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Investor Presentation
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Hizmete Özel / ConfidentialHizmete Özel / Confidential
Investor Presentation August 2019
Investor Presentation
www.tupras.com.tr
Hizmete Özel / ConfidentialHizmete Özel / Confidential
Disclaimer
This presentation contains forward-looking statements that reflect the Company management’s
current views with respect to certain future events. Although it is believed that the expectations
reflected in these statements are reasonable, they may be affected by a variety of variables and
changes in underlying assumptions that could cause actual results to differ materially.
Neither Tüpraş nor any of its directors, managers or employees nor any other person shall have
any liability whatsoever for any loss arising from use of this presentation.
2
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Content
3CONTENT
• Refining Market Slides
• Turkish Market Slides
• Company Overview Slides
• Operations Slides
• Key Financials Slides
• Outlook Slides
• Appendix Slides
4-10
11-14
15-19
20-24
25-39
40-45
46-51
REFINING
MARKET
Investor Presentation
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54.5
55.2
0
10
20
30
40
50
60
70
80
90
100Brent
Brent Crude Oil Prices ($/bbl)
CONS
• Increase in shale production in US
• Inventory Levels
• Impact of trade disputes
• Weak PMI in Europe and China
PROS
• OPEC+ supply cut
• Political instabilities in Middle East, Africa
and Latin America
• Impact of sanctions
REFINING INDUSTRY
Source : Platts
As of August 7th.
5
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Refinery Capacity Change (mb/d)
6
2.7
0.5
1.9 2.0
1.5
0.5
2019 2020 2021 2022 2023 2024
Asia & Middle East Other
Source:, Reuters, International Energy Agency, Tüpraş, sector reports and news.
2019-2024 Net Capacity Additions
REFINING INDUSTRY
2.1
1.0
1.7
0.5
1.3
-1.0
0.2
-1.4
China
India
Middle East
Other Asia
Other
Japan
N. America
Europe
2012-2018 Net Capacity Additions by Region
1.2
1.1
0.6
1.1
0.8
-0.1
0.9 0.91.0
0.9
0.6
0.4
2019 2020 2021 2022 2023 2024
RefineryThroughput
Refinery Products Demand
2019-2024 Additional Refinery Throughput vs. Demand
Expectations until 2024:
• ~78% of net capacity additions to come from Asia & Middle East
• Global utilization rate to decline from 82% (2018) to 79% (2024)
• Net capacity and demand in Europe to remain roughly unchanged
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Middle Distillate Cracks ($/bbl)
7
7.2
10.0
10.4
11.5
12.1 12.212.6
13.6
14.3
13.7
13.6
15.9 14.1
15.5
19.5
15.014.9
16.2
15.0
12.2
12.911.4
14.1
15.9*
0
5
10
15
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2016 2017 2018 2019
6.6
9.19.5
11.411.9
14.413.7
14.413.9
13.2
13.3
14.4
12.5
14.3
18.1
15.214.4
13.813.2
10.310.9
11.2
14.8
16.1*
0
5
10
15
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Diesel Jet Fuel
REFINING INDUSTRY
Source : Platts
*As of August 7th
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18.6
11.913.5
9.7
10.210.6
12.012.1
13.0 13.1
13.4
14.4
9.6
5.55.0
3.5
1.7
2.9
9.0
12.1
10.0
9.4
14.7
13.4*
0
5
10
15
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2016 2017 2018 2019
Gasoline and High Sulphur Fuel Oil Cracks ($/bbl)
8
-12.5
-10.2
-8.7
-12.2
-13.2
-11.9
-12.7
-15.2
-13.0
-9.1
-8.3
-8.5
-13.2
-10.9
-3.7
-6.8
-7.0
-5.0-5.5
-8.6
-11.3
-9.8
-6.9
-9.1*
-20
-15
-10
-5
0
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Gasoline High Sulphur Fuel Oil
REFINING INDUSTRY
Source : Platts
*As of August 7th
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Quarterly Crack Margin Comparison in 2015 – 2019 ($/bbl)
9
Compared to Q2 2018, Mid-distillate (Diesel: -12%, Jet -22%) and Gasoline (-17%) performed weaker in Q2 while HSFO
(+20%) cracks were stronger.
