Kiatnakin Phatra Securities (KKPS) has highlighted Star Petroleum Refining Public Company Limited (SET: SPRC) for its robust financial performance in the first quarter of 2026, reporting a net profit after tax (NPAT) of THB 7.4 billion. This marks a substantial increase from THB 1.1 billion in the previous quarter, closely aligning with KKPS’ projection of THB 7.5 billion. The strong results were primarily driven by a notable stock gain of $22.3/bbl and elevated gross refining margins (GRM) of $12.8/bbl.
Excluding the significant stock gain of THB 7 billion, SPRC’s core NPAT stood at THB 1.7 billion, a decrease from THB 2.4 billion in the fourth quarter of 2025. Despite this dip, core NPAT for the quarter equates to 56% of the consensus full-year earnings estimate of THB 3.1 billion and 41% of KKPS’ own forecast of THB 4.2 billion for 2026, signaling momentum for potential earnings upgrades.
The company benefitted from surging crack spreads in March, influenced by the U.S.-Iran conflict, which boosted market GRM to approximately $12.8/bbl from $9.3/bbl in the previous quarter. However, SPRC did not fully capture these gains due to maintenance on its FCC unit from early February to early March.
Refining volumes also declined, with SPRC processing 10 million barrels (a 62.5% operational rate), compared to 14.7 million barrels (93%) in 4Q25. Cash operating expenses (OPEX) rose to $48 million, largely due to booked maintenance, but normalized OPEX remains within the typical $30-34 million range.
SPRC’s oil retail EBITDA surged to $52.8 million, up sharply from $7.2 million in the prior quarter, driven by a stock gain. Without this, EBITDA would have registered at $11.1 million, compared to $7.2 million previously, supported by stronger commercial margins and modest increases in OPEX.
KKPS maintains its “Buy” rating for SPRC with a target price of THB 9, citing the company’s high dividend yield and attractive valuations. Looking ahead, second-quarter 2026 core NPAT is projected to rise sharply due to the absence of major maintenance shutdowns—implying a 30% quarter-on-quarter volume increase—and continued strength in market GRM.
