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

Welcome back to the second segment of today, which is the announcement of the Q4 performance and year-end 2020. Likewise, you can always send your questions via Facebook Live, WebEx, raise hand. Our staff are monitoring your questions constantly. May I now invite Khun Auttapol Rerkpiboon, CEO of PTT Group; and Khun Pannalin Mahawongtikul, CFO. Please.

Good morning, dear analysts and representatives of financial institutions. We meet again as we share results of 4Q 2020 and year-end 2020. We still meet virtually because it's not normal yet. Hopefully, we will meet face to face shortly. Not to waste time, may I start by sharing with you key activities during Q4. First of all, PTT Board approved PTTGM in which PTT holds 100% to acquire shares of Global Renewable Power, or GRP, which is a subsidiary of GPSC, holding 50% the value of THB 693 million in order to strengthen GRP's focus to work on -- to pursue renewables opportunities outside Thailand. As I mentioned, PTT set the target of having 8-gigawatt renewable in our port by 2013. And another highlight is the establishment of Innobic (Asia) to pursue life sciences business, which is part of our strategy focusing on pharmaceutical business, nutrition, medical devices business. We anticipate that this business shall grow significantly over the period of next 10 years. Next, coal business. We are winding down by dissolving 3 coal subsidiaries, 3 SAR subsidiary. For coal business, PTT's strategy is not to invest in coal business and finding ways to withdraw from coal business. Dividend, you've probably heard already, THB 1 per share. Payout ratio of 76%. So we have already paid THB 0.12, so THB 0.82 -- I apologize, we paid THB 0.18, THB 0.82 remaining to be paid on 30th of April. Next is our debut in the stock market on 11 Feb, Chinese New Year's Day. So it's like doling out rate packets IPO THB 18 opening at THB 26.5, if I'm not mistaken. And that day, the trade volume was huge, 44% of the overall market turnover that day. I understand that it's still in the range of THB 30. Also in terms of credit ratings of PTT Group, S&P continue our ratings of foreign currency rating at BBB+, but it adjusted downwards the standalone of local currency rating from A- to BBB+, resulting in final ratings of our subsidiaries, GEC dropped from BBB+ to BBB. In any case, it stays in the investment-grade range. Awards recognition. We have received plenty, starting from Best Investor Relations Award second consecutive year. And PTT, a part of Thailand's Sustainability Investment listing in 2020. And when we issued bonds, we were awarded by various agencies, the asset Alpha Southeast Asia and Thai BMA. And PTT Group has managed to stay in DJSI. PTT itself has maintained ninth consecutive year. And last year, it's the industry leader in upstream oil and gas. We received 4 outstanding sales enterprise. So these are key activities in Q4. I would like to follow-up with key business drivers impacting the performance in Q4. Dubai Crew average in Q4 compared with Q3, up by 4% from $42.9 to $44.6 per barrel, mainly because OPEC managed the production cut compliance. And between August to December, they agreed at 7.7 million barrels per day. And they reached an agreement that in January, they will decrease to 7 million, so they will cut further. So that's positive impact as well as the vaccination, good news on the vaccine front. 2020 compared with 2019, the whole year, down 33% from 60 something to 42, mainly because of the pandemic and price war in early 2020. If you recall, fuel oil Q-on-Q higher by about 9% from $40.4 to $44.1 per barrel due to increasing demand and also the spike of LNG price towards the end of last year. Now year-on-year fuel oil, high sulfur, down 33% from $58 to $39 per barrel. Natural gas average Q3, Q4, down by average 8% from $5.7 to -- sorry, from $6 to $5.67 MMBtu resulting from the fact that all 3 sources, Gulf of Thailand, Myanmar and spot LNG imports decreased across the board. Year-on-year, 2020, down by about 10% compared with 2019 from $7.2 to $6.5 per million BTU in all sources, Gulf, Myanmar and LNG spot -- may I correct myself, Q3, Q4, LNG is actually higher, not down. Q3, LNG imports, price is higher due to winter. Petrochemical olefin spread improved on the basis of Q3, Q4 as well as year-on-year 2020 and 2019. The quarterly spread, the spread improved by 13% due to increasing demand from medical devices, packaging as well as online e-commerce. Spread of PP compared with naphtha is higher by 29% as a result of supply and shutdown maintenance according to planned and unplanned and increasing demand from the automotive sector, especially China, where manufacturing has resumed. Spread of HDPE-Naphtha higher by 7%. Spread of PP-Naphtha higher by 6%. Aromatics improving in -- so if we compare Q3, Q4, but year-on-year, it is down Q-on-Q. PX spread naphtha, up by 3% due to higher demand of the textile industry and demand of PTA for a number of new factories, particularly in China. Spread of benzene and naphtha by more than 100% due to demand food packaging in China, U.S.A., industry uses, electric appliances, building materials and automotive. But if we compare year-on-year, spread of PX-Naphtha down 18%, Benzene-Naphtha, down by 10%. Regarding FX, as we -- as all of you know, end of Q4 2020 rate, baht was stronger by THB 1.6. And year-on-year, baht was stronger slightly by THB 0.1. So those are key drivers impacting the performance. In terms of the performance itself, I would like to invite Khun Pannalin to share with you. Khun Pannalin, please.