12.3
13.914.6
16.815.4
12.2
Q1 Q2 Q3 Q4
Diesel
2019 2019-2015 Min - Max2019
Slow down in economic activities
High product flows from Asia & US to Europe
10.9
12.7 12.6
4.74.5
10.5
Q1 Q2 Q3 Q4
GasolineLighter shale gas processing leading to increase in gasoline yields globally
Lower naphtha demand due to decreased petrochemical driven consumption
13.3
13.8 13.4
15.9
13.8
10.8
Q1 Q2 Q3 Q4
Jet
Lower Asian air traffic
Imports from Asia to Europe kept markets well supplied
Lower supply due to decreased heavy crude availability
Higher HSFO demand in power generation replacing crude oil
-12.6 -12.4
-10.0
-7.2
-5.8
-9.9
Q1 Q2 Q3 Q4
High Sulphur Fuel Oil
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Crude Price Differentials to Brent ($/bbl)
10
Heavy crude differentials continued narrowing in Q2 with lower availability mainly due to OPEC+ cuts, Iran sanctions and limitations
on Venezuelan supply. Ural and CPC differentials both widened in June due to ample oil supplies in the European Market.
*Simple average of listed differentials
-12
-10
-8
-6
-4
-2
0
2
Q1
20
15
Q2
20
15
Q3
20
15
Q4
20
15
Q1
20
16
Q2
20
16
Q3
20
16
Q4
20
16
Q1
20
17
Q2
20
17
Q3
20
17
Q4
20
17
Q1
20
18
Q2
20
18
Q3
20
18
Q4
20
18
Q1
20
19
Q2
20
19
Arab Heavy Basrah Heavy CPC Kirkuk Kuwait Libya Ural Average*
OPEC Cut Decision
OPEC Cut Decision
Iran Sanctions
TURKISH
MARKET
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4.99
4.52
4.40
4.58
2018
2017
2016
2015
Turkish Consumption 2015-2018 (Million tons)
12
Diesel
-3.9%
Jet Fuel
0.39
0.49
0.58
0.60
0 0 0 0 1 1
2018
2017
2016
2015
Fuel Oil*Gasoline
+6.5% -3.5%
23.58
24.17
22.31
20.56
0 4 7 11 14 18 21 25
2018
2017
2016
2015+8.5%
+8.3% +2.7%
+3.1%
-20.1%
REFINING INDUSTRY
2.34
2.30
2.23
2.10
2018
2017
2016
2015
*Bunker excluded.
-2.4% +10.4%
+1.8%
-15.7%
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0.91
0.90
0 1 1 2
2019 5M
2018 5M
1.86
1.80
0 1 1 2 2 3 3
2019 5M
2018 5M
0.21
0.19
0 0 0 1 1 1
2019 5M
2018 5M
Turkish Market, 5M 2019 (Million tons)
13
Diesel contracted in the first 5M of 2019.
* Transit flight consumption included
** Bunker excluded
9.28
10.03
0 2 4 6 8 10 12
2019 5M
2018 5M
Diesel
+3.0%
Jet Fuel*
Fuel Oil**Gasoline
-7.4%
+1.1% +11.3%
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Turkey’s Import / Export Balance (Net) (Million Tons)
14
-3.1
2.4
-12.0
1.0
0.0
-3.2
2.4
-13.6
1.4
-0.4
-16
-12
-8
-4
0
4
LPG Gasoline Diesel Fuel Oil Jet
2013 2014 2015 2016 2017 2018
Import
Export
REFINING INDUSTRY
COMPANY
OVERVIEW
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16%
84%
Tüpraş Shareholder Structure
16
Energy Investments Inc. (SPV)
Free Float
*Distribution of Domestic/
Foreign Ownership of Tüpraş
Shares
*As of December 31st, 2018.
