed selling and admin expenses in the first quarter of 2021 with 15% reduction from the same
period last year.
In the first quarter of 2021, profit from sales was Baht Profit (loss) from sales by segment
3,467 million, compared to a loss of Baht 7,922 million in the (Million THB)
138
same period last year. The Downstream segment made a profit 3,329
of Baht 3,329 million, primarily driven by favorable inventory
effects. The Petrochemical segment had profits of Baht 138 (7,571)
million reflecting higher paraxylene margins than the same Downstream
period of last year due to demand-supply imbalance in the Petrochemicals (351)
region during the period. 1Q2021 1Q2020
Compared to the same period last year, net finance costs decreased by Baht 11 million in the first
quarter of 2021 primarily driven by lower interest rates.
4Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
5. Statement of Financial Position
Unit: million Baht except for percentages 31 Mar 2021 31 Dec 2020 +/- +/- %
Assets
- Current assets 28,126 22,921 +5,205 +23%
- Non-current assets 37,533 38,457 -924 -2%
Total assets 65,659 61,378 +4,281 +7%
Liabilities
- Current liabilities 37,988 35,446 +2,542 +7%
- Non-current liabilities 10,406 11,573 -1,167 -10%
Total liabilities 48,394 47,019 +1,375 +3%
Equity
- Issued & paid-up share capital 17,075 17,075 0 0%
- Premium on share capital 4,032 4,032 0 0%
- Legal reserve 1,001 1,001 0 0%
- Unappropriated retained earnings (5,293) (8,081) +2,788 -35%
- Other components of equity 443 325 +118 +36%
Non-controlling interests 7 7 0 0%
Total equity 17,265 14,359 +2,906 +20%
Total liabilities and equity 65,659 61,378 +4,281 +7%
Current assets as of March 31, 2021 increased by Baht 5,205 million from year-end 2020, mainly
due to higher inventory balances and trade receivables from the increase in price and sales volume, and
higher cash balance. Non-current assets decreased by Baht 924 million mainly caused by the decrease in
deferred income tax assets relating to tax loss carried forward.
Total liabilities of Baht 48,394 million, an increase of Baht 1,375 million, were primarily driven by
higher crude payables from higher crude purchase prices, offset by the decrease of short-term and long-
term borrowings.
Total debt was Baht 25,700 million as of March 31, 2021 compared to Baht 28,203 million at year-
end 2020. The company continued to maintain adequate financing sources to support payment obligations.
At the end of March 2021, long-term loans decreased to Baht 5,167 million, while short-term loans
decreased to Baht 20,533 million.
Total equity increased by Baht 2,906 million mainly as a result of profits for the first three months
of 2021 and unrealized gain from the re-measurement of Bangkok Aviation Fuel Services Public Company
Limited (BAFS) investment.
5Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
6. Statement of Cash Flows
Unit: million Baht 1Q 2021 1Q 2020
Cash flows from (used in) operating activities 3,346 1,081
Cash flows from (used in) investing activities (360) (474)
Cash flows from (used in) financing activities (2,608) (214)
Cash flows from operating activities was Baht 3,346 million for the three-month period ended
March 31, 2021, mainly reflected positive earnings in the period. Cash flows used in investing activities was
Baht 360 million, mainly for refinery and retail projects. Cash flows used in financing activities was Baht
2,608 million, reflecting net repayment of borrowings.
6Esso (Thailand) Public Company Limited Management Discussion and Analysis- First Quarter 2021
7. Financial Ratios
Profitability ratios
1Q 2021 1Q 2020
Gross profit margin (%) 12.0% (16.4%)
Net profit margin (%) 7.1% (16.0%)
Interest coverage ratio (times) 50.6 (77.9)
Liquidity and debt to equity ratios
31 Mar 2021 31 Dec 2020
Current ratio (times) 0.7 0.6
Quick ratio (times) 0.2 0.2
Total debt to equity ratio (times) 1.5 2.0
Long term debt to equity ratio (times) 0.3 0.4
Net debt to equity ratio (times) 1.5 1.9
Financial ratios calculation:
Gross profit margin = Gross profit / Sales
Net profit margin = Net profit / Sales
Interest coverage ratio = EBITDA / Interest expense
Current ratio = Current assets / Current liabilities
Quick ratio = (Cash and cash equivalents + Short term investments + Trade receivables) /
Current liabilities
Total debt to equity ratio = Total debt / Total shareholders’ equity
Long term debt to equity ratio = Non-current borrowings / Total shareholders’ equity
Net debt to equity ratio = (Total debt – Cash and cash equivalents) / Total shareholder’s equity
- Signed -
Adisak Jangkamolkulchai
Chairman and Managing Director
May 12, 2021
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