To those who wants to know why the electricity price goes up with demand (independent to fuel price), you may refer "Market clearing process' section 9.2.3

https://www.ema.gov.sg/cmsmedia/Handbook/NEMS_111010.pdf

By the way its been confirmed that current quarter electricity price shot up by more than 50% while the trailing 2.5 months natural gas price had dropped by more than 50% (compared to first quarter ending Mar 23'). YTL powerseraya had bought the fuel in advanced when it was cheap in large quantity.

https://www.ema.gov.sg/cmsmedia/Publications_and_Statistics/Statistics/35RSU.pdf

Q2 results is possible to have double the Q1 EPS. Hng33 is correct.

Last month, prices reached as high as S$3,594 ($2,685) a megawatt-hour in daily trading after a power plant at Jurong Island shut for a turbine upgrade amid unusually hot weather. Meanwhile, the cost of LNG has fallen 86% since March 2022.

i dont know about this mikecyc, but considering sslee request i think i3 should ban him...

personal note to sslee, have you tried just avoiding responding / interacting with such trolls...usually they will stop by themself...not sure how this happened

What happened during the last El Nino?

The last major El Nino event occurred in 2016. It affected more than 60 million people, particularly in eastern and southern Africa, the horn of the Africa, Latin America and the Caribbean, and the Asia pacific region.

It disrupted crop production, imposed societal distress and resulted in peak energy consumption

Unprecedented heatwaves driven by this major El Nino event made 2016 the hottest year on record in Singapore (since 1929) and globally

//www.straitstimes.com/singapore/what-does-the-return-of-el-nino-mean-for-the-planet-and-you

El Niño planet-warming weather phase has begun

Published
4 hours ago

https://www.bbc.com/news/science-environment-65839060

There's also a strong likelihood that this year's version will push 2024 past 2016 as the world's hottest year.

ah ok, i got it dragon328...so the value goes up as per the rise in cost of equity and debt

https://klse1.i3investor.com/servlets/ptres/67695.jsp

We came away from its analysts briefing last Friday feeling positive about its earnings outlook. The key takeaways are as follows:

1. The company expects PowerSeraya’s earnings to sustain at least in the next 2-3 years given: (i) no new plant-up of power plants in Singapore for the next three years which would sustain good retail price that it currently enjoys, (ii) no more “take or pay” LNG supply agreements which have ended between 2020 and 2023, which reduces input costs, and (iii) its locked-in low gas prices secured during the early days of the pandemic which will last for the next 2- 3 years, thus keeping its fuel cost low.

@dragon328, i am truly impressed with the level of knowledge you have in this power business in singapore and other YTLP businesses

somehow i feel you must be having someone working inside YTL

@dragon328, you mentioned on Wessex RAB as per below:
-The beauty of a regulated asset is that it never loses money and its asset base will always expand along with inflation.
-With rising interest rates in next 2 years, Wessex is entering a rapid asset expansion phase with its RAB expected to increase by over 500 million pounds in 2020-2025 regulatory period.

wouldn't rising interest rate would actually reduce the inflation rate? Appreciate if you could enlighten more on the mechanism of RAB valuation..

thanks dragon328..its all very clear now

thanks dragon328, the profit shows how much advantage PowerSeraya has over other Gencos

@dragon328, would like to hear your comments on some of the conclusions i am making as per my comments on your blog here:

https://klse1.i3investor.com/blogs/dragon328/2022-12-06-story-h-303952239-YTL_Power_the_Rising_Power_in_Singapore.jsp

Lower reserve margin raises spot prices

https://www.ema.gov.sg/cmsmedia/Licensees/Electricity-Policy-Papers/Information%20Paper%20-%20Enhancing%20the%20Singapore%20Wholesale%20Electricity%20Market.pdf

We have NG price drop of easily 4 USD/MMBTU between the quarters Jan - Mar 23'' and Apr 23' looking at the NG price chart using 2.5 months trailing price (Nov & Dec 22') as per basis presented by sslee above

that translates to 4 x 1.35 SGD/USD x 3.4 MMBTU/MWh = SGD 18/MWh

using CCGT efficiency of 61.8%, thats a fuel cost reduction of SGD 29/MWh

All others being equal the 'non fuel margin' expanded by SGD 29/MWh - SGD13.9 MW/h (from tariff changes), i.e by SGD 15/MWh for Apr to June 23'

appreciate to have dragon328 comments on my layman understanding :)

The Tariff revision which is a drop from 28.95 to 27.43 cents is matching the table presented on UESP 2005-2023 above which is merely a drop by SGD 13.9/MWh or about 1.39 cents per KWh.

But from this info we cannot determine anything on the non-fuel margin as its the sum effect of the fuel cost and non-fuel cost breakdown above....

considering the significant drop in NG price - more than 50% taking the 2.5 months lag effect (we can calculate it accurately if we want), it indicates the non fuel margin has expanded significantly into the second quarter (Apr - Jun 23')

They have no choice as if not, they wont even have power to meet the demand.