Foreign
Ownership
Domestic
Ownership
COMPANY OVERVIEW
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Tüpraş Refining Assets & Distribution Network
17
Turkey Storage
Capacity
Tüpraş : 50%
Opet : 7%
Other Companies : 43%
İzmit
• 11.3 MT Capacity
• NC: 14.5
• Storage Capacity: 2.99 mn m3
İzmir
• 11.9 MT Capacity
• NC: 7.66
• Storage Capacity:2.51 mn m3
• Base oil 400 k tons
Kırıkkale
• 5.4 MT Capacity
• NC: 6.32
• Storage Capacity: 1.27 mn m3
Batman
• 1.4 MT Capacity
• NC: 1.83
• Storage Capacity:0.27 mn m3
Total Capacity : 30.0 mn ton
Nelson Complexity : 9.5
Tüpraş Storage Cap. : 7.0 mn m3
OPET Storage Cap. : 1.0 mn m3
COMPANY OVERVIEW
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Nelson Complexity of Refining Companies
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Tüpraş Subsidiaries
3 Crude Oil Tanker: 480,859 DWT
1 Crude Oil - Product Tanker: 51,532 DWT
9 Product Tanker: 155,535 DWT“
1,635 stations as of 30 June 2019
As of May 2019 Market share: 18.6% in white products; 28.5% in black
products
OPET, Distribution, Tüpraş Share: 40%
Körfez Ulaştırma, Railway Transport, Tüpraş Share: 100%
~7% share in Turkish rail freight market
~780 kton of product and semi-product carried in H1 2019.
Operates with 491 cistern wagons and 9 diesel locomotives.
DİTAŞ, Marine Transport, Tüpraş Share: 79.98%
Tüpraş Trading UK, Trading, Tüpraş Share: 100%*
* Tüpraş Trading UK is a direct branch of Tüpraş.19
Trading Office in London will be an important step into wider integration with the
global energy landscape by allowing to:o Closely monitor international market opportunities
o Support import and export operations
o Create additional value from supply chain and sales activities
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Crude Suppliers of Tüpraş
21
6 610
2 2 33 3 1 0
12 13 1310 10 10
2
1715
1114 14
7
14
65 6763
7176
7981
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017 2018
Crude oil imports by region (%)
Africa America Europe CIS Middle East
In 2018, Tüpraş purchased 20 different types of crude oil from 12 countries, with gravities ranging between
19-47 API.
OPERATIONS
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Q2 Product Yields
22
2018 2019
White Products 78.0%
Production 6.1 mn tons
API 30.98
White Products 77.4%
Production 6.9 mn tons
API 32.39
LPG4%
Gasoline20%
Naphtha1%
Jet20%
Gasoil32%
Other3%
Kok3%
Fuel Oil3%
Asphalt14%
Light Distil.23.7%
Mid. Distil
.52.2
%
Other 3.2%
Black Prod.
20.9%
LPG4%
Gasoline20%
Naphtha1%
Jet16%
Gasoil36%
Other1.6%
Kok2%
Fuel Oil10
Asphalt10%
Light Distil.25.1%
Mid. Distil
.51.5
%
Other 1.6%
Black Prod.
21.7%
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Capacity Utilization and Quarterly Production Volume
23
96.5% capacity utilization was achieved in Q2 2019 despite RUP maintenance.
*Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards.
Quarterly Production (Million Tons) Capacity Utilization* (%)
5.2
6.2
6.76.9
Q1 Q2 Q3 Q4
Quarterly Production (Million Tons)
2015 2016 2017 2018 2019
98 101
101
87
67
85
107
89 89 91
4 4 7
9
11
7
7
9 4 5
103 105 108
96
78
92
115
9994 97
2015 2016 2017 2018 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19
Capacity Utilization (%)
Crude Oil Semi Product Feedstock Total
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Sales (Million Tons)
24
Tüpraş generated 29.8 million tons of total sales 2018. Jet fuel and diesel sales increased by 7.4% and
5.3% compared to 2017, respectively.
