22 February 2024

Bangchak Group Reports 2023 Performance, Closing a Year of a Historic Deal EBITDA Reached THB 41,680 Million, Achieving the Highest Revenue and Profit Record since the Inception of Business Operations.

Bangchak Group reported its performance for the year 2023 following the closing of a historic deal regarding the acquisition of shares in Bangchak Sriracha Public Company Limited (BSRC), formerly known as Esso (Thailand) Public Company Limited. The group achieved a sales and services revenue of THB 385,853 million, marking an 18% increase from 2022. Additionally, it attained an EBITDA of THB 41,680 million and a profit attributable to the owners of the parent company of THB 13,233 million, representing a record-high performance since its establishment. This translates to earnings per share of THB 9.27.

In the fourth quarter of 2023, Bangchak Group reported a sales and services revenue of THB 142,922 million and an EBITDA of THB 10,247 million. Excluding extra items, the company and its affiliates would have recorded a net profit of THB 1,347 million during the quarter. However, extra items included OKEA's recognition of a loss from impairment, based on the shareholding portion of the company, totaling THB 2,040 million in the Statfjord field, along with an inventory loss of THB 993 million. Nevertheless, gains from derivatives totaling THB 1,266 million fully offset the impact of the inventory loss. Consequently, in the fourth quarter of 2023, the company reported a net loss of THB 977 million.

Chaiwat Kovavisarach, Group Chief Executive Officer and President of Bangchak Corporation Public Company Limited, said that Bangchak Group achieved a record-high performance in 2023 since its establishment. All business groups experienced substantial growth and improvement, resulting in Bangchak and its subsidiaries earning a sales and services revenue of THB 385,853 million, an 18% increase from 2022. Additionally, the group attained an EBITDA of THB 41,680 million and a profit attributable to the owners of the parent company of THB 13,233 million, representing earnings per share of THB 9.27.

In 2024, Bangchak is poised for strategic growth and advancement following substantial investments made in 2023. The company's focus will be on creating and expanding synergies derived from the Refinery and Oil Trading Business Group, Marketing Business Group, and Bangchak Sriracha Business Group.

Furthermore, Bangchak has refined its management strategy to leverage technology and various assets within the group, aiming to maximize benefits through the creation of Platforms for Growth. These platforms will manage two refineries, logistics and oil trading, marketing business, and supporting businesses. The company is committed to implementing Shared Services in the Back Office system to reduce costs and achieve overall economies of scale, aiming to generate an EBITDA Synergy of not less than THB 3,000 million per year.

Additionally, other business groups have continuous expansion plans, with a particular emphasis on prioritizing the growth of the upstream business to ensure energy security. Bangchak will explore and evaluate additional growth opportunities stemming from potential petroleum fields in the future. Simultaneously, the company is dedicated to mitigating the climate crisis and creating a sustainable world. It aims to become Thailand's first and only facility to produce Sustainable Aviation Fuel (SAF) by the first quarter of 2025, with a production capacity of 1,000,000 liters per day.

Key Performances in 2023 by Business Group are as follows.

The Refinery and Oil Trading Business Group operated at the average production rate of 120,100 barrels per day, with a capacity rate of 100%, despite a partial maintenance shutdown for the implementation of the Euro 5 project. The business group recorded an EBITDA of THB 14,794 million, a decrease of 17% from 2022. The main contributing factor to this decrease was the reduction in operating GRM from USD 14.33 per barrel in 2022 to USD 9.50 per barrel (still higher than the refinery margin in Singapore of USD 6.84). The decline primarily stemmed from lower crack spreads observed across all product categories as global oil demand weakened, resulting in an inventory loss. Meanwhile, BCPT's oil trading business grew significantly, consistently expanding overseas trading business (Out-Out) for crude oil and crude products to supply the two refineries and expanded overseas trading business, resulting in a 59% increase in crude oil and refined oil product transactions from the previous year.

