PTT Public Company Limited (PTT) Earnings Call Transcript & Summary

So welcome back to the second segment of today, which is the analyst meeting for Q2 and first half of 2020. [Operator Instructions] I would like to hand the floor to our CEO, Khun Auttapol Rerkpiboon; and our CFO, Khun Pannalin.

Good morning, analysts, investors. Today, I would like to update you the result of PTT's performance during the first half of 2020. I would like, first of all, to start with highlights of activities and the key factors affecting us. And the performance, I would like to leave it to Khun Pannalin, and then I will come back to discuss outlook and sensitivity investments and the broad direction we've arrived at, which I can share with you. Today, may I start with some highlights, key activities completed during the first half of the year. First of all, we have signed a contract with EGAT, a 10 years gas sales agreement, which actually started in July this year and lasting until 2030. Maximum item is 736 million cubic per day to supply EGAT's 5 power plants. And we also opened 2 new EV charging stations, which are commercial operations working with charter companies to deliver services to EVs. It's -- we have an applications and payment apps through digital park and at biotech. So that is the commercial operation of charging stations. But in fact, we have installed charging in 30 of our stations operated by OR. And next is the new bond issue, which we have completed. Highlights being THB 35 billion in Green Bond for institution -- about THB 20 billion for institutional investors, of which there are THB 2 billion of Green Bond to successful reception. We also issued bond USD 700 million, 50 years. So that's the capital raising part. In terms of OpEx savings, which I have already mentioned that the target is THB 6.5 billion. We have achieved the target for first half THB 3 billion. So that's the group consolidated in terms of project's progress. PTT's key projects include the Ratchaburi-Wangnoi pipeline, 96% completed. And the fifth pipeline, 98% completed. These 2 combined will be COD-ed next year. LNG terminal 2, 52% COD is in 2022. In addition, we have done shutdown and turndown of gas separation plant #1, 46 days. That is according to plan. And 50% turndown for 38 days. And gas separation plant #5, 50% turndown for 45 days and 10 days shutdown. And next highlight is the subsidy we delivered during COVID-19 pandemic. For NGV, we offered a discount of THB 3 to public transport services over duration of 4 months, April to July. And that is translated into THB 300 million subsidy below plan. We budgeted THB 400 million. We also fixed the price of NGV between March until 15th of August. For LPG, we subsidized 100 per person per month. And there are about 5,600 users per month, equivalent to 500,000. So 6 months, THB 3 million. In fact, we budgeted THB 10 million for the purpose. For PTT Group, key highlights in the first half include EP signing senior debt financing agreements for Mozambique Area 1, totaling $14.9 billion. That is a big project. EP holds 8.5% share. The first phase of the project has capacity 13 million ton per year. That's a sizable project. And EP also sets up a new joint venture, AI and robotics venture, working with Thai Advance Innovation, which is a subsidiary of Thaicom jointly. They set up ATi Technologies. 50-50 share, THB 20 million registered capital with the mission to develop drone and smart farming technologies. Actually, they have started the work already. You probably saw their works during the royal plowing ceremony, and they will use drone and smart technology to assist in farming. So that's EP's project on the new S-Curve. For PTT Group refining synergy, we have implemented core optimization amongst the plans of 3 groups because due to drastic contraction of jet fuel demand and so we optimize. As a result, production is brought in line with the demand. We have reduced jet fuel production considerably. So for example, Q1, 20% reduced to 11%, IRPC from 4 to 0. Likewise, for GC, 15% jet fuel to 0. And optimization, they swap products amongst each other. So that synergy under volatile demand, and they've implemented hedging of risk. So in conclusion, utilization rates during Q1 compared with Q2 of PTT resulting from 101% to 95%. If we compare first half this year with last year's first half, it's down from 102% to 98%. So overall, the decrease is not as drastic as certain complexes or refineries. Regarding the group's bond issuance, GC issued THB 15 billion bond; Thai Oil, USD 1 billion; and for EP, $500 million. So those are highlights for first half of 2020. Next, I would like to discuss key drivers, which affect our operation starting