16.9
22.224.8 25.7 25.6
5.3
6.55.5 5.8 4.2
22.2
28.730.3 31.5 29.8
-1
5.25
11.5
17.75
24
30.25
2014 2015 2016 2017 2018
Domestic Sales
Export
6.79.2 10.8 11.3 11.9
3.9
4.84.5 4.5 4.9
1.8
2.02.2 2.2 2.2
1.9
2.93.4 3.5 2.9
14.3
18.920.9 21.6 21.9
2014 2015 2016 2017 2018
Diesel
Jet Fuel
Gasoline
Bitumen
Total Sales
Domestic Sales of
Key Products
OPERATIONS
Dist.; 50%
THY Opet; 10%
Jet; 6%
LPG; 3%
Other; 6%
Export; 14%
Bitumen; 10% Military;
1%
POAŞ27%
OPET30%
SHELL17%
BP13%
TP1%
AKPET4%
OTHER8%
Customer
Groups
Sales to
Distributors
29.8 mn tonnes
14.8 mn tonnes
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5.5
2.02.9
1.2
4.2
1.7 2.0
4.84.0
5.44.6
2.7
-2
0
2
4
6
8
10
12
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Month
Annual
Margin Environment ($/bbl)
26
Tüpraş’ 3.5 $/bbl Net Refining Margin in H1 2019 was higher than 2.7 $/bbl Med Complex margin.
Premium to the benchmark Mediterranean
peers’ refining margin due to:
• Refined products deficit characteristic to
the Turkish market
• Access to cheaper sources of crude oil
• Ability to use heavier and sour crudes
• Proximity to major suppliers
• Reduces transport costs
• Implemented cost reduction measures
• Energy efficiency programs
• Capacity to produce higher value added range
of refined products
• Direct pipeline connections with domestic clients
• High export capability
Med Complex
9.610.6
11.911.2
12.9
14.7
11.0
2.53.2
6.56.0
8.1
9.3
3.5
1.7 2.0
4.84.0
5.34.6
2.7
0
2
4
6
8
10
12
14
16
2013 2014 2015 2016 2017 2018 H1 2019
Tüpraş Gross Margin Tüpraş Net Margin Mediterranean
KEY FINANCIALS
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Income Statement (Million TL)
27
We generated 1.5 bn TL EBITDA and 870 mn TL net income in Q2 2019.
* On CMB reports, EBIT includes extra items such as FX impacts of trade receivables and payables. In our EBITDA calculation, FX related items are excluded from EBIT as customary in international practices.
KEY FINANCIALS
Q2 2019
Q2 2018
%6M
20196M
2018%
Net sales 23,953 20,081 19% 44,661 33,502 33%
COGS -22,282 -17,860 25% -41,998 -30,212 39%
Gross Profit 1,671 2,221 -25% 2,662 3,290 -19%
Operating Expenses -420 -277 52% -793 -545 46%
Income/Loss from other operations 82 -877 -309 -988
Operating Profit 1,333 1,066 25% 1,561 1,756 -11%
Income/Loss from equity investment 47 86 -45% 110 138 -20%
Operating Profit before financial income/loss 1,379 1,152 20% 1,671 1,894 -12%
Financial income/expense -796 -227 -1,397 -497
Profit Before Tax 584 925 -37% 274 1,397 -80%
Net Profit (excluding minority interest) 870 1,027 -15% 495 1,405 -65%
EBITDA* 1,495 2,210 -32% 2,346 3,243 -28%
Inventory Gain/Loss 675 1,016 -34% 976 1,283 -24%
EBITDA CCS* 820 1,194 -31% 1,370 1,960 -30%
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Financial Highlights
28
Tüpraş generated 851 MTL EBITDA in Q1 2019.
*Excluding minority interest
**Calculation based on rolling net income
367 3351,575 1,033 851
1,080 688
1,542 2,2101,4951,144
867
1,528
3,778
1,2081,505
1,237
1,887
2015 2016 2017 2018 2019
EBITDA (mn TL)
Q1 Q2 Q3 Q4
3,799
275 79869
378-375
710331
1,457
1,027870
750
581
992
542815
803
493
1,766
2015 2016 2017 2018 2019
Net Income* (mn TL)
Q1 Q2 Q3 Q4
1.8 1.8
1.1
1.3
1.3
1.01.1 1.2
1.3
1.1
2015 2016 2017 2018 Q2 2019
Current Ratio & Net Debt / R. EBITDA
Net Debt / R. EBITDA Current Ratio
35%
22%
41%37%
27%
2015 2016 2017 2018 Q2 2019
Return on Average Equity**
3,396
5,882
8,908
2,346
2,550
1,793
3,812 3,713
495
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Balance Sheet Analysis
29
Tight balance sheet management improved working capital.
