Relationship Name: PTT Group

1 BUSINESS & INDUSTRY DESCRIPTION

A. Business Overview

PTT Public Company Limited (formerly Petroleum Authority of Thailand) is a state enterprise and a publicly-listed company in Stock Exchange of
Thailand with Ministry of Finance as the largest shareholder. It is engaged in operation of petroleum business through different segments, namely:
i) Upstream petroleum and natural gas;
ii) Downstream petroleum; and
iii) Technology and engineering

PTT invests in petroleum exploration and production business through its subsidiary, PTT Exploration and Production Public Company Limited
(PTTEP). As of December 2020, the latter has invested in over 40 projects in 11 countries around the globe such as Vietnam, Indonesia, Myanmar,
Thailand, Australia, Algeria, Mozambique, Kenya, Oman, Brazil, and Canada.

Primary source of revenue is from Oil & Trading. Historical revenue from oil and trading accounts an average of 48% covering years from 2018 to
2020. Other revenue streams include refinery and petroleum which accounts 30% on average, gas transmission with 15% on average, exploration
and production with 5%, and power generation and others with 3%.

Presence in Asia (including Thailand) show 96% of total consolidated sale and service income of PTT . Thailand remains to be the main source of
revenue as to geographical location which made up 66% of total revenue in 2020; and Asia (excluding Thailand) made up 30% of total revenue.
Other regional operations include Europe, Americas and others.

S&P Global assigned a lower local currency rating of BBB+ (from A-) for PTT primarily due to PTTEP’s aggressive investments amid Group’s slow
recovery in consolidated earnings. S&P Global noted PTT’s aggressive debt profile will remain through 2022 with the acquisition by PTTEP of a
US$2.5B gas asset in Oman last February 1, 2021. Nevertheless, a foreign currency rating is affirmed for PTT given the strong and intact
relationship of the Group with the government of Thailand which supports the Group’s credit quality.

B. Industry Overview

Oil industry plays a vital role in global economy as it is one of the most important commodities in the world. This industry is capital-intensive and
currently being explored by largest producers: US, Saudi Arabia, Russia, Canada, and China with approximate production of 40 million barrels of oil
per day in 2020, or 43% of total world production as indicated by US Energy Information Administration.

Crude oil supply. PTT serves as PTTEP’s trading arm for the domestic and international crude oil trade. While bulk of PTT’s consolidated sale and
service income is coming from Thailand, the country has limited crude oil reserves, thus, imported crude oil supplies accounted almost half of PTT’s
total supplies. As of 2020, imported crude oil posted at 168.2 million barrels, or 47% of total supplies from 178.1 million barrels in 2019, or 47%.
Crude oil suppliers are primarily from the Middle East (including Saudi Arabia), Far East, and others such as Africa and USA.

High oil inventories to put pressure on crude oil prices. In 2020, large oil producers particularly, Saudi Arabia, raised its crude oil production upon
Russia’s refusal to lower its oil output. Saudi Arabia increased its production to 11.7 million barrels per day from 9.7 million barrels per day and
consequently affected Dubai’s crude oil price to as low as US$13.6/barrel in April 2020 from an average of US$64.3/barrel in January 2020. To date,
while OPEC+ agreed in reduction of oil output, crude oil price is expected to decline as oil inventories remain high.

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2 RISK & FINANCIAL STATEMENT ANALYSIS
FINANCIAL SPREADSHEET SUMMARY
PTT PCL (Consolidated)
(THB in millions) Full Year
December 2018 2019 2020
Dubai Crude Oil - $/ BBL $69.3 $63.5 $42.2
% Growth 30.5% (8.3% ) (33.5% )
Revenues 2,336,155 2,219,739 1,615,665
% Growth 17.1% (5.0% ) (27.2% )
Oil & Trading 1,168,077 1,087,672 710,892
Refinery & Petrochem 724,208 621,527 484,699
Gas Transmission 303,700 332,961 258,506
Exploration & Production 116,808 110,987 96,940
Power Generation & Others 23,362 66,592 64,627
EBITDA 358,074 293,946 230,311
% Margin 15.3% 13.2% 14.3%
Oil & Trading 17,904 17,637 16,122
Refinery & Petrochem 100,261 47,031 20,728
Gas Transmission 102,440 78,215 57,578
Exploration & Production 128,907 138,155 112,852
Power Generation 8,563 12,908 23,031
Interest Paid (28,148) (25,462) (26,939)
Taxes Paid (45,371) (65,259) (43,853)
Cashflow Analysis