with Dubai crude price. On average, they -- it decreased from $50.7 per barrel in Q1 to $30.6 in Q2. So I think we are fully aware of it due to the pandemic and price war. What is the OpEx agreement to cut production? For first half, they have agreed to cut at 9.7 between May and June and -- 9.7 million barrel per day. They have achieved that so far between July to December. They agreed at 7.7 million. And June through April next year, they agreed at 5.4 million production cut. We have to monitor closely because it will affect the oil price. So first half of this year and first half of last year, down as well from $65 to $40.6. For fuel oil, surely, it falls in line with crude from $43.4 in Q1 to $28.9 in Q2. For half year, $64.6 for last year to $36.2 per barrel this first half. Gas pooled price from 3 sources: Gulf of Thailand, Myanmar and LNG, overall, 5% down from $7.26 in Q1 to $6.9. In Q2, mainly Myanmar is down 5%. LNG import, down by about 1.5%. For the Gulf, the price remain constant, and it will start coming down from Q3 this year because the [indiscernible] in the calculation. So half-half comparison, a slight increase of 1.3%. Spot down -- LNG spot is down from $4.8 per million BTU to 2.7 in Q2. Let's take a look at olefins, petrochemical. The spread at the HDPE-Naphtha, it is up 22%, in line with Naphtha's decrease in line with crude. HDPE also slightly increased, and therefore, the spread is higher. PP-Naphtha up 9%, in line with Naphtha's price. Half year comparison, olefins price is down quite drastically due to -- in the event of what we already know of aromatic spread. Q-on-Q, PX-Naphtha down 17% due to contracted demand for textile products as well as new capacity coming online from China. So half-on-half, down quite drastically, 47%. Benzene, similarly, Q-on-Q, down 44%, reflecting betting price. Half-on-half, down -- or up actually by 70%. FX, Q-on-Q, baht is up resulting in Q2's gains from U.S. dollars loan, whereas Q1, there is FX loss due to weaker baht. So baht in rate, Q2 is stronger at 31.1. And this affects mark-to-market loans, and Q-on-Q baht average in Q2 at 32.1. It is weaker, 0.6 compared with Q1, which is 31.5. So those are the key drivers. I will -- we will continue with the performance. Well starting with our net income in Q2. Looking from the graph, the Dubai dropped by 40% in Q2 compared to Q1. So it affected our net income in Q2. It has decreased by 29% from about THB 480 billion to about THB 380 billion. And that's because of the lower prices of oil products and also the lower sales volume for oil products as well. Coming down to EBITDA. Reversely, you would see that net income has dropped, but EBITDA is going up. In Q1, we have stock loss, which was quite high. But in Q2, P&R, we have stock gain. So it helped us a lot to increase the EBITDA in Q2. So EBITDA Q-on-Q is up by 76% -- sorry, 67%. For other business, EBITDA is good as well. E&P, PTT and OR EBITDA dropped, both from the prices and lower sales volume. So the net income, it's up quite a lot compared to Q1. It's better by more than 100% because in Q1, the loss is more than 1.5 -- THB 15 billion. But in Q2, EBITDA is better, supporting by other factors. For example, DD&A, which is lower, foreign exchange gain because of baht strengthening. Also, we have lower tax expenses. But at the same time, we also face with higher hedging loss on derivatives and impairment from E&P. That's about USD 47 million. But anyway, NI is up. We have about THB 12 billion profit -- net income in Q2. Half on half because we have lower prices for almost all of the products and also because of COVID-19 pandemic, it affected sales volume quite significantly because we see economic slowdown. So for our net income, for first half of this year, it's lower by 26%, resulting from lower sales volume and prices, except for PTTEP and GPSC because PTTEP, at the end of last year, they acquired Malaysian assets that's Partex and Murphy. And for GPSC, they acquired GLOW last year around mid of March. And for this year, we can recognize a full year, which is already 6 months already. For EBITDA, first half of this year compared to last year, it decreased by 44%, mainly because of stock loss because in Q1, as mentioned before, stock loss is quite high. While last year, it is stock gain by THB 36 billion from P&R. And this year, it is about THB 30 billion. For P&R, GRM also decreased, and the spread of petchem is also decreased. For gas, E&P and OR EBITDA dropped as well while trading GPSC EBITDA is higher. Details will be portrayed later on. Net income, first half of this year, it's dropped by 81% from THB 55 billion to about THB 10 billion. That's because of decreasing EBITDA and also DD&A of PTTEP and