PTT oil and fuel sales down 10 per cent

PTT Oil and Retail Business Plc (OR), the retail arm of Thailand’s biggest energy firm, said on Tuesday that its oil and fuel sales volume has dropped by 10 per cent this quarter due to the state’s Covid-19 curbs on mobility.

“The company’s growth will be in line with the country’s momentum,” said the senior executive Phichin Aphiwantanaporn. “Stringent Covid-19 control measures imposed during the third quarter have affected the amount of [vehicle] refueling to some extent.” 

Phichin noted that the non-oil businesses such as Cafe Amazon, Jiffy shops, and Texas Chicken also recorded less than 10-per-cent of growth in 3Q.

However, he expected a rebound in September after some restrictions were eased this month, coupled with ongoing vaccination, which will allow more domestic travel.

Analysts at KGI Securities estimated OR’s 2021 full-year oil and fuel sales volume of 22.8 billion litres, down from 24.4 billion last year, with an annual earnings forecast of 11.7 billion baht.

PTT Oil and Retail has reduced its business expansion goal this year as the third wave of the outbreak continues to wreak havoc on the economy, cutting demand for both the oil and non-oil sectors.

The company lowered its aim for new petrol stations from 110 to 95, while keeping its plan for EV charging stations at 100 before growing to 300 by next year. 

According to Phichin, The OR’s new bakery plant is set to launch this month to potentially raise the non-oil profit margin.

Stock price movement

As of Tuesday midday, OR traded at 29.25 baht, 0.86 higher than its previous closing. The price rebounded from a downswing during August when the strict measures were put in place throughout that month.

Analysts hold different views on OR’s upcoming trajectory. The latest target prices from Bualuang, Tisco, and Finansia Syrus were around 35 baht, while those from Nomura, DBS Vicker, and Asia Plus hold the target at around 24 baht.

Finansia Syrus suggested ‘Buying’ ahead of earnings recovery starting from 4Q of 2021. “We expect OR price to rerate” backed by rising demand for its operation, said the analyst. 

Nomura, however, noted that the price already reflected upsides in the next few years, and the fallout from the Covid-19 crisis will still hinder OR’s earnings. The analyst rated the stock ‘Sell’.

In February, OR debuted on the Stock Exchange of Thailand by jumping 63 per cent to close at 29.25 baht on the first day, up from its initial public offering (IPO) price of 18 baht. The surge in prices ranked the stock as the country’s best performance for an IPO event, according to Bloomberg. 

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