Thai Oil (TOP) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw solid operational performance with refinery utilization at 111%, strong domestic sales, and a focus on high-margin products, despite softer market conditions and lower gross refining margins.

• Net profit for Q2 2024 was 5,547 million THB, supported by stock gains and bond buyback profits, though core operating profit and GRM declined.

• Strategic progress continued in clean energy projects, regional market expansion, and the acquisition of Shell's Singapore assets.

• Recognized for ESG leadership, with multiple awards and continued DJSI membership.

Financial highlights

• Q2 net profit: 5,547 million THB, down from Q1, mainly due to lower market GRM but offset by stock gains and bond buyback.

• Net operating profit: 3,871 million THB; stock gain: 2,130 million THB; bond buyback gain: 931 million THB.

• First half 2024 net profit: 11,410 million THB, nearly double YoY, driven by FX gains and stock gains.

• EBITDA for Q2: 8,873 million THB, down from Q1 but up YoY.

• Q2 2024 sales revenue reached 119,639 million THB, up 5,400 million THB from Q1 and 11,172 million THB YoY.

Outlook and guidance

• H2 2024 expected to see gradual recovery in GRM, supported by seasonal demand and potential economic stimulus from interest rate cuts.

• Risks include high product stocks, new refinery startups, and global economic uncertainties, especially in China.

• Oil prices may soften as OPEC+ unwinds cuts and non-OPEC supply rises, but demand is expected to improve with anticipated Fed rate cuts.

• Clean fuel project completion and Singapore asset acquisition expected to drive future growth.

• Aromatics margins to remain strong as PX demand outpaces capacity; olefins market remains challenging due to high new capacity.