GPSC, which is higher because of the acquisitions and the higher sales volume. So that's why DD&A was up and also THB 47 million depreciation and impairment of PTTEP. Now breaking now into each business, starting from E&P or PTTEP. You would see that for the net income, net income in Q2 compared to Q1, it's dropped by 51% while first half, it's dropped by 51% as well. Mainly, it's because of price. Looking at the selling price, average selling price of PTTEP in Q2 decreased by 22% from $44.8 per barrel oil equivalent to about USD 35. And that's because of the lower price of liquid and natural gas. For the first half, also, average selling price decreased by 15% from USD 47 to about USD 40, both for liquid and natural gas price. For the volume for the second quarter, volume decreased by 10%, mainly from lower gas nomination in Bongkot and contract for projects. For the first half, volume is higher by 6% from the acquisition of Malaysia project, while Contract 4 faced the lower sales. Net income in Q2 drops because of lower sales volume and price. And also in second quarter, there are positive factors like tax, lower by USD 173 million, and DD&A dropped by USD 184 million. And we have impairment of 47 million. So net income dropped to 134 billion. For the first half, with higher sales volume, DD&A also up by USD 84 million. Tax is higher also by USD 90 million because of the devaluation of baht half-on-half and the impairment loss, while derivative gains is higher. So net income of PTTEP is down to USD 409 million for the first half of the year. EBITDA breakdown of PTT, the core business is natural gas and trading. Starting from EBITDA of gas, EBITDA of gas in Q2 compared to Q1, it's dropped in all units. Starting from S&M of natural gas, EBITDA dropped by about 30%, and that's because of the average selling price to industrial customers, which is lower related to the price of fuel oil, while the GULF gas is still high. Sales volumes dropped by 8% from 4,600 mmscfd to 4,200 mmscfd. So it's down from all sectors of customers because of economic slowdown and the pandemic effect. Also, there are shutdown of the gas separation plan. It's both for the shutdown and the change of the contracted capacity. TM EBITDA down by 1% because the sales volume is down. EBITDA is on the red because of 2 factors, both the shrink sales volume because of the turnaround and lower running capacity and also of the lower average selling price. Packing price was lower, so that's why the EBITDA of gas separation plant is on the red. For NGV, it's with more loss by 18%. Sales volume is down. But for the selling price, it's also adjusted down because PTT has the policy to help the Thai citizens during the pandemic. So we adjusted our price down, and that would affect the EBITDA of NGV. With this kind of situation, we have to consider the subsidies given to people as well because we would like to make sure that we help out people in need. For other businesses, PTT, LNG, NGD, PTTGL, performance is down by 15% because PTTNGD, they sold out their gas related to FO price. And the price is lower by 33%, and that affects the performance for sure. EBITDA of other businesses was down. While trading, performance is getting better quite substantially by 38% from THB 907 million to be over THB 1 billion in Q2 because their margin was better by 17%, even though the sales volume is down by 8%. Half-on-half, both gas was down by 33%, with the same old reason in that S&M EBITDA dropped because of lower selling price and lower sales volume by 9%, while the cost of gas is lower by 1%. For the pipeline, EBITDA is higher by 5% to be THB 18 billion because some kind of cost was cut down to respond to the pandemic situation. For GSP, EBITDA was down by 86% to be THB 1.3 billion because of lower sales volume and average selling price. For NGV, EBITDA loss was down by 33%, mainly from lower sales volume by 28%, while the average selling price was down by 1%. So our loss was down as well. For others, EBITDA was down by 27% because PTTNGD, their average selling price was down. For trading, EBITDA was improved from THB 900 million something to be THB 2 billion due to derivatives gain. The sales volume was down by 4%. So first half trading was doing quite good. Now I would like to go to Page 12 because other details was already portrayed. Going to the oil business, PTTOR Group. Petroleum prices, like the CEO has just mentioned, all of the petroleum field products was down, both for Q-on-Q and half-on-half. That's down by about 40%, plus or minus, for all products. OR was affected because of the stock loss. Gross margin. In Q2, gross margin of OR was down quite substantially from THB 1.24 per liter to [ THB 77 per