PTT Public : Management Discussion and Analysis Quarter 3 Ending 30 Sep 2020

Member of DJSI for 8th consecutive year

PTT Public Company Limited 3Q2020 2

Management' s Discussion and Analysis ( MD&A) and operating results for the three- month and first nine-month periods ended September 30, 2020

Executive Summary

Unit : Million Baht	3Q2019	2Q2020	3Q2020	%Inc. (Dec.)	9M2019	9M2020	% Inc.
		(Dec.)
YoY	QoQ
Sales Revenue	538,437	341,325	383,599	(28.8%)	12.4%	1,659,633	1,208,491	(27.2%)
EBITDA	67,697	54,208	67,465	(0.3%)	24.5%	222,024	154,058	(30.6%)
Net Profit	20,255	12,053	14,120	(30.3%)	17.1%	75,505	24,619	(67.4%)
Earnings per share (Baht/share)	0.70	0.42	0.50	(28.6%)	19.0%	2.61	0.86	(67.0%)
Average Dubai crude oil price	61.2	30.6	42.9	(29.9%)	40.2%	64.0	41.4	(35.3%)

In the third quarter of 2020 ( 3Q2020) , PTT and its subsidiaries reported Earnings before Interest, Tax, Depreciation and Amortization or EBITDA in an amount of Baht 67,465 million, increased by Baht 13,257 million or 24.5% when compared to the Second quarter of year 2020 ( 2Q2020) . This resulted mainly from the Petrochemical and Refining businesses due to their stock gain in this quarter from higher crude oil price in this period which caused by OPEC and its allies ( OPEC+ ) agreement to cut their oil production output by 7.7 million barrels per day from August to end of year 2020, the shut-inof offshore oil wells in the Gulf of Mexico due to Hurricane together with the recovery on demand of crude oil according to improved demand of petroleum products after the easing of lockdown worldwide and resume economic activities. However, Market Gross Refining Margin (Market GRM) excluding stock gain & loss decreased from US$ 1.6 per barrel in 2Q2020 to US$ - 0. 4 per barrel in 3Q2020 due to the increase in crude premium and the decrease in most of petroleum product spreads especially diesel spread. However, the Olefins spreads, mainly Polyethylene (PE) spread, gradually improved from the increase in product prices according to an increased demand from food packaging, household appliances and the medical products. However, Aromatic spreads, both paraxylene ( PX) and benzene ( BZ) decreased resulting from lower demand of downstream products and new supply from China. In addition, the overall sales volume of both petroleum and petrochemical products dropped. Furthermore, there was stock gain from Petrochemical and Refining businesse increased from approximately Baht 1,800 million in 2Q2020 to Baht 5,700 million in 3Q2020. Likewise, the Exploration and Production business's performance improved from higher selling prices and sales volume due to the Bongkot and Contract 4 projects. The performance of Oil business also increased from higher gross margin as higher selling prices and sales volume due to increased demand after the easing of lockdown, however, stock gain was slightly decrease in this quarter. In addition, the Gas business recorded an increase in its performance mainly from PTT's Gas Separation Plant (GSP)'s higher sales volume from increased demand according to better economic situation after the easing of lockdown from COVID- 19. Moreover, there was an increase in average selling prices of GSP' s products in line with the higher global petrochemical referenced prices. In addition, the higher performance of Natural Gas Sales and Marketing (S&M) business also increased mainly from better gross profit from Industrial customers following lower natural gas cost. In this regard, Net income in 3Q2020 was reported at Baht 14,120 million, increased by Baht 2,067 million or 17.1%, which was in line with the increased in EBITDA. In

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the meantime, there was higher gain on derivatives despite higher loss on foreign exchange rate from the depreciation of Thai Baht against US Dollar in 3Q2020 when compared to the previous quarter together with higher foreign currency loan. Futhermore, the corporate income tax expenses were higher mainly from Exploration and Production business' s higher reversal amount of income tax expenses (to tax benefit) in 2Q2020 than in 3Q2020 according to the change of currency in corporate income tax and Petroleum Income Tax Act ( PITA) calculation starting from 2Q2020 onwards, and overall increased tax expenses resulted from better performance. Although PTT group incurred an impairment loss in 3Q2020 amounting to Baht 1,397 million mainly from coal business and an impairment loss in 2Q2020 from Exploration and Production business amounting to Baht 1,480 million mainly from Mariana Oil Sands project.