Right now, we are coming back to the performance. The -- first of all, about the financial highlight, you can see that during the past year, PTT, it shows because of the COVID-19. We didn't know at the time how long the COVID-19 would last and what would be its intensity. So we did the prefunding, which means that we borrowed money in order to accommodate ourselves with the changing situation as well as took the opportunity to restructure our finance. So during the past year, we issued debentures in terms of Thai baht and USD. For Thai baht, it's about THB 35 billion. In USD, it's about $700 million. And for $700 million, the turnover is 50%, and the coupon rate was quite attractive, which is about 5%. And it is the longest corporate bond from Asia, ex Japan, since 1997, and we consider that is a successful case. In addition, last year, we also took the opportunity to issue the green bond as a unconventional funding, and it was about THB 2 billion. And it was our attempt to serve the environmental concern. So it means that funding was used to do the conservation activities and this is the first time for the Thai company to do something like this. And we were able to capture low interest rate and lower the cost of our fund because we have longer-term debentures in our port. So it means that we were able to reduce our interest cost from 5.9% to 4.1% at the end of the year. In terms of loan life, from 9.3 to 17.44 at the end of the year, which means that the loan life is longer. In terms of credit rating, the President has already said that the downgrading all happened to our standalone. However, in -- for the main credit rating, our rating remains the same. In terms of performance, I will start at Q4 compared to Q3. You can see that because of the average price of Dubai oil price, which is up by 4%. And this means that our revenues is increasing by 6% Q-on-Q from -- to THB 407,000 million. And these revenues increase is happening across the board. In terms of the product and in terms of volumes, there's only natural gas business whose income is reduced because of the decline of the pool gas and as well as the sales of the gas, which is lower. This is because towards the end of the year last year, the weather was quite cool. That's why the demand was down. In terms of EBITDA, Q-on-Q is increased by 6%, mainly from the petrochemical business. You can see that olefin spread and aromatic spread was higher in response to higher demands in terms of downstream products. The sales volumes are also increasing because in Q4, there was not any shutdown of the factories compared to Q3. At the same time, the COVID-19 situation was improving. However, the refinery businesses, the accounting GRM was increase -- was decreasing. In Q3, it was 40 -- minus $0.42 and later on in Q4, it was increasing by $1.4 as a result of the jet fuel oil spread. However, in Q3, because of the decline of the -- the slight decrease of the stock gain -- from THB 5.3 billion to THB 5.2 billion. So the accounting of GRM is down from $4.3 to $2.6 as a result of the decline of the stock gain and as a result of the hedging loss. Eventually, the olefin business is down. In terms of the gas business, EBITDA increased by 22%, thanks to the positive factors. First of all, the cost of the gas in the Gulf of Thailand is declining. Sales prices is increasing. And that's why the gas business -- the EBITDA of the gas business is increasing. In terms of E&P, EBITDA is declining because of the sale price, which is down by 5%, although sales volume increased by 11% thanks to the projects in Malaysia. However, because of the sales price, which is down, the EBITDA is also down. In terms of the oil business, the -- its EBITDA was down by 12% because of the stock margin. Margin was down from THB 1.2 per liter to THB 1.04 per liter in Q4. Yet, the volume was increasing by 4% because at the end of the year, the government promoted tourism activities before the second wave of COVID-19 returned to Thailand. So at that time, prior to the second wave, people started to travel. As a result, the volumes of the oil business are increasing. In terms of the net income, Q-on-Q shows the decline by 7% and mainly was because of the impairment in Q4. The impairment was increasing, and this accounted for THB 0.7 billion and mainly it was coming from the coal business as well as the impairment of the [indiscernible] reserve. As a result, in the net income of PTT from -- was down from THB 1.4 billion to THB 1.3 billion. In addition, in Q4, while there was an increasing of the impairment in Q3, there was a loss on impairment and loss on derivatives was increasing by THB 6.5 billion, mainly from the trading business. In terms of tax expenses, this increased by almost THB 500 million. FX gains also increased by THB 10 billion. This was because in Q3, the Thai baht was weakening. Yet, in Q4, the Thai baht was stronger by THB 1.6. So we got FX gain in Q4 by THB 8 billion. So altogether, after the loss, in Q3, so eventually, we got the FX gain