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2022-08-27 10:56 | Report Abuse
ok thanks John. If thats true, then actual gross profit is 415 + 207 = 622 million MYR
thats very interesting as i firmly believe derivative loss will disappear once the crack and oil price steadies...
2022-08-27 10:38 | Report Abuse
for HY the gross profit shown in income statement is before accounting derivative loss / gain
2022-08-27 10:37 | Report Abuse
at the bottom pf page 14 under section 18, they do seem to be saying its accounted on the gross profit
if thats true, then petronm actual gross profit without derivative loss is much greater then?
2022-08-27 10:34 | Report Abuse
yes John, but i am trying to tally this with the Income statement
does that mean the gross profit of 415m is after accounting this loss?
or is it accounted in 'óther expenses' after 'finance cost' on income statement?
Posted by Johnzhang > Aug 27, 2022 10:29 AM | Report Abuse
@probability, go to note 18 where it mentioned Profit before tax after charging the following:
Derivative realized loss $207.86 mil
Unrealized loss $166.8 mil.
2022-08-27 09:33 | Report Abuse
@sslee, is the gross profit reported in Q2 of 415 million accounted the derivative loss (realized 207m & unrealized 166m) shown on section 18 of the financial report?
i cant see where it is accounted on the income statement
if its accounted, then PetronM is indeed benefitting significantly from the Diesel crack spread rise
2022-08-27 08:41 | Report Abuse
Revised below:
............
@sslee, 60% (diesel + Jet fuel) crack at say avg 40 USD/brl minus Tapis premium of 20 USD/brl, should provide at least a margin of 20 USD/brl in Q2 for PetronM.
If we use 47 kbpd, sales per qtr is :
= 47,000 bpd x 90 days x 60%
= 2.5 million barrels
As such gross profit from Diesel + Jet fuel ALONE:
= 20 USD/brl margin x 2.5 million barrel/qtr
= 220 million MYR
Gasoline margin was also high in Q2. As such something is missing or not accurate on their yield info from the AGM i think
2022-08-27 08:23 | Report Abuse
Crack rose to USD 46.18 / brl as predicted...
Posted by probability > Aug 26, 2022 11:15 PM | Report Abuse X
live data shows refining margin is further rising, we will see a further rise in Diesel crack spread soon:
https://www.tradingview.com/symbols/NYMEX-GZ1!/
2022-08-26 23:12 | Report Abuse
Extract from a news in June 22' concerning Diesel margin:
https://sg.finance.yahoo.com/news/red-hot-asia-gasoil-margins-075310521.html
Refining margins for the benchmark 10 ppm gasoil in Singapore, which have soared nearly 63% in the last two weeks, hit $55.77 a barrel over Dubai crude on Monday, an all-time high according to Refinitiv data that goes back to 2014. Gasoil is currently the top money spinner for Asian refineries.
2022-08-26 23:11 | Report Abuse
Extract from a news in June 22' concerning Diesel margin:
https://sg.finance.yahoo.com/news/red-hot-asia-gasoil-margins-075310521.html
Refining margins for the benchmark 10 ppm gasoil in Singapore, which have soared nearly 63% in the last two weeks, hit $55.77 a barrel over Dubai crude on Monday, an all-time high according to Refinitiv data that goes back to 2014. Gasoil is currently the top money spinner for Asian refineries.
2022-08-26 23:05 | Report Abuse
refer Page 22 of the annual report for complete picture on HY products.
As a complex refinery HY has to ability to adjust yield of its products. HY produces 46% Diesel on this table.
https://klse1.i3investor.com/servlets/staticfile/422363.jsp
2022-08-26 22:39 | Report Abuse
yes exactly..
Posted by sonyx > Aug 26, 2022 10:39 PM | Report Abuse
And is it correct to interpret that the basket of products would then be referred to let say (Diesel (which is 46% of mix) multiply with the market selling price based on the index + Fuel * D1N1 + ....)?
2022-08-26 22:37 | Report Abuse
Asia's record level margin ever was in June 22' where diesel margin hit above 58 USD/brl.
Due to HY hedging effects the profit will fall into July.
July crack was relatively lesser and this will fall into Aug 22'.
