IRPC revealed the operating performance for the first quarter of 2022 with a net profit of THB 1,501 million with confidence that it would continuously grow, despite facing the increasing crude oil cost. The Company is investing in new businesses to strengthen its current business with innovative materials and energy utilisation to create balance for the society and environment in order to accommodate the world’s economic recovery and the country’s reopening.
Mr. Chawalit Tippawanich, President and Chief Executive Officer of IRPC Public Company Limited or IRPC, disclosed that the company generated a total sales revenue of THB 76,608 million for the first quarter of 2022, which increased by 13% compared with that in the previous quarter mainly because of an increase in selling prices following the increasing crude oil price. The market gross integrated margin (Market GIM) was THB 4,105 million or USD 7.08 per barrel, decreasing by 39% primarily due to the decreasing price spread of lube base oil and most petrochemical products as well as the increasing crude premium costs, although the diesel and gasoline price spread had improved. The accounting gross integrated margin (Accounting GIM) was THB 9,891 million or USD 17.05 per barrel, increasing by 42%. As a result, the company recorded the earnings before interest, taxes, depreciation and amortisation (EBITDA) of THB 6,600 million, increasing by 113% and a net profit of THB 1,501 million.
According to the vision “To Shape Material and Energy Solutions in Harmony with Life” in accordance with the world’s direction in the future and all consumers’ lifestyle, the Company has invested in new businesses to strengthen its current business that would create a balance of the business, society and the environment. In so doing, the Company has increased the production proportion of specialty products especially smart materials. IRPC was the first in Thailand to successfully research, develop and produce PP Melt blown. To vertically integrate petrochemical business, Innopolymed Company Limited was jointly established to produce non-woven fabric with melt blown process. The factory has been built and is in the process of test run to produce PP Melt Blown fabric which is the main raw material for the filtration in medical masks, N95 respirators, gowns, air filters and others. This is an important step for IRPC to enter into the medical device industry to replace the imported raw material, to improve its stability and Thailand’s competitiveness to manufacture medical devices to the international level.
Regarding the crude oil market outlook in the second quarter, the world’s crude oil consumption is expected to be higher compared with that of the first quarter according to easing of Covid-19 controlling measures in various countries across the world. As a result, the overall economy will recover and crude oil prices will have a tendency to be higher as it is expected that the sanctions imposed against Russia will be extended and have more impacts. Another factor that affects crude oil price is that The United States of America (USA) and International Energy Agency (IEA) have made an effort to utilise Strategic Petroleum Reserves (SPR) of 1 million barrels per day between May and October of 2022 as well as the expected increase in Iran’s crude oil exports in the second half of 2022 in case US sanctions imposed on Iran are lifted at the end of second quarter of 2022. Moreover, lockdown announcements in various regions of China to control COVID-19 infection may affect oil consumption because China is the world’s biggest oil importer.
Regarding the petrochemical market outlook in the second quarter, the demand is expected to be higher than that of the previous quarter. Downstream manufacturers start to order more polymer because they expect that high prices will continue due to the instability from the Russia-Ukraine conflict. Factors to be monitored include the severity of the situation which may cause higher crude oil and raw material prices, and the increasing demand, due to new normal lifestyle, of downstream petrochemical products such as food packaging, medical devices, health and sanitation products. In addition, demand from the electrical vehicle (EV Car) industry also has increased rapidly. An EV Car is composed of substantial plastic parts in order to increase driving efficiency. However, a considerable increase in new production capacity in 2022, both as planned and as delayed 2021 plan, mostly from China to reduce dependence on petrochemical import policy, a higher freight rate and a port congestion causing limited activities, are suppressing factors of petrochemical prices.
IRPC has implemented the climate change strategy to directly and indirectly reduce greenhouse gas emissions to support and drive businesses towards the low-carbon society, including setting goals, strategies and plans to achieve zero carbon emissions and prepare to be a net zero emission organisation. Moreover, IRPC has prepared to issue bonds and green bonds which will be utilised to invest based on the new strategy and to expand conservation investment such as a floating solar project expansion in accordance with the accepted green bond standards. The bonds will be open for subscription from May 17 to May 19.
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