by the year end. So in terms of year-on-year, as the CEO has already said that because of the decline by 44% of the average Dubai oil price, so it effects PTT's revenue and net income. So our revenue of the entire group was down by 22% to THB 1.6 trillion. This is mainly in the trading business, in the oil and gas business, in the refinery business or almost the entire group. Yet, the power business, its income is increasing, as you can see that the takeover of the growth business is already completed. In terms of the sales revenue, most of the time, the entire group experienced the decline of the sales. Only GPSC and the exploration business was increasing. EBITDA also -- was also down by 22% almost from all business, except the power business. In terms of the E&P, the EBITDA was down by 22%. And although the sales volumes was increasing as a result of the Malaysian projects that it had acquired towards the end of the year, yet because of the decline of the sales price by 18%, so its EBITDA was down by 20%. In terms of refinery business, the EBITDA was also down. Market GRM was down as a result of the margin of the oil price affecting almost all products in this business. In terms of the petrochemical business, the spread -- the petrochemical spread was also down because of the COVID-19. Aromatic spread of benzene and condensate was higher by 40% because of the higher demand towards the end of the year as a result of the demands for [indiscernible] and in the electricity business. However, in terms of the aromatic business, the volumes are higher because in 2020, the shutdown of business for maintenance and renovation was less than 2019. In terms of the gas business, sales business was down. Price was down as a result of the reference price. And the sales volume was down because of the shutdown of the plant as well as the COVID-19, which affects the demand for consumers. The trading business was also down because of the maintenance. The NGR sales price was also down because of the decline of the fuel oil. In the power business, its EBITDA was higher by 20% because of GLOW's contribution. In terms of net income, in 2020, you can see that net income was down by 59%. Aside from the EBITDA that I have already mentioned, there was also a factor of impairment in 2020. We have the impairment accounting for THB 9.5 billion, and this was a result of impairment from the [indiscernible] sources of the exploration and production business, and we also have the impairment from the MARs business accounting for THB 175 million. In 2019, there are negative factors ranging from staff expenses per the new Labor Relations Act by about THB 2.8 billion for PTT's share. And alone 2019, there are THB 2 billion also for the NACAP litigation pipeline, THB 500 million. So these are negative factors for 2019 in terms of depreciation, it's up by THB 6 billion 2020, mainly due to EP and GPSC and their acquisition in Malaysia and acquisition of GLOW. For FX gain, down by about THB 6 billion because end of December 2020, baht was only THB 0.12 stronger. But compared to the previous year, THB 2.2. As a result, FX gain was THB 6 billion less. At the same time, we have gains from derivatives, about THB 2 billion or so, mainly because of PTT trading and PTTEP. So that's a gain throughout the year. Another element is less tax expenses on the back of decreased operations resulting in the overall NI, as I mentioned. Now let's take a look at breakdown by business, starting with upstream. EP, as we discussed earlier, Q-on-Q average selling price is down by 5%, mainly because of the gas price down by 9%. But liquid, in fact, price is up by 2%. Average volume, up 11%. NI down 65%, chiefly attributable to, apart from less selling price, losses of -- due to financial instruments and increasing OpEx, THB 53 million from the more selling volume of Partex and THB 48 million increase in OpEx, mainly professional fees, consultancy fees and losses from the impairment of Yetagun, USD 44 million. Throughout the year, average selling price is down by 18% from liquid, which is 32% less, whereas natural gas price is down by 9%. So selling prices have gone down considerably in terms of volumes slightly higher 1%, resulting from full recognition of Malaysian sale. In any case, the contract for [indiscernible] got less sale volume because of less dispatch. And so sales volume is only up by 1%, net income down by 54% from USD 1.6 billion to USD 720 million. So apart from less income, as I mentioned, the higher depreciation costs and FX losses already mentioned and also the tax benefits, tax expenses as a result of FX gains, all told, NI is down by 54%. For PTT itself, this is our proprietary business, only natural gas and trading. Starting with natural gas, you will see that Q-on-Q, gas business improved quite reasonably. But if you look the whole year, it's the opposite. Starting from S&M, S&M EBITDA improved by 37% as a result of less gas cost by 8% because it's cyclical of the Gulf gas price as well as the Myanmar