4.0
7.5
1.6 1.5 1.0
4.4
1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years
Redemption Schedule (Billion TL)
Loan Eurobond TL bond
0.8
-0.2
2.1
4.7
1.6
-0.7
Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19
Working Capital Requirements (Billion TL)
6.96.1 6.2
12.010.6 10.1
Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19
Net Debt (Billion TL)
Proactive Financial Management • Ensured diverse funding base with
favorable rates
• Working Capital continues to improve with better payable terms
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Q2 Profit Before Tax Bridge (2018-2019)
30
Decline in profit before tax was driven by weaker cracks, narrower differentials and RUP maintenance.
Million TL
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2018 Profit Before Tax Bridge
31
2018 PBT was lower mainly due to Crude Oil Differential and Crack Margin impacts. With the help of FX
based pricing, FX losses incurred from payables were recovered with Inventory Gains.
Million TL
KEY FINANCIALS
4.474
3.724
2.129
164
311
660
293
1.779
2017 Inventory Gain Crack Margin Crude OilDifferential
Production FX Other 2018
,
,
,
,
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Dividend (TL)
32
1.73
3.24 2.94
4.96
5.83
4.78
0.00
10.18
7.16
15.2214.83
2.31 2.502.98
3.93 3.85
1.580.00
6.50 6.20
13.60
15.15
-500
500
1500
2500
3500
4500
0
2
4
6
8
10
12
14
16
18
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Earings per Share Gross Dividend Total Payout
One of the highest dividend
yield in BIST
2012/2013 EPS includes the tax incentive.
KEY FINANCIALS
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Investments (Million $)
33
• Revamp of Crude Unit
• FCC Modernization
• New Sulphur Units
• Energy Saving Projects
• Optimization of conversion units
• 9.5 Nelson complexity
• High white product yield
• Process more heavier and sour crudes
• Run all refineries with 100% capacity utilization
• 6.5 bn USD investments since privatization
Ongoing Projects
Avg. 220 mn$
Avg. 943 mn$
Avg. 278 mn$
274
355400
186177
628
974
1,213
959
344
213185 138
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
KEY FINANCIALS
70
2019Q1
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H1 2019 Results
34KEY FINANCIALS
3.5
2.7
0 1 2 3 4 5 6 7 8
H1
Refining Margins ($/bbl)
Med Margin Tüpraş Net Margin
+3.5 $/bbl net refining margin in H1 2019.
Med FY Exp
Tüpraş FY Target
95% total capacity utilization in H1 2019.
13.7
28
14.4
30
H1 2019 Target
Operationals
Production Sales 14.4 mn tons of sales and 13.7 m tons of production in H1 2019.
70
200
H1 2019 Target
Capex (mn $)
70 mn$ CAPEX in H1 2019.
95.0
0 20 40 60 80 100
H1
Capacity utilization (%)
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Tüpraş Balance Sheet
35
Million TL 30.06.2019 31.12.2018 Diff. Diff. (%)Current Assets 29,731 20,962 8,769 42
Cash & C. Equivalents 9,889 5,983 3,907 65Receivables 8,700 5,429 3,271 60Derivatives 270 176 95 54Inventories 8,384 6,765 1,620 24
Pre-paid expenses 256 109 148 136Other Current Assets 2,230 2,502 -271 -11
Long Term Assets 26,550 19,074 7,477 39Financial Assets & Subsidiaries 1,308 1,271 37 3
Fixed Assets 20,260 12,397 7,863 63Derivatives 140 168 -28 -17
Pre-paid expenses 257 378 -121 -32Deferred Tax 3,131 3,566 -435 -12
Other Long Term Assets 1,455 1,293 162 13
Total Assets 56,281 40,036 16,245 41
Short Term Liabilities 26,992 15,950 11,042 69Financial Loans 4,063 4,113 -50 -1
Payables 17,949 7,663 10,286 134Derivatives 193 236 -43 -18Provisions 206 80 126 156
Other ST Liabilities 4,581 3,857 724 19Long Term Liabilities 16,264 14,140 5,203 15
Financial Loans 15,968 13,836 2,132 15Payables & Provisions 259 257 2 1
Derivatives 28 42 -14 -34Other LT Liabilities 9 5 4 91
Total equity attributable to equity holders of the parent 12,885 9,825 3,060 31Minority Interests 140 121 19 16Total Liabilities & Equity 56,281 40,036 16,245 41
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Creating Competitive & Sustainable Shareholder Value
36
73%
27%
Buy Hold
Foreign Currency
Long Term
Tüpraş BB- (Neg.) B1 (Negative)
Türkiye BB- (Neg.) B1 (Negative) B+ (Stable)
Koç Holding B1 (Negative) BB- (Stable)
Analyst Recommendations
92.9
99.5
94.0
95.5
94.8
0 25 50 75 100
Board
Stakeholders
Transparency
Shareholders
Overall
Tüpraş has one of the highest Corporate Governance Ratings.