Thats why they are forced to buy from Malaysia recently...else the next marginal unit price will be even higher.

It makes sense to pay the same non-fuel margin for the efficient ones as else it will be unfair to them.

I think i got it now...

when the demand had been increasing in Singapore while the supply side (installed) been stagnant, the marginal unit has gone up to the level of even less efficient open-cycled unit that needs non-fuel margin of SGD80/MWh to breakeven. As such the bidding mechanism will secure this margin even for the efficient CCGT ones like PowerSeraya

@dragon328, excellent work! Thanks..

https://klse1.i3investor.com/blogs/dragon328/2023-05-26-story-h-269658206-YTL_YTL_Power_Croaching_Tiger_Hidden_Dragon.jsp

'All other generating units, whether it is combined-cycled unit or open-cycled unit, will get the same wholesale price of SGD240/MWh for the period when an open-cycled unit is the marginal unit.'

I realized that there is a 'non-fuel margin' component as per dragon328 article above which is purely dependent on efficiency. This means its not dependent on NG price.

This what translates to the gross profit...how this changes is something i am unclear, perhaps it has to do with the CCGT efficiency against other power gen

you can see that'aug, oct, nov and dec 22' was even lower than current April 23'....Jan 22'was 480 SGD/Mwh...cant see much correlation with the NG price

https://www.ema.gov.sg/cmsmedia/Publications_and_Statistics/Statistics/35RSU.pdf

@sslee, but NG price was around current level before 2021

click the 5 - Yr chart

@dragon328, could you comment on this figure of SGD259/MWh? Can we use SGD 259 - SGD 85 as the rise in profit for YTLP for next 2 years? I must have some incorrect understanding


https://www.pressreader.com/malaysia/the-borneo-post/20230420/282492892996338

PowerSeraya’s earnings outlook remains bright with the elevated Uniform Singapore Energy Price ( USEP) and locked- in competitive gas contracts. The USEP has average at SGD259 per MegaWatt Hours ( MWh) between Jan and Mar this year, which is significantly higher than the SGD85 per MWh 5- year average that was seen during 2016 to 2020.

https://theedgemalaysia.com/node/669695

thanks sslee

their procurement head should be sacked for taking such risks in the first place

refineries are supposed to make margin no matter how oil price fluctuates as long as crack spread is positive

even HY did not lose money in 2020 when oil price drop below 10 USD/brl

there is no obligation for them to operate to lose 600 million

they can pay their employee wages for 12 qtr (3 years) without operating for that amount

thanks for the very valid queries sslee, especially on the high crude oil price they bought above selling price

they might as well stop operating and go for MTA activities if they cant buy crude cheaper than what they can sell

to all, i am truly sorry that my insights on HY profit generation is far out from reality

it appears that there are many practical factors that affects their margin such as the way the crude supply contract is made with petronas and sales with Shell..

HY may not had the flexibility to switch crude supplier or sales to other buyer than Shell Malaysia (whose fuel demand for diesel could have been muted during the period) within a very short time

90% if their crude supply and sales are to these parties which they probably cannot change within a short span

the only consolation is no one including HY is disputing the available market margin of diesel and gasoline based on means of platts singapore (MOPS)

good luck

Low crude oil price will drive demand for gasoline and diesel, refining margin will further expand (check out the crack spread tomorrow).

Russian oil price cap seems to be having positive effects on crude oil....and general market.

7 more days before sanction takes place.

well said...thats occam's razor

in fact 50% of their products are imported, their refinery output is much lesser

Posted by kebling98 > Nov 28, 2022 7:42 AM | Report Abuse

Macam petron crude distillation capacity of 88,000 barrels per day
3months =7.92m only lah
But impossible to run 100% rate one mah
3month Sales 8.6m
Obviously
Petron import finished product lah
If you read Agm reports
You know they import gasoline loh
Thats why cost per barrels for petron is so high loh
When gasoline price in July dropped drastically
Petron suffer loh. They import expensive gasoline in June and sell cheap cheap in July lei

ok ok

Posted by UlarSawa > Nov 26, 2022 12:50 PM | Report Abuse

Ular bukan cakap you lah. Ular cakap someone else lah. That one also cakap facts n figures one and cakap eps 2.00 lah. Haiyoh. Correct?

@ular, i have never stated Q3 minimum EPS 2

dont quote something i have not said

@upshare, i didnt get you

i have shared EPS expectation without hedging of inventory and with hedging of inventory (if you see my last posting)

HY has an inventory 3.5 million barrels

As worst case scenario, if you would like to consider inventory loss at 10 USD/brl, the loss will be:

= 3.5 million barrels x 10 USD/brl x 4.5 RM/USD
= 157 million

You can even add the loss above on below if you wish, you will still obtain an EPS of 1.20




Posted by probability > Nov 24, 2022 6:57 PM | Report Abuse X

simple rock bottom EPS derivation for HY going forward:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %,
lets conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)

https://www.tradingview.com/symbols/NYMEX-GZ1!/

Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.50/USD)
= 708 million MYR ....

