IRPC (IRPC) Q2 2024 earnings summary

Executive summary

• 2Q24 and 1H24 performance was impacted by softened petroleum and stagnant petrochemical markets, with significant volatility in product spreads and margins.

• Net income for 1H24 surged 142% year-over-year to Baht 812 million, reversing a net loss in 1H23, supported by higher net inventory gains and profit sharing from associates.

• 2Q24 net loss was Baht 732 million, reversing from a net profit in 1Q24, but a 67% improvement from 2Q23.

• Awards and sustainability initiatives included multiple recognitions, new ESG-linked financing agreements, and the completion of the Ultra Clean Fuel project.

Financial highlights

• 1H24 EBITDA reached Baht 6,118 million, up 187% year-over-year; net income was Baht 812 million, up 142% year-over-year.

• 2Q24 EBITDA was Baht 1,439 million, down 69% sequentially but up significantly year-over-year; net loss was Baht 732 million.

• Market GIM for 1H24 was USD 7.16/bbl, down 2% year-over-year; accounting GIM was USD 10.06/bbl, up from USD 7.06/bbl in 1H23.

• Net sales for 1H24 were Baht 148,710 million, up 1% year-over-year; 2Q24 net sales were Baht 74,066 million, up 5% year-over-year but down 1% sequentially.

• Net finance cost in 2Q24 rose 23% sequentially and year-over-year to Baht 614 million.

Outlook and guidance

• 2H24 petroleum product spreads are expected to remain under pressure, with diesel and gasoline supported by seasonal demand and geopolitical factors.

• Oil demand in 3Q24 is expected to improve due to seasonal factors, but Asian demand may be pressured by monsoon season.

• Petrochemical spreads are forecast to recover slightly in late 3Q24 and 4Q24, with demand aided by stimulus in China and seasonal manufacturing cycles.

• Oil demand growth in 2024 will be led by China and India, with jet fuel and LPG as main contributors.