KEY FINANCIALS
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Financial Policy
37
Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity,
interest rate and currency exposure.
KEY FINANCIALS
Leverage
& Liquidity• Net financial debt/EBITDA
• Net financial debt/Equity
Proactive in liquidity risk management & targets/limits for financial ratios:
• Current ratio
• Share of long term debt
Counterparty
Risk Policy
• Credit rating assessment and strong capital base.
• Cap on the maximum deposit allocated to a single bank.
• Threshold for deposits subject to banks shareholders’ equity.
Deposit is kept within bank-based limits
Interest
Rate & Fx
• The fixed/floating profile of financial debt.
• Proactive management of FX risk with derivative instruments
• Zero FX exposure target.
Commodity
Hedging
Policy
• Operational hedge: Optimum stock policy & forward pricing mechanism.
• Financial hedge: Expected inventory exposure for the year end is hedged by using derivatives.
• Hedging ratio increasing throughout the year.
Inventory Hedging Policy:
• Financial hedge: Crack margin (gasoline, diesel, jet fuel, fuel oil) risk mitigation by using derivatives.
• Statistical / mechanical approach: Historical average prices + standard deviations.
• Hedge ratio between %0-%50 with up to 1 year hedge tenor.
Crack Margin Hedging Policy:
Investor Presentation
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FX Exposure Management (30 June 2019)
38
* Cash flow hedge accounting : 899 mn $
Tüpraş continues to employ strict FX policies to mitigate currency risks stemming from
volatility.
Tüpraş continues to employ strict FX policies to
mitigate currency risks stemming from volatility.
• A significant portion of the Group's crude oil and refined
product purchases are denominated in US Dollars. In
addition, the Group finances its capital expenditures
mostly through borrowings denominated in US Dollars.
• Natural Hedge: The Group is able to mitigate some of the
impact of volatility in exchange rates through natural
hedges: crude oil and refined product inventories are US
Dollar denominated assets.
• Cash flow Hedge: RUP Facility financing loans
designated as hedging instruments of highly probable
export revenues.
• As a general Koç Holding financial policy, Group
companies are allowed to keep foreign exchange
positions within certain limits.
Cash
1,057
Forward & CFH2,082
Stock1,406
Receivables & Other Assets
97
Payables2,193
ST Financial Loans528
• RUP: 179• Other: 349
LT Financial Loans1,919
• RUP: 688• Eurobond: 700• Other Loans: 531
Consolidated Assets Consolidated Liabilities
Million $
+2 mn $
Investor Presentation
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Growing
Tüpraş: Growing, Resilient, Profitable
39
Tüpraş is a compelling investment case with strong sales growth, resilient and profitable operational and
financial structure.
• Operating in a diesel short market (supplies
45% of the market) , along with strong jet
growth
• Well poised to capture future opportunities
including IMO 2020 with its output
complexity
• Continuous investment in logistics,
infrastructure and trading capabilities
• Strong balance sheet with no
immediate rollover requirement.