liter ] (sic) [ THB 0.77 per liter ] or about 38% down, mainly because of the margin of the jet fuel, which has dropped quite substantially during the COVID situation. There is no travel because of the lockdown period. So that's affected the gross margin quite substantially because this is the main generator of income for OR. In Q2, the sales volume is down by 18% compared to Q1 because of jet, LPG and benzene, which the sales volume was dropped because of the pandemic. For the first half of the year, the margin was down by a little bit, 3% from 1.06 to 1.03. Compared half-on-half, the margin was dropped just a little bit despite the pandemic while the sales volume was dropped down by 8% from 13. That would result the EBITDA of OR Group -- in Q2, OR group has the EBITDA, which was dropped by 22% to only THB 3 billion. That's because of the margin and the lower sales volume. Stock loss in Q1, that's about THB 3.3 billion. In Q2, they have stock gain by THB 480 million. So it helped increase the EBITDA of OR quite substantially. For expenditures concerning the employees, that's lower. EBITDA is lower by only 22%. Looking up to Q-on-Q, it dropped by 25%. Nonoil EBITDA dropped as well because of the lower sales volume because of the pandemic. But when you look at the international businesses, sales to overseas, EBITDA is adjusted up by 44%, mainly from PTT Laos and Cambodia. They have increased sales volume because they expanded the numbers of stations and also the gross margin per unit of Laos is higher, especially from benzene and diesel. They have higher margin, leaving the EBITDA of international unit higher. For the first half of the year, it's down by 30% from 9.5 billion to 6 billion. Gross margin and sales volume would affect stock loss as well. Last year, they had the stock loss about THB 1.8 billion. But for this year, the stock loss is at THB 3.3 billion, and that affects the EBITDA of the oil business. EBITDA decreased overall. Breaking down into each products: oil, down by 30%; non-oil, also lower by 18%, while international units is higher by 7% with the same result -- with the same reasons due to PTT Laos and Cambodia. P&R business, as the CEO mentioned earlier, the price of olefins and aromatics have decreased both on the basis of Q-on-Q and half-on-half. But in Q2, you will see that olefin spread has improved due to less cost of raw materials rather than lower cost of -- lower sales price. And also in Q2, the sales volume of GC is higher because they didn't do any shutdown during Q2, resulting in GC's performance in Q2 improving compared with Q1, whereas utilization rate is up from 89% to 102%. Whereas first half, the price is down, spread is also down. And sales volume down. U-rate is down from 100% to 95%. For aromatics line, the decreased sales price versus the spread show that, in fact, the PX spread in Q2 improved versus Q1 with the decrease of benzene. Utilization which reflects sales from 97% to 98%, meaning that sales volume is up. For first half, the sales price, PX, up 40%; benzene, 19%. But -- the spread of PX is down, but the spread of benzene is higher. Sales volume higher from 83% to 98%. With these drivers, their performance is impacted. GRM -- market GRM in Q2 compared with Q1 is -- well it's actually improved from $0.83 to $1.6 per barrel. But there is an issue of stock loss affecting GRM, therefore, accounting GRM in Q2 remains in deficit of minus 1.56, but that is still better compared with very high stock loss in Q1, therefore, slight deficit of accounting GRM and the pandemic impact results in decrease of utilization rate where they used to run higher than 100%, is down to 95% and the sales volume is down. For the first half, the impact is quite sharp as the impacts dragged on from Q1 as seen in the decrease of 50% of market GRM from 2.44 to 1.22. In first half, accounting GRM from plus 3.4 to minus 4.7 per barrel, resulting in the performance of refineries in red. Utilization rate and sales volumes have been lower from 102% to 98%, resulting in net income of Q2 improving due to stock gain in Q2, offsetting with stock loss in Q1, resulting in better performance in net income. But overall, first half, it's still loss-making due to the stock loss factor resulting in net profit of P&R down from last year, 14 billion profit to 27 billion in loss. So all of these will affect PTT's own performance. Next, coal business. Similarly, following the same trend as other business, the average sales price in Q2 decreased by 12%. Even so, their cash cost is down, but it is less compared with the sales price. And so it affects the performance of the coal business. Let's take a look at first half. Average sales price is down 14%, whereas cash