Now crack has averaged quite good for Aug and this will reflect on Sept 22.
As such Q3 is secured with PAT that is very likely to be higher than Q2 results.
Posted by sonyx > Aug 26, 2022 10:30 PM | Report Abuse
Thanks for the prompt response @Probability. Ok looks like the Diesel mix should keep the blended crack margin intact for Q3 2022.... at least for now
2022-08-26 22:32 | Report Abuse
Refer to the notes on how the weighted average refining margin is calculated:
Weighted Singapore product prices (for a standard Lytton Refinery basket of products)
Less: Reference crude price (the Ampol reference crude marker is Dated Brent)
Equals: Singapore Weighted Average Margin (Dated Brent basis)
https://www.listcorp.com/asx/ald/ampol-limited/news/2q-2022-lytton-refinery-performance-and-trading-update-2736295.html?ref=more_news
The Lytton Refiner Margin (LRM)1 for the second quarter reached the unprecedented level of US$32.96 per barrel, materially higher than the US$10.59 per barrel realised in the first quarter. The significant increase in Singapore Weighted Average Margin (SWAM) was the key driver of the increase, reaching US$33.62 per barrel for the quarter
2022-08-26 22:27 | Report Abuse
@sonyx, refer Page 22 of the annual report for complete picture on HY products.
As a complex refinery HY has to ability to adjust yield of its products. HY produces 46% Diesel on this table.
https://klse1.i3investor.com/servlets/staticfile/422363.jsp
2022-08-26 18:50 | Report Abuse
the above is just for uncle's record
2022-08-26 18:49 | Report Abuse
HY Complex refinery margin update - 26/08/22
...........
Diesel: https://www.tradingview.com/symbols/NYMEX-GOC1!/
Jet Fuel: https://www.tradingview.com/symbols/NYMEX-ASD1!/
Gasoline Mogas 92: https://www.tradingview.com/symbols/NYMEX-D1N1%21/
Gasoline Mogas 95 premium: https://www.tradingview.com/symbols/NYMEX-SMU1!/
From above:
1. Diesel at 46% yield, cracks USD 45.95/bbl
2. Jet fuel at 7% yield, cracks USD 34.30/bb
3. Gasoline Mogas 95 at 35% yield, cracks USD (10.00 + 3.96) / bbl
4. Rest of product yield at 12%, using Mogas 95 cracks USD 13.96/bbl
Gross refining margin:
= (0.46 x 45.95 ) + (0.07 x 34.30) + (0.35 x 13.96)+ (0.12 x 13.96)
= 21.14 + 2.40 + 4.88 + 1.67
= US $ 30.1 / brl
.................
Gross Profit at above derived present refining margin
= (10.7 million barrel sales per qtr) x ( US $30.1/brl) x (MYR 4.4/USD)
= 1.417 Billion MYR
...................
2022-08-26 17:46 | Report Abuse
ok superpanda - just move on.. thought my msg will end the arguments.
hope it ends and go for more fruitful discussion
2022-08-26 16:54 | Report Abuse
yes John, some just seems to enjoy poking others..could be many useless motives like ego, sadism, revenge, brag etc...
and useful motives too - to bring down share price using deceptive information
its unfortunate part of human nature...
just focus where its most beneficial to self
2022-08-26 14:25 | Report Abuse
@superpanda, i think much people values Johnzhang's opinion than yours as he had shown integrity...
once you show disrespect and lack of integrity, eventually people no longer value your opinion..
your comments are just a waste of forum space then
no doubt there are no rules set in the real world including forum here....any meaningful interaction needs some basic social etiquettes, integrity, honesty, reliability etc..
these are unwritten rules for mutual benefit
2022-08-26 13:31 | Report Abuse
sslee is a great asset to i3, all the questions asked to PetronM during AGM that has been documented was likely from sslee
2022-08-26 13:27 | Report Abuse
sslee made a lot of money from CW i think..aiming to be significant shareholder of Petronm..
2022-08-26 13:25 | Report Abuse
not the money itself i mean..ha ha
2022-08-26 13:24 | Report Abuse
yes - will share the money made too...