• Secure receivables portfolio, tight
working capital management
• Pricing mechanism in place to address
commodity and FX fluctuations
• Benefits from full system optimization
given high complexity, procurement and
logistics flexibility
• Prudent hedging practices to ensure
stable earnings outlook
• High dividend pay-out ratio annually
Resilient Profitable
OUTLOOK
Investor Presentation
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2019 Refinery Maintenance Schedule
41
RUP Maintenance
Preparation and
planning phase: 2018
Maintenance Start: Feb 26
• Catalyst changes
• Checks on distillation columns, heat
exchangers and furnaces
• Detailed planned maintenance
Completed as of 13 May 2019
Unit QuarterDuration(weeks)
Reason Status
İzmir
Plt 100 CDU Q4 2-3 Periodic
Plt 9200 CCR Q1 3 Completed
İzmit
RUP Q1&Q2 11 Completed
Plt 2 Crude Oil & Vacuum Q4 7-8 Periodic
Plt 7 FCC Q4 5-6 Periodic
Kırıkkale
BatmanPlt 100/1100 Crude Oil &
VacuumQ1 10 Completed
Investor Presentation
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2019 Expectations
42
Med Complex margin expectation in 2019 is 3.75 – 4.25 $/bbl.
Net Tüpraş refinery margin expectation in 2019 is 6.0 – 7.0 $/bbl.
• Capacity utilization target is 95-100%.
• Production: ~28 million tons
• Total sales: ~30 million tons
Refining investments expectation is revised as ~200 Million $.
Med Complex
Margin
Tüpraş
Net Margin
Operations
Investment
Investor Presentation
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Competition # 1 (SOCAR-STAR Refinery)
• Goldman Sachs has acquired a 13% stake in SOCAR Turkey for $1.3 billion.
• Goldman Sachs has the right to resell 10% of its stakes to Socar, and the remaining 3% to
‘Sermaye Investments Limited’ owned by SOCAR within 6 years at the same price.
STAR Refinery (Total Cap. 10 mn ton)
2019
mn ton
Production
Turkish
DemandBalance
Tüpraş Star Total
LPG 1.1 0.3 1.4 4.1 -2.7
Petchem Feeds 0.2 2.6 2.8
Gasoline 6.1 6.1 2.4 3.7
Jet Fuel 5.2 1.6 6.8 5.2 1.6
Diesel 10.7 4.5 15.2 26.5 -11.3
Coke 0.8 0.7 1.5 4.6 -3.1
Fuel Oil 1.8 1.8 1.3 0.5
Bitumen 3.1 3.1 3.1
Star Refinery Production Numbers (k ton)
Fuels
Petrochemical
Feedstock
Diesel 4,500
Jet Fuel 1,600
Sulphur 158
Petrocoke 698
LPG 260
Naptha 1,600
Mixed xylene 460
Reformate 524
• 3.3 billion $ credit agreement. First
4 years grace period total 15-18
years term.
• Project finance is supplied to company
(1.5 Billion $).
• It is expected to be operational as of
2019.
Credit : 3.3 Billion $
Equity : 2.4 Billion $
Total
Investment: 5.7 Billion $
OUTLOOK 43
Investor Presentation
www.tupras.com.tr
Competition # 2 (Regional Competition)
44
• Tüpraş is competing with 71 refineries in the Mediterranean and Black Sea markets.
• Mediterranean regional product balance is also affected from Middle East, North West Europe and Asia.
Mediterranean Black Sea
54 Refineries
7.8 mn bpd
17 Refineries
1.8 mn bpd
OUTLOOK
Investor Presentation
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0
3
6
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Compliant HSFO Non-compliant HSFO ULSFO MGO LNG
Marine Bunker Specification Changes and Its Effects
45
IMO 2020: the sulphur cap for marine bunkers is reduced from 3.5% to 0.5% (5000ppm)
- effective from 1 Jan 2020.