source and average selling price to industry users improved on the back of rising fuel oil price. Sales volume down by 4%, explained by less sales to power sector on the back of less energy demand and weather NGV down -- sales volume down 2%. That is deemed positive factor, whereas selling volume of separation plants stabilized because shutdown maintenance were equivalent to Q3. TM transmission line, EBITDA down by 7% because gross margin of TM is down in line with selling costs due to right of use, which is up by THB 290 billion and maintenance cost by about THB 13 million, plus less selling volume result all impacting gross margin. And there are a little bit extra items. Due to the gas leakage incident, there are expenses incurring about THB 140 million. GSP EBITDA is up quite significantly, more than 100% from Q3 from THB 582 million to THB 2.9 billion due to 3 factors, less feed cost by 12%, average selling price higher on the back of benchmark petrochem price and a 3% increase in sales volume because of propane and LPG. Due to demands from petrochem plants, NGV business loss is down by 62% due to 3 positive factors, namely the costs -- gas costs down by 8%, sales volume down by 3% and the compensation to public clients, well, subsidy basically down, and therefore, less loss for NGV business. For others, the main ones are LNG and NGV, EBITDA up by 7%. Chiefly because of NGV, EBITDA up because the pricing formula as linked to fuel oil. Fuel oil price is higher, whereas volume started to recover for industry uses. Trading business EBITDA is down by 56% from THB 601 million in Q3 to THB 256 million (sic) [ THB 265 million ] in Q4 because of less gross margin from THB 0.07 to THB 0.06 per liter in Q4 due to mark-to-market loss and increasing condensate loss despite 2% increase in selling volume. So overall, EBITDA is still down by 56% year on year. 2020 compared with 2019, overall EBITDA of PTT is down 21% from THB 71 billion to the tune of THB 58 billion. Breakdown per business, gas EBITDA down 23%; S&M, down 46%, resulting from less sales volume by 8% across all clients groups. And also energy sector consume less gas separation plan, bought less gas due to maintenance shutdowns. So auto, the whole year sales volume is down by 8%. Average industry sales to clients down as well on the back of fuel oil price trend resulting in S&M business. Even though the pool gas cost is down by 10%, that was only slightly helpful. Pipeline business EBITDA up slightly 2% due to 18% less of cost, explained by the unused gas cars, reclassification of right of use. We changed the category. And so selling costs on this part is down because it's shifted as amortization, so lower than EBITDA. And another positive factor is the SG&A, we managed to squeeze due to our internal restructuring, resulting in higher EBITDA. Gas separation business EBITDA was down significantly, 70% the entire year due to depressing sales price on the back of global oil price across all product categories and sales volume down by 13% because of the pandemic driving down use rate. And so they have to adjust the production accordingly. But in terms of feed cost, it's 1% down. NGV business, EBITDA, well, the loss is down by 56% due to 26% less sales, pool gas down 10%. In any case, average sale price is down 2% on the back of less gas price. For others, the main drivers are PTT NGV, down by 14%. The NGD EBITDA is less by THB 1.4 billion because average selling price is down according to the formula. Trading business EBITDA is up 42% from -- as we discussed earlier, trading has managed to capture arbitrage opportunity. And condensate discount is down. Also SG&A, they managed to reduce. And all this contribute to improved EBITDA despite 9% less sales. So that's the overview of PTT EBITDA breakdown by business. May I skip to oil business, which has spun-off from PTT and listed in the market, OR. On Slide 13, you will see that Q-on-Q, volume increased 4%, most visibly in diesel and jet fuel. Q4, traveling started to pick up, boosting jet fuel sale. Non-oil revenues increase as well due to increased sales of Amazon Cafe. Now that it's listed in the market, we have more and more owners. Hopefully, that will boost the sales, both in terms of the oil and Cafe Amazon cups. Q4, the margins, when combined with stock gain loss, is less by 14%. So this is typical. When oil price adjusted quickly, we would -- the OR would -- there is a timeline. They have to consider the timing as well. So when oil prices went up very quickly, their margins would be shaved off, and as a result, margin is 14% less. Q-on-Q, EBITDA down 12% due to depressed margin despite increased stock gain. For international trade, inter and others, EBITDA is down 10%, in line with less sales volume, most visibly in the Philippines because Q3, they won the bid for diesel in the Philippines. But Q4, no such item. And the income from benzene diesel is also down, impacting -- we didn't show here. But now they're listed -- the bottom line, Q4 down also as a result