Bangchak Corporation Plc: 3Q25F: A great rebound
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- Expect net loss of THB2.34bn (weaker both y/y and q/q) in 2Q25F, hit by lower utilisation rate, large inventory and hedging losses
- Market GRM projected at USD4.8/bbl (+83% y/y ,+21% q/q), lifted by spread improvement from strong demand
- A great rebound expected in 3Q25F, supported by higher utilisation rate, normalising OPEX, and margin improvement
- Maintain BUY with an FY25F TP of THB43
2Q25F hit by large amount of inventory and hedging losses. We expect BCP to report a 2Q25F net loss of THB2.34bn (vs. 2Q24 net profit of THB1.82bn and 1Q25 net profit of THB2.11bn). Financial performance deteriorated due to i) a THB3.9bn inventory impact (vs. 2Q24’s gain of THB988bn and 1Q25’s loss of THB297mn), ii) hedging loss on crack spread of THB1.1bn, iii) lower utilisation rate of the Sriracha refinery, and iv) softer performance of OKEA, hit by sales volume drop and falling oil prices.
In this quarter, we project market gross refining margin (GRM) at USD4.80/bbl (+83% y/y, +21% q/q), and ii) gross marketing margin at THB0.89/litre (-7% y/y, +7% q/q). Overall EBITDA is projected at THB2.74bn (-70% y/y, -74% q/q).
2Q25F key operating metrics
- Refining utilisation rate is expected at 82% (vs. 78% in 2Q24 and 91% in 1Q25) due to the turndown of Sriracha refinery for operation improvement. On a 2Q25 basis, JET/GO/ULG/HSFO crack spreads stood at USD14.2/15.8/11.5/1.8 per barrel (+8%/+11%/+49%/n.a. q/q). Stronger spreads were lifted by a) tight global supply, b) increasing demand for motor oil, and c) seasonal demand. Hence, market GRM is expected at USD4.8/bbl (+83% y/y, +21% q/q).
- Regarding inventory impact, we expect BCP to book a net inventory loss of THB3.9bn (vs. 2Q24’s gain of THB988mn and 1Q25’s loss of THB297mn) or USD-1.56/bbl as average Dubai price dropped by c.USD9.0/bbl.
- Marketing business performance is expected to deteriorate y/y and remain flattish q/q. Total sales volume is expected at 3,393mn litres (flat y/y, -3% q/q). The weaker sales volume is due to slow jet demand for industrial customers and high competition in the retail market. Gross marketing margin (MKM) is estimated at THB0.89/litre (-7% y/y, +7% q/q).
- The renewable business’s core performance is expected to remain flattish y/y but improve q/q. We expect stronger electricity sales volume from a) hydro power in Laos during the rainy season, and b) higher utilisation rate of the US’s cogeneration power plant. Hence, EBITDA is estimated at THB987mn (-3% y/y, +10% q/q).
- Upstream business performance is expected to deteriorate both y/y and q/q. Total sales volume was 33kboed (-1% y/y, -16% q/q), due to lower crude load from the overlift at Draugen and Brage fields. Average selling prices and EBITDA are projected at USD63.1boe (-21% y/y, -16% q/q), and THB4.02bn (-65% y/y, -40% q/q).
- Extraordinary items in 2Q25F included a) a forex gain of THB120mn, and b) after-tax technical impairment expense of THB480mn from OKEA, c) net non-recurring expenses of THB350mn from BCPG, and d) a gain of THB1.30bn from revaluation of wholesaler contract from acquisition of ESSO Thailand.
2H25F outlook
(+) Strong refinery margins ahead, supported by tight supply and seasonal demand. Looking into 2H25F, we expect strong middle distillate margins (diesel and jet), supported by i) falling global refined inventory level, and ii) seasonal demand during the driving season in 3Q25 and winter in 4Q25. However, we expect softer gasoline margin as the c.600kbd-capacity Nigerian refinery is now back online. 3Q-to-date, Singapore GRM averaged USD4.78/bbl (vs. USD4.45/5.64 in 2025TD and 2Q25 respectively).
On a 3Q25TD basis, JET/GO/ULG/HSFO crack spreads stood at USD16.2/20.1/9.8/-4.6 per barrel (+14%/+27%/-15%/n.a. q/q).
(+) Expect a great performance rebound in 3Q25F. Our view is supported by the following:
- Higher refining utilisation rate – we expect overall refining utilisation rate at 93% as the Sriracha plant has finished its slowdown activities for operational improvement. Thus, Sriracha run rate is expected to improve from 120kbd in 2Q25 to 155kbd in 3Q25F.
- Normalising operating cash cost – given the plant upgrade in 2Q25, we expect normalising operating cash cost in 3Q25F as Phrakanong and Sriracha OPEX are estimated at USD1.6/bbl and USD1.8/bbl (vs. USD1.7/bbl and USD2.0/bbl in 2Q25) respectively.
- Gasoil spread uptrend – we expect higher middle distillate product yield at Sriracha plant, from c.38% to c.48% in 3Q25F, thanks to the plant upgrade. Moreover, gasoil spread should breach above USD22/bbl this week, the highest level since 1Q24. Thus, BCP should be able to capture full benefit of gasoil spread uptrend in 2H25F.
- Minimal inventory impact – on a 3Q25TD basis, Brent and Dubai averaged USD71/bbl (+5% q/q) and USD70/bbl (+4% q/q). As a result, we expect minimal inventory impact in 3Q25F relative to 2Q25.
- Improving upstream performance – with an oil price uptrend, we expect OKEA’s average selling price to improve in 3Q25F. However, we expect total sales volume to remain flattish q/q at c.32-33kboed.
Maintain BUY rating. We maintain BUY for BCP with an FY25F TP of THB43, pegged to an FY25F P/BV of 0.7x, equivalent to its five-year average. Our positive view is supported by i) BCP being one of the healthiest domestic refineries with a strong margin of safety; ii) its lack of business exposure to the chemical industry, where the outlook remains bearish; iii) its five-year average P/BV of 0.7x, still below local peers’ average of 0.8x; and iv) relatively lower exposure to regulatory risks from domestic energy price cuts than domestic peers.
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