Performance Summary

Performance Result 2018
The consolidated financial statement recorded revenue from sale of goods and rendering of services of Baht 192,025 million and Net Profit of Baht 3,235 million which was the Net Profit attributable to owners of the Company of Baht 2,463 million, or earning per share of 1.79 Baht.

Total EBITDA (10,201 MB.)

Unit: THB Million

Key Financial

Business Performance

Bangchak boasts a complex refinery with a capacity of 120,000 barrel per day based on sophisticated hydrocracking technology. The Company took assorted measures to raise its outputs and manage its refining margins.

Stock Snapshot

Bangchak Corporation Public Company Limited

is a Thailand based company engaged in the operation of oil refinery and marketing the finished products through its service stations. The Company’s oil market includes consumers in various sectors, such as transportation, aviation, shipping, construction, industrial and agriculture. Other businesses are renewables and Exploration & Production.


Fundamentals

Executive Talk

In this IR Newsletter, we are graced by
Mr. Suwat Meemook, executive vice president at Bangchak Initiative and Innovation Center (BIIC) of the Bangchak Corporation Plc; here to discuss the Startup business through the operation of BIIC
Q: What is BIIC? What is its objective, and what series of innovation is it focusing on?

A: BIIC or Bangchak Initiative and Innovation Center was set up in 2017 to scout for new businesses that will be the new S Curve supporting the business of the BCP group; including the refinery business, marketing business, and what we highly emphasize, the green electricity energy business under BCPG Plc. and the bio-based business under the BBGI PCL. This coincides with the goals of the BCP business group within the next 5 years, in which we intend to adjust our business portfolio to consist of Oil and Non-oil business in 50/50 proportion, from the current 60/40 proportion.

There are 3 working teams within BIIC, the first of which is the Corporate Venture Capital (CVC), this team will look for and invest in Startups; which in the beginning was solely focused on the United States and later moving on to the EU countries, China, and Israel. And, in late 2018, BCP established 4 new subsidiaries to invest in new Start-ups in Thailand exclusively on businesses that is innovation related; concentrating on investing domestically. The second team is the Research and Development team (R&D) focusing on the creation of new products, especially on Bio-based products. The R&D has numerous researches under their supervision i.e. seaweed related products; which has moved pass the research phase and is moving on to the next step, BBGI Plc. has shown interest in this product and will be taking the reins from the R&D team. The last team oversees Ecosystems and Incubation to which they will be corresponding with various agencies i.e. universities, laboratories, government agencies, and including assortments of start-ups based in Thailand.


Q: What is BIIC’s investment goal? Currently, which company has BIIC joint invested in or is supporting?

A: BIIC investments, which is under the CVC team’s care, uses investments as a way to garner new technologies and networks, not just driven by profit, these strategic investments will focus its resources on Start-ups with Deep Tech. Presently, BIIC has invested in 4 companies, 2 of which is involved in energy and the other 2 is involved in Bio-based product business, as examples of projects that received BIIC’s investments.


The first business that we invested in during late 2017 was Bonumose, this company produces healthy sugar from plant-based raw material with special properties such as compounds that is found in nature, taste like sugar, when ingested the body will absorb less energy from said compound than glucose found in ordinary sugar, thus making it more suitable for people that has problems with diabetes, as well as health conscious consumers who wants to watch their weight. BIIC sees high potential in the company’s technology; adding value to agriculture products, furthering the company group’s Bio-based product.


Source: https://bonumose.com/


Furthermore, the company in late 2017 also invested in a business associated with electric power plant business that company is Semtive which operates cutting edge windmill power plant technology that includes micro windmill blades designed especially to operate under low wind speed and possesses the micro inverter that suits operations in households and commercial buildings. BIIC foresees that this technology can be capitalized along with the Blockchain system for peer-to-peer electricity trade.


Moving along to late 2018, we invested in a Startup working on Animal-Free Collagen which resulted from the Synthetic Biology production method, using sugar as the raw material, the aforementioned collagen is used as part of the mixture in cosmetics and skin care products, its properties gives way to 5 times the moisture in Marine Collagen, it has no color, scentless, and is PH neutral. Presently, products from some leading cosmetic brands have included the Collagen from the startup in their products have been launched to the market since mid-2018.

Recently, in early 2019, we invested in an EV car battery startup specializing in Fast Charging Batteries with High Energy Density, meaning that aside from charging up very fast, the battery can hold its battery longer, allowing cars to be driven farther. The CVC team focuses its investments on mid-size businesses, and monitors the other people who are investing in this business. This business that we have invested in has a one of the top global scale car battery company investing in it, as well as large size car makers investing in the company as well. Aside from learning more about the technology and the network, we are able to follow the changes in future global trends because the batteries being produced may become the battery of the future.


Q: We understand that BIIC allows Thai Startups to pitch their projects, we would like to get details on the pitches and how are they fared. How many pitches were of interest, and what sort of innovation were they?

A: Our third team that works on Ecosystems and Incubation is responsible for this, they have networked with startups and accelerators in Thailand, including government agencies such as the National Science and Technology Development Agency (NSTDA), the National Science Technology and Innovation Policy Office (STI), and various universities.