In 3Q2020, PTT and its subsidiaries reported EBITDA decrease by Baht 232 million or 0.3% when compared to the

Third quarter of year 2019 ( 3Q2019) . This was mainly due to lower performance of Gas business group. Performance of GSP business decreased mainly from lower sales volume from the impact of COVID- 19 as well as GSP' s maintenance shutdown in 3Q2020, despite no maintenance shutdown in 3Q2019 and lower selling prices in line with the lower global pretrochemical referenced prices. Moreover, the S&M business' s reported soften performance due to lower sales volume as well as the decreased fuel oil referenced selling prices. Likewise, the performance of Exploration and Production business decreased from both lower selling prices in line with crude oil prices and overall sales volume despite the increased sales volume from the Partex group after its acquisition in the fourth quarter of 2019. Petrochemical and Refining businesses' s EBITDA was improved due to its stock gain in 3Q2020 despite the drop in Market GRM from US$ 3. 6 per barrel in 3Q2019 to US$ - 0. 4 per barrel in 3Q2020 according to the decrease in most of petroleum product spreads as well as the decrease in Aromatics spreads in spite of the increase in Olefins spreads. Furthermore, the performance of Oil business increased from higher gross profit due mainly to its stock gain whereas slight lower sales volume. Therefore, Net income dropped by Baht 6,135 million or 30.3% when compared to 2Q2020 in line with a decrease in EBITDA. There was an increase in loss on foreign exchange rate from the appreciation of Thai Baht against US Dollar in 3Q2020 despite thedepreciation of Thai Baht against US Dollar in 3Q2019 together with higher foreign currency loan. Meanwhile, corporate tax expense decreased according to lower performance. There was an impairment loss in 3Q2020 amounting to Baht 1,397 million mainly from coal business and additional labour compensation expenses as per the Announcement of State Enterprise Labor Relation Committee of PTT amounting to Baht 1,069 million in 3Q2019.

For the First nine month of 2020 (9M2020), PTT and its subsidiaries reported EBITDA of Baht 154,058 million, dropped by Baht 67,966 million or 30. 6% when compared to the same period of last year ( 9M2019) . This was primarily due to Petrochemical and Refining businesse from their stock loss in 9M2020 in an approximated amount of Baht 24,500 million. This resulted from the sharp drop of crude oil price from the end of 2019 at US$ 67. 3 per barrel to the end of 9M2020 at US$ 40. 3 per barrel due to oil price war, the oversupply together with the lockdown amid COVID- 19 pandemic leading to the drop on demand of both Petroleum and Petrochemical products. Whereas, there was stock gain in 9M2019 in an approximated amount of Baht 1,500 million. Moreover, the dropped Market GRM from US$ 2. 8 per barrel in 9M2019 to

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US$ 0. 6 per barrel in 9M2020, was caused by lower spreads of almost all petroleum products as well as the olefins and aromatics, mainly PX spreads. Perofrmance of Gas business group decreased mainly from the GSP' s lower selling prices in line with the lower global petrochemical referenced prices and lower sales volume according to the impact from COVID- 19 and the maintenance shutdown and production turndown according to lower customer demand in 9M2020. Furthermore, soften S&M business' s performance was due mainly to lower sales volume and soften gross profit of industrial customer from lower fuel oil referenced selling prices. Likewise, performance of Exploration and Production business decreased from lower selling prices despite the increase in sales volume from Malaysia project and the Partex group. The performance of Oil business decreased from lower sales volume and selling prices due to impact from COVID- 19 pandemic. However, performance of Technology and Engineering business improved particularly from GPSC' s performance according to the acquisition of GLOW at the end of the first quarter of 2019 (1Q2019). In this regards, Net Income in 9M2020 was reported at Baht 24,619 million, dropped by Baht 50,886 million or 67. 4% from 9M2019 in line with the decline of EBITDA and higher depreciation and amortization expenses mainly from Exploration and Production business and Technology and Engineering business due to the business aquisition as aforementioned. Furthermore, there was a decrease in gain on foreign exchange rate in 9M2020 due to the depreciation of Thai Baht against US Dollar and higher foreign currency loan, despite an increase in gain on derivatives. In Addition, there was recognized lower income tax expenses according to the decrease in most of the group performance, despite higher tax expenses from Exploration and Production business due to the higher reversal amount of deferred tax assets (to tax expenses) in 9M2020 than in 9M2019 according to change of currency in corporate income tax and PITA calculation starting from 2Q2020 onwards. Furthermore, there was an asset impairment from Exploration and Production business and coal business amounting to Baht 2,879 million in 9M2020 and additional labor compensation expenses according to the Announcement of the State Enterprise Labor Relations Committee and the new Labour Protection Act of PTT Group, amounting to Baht 4,190 million despite extra income from the warranty claim on project construction of IRPC amounting to Baht 271 million in 9M2019.

As of 30 September 2020, PTT and its subsidiaries had the total assets amounting to Baht 2,559,370 million,

increased by Baht 72,405 million or 2.9% from 31 December 2019, mainly due to the increase in right of use by 69,217 million mainly from the reclassification according to the adoption of Thai Financial Reporting Standard - the Lease, effective from 1 January 2020 onwards. Whereas, the total liabilities were recorded at Baht 1,272,692 million, increased by Baht 86,767 million or 7.3% including an increase in the interest-bearingdebt amounting to Baht 164,754 million mainly from the increase in long- term loans and bonds and the increase of lease liabilities from the adoption of Thai Financial Reporting Standard - the Lease offset by accounts payables and income tax payable approximately by Baht 88,000 million. The total shareholders' equity was Baht 1,286,678 million, decreased by 1. 1% or Baht 14,362 million, mainly from dividend payment from the performance of second half of year 2019 and the first half of year 2020.