2022-08-26 13:22 | Report Abuse
i am hoping EPS above RM 1 will do...
the price movement effects will happen once market understands how HY is deriving the earnings...
if market dont understand - we will teach ..he he
Posted by CharlesT > Aug 26, 2022 1:20 PM | Report Abuse
If this Q can make EPS rm2 but cant bring the price back to RM6+...
Then if Q3 of EPS goes back to RM0.20 u think share price then can go back to RM6 ah
2022-08-26 13:17 | Report Abuse
ha ha...past bite still lingers...
2022-08-26 13:16 | Report Abuse
this is true if the russian oil sanction will be cancelled..
Posted by Mikecyc > Aug 26, 2022 1:11 PM | Report Abuse
Haha I had posted in i3 on August 2020 on Nitrile Gloves Demand vs Supply for 7 Glove Companies , that Supply can meet the Demand in a Year time span starting from September 2020 to August 2021 ….
2022-08-26 11:43 | Report Abuse
its very very probable for this TP to come true by Dec 2022, provided the below crack spread maintains till end of the year and russian oil sanction takes place by 5th Dec 2022 as decided by EU.
https://www.tradingview.com/symbols/NYMEX-GZ1!/
almost certain with the above two conditions
Posted by NoviceJ > Aug 26, 2022 11:35 AM | Report Abuse
If the share prices is @RM18.89 I'm a Very very happy man
Thank you Probability for the clarification
2022-08-26 10:57 | Report Abuse
use the below as a very fair guidance
Posted by Johnzhang > Aug 14, 2022 4:15 PM | Report Abuse
Hi probability, Thanks for the explanation.
Total expenses after GP (ie manufacturing, Adm, Dep & Amortisation, Finance) was $95M for Q1 2022, $100M per qtr average for 2021 and $106M per qtr average for 2020. Your $80+100 M = $180M expenses for Q2 is well above the actual in recent qtrs and therefore with huge buffer built-in.
Your estimated GP is $1,056 M
less hedging loss ($100M)
less Expenses ($180M)
-------------------------------------
PBT $776M
Tax $100m @24% ($24M)
Tax $676M @33% ($223M)
-----------------------------------------
NPAT $529M
EPS $1.76
The upside are :
1. lower expenses than the $180M built-in the calculation
2. Higher GP from significantly higher Diesel yield (46 vs 34%) and lower Fuel oil.
The reservation i have if the Management's actual hedging deviate from the model described by you. Let's wait for the QR with much excitement.
We look forward to the exciting QR.
2022-08-26 10:54 | Report Abuse
need to deduct manufacturing, s&A cost etc..interest and tax before arriving at PAT and EPS
Posted by NoviceJ > Aug 26, 2022 10:50 AM | Report Abuse
Hope that your forecast profit will come true Base on Probability estimate and if we work out the sum
1417/300=4.72
4.72X4Q=18.89 per year profit
Guess what will the share prices be
2022-08-26 10:18 | Report Abuse
It is for certain that HY hedging loss / gain will be neutral soon.. i.e zero.
.....
If not in Q2, it will be in Q3...and then even gain after that.
hedging gain /loss only occurs when a variable is changing such as expansion or contraction of margin (price difference between refined products & feed crude), or the oil price changes...
as long as the change in these variable is not on the same direction continuously indefinitely, the hedging gain / loss will eventually come to a stand still...and reverse when the direction changes
its like the tail catching up with head and going at same speed eventually.
at times the tail speed is slower (hedging loss) and at times faster (hedging gain)...but it can never runaway from the average head speed (the gross profit).
2022-08-26 10:18 | Report Abuse
HY Complex refinery margin update - 26/08/22
...........
Diesel: https://www.tradingview.com/symbols/NYMEX-GOC1!/
Jet Fuel: https://www.tradingview.com/symbols/NYMEX-ASD1!/
Gasoline Mogas 92: https://www.tradingview.com/symbols/NYMEX-D1N1%21/
Gasoline Mogas 95 premium: https://www.tradingview.com/symbols/NYMEX-SMU1!/
From above:
1. Diesel at 46% yield, cracks USD 45.95/bbl
2. Jet fuel at 7% yield, cracks USD 34.30/bb
3. Gasoline Mogas 95 at 35% yield, cracks USD (10.00 + 3.96) / bbl
4. Rest of product yield at 12%, using Mogas 95 cracks USD 13.96/bbl
Gross refining margin:
= (0.46 x 45.95 ) + (0.07 x 34.30) + (0.35 x 13.96)+ (0.12 x 13.96)
= 21.14 + 2.40 + 4.88 + 1.67
= US $ 30.1 / brl
.................
