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IRPC expects better second half if crude oil prices remain stable

Jul 09. 2020
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Petrochemical firm IRPC said its performance in the second half should improve since its profit margin will rise in line with the increasing price of petroleum and petrochemical products.

Noppadol Pinsupa, director of IRPC, said the company’s refinery should be able to produce 205,000 barrels per day, and its primary profits should be between US$9 and $10 (Bt281 and Bt312) per barrel, rising from $8.7 per barrel last year.

However, he said, this depends on the direction the crude oil takes, adding that the price of crude oil for the rest of this year should hover between $40 and $50 per barrel, versus $60 per barrel last year.

Noppadol added that IRPC should do better than it did in the first quarter, when it was at a deficit of Bt8.91 billion, after the market GIM had increased to $8 or $9 dollar per barrel.

Also, due to several improved factors, its earnings before interest, taxes, depreciation and amortisation (EBITDA) should not contract in the second quarter, like it did by Bt6.44 billion in the first quarter.

In addition, IRPC has launched a five-year (2020 to 2025) strategy called “Strengthen IRPC” in a bid to cope with the Covid-19 fallout. Under this strategy, its EBITDA should reach Bt20 billion in 2025 and Bt30 billion in 2030. The firm’s EBITDA was Bt5.94 billion in 2019, the director added.

IRPC’s new strategy focuses on increasing specialised products as well as the expansion of sales channels. The strategy was relevant to the stock-and-cost management and the total budget spent in each aspect of “Strengthen IRPC” added up to Bt2.18 billion.

Noppadol added that IRPC holds a 50 per cent state in Mytex Polymers, the manufacturers of PP compound plastic. He said this investment will help the corporation expand into the automobile industry at a faster rate.

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