of EBITDA and a higher depre. When we look at the whole year, the sales volume of OR is down 12% due to the pandemic. Especially jet and LPG, volume was down, especially in the transport and household sectors. Even so diesel and benzene sales volumes increased because people are scared of public transport. They use private vehicles, boosting the sales of diesel and benzene. Margins the whole year, improved by 9% from THB 0.89 to THB 0.97 per liter, including stocking because in 2019, they suffer a stock loss, but by 2020, a slight gain of THB 187 million. Even though marketing margin, minor stock gain loss, so decreased slightly. EBITDA improved by 4% for all businesses. Oil business, EBITDA plus 1%, non-oil EBITDA, plus 5% from the expansion of Amazon Cafe outlets and number of cups increased by 13 million, resulting in higher EBITDA. On this part, inter and other up 34%. Even though revenue and gross income are less, they manage cost cutting a lot, resulting in improved EBITDA. SG&A of OR down by about THB 1.8 billion as a result of less PR marketing and consultant fees. Looking at net income, all year, down -- from THB 19 billion of 2019 to about THB 8 billion in 2020. In part, apart from what we discussed, there are depre and amor that increase as a result of expansion of outlets. And so depreciation costs rose too. So that's OR's performance. So for the petroleum and refinery business, let's see Q4 compared to Q3, positive factors coming from the increasing price of products as a result of increasing demands in China. The product's price improved as a result of the increasing demand. Sales volumes, however, went down a little bit from 726 kton in Q3 to 723 kton in Q3. For aromatic spread, it was also better. The utilization rate was also better because the shutdown was about 19 days in Q3. Regarding QX demand was increasing in the downstream products as a result of the return for operation of PPE plants in China. For benzene, as a result of the COVID-19, consumers were increasingly conscious when using products. So they were concerned in terms of packaging materials. So there were demands for solutions. So that's why the benzene spread was better. In terms of the refinery business, the overall picture, their utilization rate increased from 93% in Q3 to 95% in Q4, partly because of the increasing demand. However, in terms of GRM, market GRM, it's also better. In Q3, it was minus by $0.42. However, Q4 is positive, plus $1.2 cents. In terms of accounting GRM, it was down from USD 4 to USD 2.26 in Q4. And this also affected the refineries business performance. As a result, the net income, the overall net income in Q4 was significantly increased from -- to THB 15 billion in Q4. And another factor is a result of FX gain in Q4 because of the depreciation of baht as compared to Q4 when the Thai baht was stronger. However, there are a few negative factors. In Q4, the net gain -- the net stock gain was slightly down. For the year-on-year performance. Starting from olefin, the performance was down as a result of 2 factors because of the decline of the product spread because -- as a result of the decline of the sales volume and the demands. Aside from the COVID-19, which prompted demands down, there was also the shutting down of the operation plant for maintenance purpose. In terms of aromatic, the year-on-year performance was also down mainly because of the PX spread, which is down as a result of the decline of demand. However, the benzene spread was better because of the increasing demands, as I said before, because there were increasing demands for electricity devices as a result of work-from-home measures. As a result, demands for benzene was higher. The year-on-year sales volumes for 2020 was also higher compared to the year before. For the refinery business, the utilization rate was slightly down from 97% to 96%. However, if we look at GRM, the fall was quite dramatic. GRM in 2019, it was $2.67; and in 2020, it was $0.78. And in terms of accounting GRM, it was down from $3.01 to $0.75. And as a result, the net profit of the P&R business was significantly down from THB 17 billion to the loss of THB 9 billion, and this was mainly from the decline of the GRM as well as the effect to the entire petroleum business. Regarding the coal business, it has become a very small business under our group right now. However, as the CEO has already said, we are in the process of divesting from our business. So while we were -- we are still in the business, we continue to manage its performance. So you start at the sales volume. Q4, Q-on-Q, sales volume increased by 51% from 1.1 billion kton to 1.6 billion kton as a result of the winter, since the winter was quite severe in China last year. Sales price was slightly increased by 2% from -- as a result of the rising price of New Castle Coal. This was because we had already done the long-term contract agreement. The cash cost also better in terms of performance because it was down. However, overall speaking, the net income was dramatically