cost is 13% down. The sales volume is down in Q2, down by 16%; half-on-half, down 7%. So all of these reflect on their net profit -- or net income, but the stock decrease on both basis Q-on-Q and H-on-H has to do with the tax. First half, they receive tax from winning the lawsuit and -- but that item is not there second half. So it looks like a big hole there. So net profit is down 74%, mainly due to the tax receipts. So last year, it received a lot, so much higher than first half. And so the figures show that their net income is down by 49% in the first half of this year. GPSC is -- has shown strong performance both on the quarterly and first half basis. Their net incomes have improved, starting from the sales volume. The electricity sale is actually down by 2% because it gets less dispatch from Sriracha plant, and the steam sale to industrial buyers increased in Q2. Regarding the pricing, the average sales price is down by 1%, whereas gas cost, which is the main fuel, is down by 1%. Similarly, as a result, the profit in Q2 for GPSC is up by about 20% compared with Q1. In fact, this is thanks to higher contributions from JVs, resulting in higher net income. For half-on-half, both steam and electricity sales up mainly because the -- because of the recognition of full 6 months of GLOW performance compared with last year's recognition of only 3 months. And the pricing, sale is down 3%, but the gas cost is down by 5%, which is higher, resulting in the net income for first half is 72% higher, attributable to both the volume and the selling price plus the higher decrease of cost price, resulting in GPSC's higher net income despite the depreciation and amortization due to the acquisition of GLOW. So for all of these elements of our counterparts across the group, if you look at the waterfall, the overview Q-on-Q, the performance -- even -- so overall, the performance has improved, but the main impact come from the reduced margin compared to first Q. The margin is down by as high as 14 -- THB 18 billion, mainly due to PTT's gas business and P&R and core business. Whereas trading and GPSC enjoy higher gross margins, as I have explained. Stock loss has improved dramatically as well. As I said, Q2, it has reverted back to stock gains compared with the stock loss of nearly THB 36 billion. And so it is the main driver for the performance improvement in Q2. OpEx. As a result of our internal measures, we have improved OpEx by THB 2.1 billion, mainly due to lower staff costs. D&A decreased mainly due to EP's lower sales volume, and so their depreciation is down accordingly. Others, negative factor at THB 1.6 billion, chiefly due to impairment of EP, about THB 1.48 billion, whereas FX and derivatives are negative, factored slightly at THB 229 million. In Q1, actually, we enjoy FX gain, but it turned out -- they turned out to have derivatives losses. They almost offset each other, leaving the negative factor of THB 229 million. The remainders have to do with interest, taxes, NCIs. That's another negative factor of THB 7.6 billion. But in fact, interest payment is down. Tax payment is down, but NCI is higher because of the deficit in the previous quarter. And so the performance in Q2 has improved by 100% compared to Q1. Now we come to the balance sheet. You see that the consolidated assets down by 1.5% from THB 2.4 trillion to THB 2.449 trillion. If we look at cash in short terms, in particular, for investment is higher at THB 24 billion because PTT has invested its liquidity into short-term investments. Receivables and other current assets are down by about THB 150 billion due to the decrease of sales, and also inventories are down, reflecting the price and demand and et cetera. Other noncurrent assets, up by about THB 50 billion due to the booking of the material rights of use due to the application of the accounting standard, TFRS 16. The PP&E is higher also due to various projects by PTT, including CSC of Thai Oil, of GC. But for EP, PP&E is down. So after depreciation, which dragged down the PP&E and PP&E of PTT is down also due to the itemization we put it in the rights of use and the impact of the depreciation. So overall liabilities, down by about THB 3 billion. And trade receivables and et cetera, down by about THB 160 billion due to less trade receivables in line with the volume of sales and price. And others, down by THB 24 billion. Actually, they come from every single company within the group, PTT, EP, IRPC. These are minor details, but when combined, they result in quite big figure interest-bearing or tax burdens, mainly come from PTTEP. Short-term loans or interest-bearing debt, higher by about THB 100 billion due to the rise in long-term loans, as the CEO