• Marine Gasoil (Diesel)
• Ultra Low Sulphur Fuel Oil (ULSFO)
• Scrubbers
• LNG
Compliance can be met with:
OUTLOOK
HSFO Replacement Expected in 2020, million b/d Gradual Change in Marine Bunker Fuels, thousand b/d
Expectations 2020 and beyond:
• MGO (Diesel) is expected to be the no.1 choice in 2020
• ULSFO/blend becomes more widespread through the years as
availability & compatibility issues get resolved
• Compliant HSFO use grows as scrubber numbers rise from
~2,000 after Jan 1st, 2020 (some ports started bans on open-loop scrubbers
thus this projection might change)
3.5
0.6
0.5
1.1
1.3
Current
HSFO
HSFO
Scrubbers
HSFO
Non-complianceULSFO MGO
Source : Market Reports
Appendix
Investor Presentation
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RUP feedstock and production (000 Tons)
47
Natural Gas 246
Vacuum Resid
1,214
Atm. Resid
3,036
Total Feed 4,496
Total Production
4,250
Raw Materials Products
APPENDİX
Investor Presentation
www.tupras.com.tr
Tüpraş Production Flow and Yield Breakdown
48
• Increased
conversion capacity
• Strong
integration among
refineries
APPENDİX
Investor Presentation
www.tupras.com.tr
European Pump Price Comparison
49
Not: Prices valid on 11 February 2019.
Gasoline (Krş / Lt)
211
324
210 233292
236294
242
62 65 4764 61
330
409 516 529 528554 595 596
604
733
791 809 820854
889 898
0
100
200
300
400
500
600
700
800
900
1,000
0
250
500
750
1000
TR Spa. Ger UK Eu19 Fra. Gre. Ita.
Pump No Tax Distr. Marg. Tax
Diesel 10 (Krş / Lt)
266
360
263347
395
273 286 275
63 78 69 55 63
272
349 398434
406 504 524 540601
709739
782 801847 865 878
0
100
200
300
400
500
600
700
800
900
1,000
0
100
200
300
400
500
600
700
800
900
1000
TR Spa. Ger. EU19 Gre. Fra. Ita. UK
APPENDİX
Investor Presentation
www.tupras.com.tr
Tüpraş - ESG
50ESG
92.9
99.5
94.0
95.5
94.8
0 25 50 75 100
Board
Stakeholders
Transparency
Shareholders
Overall
Foreign
Currency
Long Term
Tüpraş BB- B1
Türkiye BB- B1 B+
Koç
HoldingB1 BB-
One of the highest Corporate
Governance Ratings3
Amount of water recycled:
20.8 mn m3
Water recycle ratio:
69.5%
Amount of solid waste recycled:
28.9 ktons
Solid waste recycle ratio:
88.6%
Energy cost saved:
36 million $
Greenhouse Gas Emission Reduced:
244 ktons CO2e
Environmental Training Provided:
10,391 person-hrs
Gender Equality
HeForShe (Global cooperation with UN Women
and Fenerbahçe Sports Club)
I Support Social Gender Equality for My
Country- (collaboration with Koç Holding)
Father Support Program in Batman Refinery
Education
Operational sponsorship for TEGV’s1 «Firefly
Mobile Learning Units Project» (262,627
students in 10 years)
Scholarship fund for TEV2 : «Our Energy For
Equality Never Ends»
Culture & Sports
Young Musicians on World Stages
Support for the Batman Disabled Sports Club
Association and Batman Tüpraşspor Football
Club
1 Education Volunteers Foundation of Turkey2 Turkish Education Foundation
In 2018
Environmental Responsibility Social Support Governance Excellence
3 Provided by CMB compliant SAHA Corporate Governance and Rating
Services Inc. (October 2018)
Investor Presentation
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Koç Holding
51
Turkey’s Leading Investment Holding Company
Turkey’s largest industrial and services group in terms
of revenues, exports, employees, taxes paid
and market capitalization.
Leading positions with clear competitive advantages in
sectors with long-term growth potential such as energy,
automotive, consumer durables and finance.
Pioneer in its Sectors
• The only Turkish company in Fortuna 5001.
• 20% CAGR in consolidated profit2 the last five years.
Notes : Data as of YE18, 2018 GDP reflects the projection of Turkish government’s New Economic Program.
(1) 2018 Report
(2) In TL terms between 2014-18
Turkey’s Leading Investment Holding Company
APPENDİX
Combined Revenues / GDP 8%
Total Exports / Turkey’s Exports 10%
Total MCap on Borsa Istanbul 16%
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