down because of the impairment totaling USD 206 million. As a result, Q4 performance for the coal business was quite down. Year-on-year, sales volume was down by 18% from 7.8 kton to 6.3 kton. This was our intention to adjust production and sales plan because we look forward and see the decline of the coal price. And sales price was also down by 14% cash cost. So we also -- we will -- we were able to push it down by 20%. As a result, the net income was affected because of our impairment. So the net income was down from profit of $58.5 million to a loss of nearly USD 200 million, mainly as a result of the impairment. And although the coal business won the case, the litigation totaling THB 7.7 million. Yet, the situation was not better. Regarding the final business, which is the power business, GPSC. You can see that in Q4, the net income was also down. And actually, sales volumes was up by 9% in -- for IPP customers, sales volumes was up. And the same situation applies to SPP, where they experienced higher sales, thanks to demand from [ ECA ] and industrial clients. Cost of sales was also down as a result of the decline of the natural gas. However, sales price, average sales price of SPP was slightly down as well as the adjustment of the FTE. Net income of the business was down 43% from THB 2.6 billion to THB 1.4 billion in Q4. Aside from sales volumes, sales price and the cost of sales, there was also the profit sharing, which was down by 51% and mainly from the hydropower plant in Xayaburi. And this was down because in Q3, that was the raining season. So the plant can generate the highest power. And also income revenue from other sources was also down, and this affected its net income. In addition, there were expenses of -- maintenance expenses of the power plant, and that's why it affected the -- its profit. In terms of performance, the year-on-year performance the net income of GPSC was higher, thanks to positive factors. Sales income increased by 10%. Cost of sales was down by 10%, thanks to the decline of the gas price. And the net income increased by 85% as a result of the recognition of the growth business contribution. The financial cost was also down because last year, GPSC issued the equity to repay the short-term loan. Therefore, the interest expense was down, and they got higher income from Ratchaburi. And after the acquisition of GLOW, there was the impairment and depreciation cost of around THB 1 billion, and this affects GPSC's financial operation. Let's take a look at the waterfalls, divided into big categories. Q4 compared with Q3, looking at the bottom line, net income decreased by 7% from THB 14 billion to THB 13 billion. But if we look at the operating net income, excluding extra items and stock gain laws, actually, it's improving by 33%. How can we explain this? In Q4, margins improved because of P&R gas trading [indiscernible]. The less margins had to do with oil, EP, GPSC. Stock gains increased also. From Q3, stock gains of THB 6 billion. By Q4, nearly THB 8 billion. So that's a positive factor. But in Q4, OpEx increased because of transport fees, PR, consultancy fees and also DD&A increased THB 233 million. Regarding other income improved THB 435 million, mainly interest income. Q4 impairments, I already explained. So that's a negative factor dragging down from coal and [indiscernible]. FX and derivatives improved THB 3.5 billion because in Q3, we were THB 748 million positive. By Q4, THB 4.2 billion. So that's a positive factor. The last column, that's negative factor because of in CI higher, 1.6 -- THB 1.1 billion plus tax expense higher [ 490 ] negative factor. And so Q4 performance is down by about THB 1 billion year-on-year. So we describe it as softened performance. The major impact is on the margin because our margin decreased across all business, except GPSC. Another impacting element is stock loss. In 2020, stock loss is as high as THB 19 billion. So that's a negative factor. Plus the pandemic -- or in the event of the pandemic, we cut down on expenses, resulting in THB 15 billion cut in OpEx. Depreciation and amortization, higher, EP and GPSC. Interest income also less as we start spending money, we no longer put the same amount of money in the bank. So less interest income. Impairment higher. FX derivatives gains decreased to about THB 3 billion. And finally, interest and CIT expense is positive because CIT decreased on the back of less operation so the whole year, the net income is at THB 37 billion. Let's take a look at the consolidated balance sheets. The overview, it is slightly higher from THB 2.48 trillion up to THB 2.54 trillion, breaking down by assets, cash and investment down because -- I apologize, higher -- cash and short-term investment higher because PTT Group, as we said, we have implemented prefunding for investment requirements, resulting in higher cash holding for short-term investments. But in terms of account receivables and other current assets, down according to oil price and inventory. And other