IRPC reported first quarter results, moving towards the GDP strategy while focusing on the digital technology.
IRPC reported the first quarter operating results, keeping on GDP strategy by integrating the digital technology into each operational process. This enhances the operational efficiency across the organization, generating the expected profit of more than Baht 1,500 million or USD 50 million in 2019.
The operating results increased tremendously when compared to those in the previous quarter. The main reason was the stock gain despite the down spread following the slow global economy and the decreased refinery utilization rate owing to the maintenance shutdown for efficiency improvement (RDCC Unit).
Mr. Noppadol Pinsupa, the President of IRPC Public Company Limited (IRPC) reported the first quarter operating results, “IRPC had the net sales of Baht 54,274 million, decreasing by 16% when compared to that in the previous quarter. The selling prices were down by 11% following the crude oil price. The sales volume was down by 5% as the refinery utilization rate decreased due to the maintenance shutdown of RDCC Unit for 28 days. During the shutdown, the catalyst cooler was installed to enable the crude selection of various types.”
For the first quarter operating results when compared to those in the fourth quarter of 2018, IRPC had the Market GIM of Baht 4,958 million (USD 8.68 per barrel), down by 44%. It was due to the deceased product spread as a consequence of an oversupply. Moreover, the demand from China shrank as a result of a slow economy. However, IRPC had the stock gain of Baht 720 million, contributing to the Accounting GIM of Baht 5,678 million (USD 9.94 per barrel), up by 37%. IRPC had the EBITDA of Baht 2,355 million, increasing by Baht 1,821 million. The financial costs were Baht 387 million, decreasing by Baht 431 million, mainly because of the gain from cross currency swap (CCS) transactions of Baht 83 million. The foreign exchange gain was Baht 127 million, up by Baht 141 million, due to the strengthening Baht. The gain from impairment and disposal of fixed assets was down by Baht 258 million, as there were non-recurring transactions of land selling in the previous quarter. All of the above-mentioned results led to the net profit of Baht 153 million, increasing by 109% when compared to net loss of Baht 1,627 million in the previous quarter.
For the first quarter operating results when compared to those in the first quarter of 2018, net sales dropped by Baht 6,214 million or 10%: selling prices were down by 6% and sales volume was down by 4%. It was mainly due to the deceased product spread and the decreased refinery utilization rate by 6% owing to the maintenance shutdown of RDCC Unit for the catalyst cooler installation. The Market GIM declined by Baht 3,611 million or 42%. The Accounting GIM also declined by Baht 3,095 million or 35% although the stock gain increased by Baht 516 million. The EBITDA was lower by Baht 3,034 million. The financial costs decreased by Baht 85 million, while the foreign exchange gain increased by Baht 30 million. The gain from investment fell by Baht 87 million as a result of dropping operating results of the joint venture companies. All of the above-mentioned results led to the net profit of Baht 153 million, decreasing by 94%.
IRPC had a good liquidity. The liquidity ratio was 0.96. Net debt to equity (D/E) ratio was 0.66. IRPC has a policy to control the net D/E at not more than 1. Besides, IRPC focuses closely on the operational and financial risk management.
The catalyst cooler has already started the commercial operation in this May, therefore now IRPC’s refinery units have more options for the crude selection while producing more electricity and stream. The GIM is expected to be up by USD 0.3 per barrel or around Baht 600 million. All of these will drive the company to move towards the target.
Another advantageous factor is IMO’s new regulations which will enforce a new 0.5% global sulphur cap on fuel oil from 1 January 2020 onwards, lowering from the present 3.5% limit in the present. This will be favorable to IRPC as IRPC is ready for the 0.5% sulphur fuel oil production.
Mr. Pinsupa added, “IRPC still goes on with GDP strategy or Power of Growth, Power of Digital and Power of People. This year, we will focus on Power of Digital or IRPC 4.0 Program to drive IRPC to be a leading digital petrochemical complex. The integration of digital technology into each operational process will enhance the efficiency across the whole organization. The improvement includes the followings: 1. Controlling and planning the production with AI while realizing the real-time outcomes. 2. Analyzing the customers’ purchasing behaviors and managing the supply chain. 3. Analyzing the market with big data system and fulfilling the customers’ needs responsively. 4. Encouraging the Lean Procurement Program which reduces the repetitive working processes. Enhancing the efficiency of procurement to maximize the cost competitiveness. 5. Improving the data management and IT structure to an extreme degree. These integrations will make a profit of more than Baht 1,500 million or USD 50 million.”
“IRPC 4.0 will strengthen all areas to be ready for the social and business challenge in the present and in the future, changing the whole organization. With the digital technology, IRPC will enter the digital era, be ready for the international market competition and move towards the sustainable growth.”
