Below Average Growth at Thailand’s PTT
Background
PTT Public Company Limited is the biggest Thailand state-owned oil and gas company by revenue, and the biggest company in Thailand.
The group’s businesses range from exploration to downstream activities including petrochemical manufacturing, electricity generation, and petrol retailing.
It is the sole owner of local gas pipelines.
Business Description
PTT is the biggest company in Thailand by revenue and its top energy producer. The group is involved in upstream oil and gas exploration (PTTEP TB), as well as downstream, in power generation, petrochemicals (PTTGC TB), refining (TOP TB), and gasoline retailing.
The main source of revenue, at 50% of total sales, is oil and trading. This includes retail sales of gasoline at service stations, which is planned to be spun out of the division and listed as PTTOR in 2019. The rest of the division does not contribute to profits.
The second-largest division is petrochemical and refining, and contributes 31% of revenue and profits. The exploration and production division, 5% of sales, is 16% of after-tax profits.
The third-largest division, gas, while less than 1/5 of revenue, produces half of the company’s net profit, thanks to a local monopoly via government contracts on gas piping for transmission. These contracts are expected to be renewed given the substantial investment in capacity.
Leadership
Krairit Euchukanonchai started his role as the Independent Chairman of PTT in 2018. Aside from this role, he also currently serves as the Chairman of Krung Thai Bank PCL (KTB TB) and an independent director of Advanced Info Service PCL (ADVANC TB). He earned his Bachelor’s degree from Chulalongkorn University, Thailand a and Master’s of Business Administration from the University of North Texas, US.
Chansin Treenuchagron was appointed the role of President and CEO of PTT in September 2018. Prior to his current position, he has served as Chief Technology and Engineering Officer and Executive Vice President among other roles since he started working at PTT in 2002. Together with his many certifications, his education consists of Bachelor’s and Master’s degrees in Economics from Thammasat and Chulalongkorn University in Thailand.
World Class Benchmarking
Profitable Growth has achieved about average rankings over the years with small fluctuations in its performance. In the past 12 months, PTT ranked in the upper half among 340 large Energy companies globally.
Profitability improved to #4 in 2016 and has stayed there since. Growth has ranked below average since 2017.
Asset utilization has consistently been at #4 since 2014. Profit margin resembles the Profitable Growth rank with the exception for a marginally worse rank in 2017.
In 2014, Sales growth ranked among the worst of its peers but has improved to become only slightly below average in the past 12 months. Margin change has ranked below average since 2017.
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