Gross Profit at above derived present refining margin
= (10.7 million barrel sales per qtr) x ( US $30.1/brl) x (MYR 4.4/USD)
= 1.417 Billion MYR
...................
2022-08-25 20:08 | Report Abuse
wah...after uncle Koon say Hengyuan has very 'Erotic' earnings, you guys started behaving one kind already..LOL!
2022-08-25 17:18 | Report Abuse
@TakeProfits, i dont think it will limit up, but it may eventually go up higher than 30%....just keep it for sometime. Sell whenever you feel profit is good enough for you.
2022-08-25 17:11 | Report Abuse
Kasi limit up tomorrow!
2022-08-25 17:09 | Report Abuse
Fantastic results of PetronM as predicted by Sslee... congrats!!
2022-08-24 14:11 | Report Abuse
@Goldberg, thats for Q3 results
2022-08-24 13:30 | Report Abuse
Sorry MM, i cant be bothered to explain when i had posted too many information concerning this here earlier...
go ahead say what you want here..np
2022-08-24 13:19 | Report Abuse
@BobAexlrod, help me calculate the below with the latest figures from crack spread chart link below: - TQ
.........................................
Diesel: https://www.tradingview.com/symbols/NYMEX-GOC1!/
Jet Fuel: https://www.tradingview.com/symbols/NYMEX-ASD1!/
Gasoline Mogas 92: https://www.tradingview.com/symbols/NYMEX-D1N1%21/
Gasoline Mogas 95 premium: https://www.tradingview.com/symbols/NYMEX-SMU1!/
From above:
1. Diesel at 46% yield, cracks USD 42.98/bbl
2. Jet fuel at 7% yield, cracks USD 34.54/bb
3. Gasoline Mogas 95 at 35% yield, cracks USD (11.35 + 3.84) / bbl
4. Rest of product yield at 12%, using Mogas 95 cracks USD 15.19/bbl
Gross refining margin:
= (0.46 x 42.98 ) + (0.07 x 34.54) + (0.35 x 15.19)+ (0.12 x 15.19)
= 19.77 + 2.42 + 5.31 + 1.82
= US $ 29.3 / brl
.................
Gross Profit at above derived present refining margin of US $29.3/brl
= (10.7 million barrel sales per qtr) x ( US $29.3/brl) x (MYR 4.4/USD)
= 1.379 Billion MYR
...................
2022-08-24 13:15 | Report Abuse
A Big Bang? Anticipating the Impact of Europe’s Sanctions on Russian Energy
https://carnegieendowment.org/eurasiainsight/87318
So, if we assume that the total of the current 7.5 million bpd of Russian petroleum exports will be slashed in half, with the other half managing to make its way past the sanctions barriers, the world petroleum balance would be short 3 to 4 million bpd, which is comparable to all of Western Africa’s production or Japan’s consumption. Such a disruption has the potential to exceed the previous oil crises of 1973, 1979, and 1991, and unlike the previous disruptions, it promises to last not just a few weeks or months, but years.
.........
they say YEARS...
The above is very much like i had estimated for Diesel alone.
EU consumes 820,000 bpd of Diesel currently from Russia. Thats 2 million barrels per day capacity of a complex refinery.
I believe EU & US is determined to weaken nuclear power russia and completely move away from dependence on their fuel.
This is marathon, do not give up on Hengyuan easily...
2022-08-23 20:05 | Report Abuse
Bear in mind that EU will also likely not import refined oil from countries that buy russian oil, as it effectively means they are still supporting russian oil business.
India had been systematically reducing russian oil intake recently.
2022-08-23 19:59 | Report Abuse
@sonyx123, the cause of the recent rise could be either on anticipation of good results for qtr ending June 22' or due to the fact that diesel shortage in EU is benefitting refineries from Asia who are able to sell at good margin and this is expected to be a prolonged phenomenon potentially worsened further when sanction is in full force by Dec 22'.
