IRPC Public Company Limited has reported a first-quarter profit of 1,545 million baht, attributed to an increased market share of specialty products in line with its strategic plan. For the second quarter of 2024, the company aims to aggressively sell Euro 5 diesel to meet rising domestic demand.
Kris Imsang, President and CEO of IRPC Public Company Limited, disclosed the company's performance on 8 May 2024. He stated, “The company achieved a profit of 1,545 million baht, an increase of 413 percent compared to the same period in 2023, and an increase of 145 percent from the fourth quarter of 2023. Total revenue amounted to 74,644 million baht, a decrease of 652 million baht or 1 percent compared to the fourth quarter of 2023. The company's ability to produce and distribute Euro 5 standard diesel domestically in the first quarter of 2024 led to an increase in the price differential of the diesel products sold by the company.”
Additionally, the petrochemical business saw initial profits from production based on market prices, particularly in the Olefins group, which benefited from increased demand in Indonesia after the government announced plans to enforce licenses for chemical imports. This resulted in the company's initial profit from market price-based production (Market GIM) reaching 5,618 million baht (9.45 USD per barrel), an increase of 107 percent,” said the President and CEO of IRPC Public Company Limited.
Furthermore, the continuous reduction in crude oil production by the OPEC Plus group and political conflicts in several countries supported the increase in crude oil prices in the first quarter of 2024, resulting in the company making a profit from oil stocks amounting to 901 million baht. This includes adjustments to reduce the remaining inventory value to the net value received of 1,324 million baht and profit from oil hedging activities (Hedging Oil) of 59 million baht, totalling a net inventory gain of 2,284 million baht. This led to the company recording an initial profit from production in the accounts of 7,902 million baht, an increase of 978 percent from the previous quarter, and an EBITDA profit of 4,680 million baht. However, in the first quarter of 2024, the weakening of the baht resulted in the company recording losses from financial derivatives contracts of 319 million baht and losses from exchange rates on borrowed money of 134 million baht, resulting in a net profit for the first quarter of 2024 of 1,545 million baht, an increase of 145 percent from the previous quarter.
Mr. Kris further mentioned, “The crude oil price situation at IRPC in the second quarter of 2024 expects a continuous increase in oil demand from the recovering aviation sector and seasonal adjustments, along with increasing demand from the construction, agriculture, and transportation sectors. Meanwhile, the OPEC Plus group continues its policy of reducing crude oil production, and the conflicts between Israel and Iran have led to a tendency for crude oil prices to increase from the first quarter of 2024.”
Market conditions for the petrochemical sector in the second quarter of 2024 are expected to stabilise slightly as demand for petrochemical products shows signs of recovery, particularly after the end of the long holiday season. Additionally, many factories in China have entered their annual maintenance season, while positive factors in the country are becoming more evident following the government's economic stimulus program, which will be implemented by the end of April 2024, helping to stimulate economic activities and support increased demand for petrochemical products. However, demand in China, the main market for the petrochemical group, still awaits recovery.
Mr. Kris added, “The company achieved success in producing and distributing low-sulphur diesel oil according to Euro 5 standards at the end of 2023, in line with the government policy to sell Euro 5 diesel oil starting from January 1, 2024. Meanwhile, the Ultra Clean Fuel (UCF) refinery efficiency improvement project will be commercially operational in the second quarter of 2024, enabling the company to produce low-sulphur diesel oil according to Euro 5 standards at a capacity of approximately 93,500 barrels per day.”
“In March 2024, the company increased the production and development of specialty products, including POLIMAXX HDPE 100 RC, a special grade for PE100 pipe production with high pressure and impact resistance properties according to EN 1555 - 2021 standards, capable of supporting new underground construction technologies, and Acetylene Black, which has special properties for electricity conduction, reducing static electricity, facilitating heat transfer, and can be used in various applications such as car batteries, electronic devices, and Energy Storage Systems (ESS),” Mr. Kris explained.