noncurrent assets, higher because right of use, which we booked according to TFRS 16. So that's the main attribute. PP&E, slightly down. PTT had construction projects. And there are depre impairment. And so PP&E of PTT Group was slightly down. For liabilities, the AP and other liabilities are down, less AR, less AP on the back of oil price decrease. And interest-bearing debt, higher across the group as we borrowed last year for about THB 210 billion, but we paid back THB 120 billion. And we booked the risk and liability according to new regulations, resulting in higher interest-bearing debt. Equity, slightly down due to the booking of net income. Last year, we paid dividend of THB 36 billion. NCI, about THB 18 billion. And therefore, total equity was slightly down year-on-year. Cash flows statement. The whole year, PTT Group generated cash flow from operation to the tune of THB 218 billion. And investment, the whole group invested nearly THB 190 billion, chiefly CapEx for various projects, PTT's own [indiscernible] and EP current investment. When we borrowed, we invested short term, about THB 53 billion; and investing in subsidiaries' affiliates, about THB 3 billion; and issuing of bonds, about THB 10 billion; dividend interest received, about THB 8 billion. And therefore, free cash flow, the whole year, is at about THB 30 billion. Financing activities. This is -- we are in the receiving phase. So we borrow, we paid back. We paid dividend. We paid finance costs, interest. So net cash for the whole year, cash in THB 39 billion. Beginning cash this year, THB 292 billion. And so ending cash, about THB 332 billion, plus short-term current investment. Ending cash, including short-term investments, THB 416 billion.

We have a couple of topics to go through. I will be brief to save time for Q&A section. Starting with CapEx. PTTs 5 [indiscernible] committed CapEx totaled THB 103,267 million, equivalent to about USD 3.3 billion, divided into 43% invested in gas business, mainly number 7 gas separation plant to replace unit 1. The capacity is 460 million per day COD in the next 2 years. And gas pipeline, 13%, the -- on line 5 -- number 5, to reinforce national energy security because it connects the West and the East together, it is due for completion in 2 years' time. And we saw 21% LNG receiving terminal, #2 in nonfab capacity, 7.5 million ton per year COD in 2022. So altogether, we will have the total capacity of 19 million tons per year, 26% in downstream. The Map Ta Phut phase -- Map Ta Phut seaport phase 3 through PTT tank and new businesses through in Innobic (Asia), plus 10% in technology and engineering, venture capital, life science, Wang Chan Valley, EECi, industry estates. But apart from these, PTT is making provision of what we call provisional CapEx over the next 5 years to the tune of THB 332 billion to increase the ability to adjust our port for projects. We are eyeing on ranging from Southern LNG terminal pipeline. So these are under negotiation, along with adjusting the PDP plan of the Ministry of Energy. We are working together or -- and also looking at the LNG value chain, gas to power project plus new businesses. As I said, life sciences, new energy, electricity, value chain, battery storage, renewables for which we've set the target of 8 gigawatt within 2030. And so that's CapEx. I'd like to share with you the group -- the whole group, 5 years, it's USD 27 billion, the committed CapEx. So 51%, the large chunk will be EP onshore/offshore exploration, Algeria, Southwest Vietnam, Mozambique Area 1. And downstream, [indiscernible] 31, CFP, Clean Fuel Project, and for GC efficiency improvement for IRPC, ultraclean fuel project, OR for oil and retail expansion domestically. And internationally, the power business, about 6%, mainly SPP replacement, ERU, working with top and pursuing renewables opportunity. For PTT Group, we also provision the CapEx over the next 5 years of THB 800 billion. Outlook. Economically speaking, IMF's latest projection of global economy, 2021, a growth of 5.5%; for Thailand, 2.2%. Main attributes, we all know about the easing of the pandemic. For Thai economic outlook of various institutions for 2020, as we all know, contraction of 6%. 2021, the economy is projected to expand by 2% to 4%, supportive factors include trade and export. The vaccine rollout despite the delay, still it will help to boost confidence and economic recovery. The stimulus and all the populous measures, these will help to revise the economy. Again, the pressure factors, COVID is with us. It doesn't go away. Petroleum and gas outlook, petroleum products are projected to be higher across our product categories, Dubai crude $55 to $60, the range of dollars per barrel. We have to keep an eye on OPEC's production cuts, whether they remain tight as they have been so far. And the pandemic, as we all know, vaccine rollout will help to stimulate the economy. And negative factors would be uncertainties. Many countries are experiencing new waves and new variants of the