I believe the latter is the actual reason.
820,000 bpd diesel is imported by EU from Russian despite US exporting as much as possible to EU. Its difficult to fill this gap unless 2 million barrels per day refinery capacity comes up outside Russia.
2022-08-23 18:09 | Report Abuse
glad to hear that from you John.. lets hope for the best
2022-08-23 16:43 | Report Abuse
thanks Zhuge, lets hope results is as expected
Posted by Zhuge_Liang > Aug 23, 2022 4:40 PM | Report Abuse
Good job done by probability.
Thank you for your excellent work
2022-08-22 23:27 | Report Abuse
newbird33, every qtr report you will find that figure there
its the hedging contract size for a month throughput (3.5 million barrels)
check all the qtrly report for the last 2 years - its value is proportional to the price of oil / refined products during the period at 3.5 m barrels
Posted by newbird33 > Aug 22, 2022 11:23 PM | Report Abuse
Pls dun be over confident on Hengyuan's results. As at 31.03.2022, it betted USD291M on refining margin swap contracts and has a loss of RM339M. That's why its EPS for Q1 was so low.
2022-08-22 23:21 | Report Abuse
@Zhuge, Lets replace the gross profit of 1.37 billion derived above on below simplified EPS calculation of Johnzhang.
Your estimated GP is $1,379 M
less hedging loss ($0M)
less Expenses ($180M)
-------------------------------------
PBT $1200M
Tax $100m @24% ($24M)
Tax $1100M @33% ($363M)
-----------------------------------------
NPAT $813M
EPS $2.71
Johnzhang posted > Aug 14, 2022 4:15 PM | Report Abuse
Hi probability, Thanks for the explaination.
Total expenses after GP (ie manufacturing, Adm, Dep & Amortisation, Finance) was $95M for Q1 2022, $100M per qtr average for 2021 and $106M per qtr average for 2020. Your $80+100 M = $180M expenses for Q2 is well above the actual in recent qtrs and therefore with huge buffer built-in.
Your estimated GP is $1,056 M
less hedging loss ($100M)
less Expenses ($180M)
-------------------------------------
PBT $776M
Tax $100m @24% ($24M)
Tax $676M @33% ($223M)
-----------------------------------------
NPAT $529M
EPS $1.76
2022-08-22 22:57 | Report Abuse
@Zhuge, i think going forward the hedging loss will become minimal and can even turn into hedging gain as expansion of refining margin peaked in June 22'.
This effectively means the gross profit we calculate above using the crack spread is what will be reported actually.
In terms of taxation, i have no idea whether the rate will be higher than current.
I realized a lot of useful information related to derivatives or hedging on Q&A session with PetronM. I think the person who had asked these questions are very much from i3 :)
Refer Questions 15 till 21
https://www.petron.com.my/wp-content/uploads/2022/07/63rd-AGM-Summary-of-Proceedings-and-Appendix-A-Questions-from-Shareholders_2022.pdf
Posted by Zhuge_Liang > Aug 22, 2022 10:46 PM | Report Abuse
probability,
Can make a net PAT of 1.0 billion in Q2 2022 and Q3 2022 respectively or an EPS of 3.00 ?
Is the above assumption possible ?
Stock: [PETRONM]: PETRON MALAYSIA REFINING & MARKETING BERHAD
2022-08-27 11:03 | Report Abuse
60% (diesel + Jet fuel) crack at say avg 40 USD/brl
20% (gasoline) avg 20 USD/ brl
If we use 47 kbpd, sales per qtr is :
= 47,000 bpd x 90 days
= 4.2 million barrels
Gross profit from Diesel + Jet fuel:
= 40 USD/brl margin x 4.2 million barrel/qtr x 60%
= 443 million MYR
Gross profit from Gasoline:
= 10 USD/brl margin x 4.2 million barrel/qtr x 20%
= 40 million MYR
Assuming the fuel cost offset the rest of the refinery product margin, the refinery contribution to gross profit:
= 443 + 40
= 483 million
Before the above changes, when refinery margin was low, retail contributes approximately 120 million gross profit
If we add the above two, we obtain about 600 million gross profit as reported.