On Monday at 10:33 AM (Bangkok time), the share price of Thai Oil Public Company Limited (SET: TOP) soared by 5.00% or THB 1.50 to THB 31.50, with a trading value of THB 472.92 million.
Kingsford Securities projected that Thai Oil’s second-quarter 2025 net profit will reach THB 5.2 billion, representing a 50% increase from the previous quarter, but a 6% decrease from the same period last year.
The improved performance was primarily attributed to a significant one-time gain, specifically negative goodwill, from an associated company acquiring a refinery business in Singapore, along with a recovery in refining margins.
Excluding special items expected to occur, the impact would be as follows:
- Crude inventory losses (including NRV) of around THB 4.5 billion
- Foreign exchange and hedging losses of about THB 580 million
- Profit from negative goodwill estimated at THB 5.5-6 billion
- Gains from bond buyback transactions this quarter estimated at THB 1.5 billion
The normalized net profit is expected to be THB 3.4 billion, an increase both quarter-on-quarter and year-on-year, mainly supported by a 33% QoQ rise in market GIM (Gross Integrated Margin) to $7.2 per barrel, alongside a 51% QoQ increase in market GRM (Gross Refining Margin) to $5.3 per barrel.
Product spreads improved this quarter but were partially offset by maintenance shutdowns at the Single Buoy Mooring (SBM), while the refinery run rates remained stable at approximately 113%, similar to the previous quarter.
In the aromatics segment (including LAB), the contribution margin is projected to hold steady at $0.9 per barrel, but the segment continues to face pressure from benzene price spreads. Refinery run rates are expected to be 75%.
For the lube business, contribution margin is forecast to remain at $1.0 per barrel. Although the spread between 500SN and bitumen improved, it was under pressure due to a decline in run rates to 76%.
If Thai Oil’s performance aligns with forecasts, net profit for the first half of 2025 is expected to total THB 8.7 billion, down 23% compared to the same period last year.
Kingsford Securities recommends a ‘Speculative Buy’ rating for Thai Oil, with a target price set at THB 34 per share, factoring in planned refinery maintenance and frequent incidents with SBM. Nevertheless, the analyst believes second-half profit should be stable, with progress on the Clean Fuel Project (CFP) now becoming clearer following work resumption.
