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PTT
Exploration & Production
PTTEP <Bt127>
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Recommendation
New : BUY
Previous : BUY
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PTTEP
rewards shareholders with dividend of Bt6.75 from 2002
earnings of Bt12bn.
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PTT Exploration and
Production (PTTEP) reported a 5% growth in 2002 earnings to
Bt12,089mn (EPS Bt18.5), roughly in line with our previous
estimate of Bt12,231mn. Volume sales rose 11% from 91,623
barrel of oil equivalent per day (BOED) to 101,736 BOED
while average petroleum prices slightly declined 0.5% to
$18.59/BOE.
Most of PTTEP's increase in
volume gas sales came from Pailin, Yadana and Yetagun, up
57%, 14% and 63% respectively. Meanwhile, Bongkot production
dropped to 566 million cubic feet per day (mmcfd) due to the
expiration of a contract to sell an additional of 11,600
mmcf. PTTEP's total revenues grew 8% yoy from higher
petroleum sales and dividends of Bt548mn and Bt55mn from New
Links and Thai Oil Power, respectively.
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Natural gas sales volume (MMCFD) |
| |
2001 |
2002 |
% |
2003F |
% |
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Bongkot |
567 |
566 |
0% |
537 |
-5% |
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Pailin |
153 |
240 |
57% |
314 |
31% |
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Yadana |
535 |
612 |
14% |
638 |
4% |
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Yetagun |
120 |
196 |
63% |
292 |
49% |
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Total |
1,375 |
1,614 |
17% |
1,781 |
10% |
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Source : PTTEP, Kim Eng Research |
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This year, we are projecting
a 10% rise in gas sales volume to 103,000 BOED mainly from
higher production of its Pailin and Yetagun projects. Also,
the company's two major projects, Bongkot and Pailin, which
contribute around 67% of PTTEP‘s total earnings, revised
up their natural gas prices by around 15% to $3/mmBTU in
October and are likely to increase prices again in April
following world oil prices. At this point, however, we are
maintaining a relatively conservative forecast of a 5%
increase in 2003 earnings to Bt12,693mn.
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PTTEP income statement |
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Income Statement (Mn Bt) |
4Q02 |
3Q02 |
QOQ |
4Q01 |
YOY |
FY01 |
FY02 |
% |
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Sales |
7,695 |
8,258 |
(7%) |
6,209 |
24% |
27,518 |
29,587 |
8% |
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COGs |
2,940 |
2,885 |
2% |
1,394 |
111% |
9,243 |
10,978 |
19% |
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Gross profits |
4,755 |
5,373 |
(11%) |
4,815 |
(1%) |
18,275 |
18,609 |
2% |
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Gross margin (%) |
62% |
65% |
N.A. |
78% |
N.A. |
66% |
63% |
N.A. |
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SG&A |
354 |
319 |
11% |
381 |
(7%) |
1,089 |
1,270 |
17% |
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EBITDA |
5,675 |
6,443 |
(12%) |
6,058 |
(6%) |
22,014 |
22,574 |
3% |
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EBITDA margin (%) |
74% |
78% |
N.A. |
98% |
N.A. |
80% |
76% |
N.A. |
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Interest expense |
351 |
347 |
1% |
432 |
(19%) |
1,837 |
1,415 |
(23%) |
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Net profit before extra item |
2,976 |
3,659 |
(19%) |
2,267 |
31% |
11,040 |
11,552 |
5% |
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Extra ordinary gain (loss) |
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- Forex gain (loss) |
127 |
(584 ) |
N.A. |
(172) |
N.A. |
(145 ) |
537 |
N.A. |
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- Other (loss) |
0 |
0 |
N.A. |
0 |
N.A. |
(12 ) |
0 |
N.A. |
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Net profit |
3,103 |
3,075 |
1% |
2,094 |
48% |
10,895 |
12,089 |
11% |
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EPS (Bt) before extra item |
4.56 |
5.61 |
(19%) |
3.48 |
31% |
16.93 |
17.72 |
5% |
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EPS (Bt) |
4.76 |
4.72 |
1% |
3.21 |
48% |
16.71 |
18.54 |
11% |
Additionally, the company
announced that total proved reserves had increased around 8%
yoy from 768mm BOE in 2001 to 826mm BOE in 2002. This
estimate includes the reserves from 34.2%-owned Medco. At
the current rate of production, PTTEP's total reserves have
a useful life of around 20 years. The current reserve still
not include Arthit field, which 80%-owned by PTTEP. At the
end of 2001, the field had an estimated reserve of natural
gas reserve of 1,000 billion cubic feet (bcf). PTTEP
disclosed that it would start commercial operations within
the first half of 2006 with an initial production rate of
300 mmcfd.
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PTTEP petroleum reserve |
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2001 |
2002 |
Medco |
2002 + Medco |
% |
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Oil and condensate (Million barrel) |
98 |
98 |
50 |
148 |
51% |
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Natural gas (bcfd) |
4,640 |
4,592 |
43 |
4,635 |
0% |
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Total reserve (BOE) |
768 |
768 |
58 |
826 |
8% |
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Source : PTTEP |
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Meanwhile, the company
announced that it would pay a dividend of Bt6.75
representing 5.3% yield at this current share price. The
current share price is inexpensive trading at PER of 6.5x,
EV/EBITDA of 4.4x for 2003 or a 22% discount to our fair
value estimate of Bt162. We are maintaining our BUY
recommendation on PTTEP.
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Financial ratios |
2000 |
2001 |
2002 |
2003F |
2004F |
2005F |
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Sales (Bt mn) |
21,519 |
27,518 |
29,587 |
31,184 |
29,956 |
29,956 |
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EBITDA (Bt mn) |
15,177 |
22,014 |
22,574 |
23,039 |
22,183 |
22,343 |
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EBITDA margin (%) |
71% |
80% |
76% |
74% |
74% |
75% |
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Normalized profit (Bt mn) |
6,405 |
11,040 |
11,552 |
12,693 |
12,247 |
12,188 |
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Net profit (Bt mn) |
5,433 |
10,895 |
12,089 |
12,693 |
12,247 |
12,188 |
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EPS (Bt) |
8.33 |
16.71 |
18.54 |
19.47 |
18.78 |
18.69 |
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PER |
15.2 |
7.6 |
6.8 |
6.5 |
6.8 |
6.8 |
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EV/EBITDA (x) |
7.5 |
4.9 |
4.6 |
4.4 |
4.8 |
4.8 |
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Gearing (x) |
1.2 |
0.3 |
0.1 |
0.0 |
0.2 |
0.2 |
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Dividend (Bt) |
3.0 |
6.0 |
6.8 |
7.0 |
7.0 |
7.0 |
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Dividend yield (%) |
2.4% |
4.7% |
5.3% |
5.5% |
5.5% |
5.5% |
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ROA (%) |
9% |
15% |
15% |
15% |
15% |
15% |
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ROE (%) |
28% |
42% |
35% |
32% |
30% |
31% |
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