THORESEN THAI AGENCIES PLC

Press Release

TTA CORPORATE| TTA Transport |TTA Energy| TTA Infrastructure

For Immediate Release

TTA announces FY2018 result with robust shipping performance

  • TTA reported consolidated EBITDA of Baht 1,457.5 million

  • Shipping Segment achieved ten-year-high net profits of Baht 1,047.2 million

  • TTA's consolidated net profits were positive at Baht 210.0 million

Bangkok, 1 March 2019 - Thoresen Thai Agencies Plc. (TTA) ended full year 2018 with consolidated net profits to TTA of Baht 210.0 million, gross profits of Baht 3,087.0 million, and EBITDA of Baht 1,457.5 million, due to robust performance in the Shipping Segment.

In FY2018, consolidated revenues were recorded at Baht 13,946.3 million, a 4% increase year-on-year. Shipping, Offshore Service, Agrochemical, and Investment Segments contributed 42%, 22%, 20% and 16% to the consolidated revenues, respectively. Meanwhile, share of profit of associates and JVs rose to Baht 401.0 million, a 19% increase year-on-year.

While emphases are persistently placed on the Shipping, Offshore Service and Agrochemical Segments, TTA has also expanded the Investment Segment to minimize risks and plans to grow this Segment into an important source of income in the future.

Mr. Chalermchai Mahagitsiri, President and Chief Executive Officer of TTA, said the Shipping Segment's outstanding performance was driven by higher freight rate and higher fleet capacity. This uptrend in the freight market is reflected by the Baltic Dry Index (BDI) which rose from an average of 1,145 points in 2017 to an average of 1,353 points in 2018.

The Offshore Service Segment still faced challenges due to lower non-vessel subsea projects and all four performing vessels were sent for dry-docking; notwithstanding, all four vessels have returned and are ready to perform in 2019. The agreement between OPEC and non-OPEC producing countries, including Russia, to cut oil production from January to June 2019 can potentially stabilize the crude oil market next year; however, the oil price is still volatile, and has traded in the range of USD 50 and 86 per barrel in 2018.

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THORESEN THAI AGENCIES PLC

Press Release

TTA CORPORATE| TTA Transport |TTA Energy| TTA Infrastructure

The Agrochemical Segment also faced challenges from low agricultural price that consequently slowed down domestic fertilizer demand. However, export fertilizer sales volume and pesticide business's sales revenue increased by 3% and 12% year-on-year, respectively.

In 2018, TTA has expanded the Investment Segment in food and beverage industry and in water business. The Company has acquired 80.5% stake in Asia Infrastructure Management (Thailand) Company Limited or AIM, a Thai water contractor/service company. In addition, Siam Taco Company Limited, a subsidiary in which TTA holds 70%, was granted a right to enter into a franchise agreement with a subsidiary of Yum! Brands Inc. to operate Taco Bell, a world-famous Mexican-inspired restaurant chain, in Thailand.

Key strategic Business Unit Performance

Shipping Segment: Thoresen Shipping achieved ten-year-high net profits to TTA of Baht 1,047.2 million, improving 157% year-on-year. The freight revenues increased 45% year-on-year to Baht 5,816.5 million, due to improved freight rate and higher fleet capacity, while EBITDA increased 70% year-on-year to Baht 1,551.4 million. Furthermore, the average TCE rate increased 37% year-on-year from USD 8,469 per day in 2017 to USD 11,591 per day in 2018, which resulted in higher gross profits of Baht 1,780.3 million, increasing 64% year-on-year.

TTA continued the fleet renewal plan by purchasing two vessels and selling two old vessels in 2018. As a result, Thoresen Shipping owned 21 vessels with an average size of 55,285 DWT and an average age of 11.71 years, at year-end 2018. Looking forward to the next few years, Thoresen Shipping is preparing its fleet to comply with IMO's sulphur limit in 2020.

Offshore Service Segment: Mermaid Maritime Public Company Limited or Mermaid faced another challenging year in 2018, due to the dry-docking program of all four main vessels and lower non-vessel projects. As a result, the Offshore Service Segment reported net losses to TTA of Baht 511.1 million in 2018. Nevertheless, performing vessel utilization rate was stable year-on-year at 52%. Meanwhile gross profits were positive at Baht 145.6 million.

For drilling business, two old tender rigs have been sold to reduce costs from non-performing assets. On the other hand, three high specification jack-up drilling rigs, operated under Mermaid's associate, have performed strongly with near 100% utilization. In addition, all three rigs remain contracted in the Middle East until 2019 and has a chance for contract renewal.

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THORESEN THAI AGENCIES PLC

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TTA CORPORATE| TTA Transport |TTA Energy| TTA Infrastructure

Agrochemical Segment: The total fertilizer sales volume of PM Thoresen Asia Holdings Public Company Limited or PMTA remained stable year-on-year at 183.9 KTons. However, the low price of agricultural products forced farmers to save money and shift toward lower-price fertilizer. As a result, single fertilizer volume increased 62% year-on-year to 22.4 KTons while NPK fertilizer volume decreased 7% year-on-year to 161.5 KTons. In 2018, domestic fertilizer sales volume decreased 4% year-on-year to 116.7 KTons due to sluggish demand and competition in Vietnam.

On a bright side, PMTA's export fertilizer sales volume increased 3% year-on-year to 67.2 KTons, mainly due to the recovery from Philippines and new market from Myanmar. Plus, the pesticide business's sales revenue increased by 12% year-on-year to Baht 181.9 million.

Besides fertilizer business, the factory area leasing business's income and other income amounted to Baht 67.6 million. Part of the space had been used to store raw materials of fertilizer products, and the remaining space had been fully rented.

Investment Segment: TTA focuses on food and beverage, water, and logistics sectors, and aims for this Segment to be an important source of income in the future.

  • F&B: PH Capital Company Limited, a subsidiary in which TTA holds 70% and received a sole Pizza Hut franchise in Thailand from Yum! Brands Inc. in 2017, had successfully expanded Pizza Hut to a total of 137 outlets nationwide at year-end 2018, increasing 29 outlets from the end of 2017.

    Siam Taco Company Limited, a subsidiary in which TTA holds 70%, was granted a right to enter into a franchise agreement with Taco Bell Restaurants Asia Pte. Ltd., a subsidiary of Yum! Brands Inc., to operate Taco Bell, a world-famous Mexican-inspired restaurant chain, with a plan to expand the business to 40 outlets within next five years.

  • Water: TTA has acquired 80.5% stake in Asia Infrastructure Management (Thailand) Company Limited or AIM, a Thai water contractor/service company. In addition, AIM owns a concession to sell tap water in Luang Phrabang, Laos, via a 66.7%-owned subsidiary, Asia Nampapa Luangprabang Company Limited.

-ends-

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THORESEN THAI AGENCIES PLC

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About TTA

Thoresen Thai Agencies Public Company Limited, or TTA, is a strategic investment holding company that is listed on the Stock Exchange of Thailand, with an investment policy to achieve growth through a balanced portfolio that is diversified both locally and internationally. Included in its current business portfolio are shipping, offshore services, agrochemical, and investment. For more information, visitwww.thoresen.com.

For media information, please contact:

Thoresen Thai Agencies Plc.

Natasa Urcharoenngan

E-mail:natasa_u@thoresen.com

Tel: +662 254 8437 ext. 332

Mobile: +668 3492 2442

Sitth Chongprasobtam

E-mail:sitth.c@thoresen.com

Tel: +66 2254 8437 Ext. 313

Mobile: +669 1762 8522

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Thoresen Thai Agencies pcl published this content on 01 March 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 01 March 2019 07:58:10 UTC