PBT = 628 million
PAT = 477 million
EPS = 1.59
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

HY also hedges their inventory to protect themself from any changes to oil price. This can be seen by their Q1 results which was not helped by the rise in Crude oil price.

This is the advantage HY has over other refineries like Petron while having almost zero output of Fuel Oil as a complex refinery (Fuel oil is at negative 31 USD/brl crack spread)

its very straight forward

the only risk i see possible is if HY had not hedged their inventory sufficiently causing a dip in margin along with the drop in oil price

in whichever case, i see the effects in HY will be way more cushioned or dampened by their active refining margin hedging

Q4 will be good too considering that now even gasoline margin had risen up


Posted by Permutation > Nov 24, 2022 7:08 PM | Report Abuse

@ probability.
Looking at petron result, what is your take on HYC coming result ? What possible shock can one expect? TQ

@sslee,

PetronM did not hedge their inventory (probably insufficiently hedged), they had to sell at their retail gas stations as per the latest market price for the refined oil they bought from their refinery at high price earlier..

thats the only simple explanation i can think of

Mogas95 crack spread had also risen more than 10 USD/brl against Brent:

https://www.tradingview.com/symbols/NYMEX-AV01!/

https://www.investing.com/commodities/brent-oil

simple rock bottom EPS derivation for HY going forward:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %,
lets conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)

https://www.tradingview.com/symbols/NYMEX-GZ1!/

Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.50/USD)
= 708 million MYR ....

PBT = 628 million
PAT = 477 million
EPS = 1.59
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

HY also hedges their inventory to protect themself from any changes to oil price. This can be seen by their Q1 results which was not helped by the rise in Crude oil price.

This is the advantage HY has over other refineries like Petron while having almost zero output of Fuel Oil as a complex refinery (Fuel oil is at negative 31 USD/brl crack spread)

@i3lurker, thanks for the details

@Bob, 8% refining gain means.... for 10.5 million barrel sales volume per qtr, they needed to process only 9.7 million barrel of crude oil

you do the maths, what will be the gross profit they make even with average product margin of 1 USD/brl (crack spread of 1 USD/brl against crude) when crude oil price is 80 USD/brl

HY refined oil output is higher than crude oil processed. Below is the last 2 annual report information before they stopped disclosing this.

Imagine the profit they make at current high crude oil price when output is higher than input (refinery processing gain).



2012 annual report Page 52:
.................

Revenue and Gross Margin

In 2012, your Company recorded a 29 per cent increase in sales volume
which resulted in a 35 per cent year-onyear revenue growth to RM15 billion.

Your Company sold 40 million barrels of products with a yield of
8 per cent over the 37 million barrels of crude processed.


2013 annual report Page 12:
.................

Revenue and Gross Margin

Your Company registered RM14.7 billion of revenue in 2013 and this is
lower by 3 per cent compared to year 2012 of RM15.1 billion mainly due to
lower average product prices. In 2013, total volume sold reduced by 0.2 million barrels to 40 million barrels of products.

The refinery processed 37.1 million barrels of crude and with a refinery
yield of 8 per cent.

there is only two enemy...PAS and corruption...

fcuk you religion and racial advocacy..for your own short term political interest..

you are just dust n bones at the end..simple fact all of us deny

you are not going to be reborn as your childrens with same race and religion...

live like water or chose to be a rock

MCA and MIC should have the balls now tp voice or never....

else dont advocate on a losing battle for own short term interest

ask all chinese and indian to convert to islam or migrate.. (i totally support this)

simple as that

its time for MCA and MIC to put a stand to UMNO....to join PH or withdraw from the BN coalition

only reason malaysia has not become like afghanistan or pakistan...economy is still in goodshape with oil ressrves..

yes..it would have take over the grassroot....root cause of all issues to begin with

Posted by Sslee > Nov 20, 2022 1:41 PM | Report Abuse

Once PAS take over minister of Education then its gameover for Malaysia.

so then...what business has future in Malaysia?

at least HY is an international business located in Malaysia

LOL...legalizing LSD would be better as will provide greater tolerance to multireligious and multiracial country

Posted by Sslee > Nov 20, 2022 11:20 AM | Report Abuse

The cure or solution to solve Rakyat suffering is legalised ketum. So that everyone can feel heaven from earth.

BN top head confirmed barbarian ma...

Posted by UlarSawa > Nov 19, 2022 2:20 PM | Report Abuse

Ular not a weatherman also cakap ular emotional kah. You see PH supporter barbarian or not. Haiyoh. Correct?