Esso Thailand Public : Management Discussion and Analysis Quarter 2/2022

Esso (Thailand) Public Company Limited

Management Discussion

and Analysis

Second Quarter 2022

Esso (Thailand) Public Company Limited

Management Discussion and Analysis- Second Quarter 2022

Management's Discussion and Analysis (MD&A)

for the Second Quarter of 2022 and the Six-Month Period Ended June 30, 2022

1. Financial and Operating Highlights
		2Q 2022	2Q 2021		1H 2022	1H 2021
Crude intake (Kbpd)		132	124		130	127
Paraxylene production (Ktons)		0	13		0	53
Average forex rate (Baht/US$)		34.4	31.4		33.7	30.8
Accounting gross refining margin (US$/Bbl)		26.9	7.0		24.9	9.4
Operating gross refining margin (US$/Bbl) (1)		19.4	2.4		12.3	2.4
Revenue from sales (million Baht)		76,092	41,070		133,772	80,328
Gross profit (million Baht)		11,667	2,289		20,235	7,007
EBITDA (million Baht)		11,086	1,779		19,147	5,938
Profit (loss) for the period (million Baht)		8,299	859		14,199	3,647
Earnings (loss) per share (Baht) (2)		2.40	0.25		4.10	1.05

1. Reflects production volume at market reference price and crude consumption at current replacement cost basis
2. Based on current number of shares: 3,461 million shares

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Esso (Thailand) Public Company Limited

Management Discussion and Analysis- Second Quarter 2022

2. Benchmark Prices for Crude Oil and Refined Petroleum Products

Average Platts Singapore quoted prices for crude oil and refined products
	Unit: US$/Bbl		2Q 2022	2Q 2021	1Q 2022		1H 2022	1H 2021
	Dubai		108.1	66.9	95.6		101.8	63.5
	Gasoline (95 Ron)		143.0	76.8	113.3		128.2	72.0
	Jet fuel / kerosene		147.2	71.4	111.8		129.5	67.4
	Diesel (50 ppmS)		158.4	73.6	116.6		137.5	69.7
	Fuel oil (180 cs)		102.4	59.7	85.2		93.8	57.5
	LPG		75.2	45.4	70.7		72.9	48.1
	Source: Mean of Platts Singapore and PCI

Dubai prices in the second quarter of 2022 averaged $108.1/Bbl, an increase of $41.2/Bbl from the same period last year. Crude prices continued in upward direction with an increase of $12.5/Bbl from the first quarter of 2022 but remained volatile as a result of uncertainties in global crude supply and demand as well as growing concerns on the economic condition. The average monthly price for Dubai in June 2022 was $113.2/Bbl, improved from March 2022 average price of $110.9/Bbl by $2.3/Bbl and from December 2021 average price of $73.2/Bbl by $40.0/Bbl.

In tandem with crude oil prices, all product prices significantly increased in the second quarter of 2022 when compared with the same period last year and the previous quarter as a result of rising demand and supply disruptions from the Russia-Ukraine war.

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Esso (Thailand) Public Company Limited

Management Discussion and Analysis- Second Quarter 2022

3. Production and Gross Margin

Refining capacity (Kbpd)

Crude intake (Kbpd)

Paraxylene production (Ktons)

Accounting gross refining margin (US$/Bbl)

Operating gross refining margin* (US$/Bbl)

Total Fuel Product Sales (KBbl)

• LPG
• Gasoline
• Naphtha
• Jet Fuel/Kerosene
• Diesel
• Fuel Oil
• Asphalt

2Q 2022	2Q 2021	+ / -
174	174	0
132	124	+8
0	13	-13
26.9	7.0	+19.9
19.4	2.4	+17.0
12,915	11,752	+1,163
674	669	+5
3,839	3,162	+677
136	321	-185
521	415	+106
6,345	5,578	+767
1,091	1,134	-43
309	473	-164

1H 2022	1H 2021	+ / -
174	174	0
130	127	+3
0	53	-53
24.9	9.4	+15.5
12.3	2.4	+9.9
25,104	23,825	+1,279
1,365	1,375	-10
7,328	6,192	+1,136

260 817 -557

1,051 879 +172

12,338	11,520	+818
2,018	2,037	-19
744	1,005	-261

1. Reflects production volume at market reference price and crude consumption at current replacement cost basis

Refinery crude intake for this period was 132 KBD, higher than the same period of last year reflecting demand recovery from country's improved COVID-19 situation and relaxed control measures. Paraxylene production has been suspended since April 2021.

Accounting Gross Refining Margin (GRM) in the second quarter of 2022 was $26.9/Bbl, $19.9/Bbl higher than the same period of 2021 largely contributed by strong industry margins and favorable inventory effects. In line with accounting GRM, Operating Gross Refining Margin (GRM) in the second quarter of 2022 was $19.4/Bbl, $17.0/Bbl higher than that of 2021 as a result of higher industry margins partially offset by higher crude premium.

Refinery Production (%)

35.0%	32.2%	35.0%	31.1%
48.5%	46.3%	48.8%	44.3%
	11.7%		11.6%
11.0%	11.1%
9.8%	13.0%
5.5%	5.1%
2Q2022	2Q2021	1H2022	1H2021

Feedstock Heavy Middle Light

Refinery production yields in the second quarter of 2022 reflected production adjustment to capture strong margin opportunity and demand recovery from improved COVID-19 situation. Compared with the same period of last year, light and middle distillate production increased as a result of maximized gasoline and diesel production in response to improved margins and demand from resumed mobility and power generation industry. Lower feedstock yields from paraxylene production suspension continued to contribute in higher gasoline yields.

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Esso (Thailand) Public Company Limited

Management Discussion and Analysis- Second Quarter 2022

Total fuel product sales volume in the second quarter	Sales Channel (Kbpd)
of 2022 was 10% higher than the same period of last year
140.8	133.3
following the increase in diesel, gasoline, and jet fuel demand
from improved COVID-19 situation. The overall sales growth
was a result of the effort to optimize our sales among higher	77.7	71.9
margin channels and capture growth opportunity in
Commercial business domestically including power generation
54.8	54.4
sector. Retail business achieved record high in June following
demand recovery and marketing activities. The company	8.3	7.0
continued to maintain market position and grow footprint via	1H2022	1H2021
service station expansion. At the end of second quarter, there

were 758 service stations nationwide, or net increase of 27 service stations from year-end 2021.

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Commercial/Supply

Retail

Export