virus. Gasoline. We look at $62 to $67 per barrel range. Gas oil likewise, $62 to $67. High-sulfur fuel oil, a range of $51 to $56. Low sulfur at $67 to $72. Singapore GRM at $1.5 to $2.5 per barrel. Actually, GRM of PTT is higher than Singapore GRM. LNG, Asian spot LNG, range of $6 to $8 per million BTU. And Henry Hub, $2.5 to $3.5 per million BTU. Petrochem, olefins, we anticipate that demand shall recover. And the price, HDPE, up by about 11% in the range of $950 to $1,000. And PP, up by about 17% in the range of $1,100 ] to $1,150. Aromatics market will be more balanced. Forecast pricing, benzene up by 40% in the range of $650 to $700. PX, up 26% in the range of $700 to $750. Naphtha demand will be supported by petrochem starting to activate. Price is anticipated to increase by 38% in the range of $500 to $550 per ton. So that's petrochem outlook. Let's take a look at guidance. For PTT's core businesses, gas business, lower port gas costs by 5% to 7%. Anticipating volume growth, 3.4% over the next 5 years. Sales volume, higher according to capacity of gas separation plant. So it could be -- [indiscernible] can be up to 92% compared with 87% of 2019. E&P, sales volume is expected to be 12% higher. Unit costs will be competitive. We will bring it down by 5% from $30.5 to the range of $28 to $29 per barrel due to its new acquisition in Oman, whose cost is relatively low with that in the port. It will drive down the unit cost. Oil business in -- well, domestically, 5 years down the road, the addition of new petrol stations, 108 stations per year outside Thailand, about 64 per year outside Thailand. By 2025, we anticipate 650 more nonoil. Cafe Amazon brand is projected to grow by about 400 outlets per year. So by 2025, there will be about 5,000 outlets in the portfolio of petrochem and refinery. [ Eure ], I already said. GRM $1.5 to $2.5 per barrel. Group utilization rate will be 98%. Petchem spread will improve. And power business. Consumption in 2021 is projected to be 2% higher versus 2020. Upcoming projects to be COD, ratably run oil gas pipeline. COD, Q2 this year, the number 5, the fifth pipeline divided into 3 phase. Phase 1, latter half of this year. And phase 2, also phase 3, we are procuring contractors to COD in 2022. For other subsidiaries, GEC, for example, Map Ta Phut retrofit project, COD first Q this year. Rayong waste to energy, focusing on plastic recycling due Q4 this year. GPSC, the high-quality circular plastic bracing plant, Q2. I would like to discuss ESG strategy, PTT's sustainability strategy. Our performance in sustainability, we adopt all the international norms as core principles in our operations. DJSI, ESG, SDGs of the UN or even the sufficiency economy of the late King Rama IX, we adopt as our guiding principles. We also communicate with our workforce on sustainability DNA. We communicate in human language on good governance and performance excellence. So these are the core principles of how PTT conducts our business. And some examples on the ESG from environment. We set up the greenhouse gas emission target. We actually outperformed our target. From the goal of 40, we've achieved 31. And we reviewed and revised our long-term target, the GHG cuts. So we also use internal carbon pricing. Within our group, the rate is $20. For social, we focus on wellbeings for the community, for citizens. For example, during the pandemic, PTT has collaborated with multiple sectors to assist, ranging from securing medical equipment, supporting hospitals. For major hospitals, we worked with about 200 and at the subdistrict level, 4,000. And we support community-based energy projects, by all manners, by all gas at household level, resulting in 800 beneficiary households. For the solar cell project, we support about 500 households for the solar cell system. And we continue to work on forestation. Today, we have achieved 1.1 million rais of forestation. We also set up learning centers, 3 forestation learning centers. We support social enterprises, Cafe Amazon for chance. We recruit and train marginalized people as baristas. To date, we have 10 such branches and sourcing coffee beans from communities. So these are livelihood and income generation in support of THB 10,000 per household per year. Governance for production, we drive optimization in the form of predictive maintenance, the design for LNG regasification storage, so that we can service more clients outside of the range of gas pipelines. We have been assessed also by the integrity and transparency assessment with a score of 91% level, PTT and PTT Group. We have always been part of the JSI listing, for PTT itself, ninth consecutive year. And this year, we are the industry leader in the oil and gas upstream and integrated sector. This is to reassure you investors that -- in the way we conduct our business, PTT conforms strictly with stakeholder engagement to ensure our sustainability. I end the presentation. [Statements in English on this transcript were spoken by an interpreter present on the live call.]