Marketing Business Group recorded an EBITDA of THB 3,157 million, a 9% increase from 2022, driven by a significant increase in the total sales volume of products through all channels, reaching a record high of 6,490 million liters, which represents a 9% increase from the previous year. This was due to a rebound in the aviation fuel market and the continuous broadening of sales channels with new trade partners. At the end of 2023, there were 2,219 service stations (1,389 Bangchak service stations and 830 network service stations acquired through BSRC). For Non-Oil businesses, Inthanin Coffee had 1,020 outlets and more than 265 EV charging locations.

Bangchak Sriracha Business Group, operated by BSRC, recorded an EBITDA of THB 997 million in 2023 (a 4-month period in 2023). Bangchak Sriracha Refinery had an average production rate of 101,900 barrels per day despite the 40-day maintenance shutdown (September-October 2023). Following the scheduled maintenance, refining capacity was systematically increased, reaching 143,800 barrels per day in December 2023. The total sales volume of oil products amounted to 2,145 million liters.

Bangchak Group has a total combined nameplate capacity from the two refineries at 294,000 barrels per day, the highest in the country. The increased capacity from Bangchak Sriracha Refinery will help to meet the growing market demand from Bangchak’s Marketing Business that cannot be entirely fulfilled by Bangchak Phra Khanong Refinery.

The Power Business Group, operated by BCPG Public Company Limited, expanded its investments in natural gas power plant projects in the United States and oil terminals, seaports, and pipelines in Phetchaburi Province to generate recurring income from these assets. This mitigated the impact of the expiration of the Adder of solar power plants in the country. In 2023, it recorded an EBITDA of THB 4,219 million, a 34% decrease from 2022.

The Bio-Based Products Business Group, operated by BBGI Public Company Limited, recorded an EBITDA of THB 667 million in 2023, an 8% increase from 2022. The group benefitted from the increased sales volumes of biodiesel and ethanol products due to orders from BSRC and the biofuel production and distribution business. The improved performance was also supported by the Energy Policy and Planning Office's (EPPO) announcement to increase the biodiesel blending in high-speed diesel from B5 to B7.

The Natural Resources and New Business Group recorded an EBITDA of THB 19,671 million in 2023, a 12% increase from 2022. This growth was primarily driven by a 74% increase in sales volume of oil and natural gas liquids from OKEA compared to the previous year, mainly from the full-year 2023 performance recognition of the transferred business operations of Wintershall Dea. Moreover, OKEA completed the development of the Hasselmus field and, on December 29, 2023, completed the transfer of rights of a 28% working interest in the Statfjord field. This increased OKEA’s production capacity to approximately 35,000-40,000 barrels of oil equivalent per day (the average production rate in 2023 was 24,590 barrels of oil equivalent per day), representing a 47% increase. However, lower-than-anticipated reserves in the Statfjord field resulted in losses from the impairment of assets after tax and, based on the shareholding ratio, amounting to NOK 619 million (equivalent to THB 2,040 million).

Chaiwat stated that the increase in assets, robust operational performance in 2023, and the ability to achieve various milestones are the prelude to creating a new chapter in business operations. It not only serves as a strong foundation for enhancing Bangchak’s competitiveness but also presents opportunities for expanding into new business ventures in the future. 2024 is another year with challenging business environments. However, with the strategy and business plans of each business group, Bangchak is poised to grow into its fifth decade while remaining committed to building a secure and stable business that fosters sustainability for the organization and Thai society and balancing the Energy Trilemma to deliver Regenerative Happiness through the vision of “Crafting a Sustainable World with Evolving Greenovation.”

On February 22, 2024, the Board of Directors approved the dividend payment proposal for the second half of 2023 at THB 1.50 per share. Combined with the interim dividend for the first half of 2023 at THB 0.5 per share, the total dividend payment will amount to THB 2.00 per share, with the Record Date scheduled for March 7, 2024, and the Payment Date scheduled for April 24, 2024.