mentioned, that the group itself has borrowed more. And the obligations according to lease increase as a result of the application of TFRS 16. Short-term loans are down by about THB 20 billion due to GPSC's repayment of short-term loan and also PTT trading. For shareholders' parts, down by about THB 34 billion, mainly due to dividend payment, THB 41 billion and profits of first half, THB 15 billion, resulting in shareholders' part down. Financial ratio. The net debt-to-EBITDA is higher from 1.14 to 1.84 as a result of higher net debt due to borrowings, whereas EBITDA decreased and so net debt-to-EBITDA is higher to 1.84, but it's still lower than policy. Net debt-to-equity is slightly higher, 0.25 to 0.32 due to higher debt burden and reduced debt to equity. But it's still lower than the policy rate. And therefore, PTT's financial position remains solid. Looking at cash flow statements. First half of 2020, we have cash flows from operations totaling about THB 100 billion according to our performance, as I explained. At the same time, on the investment front, we've invested about THB 130 billion, chiefly in infrastructure projects. For PTT, Thai Oil, EP, GC and the short-term current investments, about THB 63 billion, chiefly from short-term savings. And so there is cashouts. Investment, about THB 2.4 billion. So we pay to acquire businesses as well as investing in joint ventures and subsidiaries. But the main one is from GPSC's acquisition of various businesses. Dividend interest received THB 5.2 billion and others of about THB 10 billion. So that's the bond sales, private fund of EP, so they fall into the others. So these operating cash flows and investment resulting in the minus of free cash flow at THB 31 billion, whereas financing is in the cashout box as well. For details, actually, we paid off the loans by about 60, but we borrow about THB 110 billion, dividend payment of THB 42 billion and other finance costs of THB 13 billion and derivatives payment THB 30 billion and the gains from bond issue of GC subsidiary. So all these, plus the adjustment resulting in first half out of THB 35 billion. But at the beginning, we have -- beginning cash, [ 2 9 2 5 2 5 ]. So at the end, ending cash, we have 355,231. So combined with short-term investments, we have -- we are holding cash of THB 355 billion. Under the circumstances, it is safer to have this level of liquidity in hand. Well moving over to the outlook, the global economic outlook. What I have shown here is the statistics from IMF. In June, they do recalculate it and lower the growth. In April, they estimated of minus 3%. Right now, they adjusted it to minus 4.9%. Thailand, we got minus 7.7%, down from minus 6.9%. So the analysts have shown their position looking at the pandemic and the stimulus that the governments in each country has. To the positive factor, about 75% of the country so far started to reopen their cities after the lockdown, especially in April. We see receding numbers of infectious cases, especially China. Each country would have their economic measures, especially developed countries. They invested like 2 digits percentage to stimulate their economy. Some countries started to expand their lockdown period because of the relapse of the pandemic, like U.S.A., Brazil, India, which is quite big countries. Also, we have the geopolitical conflict and the trade war between U.S. and China. All of these are the negative factors putting pressure on global economy. Into Thailand, IMF forecasted minus 7.7% growth. We collected the estimates from all the agencies, so it is -- varies, but we don't see minus 2 digits yet. And we just hope so that we don't go that far. To the positive factors, we eased our lockdown already, and it is almost 100 days that we don't have the new case of infection in the country. So we just hope to see the signs of recovery. Exports of farm and food products also have strong expansion. So this is also the positive side. Products from our country will be welcomed by other countries, for sure. We started to see COVID-19 relief measures, and that's about 10% of the GDP to help stimulate our economy. On the negative factors. Our tourism industry, we wouldn't see travelers coming in yet. But lately, the government is trying to find stimulus packages in order to accommodate travelers or tourists for some specific sites and attraction. For the shutdown, we would see more effect after that. But we would have to look into any kind of measures to respond to that. And what we see now is the political unrest, which might affect our economy as well. To the petroleum products, the second half of the year, we just hope that the economy and the crude demand would be up. Also, we have to keep