06 November 2013

Submission of the Interim FS for 3Q/2013 and MD&A

(Translation) Ref. No. 01- 945/2013 November 6, 2013 Subject: Submission of the Interim Financial Statements for the three-month period and nine-month period ended September 30, 2013 and the Management's Discussion and Analysis (MD&A) of PTT Global Chemical Public Company Limited and its Subsidiaries To: President, The Stock Exchange of Thailand Attachment: 1. A copy of the Interim Financial Statements of PTT Global Chemical Public Company Limited (the "Company") and its Subsidiaries for the three-month period and nine-month period ended September 30, 2013 and reviewed report of certified public accountant, with a copy of English translation 2. Company's and its Subsidiaries performance report (Form F45-3) 3. Management's Discussion and Analysis (MD&A) and operating results of the Company and its Subsidiaries for the three-month period ended September 30, 2013 We are pleased to submit the Interim Financial Statements for the three-month period and nine-month period ended September 30, 2013 of the Company and its Subsidiaries, which were audited by our external auditor, KPMG Phoomchai Audit Ltd., and were reviewed by the Company's Audit Committee (details as per Attachment 1 and 2) and hereby prepared management's discussion and analysis (details as per Attachment 3). In 3Q/2013, PTT Global Chemical Public Company Limited ("the Company") reported net profit of 9,610 MB or 2.13 Baht/share, increased 130% from 2Q/2013 with net profit of 4,172 MB or 0.93 Baht/share, and decreased 25% from 3Q/2012 (restated) with net profit of 12,879 MB or 2.86 Baht/share. Performance Summary (Unit: Million Baht) 3Q/2013 3Q/2012 (Restate) 2Q/2013 YoY % + /(-) QoQ % + /(-) 9M/2013 9M/2012 YoY % + /(-) Sale Revenue 141,394 145,309 111,887 -3% 26% 394,590 418,216 -6% EBITDA 16,388 18,581 11,466 -12% 43% 44,273 41,106 8% EBITDA Margin (%) 12% 13% 10% -1% 1% 11% 10% 14% Net Profit 9,610 12,879 4,172 -25% 130% 25,857 24,239 7% EPS (Baht/share) 2.13 2.86 0.93 -26% 129% 5.73 5.38 7% Adjusted EBITDA* 12,619 15,306 12,888 -18% -2% 42,569 40,609 5% Adjusted EBITDA Margin (%) 9% 11% 12% -2% -3% 11% 10% 1% Note: * Adjusted EBITDA refers to EBITDA excluding impact of inventory value (excludes Inventory and NRV) In 3Q/2013, Dubai crude price averaged at 106 USD/BBL, rose from previous quarter by 5 USD/BBL or 6% due to the anticipation of lower supply with concern on unrest in Middle East and North Africa. This caused prices of most petroleum and petrochemical products to rise from previous quarter. Refinery business had a higher spread of petroleum product over Dubai crude price which resulted in an increase in Market GRM to 3.49 USD/BBL from 2.38 USD/BBL from previous quarter. The CDU utilization rate in 3Q/2013 was 98%. Aromatics Business had gross margin (P2F) of 260 USD/ton, decreased from previous quarter at 325 USD/ton due to lower spreads of paraxylene and benzene over condensate resulted from the ease in supply tightness of paraxylene and benzene. The BTX utilization rate was at 91%. Olefins business had utilization rate of 75%, down from previous quarter due to the lower feed of natural gas from unplanned shutdown of PTT Public Company Limited's ("PTT") GSP#5. Polyethylene utilization rate was at 88% due to unplanned 78-day shutdown of LDPE plant resulting in less excess output of olefins. HDPE price averaged at 1,489 USD/ton for this quarter or increased 3% from previous quarter. In 3Q/2013, the Company had stock gain (Net NRV) up to 3,768 MB from increasing in crude price during the quarter and Thai Baht depreciation. In addition, the Company realized Oil Spill expenses and its provision of 1,059 MB in this quarter. As a result of the market situation and business operations mentioned earlier, in this 3Q/2013, the Company reported EBITDA of 16,388 MB, increased from 2Q/2013 by 43% while the EBITDA margin of this quarter was 12%. Summary of the Company's major events that had significant impact on the financial statements of 3Q/2013, 3Q/2012, and 2Q/2013 are as follows: - In 3Q/2012, the purchase price adjustment (PPA) for the investment of NatureWorks and Vencorex on May 31, 2012 was restated. The valuation of the PPA was completed at the end of 4Q/2012, thus the accounting standard required the Company to realize the adjusted PPA on the investment date, and therefore 3Q/2012 financial statements were restated. - On January 10, 2013, PTT Utility Company Limited ("PTTUT") amalgamated with Independent Power (Thailand) Company Limited ("IPT") and became Global Power Synergy Company Limited ("GPSC") which diluted the Company's shareholding portion from 60% to 30.31%. In this regard, the Company has changed the method of recording transaction from recognition of all revenue & expenses of PTTUT's profit and loss into the Company's consolidated financial statement (Consolidation) to realizing only gain/loss of the investment portion in to the Company's financial statements (Take equity). This method has been applied since 1Q/2013. However, year-on-year comparison is based on different accounting basis. Summary of the Company's major events during 3Q/2013 until the release of financial statement as follows: - On July 10, 2013, the Company' shutdown LDPE plant (capacity 300,000 tons per year) was shutdown to repair the cylinder of the Booster/Primary Compressor with an estimate repair period of 3.5 months. The Company expected the impact of no greater than 2% of the year net profit. However, the LDPE plant has started up since September 26, 2013. The total shutdown period was 2.5 months. - On July 27, 2013, at 6.50 Hrs. a leakage in the flexible hose was found at the Single Point Mooring (SPM) while discharging crude oil from a vessel to the Refinery. The leakage resulted in oil spill of approximately 50,000 liters or equivalent to 316 barrels into the sea. The company has urgently performed oil slick removal from the sea and Prao bay has been completely cleaned afterward. In this regard, the Company has set up measures to take care of environment, community as well as improvement in standard of operations. However, in 3Q/2013, the operation of refinery was not affected by the oil spill. - On August 14, 2013, there was a lightning strike accident on the equipment of PTT's Gas Separation Plant Unit 5 ("GSP#5"). This has resulted in cease of its operation, and being unable to feed raw materials for production to the Company. However, the Company has arranged preliminary mitigation plans by sourcing natural gas from other sources, and allocating natural gas, especially ethane among the Company's olefins plants to maximize the value and to minimize impact to the its performance as well as its customers. Initially, the Company expected the GSP#5 shutdown of 3-5 months with an impact of 400 MB per month. However, since October 21, 2013, GSP#5 has officially resumed its operation at 50% capacity which will result in higher volume of raw material supplied to the Company in 4Q/2013 as well. The actual period of shutdown was 9 weeks. - On August 16, 2013, the Company's Board of Directors has approved a resolution for the payment of interim dividend for the first 6-month period of 2013 from January 1, 2013 to June 30, 2013 to the Company's shareholders at the rate of Baht 1.62 per share, amounting to approximately Baht 7,304 million or 45% of the net profit for the first 6-month period of 2013. - On August 30, 2013, the Company has completed the entire business transfer of Bangkok Polyethylene Public Company Limited ("BPE") and PTT Polyethylene Company Limited ("PTTPE") to the Company and the transactions have been effective under the law, and the Company has completed the dissolution of BPE and PTTPE. - On September 20, 2013, the Company's Board of Directors resolved as recommended by the Nomination and Remuneration Committee to appoint Mr. Bowon Vongsinudom, President, to be Chief Executive Officer and Secretary to the Board of Director and acting President effective from October 1, 2013 onwards. Please be informed accordingly. Sincerely yours, (Bowon Vongsinudom) President and CEO Corporate Finance and Investor Relations Department Tel: 02 265 8400 ext. 8421, 8712, 8713, 8714, 8327 ______________________________________________________________________ This announcement was prepared and disseminated by listed company or issuer through the electronic system which is provided for the purpose of dissemination of the information and related documents of listed company or issuer to the Stock Exchange of Thailand only. The Stock Exchange of Thailand has no responsibility for the correctness and completeness of any statements, figures, reports or opinions contained in this announcement, and has no liability for any losses and damages in any cases. In case you have any inquiries or clarification regarding this announcement, please directly contact listed company or issuer who made this announcement.