OR’s 2Q21 Earnings Soar 520% from Higher Revenue and EBITDA

PTT Oil and Retail Business Public Company Limited (OR) has announced its 2Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

OR reported a net profit of 3,224 million baht in 2Q21, increased 520% from a net profit of 520 million baht in 2Q20. The increase was due to the hiking of both sales revenue and EBITDA, primary due to the rebound of Thailand’s economy from the COVID-19 pandemic,  here the Thai government imposed more relaxed control measures in 1H21 compared to the first wave in the same period last year that included a nationwide lockdown.

 

Revenue from sales and services rose by THB 32,354 million (+41.8%) due to the sharp increase in average selling prices following an uptrend in global oil prices. The overall sales volume also increased (+2.0%), mainly from the commercial market (+6.5%) in aviation fuel due to COVID-19 control measures regarding air travels back in 2Q20: airlines companies suspended for both domestic and international flights in April 2020.

Meanwhile, gasoline and diesel consumption decreased due to stricter control measures to contain the new wave of COVID-19 outbreak from April 2021 onwards in Bangkok and nearby provinces, compared to 2Q20 decrease in volumes that was only curbed by a shorter lockdown period. For the retail market, sales volume decreased (-1.8%) primarily from diesel due to the same reason mentioned for the commercial market.

 

Gross profit increased by THB 2,293 million (+50.7%), mainly from gasoline and diesel in retail and commercial markets, attributable to higher average gross profit per liter from the higher average selling price. In addition, gross profit of aviation fuel rose, attributable to higher sales volume and average gross profit per liter, compared to 2Q20 where all flights were suspended.

 

EBITDA rose by THB 2,361 million (+>100%) from the increase in gross profit mentioned above and from a decrease in the net operating expenses, attributable to the revision of oil terminal lease agreements with PTT to sublease agreements in some locations instead. Hence, the EBITDA margin increased from 2.4% in 2Q20 to 3.8% in 2Q21.

 

The average Dubai crude oil price was US$66.9 per barrel, increased from 1Q21 at US$ 60.0 per barrel and 2Q20 at US$ 30.6 per barrel. This was due to (1) the recovery of the world economy from economic stimulus measures and vaccination progress (2) OPEC+ decision to cut aggregated crude oil production, with Saudi Arabia decision to voluntarily cut crude output in Feb – Jun 2021 and slowing their reduction in May 2021 (3) the easing of social distancing rule in the US and Europe and (4) a solid economic rebound. Nonetheless, there were negative factors that affected the crude oil price, mainly from the rise of COVID-19 cases with India’s record high in April 2021 and Asia Pacific’s continuous increase since May 2021.