4Q24: Profit sinks QoQ but beats slightly
Net profit was Bt9.3bn in 4Q24, falling 72% YoY and 43% QoQ on a Bt38.7bn hit from FX and hedging losses. Operating income jumped 136% YoY and 18% QoQ, driven by the P&R segment, where loss was much lower in 4Q24. Contribution from associates and JV turned up to profit of Bt1.2bn from a loss of Bt8.4bn due to the business termination of PTTAC (under PTTGC). Gas operating profit fell 7% YoY and 17% QoQ due to seasonal impact, which hurt profit at the supply & marketing and transmission units, while GSP profit grew QoQ on higher gas supply from the Gulf of Thailand. 2024 net profit fell 19.6% YoY on weak P&R earnings and losses from associates and JV, as well as from impairment for PTTGC. We expect better earnings in 2025F on profit from the GSP and P&R segments and lower impairment. PTT announced a final DPS of Bt1.3 (XD: Mar 6), bringing its 2024 dividend to Bt2.1 (67% payout ratio), better than expected. Maintain Outperform on attractive upside to our SOTP TP of Bt41.
Profit of gas business weakened QoQ. Gas sales volume declined 5.8% YoY and 6.5% QoQ to 4,008mmcfd (the lowest quarterly sales volume since Dec 2022) on a drop of 11% YoY and QoQ in power sector demand, reflecting seasonal impact. This was offset by higher sales volume to gas separation plants, which raised utilization rate to 84.8% in 4Q24 from 83.7% in 3Q24 in response to the higher gas supply from the Gulf of Thailand. GSP sales volume increased 5.5% YoY but fell 3.9% QoQ to 1.68mt despite higher sales volume of ethane (+12% QoQ) given gas supply from the Gulf of Thailand after maintenance shutdowns in 3Q24. E&P operating profit fell 10% YoY but rose 7.6% QoQ as higher sales volume offset lower ASP. Gas and E&P drove 4Q24 operating profit (88%).
Higher oil marketing profit to compensate for weak P&R profit. Oil segment earnings reversed to profit in 4Q24, driven by higher gross profit/liter of Bt0.83/liter (+63% QoQ) for the mobility segment with a smaller stock loss, though competition remained intense. Oil sales volume rose 1.4% YoY and 9.3% QoQ to a record 7.08bn liters, driven by seasonal high demand in both retail and commercial segments. This helped offset weak earnings at P&R associates, especially the petrochemical segment, which reported net losses of Bt63mn in 4Q24 on weak product spread and impairments, though admittedly much better than the Bt16bn loss in 3Q24.
1Q25F profit to improve slightly QoQ on higher profit from gas. We expect gas sales volume to recover QoQ after low season in 4Q24, fueling the EBITDA for the segment’s gas transmission, supply & marketing and GSP units. E&P profit will slip QoQ due to lower sales volume while oil price will be an upside to segment earnings as Dubai oil price is up 7% QoQ and PTTEP guided that gas price could edge up 1-2% QoQ. Key risk remains the weak market GRM for the P&R segment in 1Q25, falling 54% QoQ to US$2.3/bbl for Singapore GRM.
Key risks: An economic slowdown would erode demand for PTT’s energy and petrochemical products while oil price volatility may cause more stock loss. Other risks are asset impairment, losses from asset divestment, regulatory changes on GHG emissions and the government’s intervention in the retail oil business. Key ESG risk factors are the environmental impact of its business and how it adapts during the transition to clean energy.