FFO 284,556 203,224 159,519

Working Capital Change (42,439) 26,663 19,156
Trade Receivables 2,430 19,002 56,322
Inventories (5,842) 11,353 22,119
Trade Payables (2,081) (7,440) (52,545)
Other Debtors (23,901) 24,550 3,460
Other Creditors (13,046) (20,802) (10,200)
NOCG 242,117 229,887 178,675
Capital expenditure (108,747) (144,336) (143,344)
Maintenance (69,147) (69,147) (69,147)
Expansionary (39,601) (75,190) (74,197)
Dividends (85,035) (81,351) (51,624)
Free Cash Flows 48,334 4,200 (16,293)
Debt Repayments (137,770) (134,328) (123,857)
New Debt / Refinancing 148,595 194,560 210,693
Acquisitions / Investments (43,755) (172,331) (65,700)
Disposals / Divestments 16,961 16,718 63,248
Intercompany Flows 3,851 2,923 2,271
Dividends Received 4,814 4,788 5,283
New Equity / (Distribution) (9,109) (23,644) 268
Other sources / (uses) 6,042 3,828 10,777
Ending Cash Balance 433,517 330,231 416,921
Total Debt 581,866 664,987 800,485
STD 25,562 44,441 4,223
CPLTD 63,109 51,782 81,431
LTD 454,964 562,746 709,849
PTTEP Perps 38,232 6,018 4,982
Key B/S, I/S Indicators & Ratios

Secured Debt 31,947 32,312 40,774

Total Assets 2,353,682 2,486,965 2,544,183
Total Liabilities 1,074,348 1,191,943 1,263,320
Total Equity 1,279,334 1,295,022 1,280,863
Group Net Income (ex. Minority Interest) 165,374 122,092 39,950
Dividend Payout 46% 49% 42%
Total Debt / Adj. EBITDA 1.6 2.2 3.4
Net Debt / Adj. EBITDA 0.4 1.1 1.6
Total Debt / Equity 0.5 0.5 0.6
Net Debt / Equity 0.1 0.3 0.3
Adjusted TDRC (1) 1.4 1.1 1.0
Adjusted FCCR (2) 1.3 1.0 0.9
Net Trade Cycle 26 26 31
(1) TDRC = Adj. EBITDA / Sum of Maintenance Capex, Interest, Tax, Dividends, and 7% of Total Debt
(2) FCCR = Adj. EBITDA / Sum of Maintenance Capex, Interest, Tax, Dividends, and CPLTD
(3) Adj. EBITDA = EBITDA + Dividend Receipts + Interest Income

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Relationship Name: PTT Group
2.A RECENT DEVELOPMENTS / FINANCIAL RESULTS WRITE UP

PTT - AFS 2020 vs 2019 (Consolidated)

Revenue further declined by 27.2% mainly due to lower Dubai crude oil prices resulting from recent oversupply in 2020. Dubai crude oil price
averaged US$42.2/barrel viz-a-vis US$63.5/barrel in 2019.

Oil and trading segment remains to be the primary source of income which accounted 44% of total consolidated sale and service income in 2020
(2019: 49%). Bulk of international trading business are coming from sale of crude oil and condensate. In 2020, PTT sold lesser volume of crude oil
and condensate at 359 million liters, or THB 482 million from 378 million liters, or THB 763.6 million in 2019.

Improved EBTDA margin at 14.3% in 2020 owing from lower costs for power generation.

Strained cash flow in 2020 resulted from high uncollected trade receivables combined with substantial increase in inventories as the overall volume
distribution to industrial and other business segments decreased due to the economic slowdown and COVID-19 pandemic beginning 2020.