BIIC has opened its doors to startups to pitch their plans every month throughout 2018, the first round pitch occurred on the 4th of April, 2018 at BIIC on the 5th floor of BCP HQ at the M Tower. Startups that have piqued BCP’s interest will receive maximum investment budget of THB 35 million per team. During 2018, BCP held 5 pitching sessions which saw 30 to 40 startups presenting, as well as SME Startups which we collaborated with the Marketing Business Group that concerned Food Innovation, which proved a success, receiving a SPAR AWARD, and is actually being sold in SPAR convenience stores.

Due to Startups in Thailand being far and few in between, and with most of them focusing on Fintech, as for BCP, the company is interested in two areas deep tech startups which concerns green energy and Bio-based products, which are not so numerous in numbers. However, the BIIC will stay the course and will support the Ecosystem in Thailand in order to give opportunities to Thais new concepts for innovation and technology to showcase their work and to align themselves with us.

Mr. Suwat Meemook

Executive Vice President

Oil Market Outlook

Crude Oil Price Outlook : Crude price has increased as OPEC+ cut oil output in 1H, and Permian’s new pipeline in US coming in mid-year caused oil price should drop again

Focus on Q1’19:

  • OPEC+ agree to cut output by 1.2 MBD in first half of 2019
  • Supply disruption in Venezuala as U.S. Sanction and economic crisis
  • Better trade tension situations between US & China after US extend negotiating period to 90 days
  • Lower oil demand from emerging countries after weaken currency such as India, Turkey & Argentina
  • China’s oil demand will decline due to trade tension

Market Highlights in 2019:

  • Supply disruption in Venezuela & Iran (U.S. sanction)
  • Will OPEC+ remain to agree cut oil output by 1.2 MBD in second half of 2019?
  • Strong dollar index effect emerging countries demand
  • U.S. production spike to 12-14 MBD if debottlenecking Permian’s pipeline facility complete
  • IMF declines world economic growth forecasts in 2019 by 0.2% to 3.5% due to US & China trade tension
  • China revised the lower economic growth target from 6.0-6.5%to 6.0 in 2019 compared with last year’s target of “around” 6.5 percent
Strong middle distillate crack spread in Q1, weighted by Chinese demand; while gasoline crack remain pressure by very high gasoline stock in main port around the world.

Focus on Q1’19:

  • Strong Chinese demand in anticipation of the switch to 0.5%S bunker on 1 Jan2019
  • Asia’s refineries into spring turnaround
  • Gasoline crack will be pressured by very high stock and China’s slower demand
  • Strong gasoil crack will be supported Chinese demand and S/D India’s refineries to revamp to Bharat VI
  • Lower fuel oil arbitrage from West to Asia due to decreased OPEC+ heavy output and declined heavy crude export of Venezuala as U.S. sanction

Market Highlights in 2019:

  • The next year to continue to be strong for middle distillates on the back of healthy demand growth and with additional marine gas oil volumes likely to head into the bunker pool come 2020.
  • The supply of fuel oil in the world continued to fall over 2019 on the back of continued refinery modernization
  • Demand growth for gasoline in China and India will, however, outstrip supplies from their new refineries.

IR Activities

27 November 2018

SET AWARD 2018

Bangchak Corporation Plc. by Mr. Surachai Kositsareewong, Senior Executive Vice President, Accounting and Finance joined SET Awards 2018 event hosted by Stock Exchange of Thailand at Stock Exchange of Thailand Building on November 27, 2018. Bangchak Corporation Plc got Outstanding Investor Relations Award.

29 November 2018

SET Digital Roadshow

Bangchak Corporation Plc. by Mr. Chaiwat Kovavisarach, President and Chief Executive Officer Director joined SET Digital Roadshow event hosted by Stock Exchange of Thailand to give information about BCP's business and performance to local and foreign investors via SET's website on Novenber 29, 2018

10 January 2019

Credit suisse 10th Annual Asian conference 2019

Bangchak Corporation Plc. by Mr. Chaiwat Kovavisarach, President and Chief Executive Officer Director joined 10th Annual ASEAN conference 2019 event hosted by Credit Suisse Securities to meet and update BCP information to foreign insititutional investors at The Ritz-Carlton hotel, Singapore on January 10, 2019

22 January 2019

FSSIA’s Investment Conference 2019

Bangchak Corporation Plc. by Mr. Surachai Kositsareewong, Senior Executive Vice President, Accounting and Finance joined FSSIA’s Investment Conference 2019 event hosted by FSSIA to meet and update BCP information to local insititutional investors at Grand Hyatt Erawan Bangkok, Thailand on January 22, 2019

25 February 2019

Analyst Meeting (2018 Performance Result)

Bangchak Corporation Plc. by Mr. Chaiwat Kovavisarach, President and Chief Executive Officer Director and Mr. Surachai Kositsareewong, Senior Executive Vice President Accounting and Finance had announced the company’s 2018 performance to to analysts and investment communities at Bangchak Corporation HQ, M Tower Building on February 25, 2019

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