SPRC’s 2Q21 Earnings Contract 32% from Lower Refinery Margin

Star Petroleum Refining  Public Company Limited (SPRC) has announced its 2Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

In 2Q21, SPRC recorded a net profit of 773.42 million baht, decreasing 32.06% from the same period of last year, and total sales revenue of 41,545 million baht. Despite sales revenue increasing 63% due to the increase in oil price, crude intake and financial performance in 2Q21 were lower than the prior year quarter. 

Covid-19 spreading in Asia brought to the demand destruction and lower refinery margin, while prior year quarter refinery margin was stronger from crude price discount benefit. NIAT in 2Q21 was at US$ 25 million compared to US$ 37 million in Q2/20. Higher stock gain in 2Q21 due to higher rise in oil price was wiped out by lower market refining margin. Higher total operating expenses in 2Q21 from provision for employee benefit obligation also disadvantaged this quarter NIAT compared to previous year quarter but offset with lower foreign exchange loss. 

Furthermore, Thai Baht depreciating against the US dollar during 2021 has resulted in SPRC encountering exchange loss (including derivatives) in both 2Q21 and 1Q21. Exchange loss of US$0.4 million in 2Q21 was less than exchange loss in 1Q21 of US$1.5 million due to Baht depreciation to a lesser extent in this quarter. Comparing 2Q21 to 2Q20, there were exchange losses in both quarters of US$0.4 million in 2Q21 and US$2.6 million in 2Q20.

In addition, SPRC has approved the resolution for no interim dividend payment to the shareholders for the first half of 2021 performance since the company carried the unappropriated retained loss amounting US$ 19,988,922 as of 30 June 2021.