Weaker total debt/adjusted EBITDA ratio of 3.4x in 2020 (2019: 2.2x) due to additional funding requirements to finance significant expansion CAPEX
of THB 74 billion in 2020 combined with lower EBITDA of THB 230 billion. Total Debt/Equity remained at an acceptable level at 0.6x in 2020 owing
from substantial equity amount of THB 1.3 trillion.

While PTT (on standalone basis) has no obligation over the repayment of the debentures obtained for exploration and production properties because
a subsidiary company obtained the facility, the Group (on consolidated basis) has to comply with financial covenants as it provides financial support
as guarantor on certain loan agreements.

Industry Outlook

PTT’s operation is susceptible to macroeconomic movements. With the ongoing pandemic crisis, world economy has been pinned down by great
lockdowns (except China which managed to recover earlier as expected). To date, with the continuous roll-out of vaccines, restrictions shall be
eased while mobility and other economic activities must gradually pick up. This is in accordance with IMF’s forecast of global economic growth for
2021 at 5.5%. Consequently, Dubai Crude oil prices is expected to post at an average of US$50 to $60/barrel in 2021.

World oil demand is expected to grow in 2021. Organization of Petroleum Exporting Countries Plus (OPEC+) forecasted an increase in oil demand
by 6 million barrels a day from a plunge in 2020 of about 10.5 million barrels per day resulting from pandemic crisis restricting mobility and other
economic activities. Moreover, the organization expects that oil demand will return to its pre-pandemic levels in 2022 with improved containment of
the COVID-19. Prospectively, volume distribution to customers is expected to increase as industrial and other business segments will return to usual
business operations.

PTT’s investment plans hinge more on energy and gas business particularly the expansion of LNG receiving terminal capacity and expansion in oil
and retail business domestic and international. These plans are in accordance with the national energy reformation of Thailand, as the latter drives to
become a regional LNG hub and expects higher consumption of commercial primary energy.

PTT as a state enterprise is capital rich with consolidated net worth of THB 1.3 trillion. In the event of default on the proposed facility, PTT’s credit
facilities is supported and backed by the Government of Thailand. Hence, lower risk is expected in lending to the Group.

2.B KEY CREDIT DRIVERS

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Relationship Name: PTT Group

Risk Mitigants

Vulnerable world crude oil prices with swamped rivals and frequent Engaging in hedging through derivative contracts with companies in
disagreements on volume production both petroleum and petrochemical, and crude oil prices.
Volatile energy prices directly affect sales volume for petroleum and
petrochemical
Foreign exchange risk (US to Baht) has impact to the Group’s The Group balances its foreign-denominated currency loans with
financials foreign-denominated currency revenue
- prices of oil and other products are tied with the world
market price (US$) which directly affects the revenue
- Fluctuation of Baht affects outstanding foreign-
denominated loans

3 EXPOSURE SUMMARY

Recommendation for the grant of short-term line (Revolving Credit Line-RCL) to fund working capital requirements and general corporate purposes.

Rationale:
 Cash flow is currently strained due to uncollected trade receivables from customers. Given the pandemic situation, PTT’s clients are
experiencing temporary cash flow pressure in which their respective cash reserves are only adequate to maintain their capital assets.
Hence, customers were not able to pay PTT, thus, stretched trade receivables for the latter.
 While PTT’s ending cash balance is still substantial for 2020 at THB 416.9 billion and is sufficient to internally fund working capital
requirements, PTT may use the cash reserves for its other existing obligations and planned investments, particularly the acquisition of a
gas asset in Oman.
 Grant of THB 50 billion RCL is recommended in addition to existing short-term loans with other financial institutions to finance working
capital requirements while billed trade receivables remain uncollected. Proposal of RCL shall be supported by assignment of receivables
from customers.
 Note: No proposal of long-term loan yet for PTT until financial results, particularly revenue and EBITDA, will show resilience as to total
debt/adjusted EBITDA.

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