an eye on OPEC agreement to cut their production. Until the end of the year, we expect the cut of 7.7 million barrel per day. America, Canada, they might cut about [ 3 barrel ] (sic) [ 3 million barrel ] per day. These are the pressure. And also, we have to look at the pandemic as well. Also, the trade war between U.S. and China. PTT Group does expect that crude oil price, Dubai price would be in the range of USD 40 to USD 45 for the whole year. The spread of more gas or gasoline would be averagely at USD 5 to USD 7. Diesel spread to be around $8 to $10. High sulfur spread, to be around minus USD 4 to minus USD 6 per barrel. Singapore GRM is expected to be around USD 0.5 to USD 1.5 per barrel. Singapore GRM would be adjusted according to the GRM of PTT as well. For the gas spot LNG, we expect it to be better. With the better economy and as we are entering into the winter season, we expect to see higher demand. But if you look at the inventory in China, Japan, Korea, still they keep high inventory. Petrochemical outlook. Olefins, downstream demand still started to recover after the ease of the pandemic. We see higher demand from single-use applications to ensure hygiene and public health safety. But still, we see the new supply from Malaysia and China, which would put the pressure on olefin price. The price is expected to lower from the year before by about 20%. Aromatics, it would be worse than olefins. PX downstream demand expected to be lower because textile and clothing industry demand would be down due to the slow growth. In China, they would have increased capacity at the end of 2022. Benzene demand, it would be slowdown for the whole year, especially in automotive and appliance. So in general, aromatics, for the whole year, it would be lower from 2019 by 25% to 30%. For other outlooks like that, in 2020, average fuel price for the second half of the year, it would be down by 15% to 20% compared to the first half from all sources. It's like time by 16 to 12 months. For the gas in 2020, sales volume would be down by 6% to 11% compared to 2019. Petchem also, we expect it to be down. GSP, the utilitization rate, Q3 is about 87% to 91%. Q4 is about 90% to 94%. GSP plant turnaround, GSP #1 plant shutdown, about 45 days in Q3. GSP #5 turndown, 50% for 43 days in Q4. GSP #6 turndown, about 10% for about 69 days in Q3 and Q4. For maintenance schedule, we have GC, which -- with a turnaround, Thai Oil, major turnaround. For the upcoming projects in 2020, it's still on schedule. ABS expansion of IRPC, COD in Q3 of this year. Power plant in Nava Nakorn of GPSC, it will increase the capacity from 125 megawatts to 185 megawatts. GC COD of the retrofit is in Q4. And PO/Polyol is still on schedule. For the cut of OpEx in the group, we set the target at about THB 21 billion for this year. For PTT Group GRM for the second half, it would be up. Q3 is expected to be USD 0.6 to USD 1 per barrel, and Q4 is USD 2.5 to USD 2.9 per barrel. For the cash position of PTT, we ensure you that we still have a strong cash position. At the end of Q1, you would have about THB 250 billion. And PTT only, we have cash about THB 40 billion. And that's the outlook. Now to the strategic investment or our direction. We have the meeting between the management and the Board. And if you still remember, we have mentioned 4 Rs. The 3 R is -- reimagine. And that is to revise all of the units of the businesses and then we formulate our strategic move for each unit. Right here, we show you 3: reimagine, reinforce and reignite. We just see that the world would be switching more to gas, so we set the target to increase the investment in gas industry, including LNG. We would look into the LNG portfolio through the whole value chain to also expand the business overseas. And we would make our investment global investment. For reinforce of the downstream, we try to enhance more synergy for the group value to create sustainable long-term competitiveness. We strengthen collaboration and trust among flagship companies. We have started this already like the optimization during the pandemic, and we got quite a satisfactory result. We try to expand more about this, and we try to reduce redundant investment because right now, it is the oversupply market. In order to invest, we have to be very careful not to have the redundant investment among our group itself. Otherwise, it can affect our supply and demand. For the new business, we use the reignite. We try to drive strategic enablers to speed up our execution. We focus on new energy, new users of fuel, renewable energy. If we look into new businesses like [Audio Gap] [Statements in English on this transcript were spoken by an interpreter present on the live call.]