Net profit was Bt17.9bn, down 1.3% YoY and 25.5% QoQ, in line with market and INVX estimates. This reflects lower sales volume due to maintenance of several production wells in the Gulf of Thailand and higher unit cost; non-recurring loss was lower QoQ as FX gains offset an asset write-off in Mexico. Recurring profit fell 4.3% YoY and 25.9% QoQ to Bt18.1bn. 9M24 net profit is Bt60.5bn, accounting for 76% of INVX 2024F forecast and we leave our profit of Bt79.4bn unchanged. We rate Outperform given solid earnings and a strong balance sheet. Our DCF-based TP of Bt172 is pegged to LT Brent at US$70/bbl from 2026. Watch geopolitical risks that could disrupt oil supply, which would be upside for 2024F, now pegged to Brent at US$82/bbl vs. YTD average of US$82.67
PTTEP – 3Q24: QoQ drop in profit was in line
Sales volume fell QoQ in 3Q24 on maintenance and lower oil loading. Sales volume fell 6.2% QoQ to 475kBOED, slightly lower than guidance of >480kBOED but still higher than the 5-year average quarterly sales volume of 426kBOED. Behind the drop in sales volume was the planned shutdown of several gas fields in Thailand and fewer oil shipments out of its joint ventures in Algeria and Oman.
ASP steady QoQ despite lower spot oil price. Average selling price was nearly unchanged QoQ at US$47.07/BOE but slipped 3.2% YoY. A rise in gas price (+2.2% QoQ) to US$5.93/mmbtu supported ASP, while price of liquid products (-5.2% QoQ) fell at a slower pace than the 8% QoQ fall in average Dubai oil price due to the lag for adjusting oil price from operating fields in Oman and UAE. This also reflects a higher proportion of liquid product at 28% in 3Q24 vs. 26% in 2Q24.
Unit cost rose to >US$30/BOE on volume effect and higher oil production. PTTEP’s unit cost grew 9.6% YoY and 13% QoQ to US$31.91/BOE, the highest since 4Q19, on lower sales volume, more maintenance expenses and higher weighting of sales from high-cost production at Malaysian assets. This was slightly higher than earlier guidance of US$28-29/BOE. We do not expect to see continued high unit cost in 4Q24 on higher sales from low-cost production wells in Thailand.
4Q24 volume up QoQ but offset by lower ASP. We estimate a 9-11% QoQ rise in PTTEP’s sales volume in 4Q24 to 520-530kBOED from higher oil loading at operating projects in Malaysia and Algeria as well as a full quarter of production from fields in the Gulf of Thailand after maintenance shutdowns in 3Q24. This implies full-year sales volume of 496-497kBOE vs. guidance of 501kBOED and INVX assumption of 490kBOED. We believe there remains some upside to our current forecast.
TP of Bt172 based on DCF (end-2025). We maintain TP (end-2025) at Bt172/share, based on L/T Dubai of US$68/bbl and Brent of US$70/bbl from 2026F vs. five-year average of US$72. We maintain our volume assumption at 3% below guidance to provide a margin of safety. At our TP, it trades at 1.2x 2025F PBV or at 5-year average.
Risk factors: 1) Volatile crude oil price, 2) higher unit cost, 3) asset impairment and 4) regulatory change on GHG emissions. Key ESG risk factors are the environmental impact of its business and adapting to transition to clean energy.