board audit committee meeting pilipinas shell petroleum … · pilipinas shell petroleum...

Investors BriefingDelivering a world-class investment case

Shell Pakistan Limited

1

Pilipinas Shell Petroleum Coproration

Definitions and cautionary noteReferences in this presentation to “our Company” or the “Corporation” refer to SPL. The words “we”, “us” and “our” are used to refer to SPL or to those who work for SPL.

This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of SPL.

All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of SPL and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the disclaimer contained or referred to herein. Audience should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in SPL Annual Report for the year ended 31 December 2018 (available at https://www.shell.com.pk/investors/financial-reporting/annual-reports-publications.html. These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the audience. Each forward-looking statement speaks only as of the date of this Quarterly Investors and Analysts’ Briefing on ------. Neither SPL nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.

2


Safety FirstFor this meeting please review the following LIFE SAVING RULES


Evacuation Plan & Assembly Area

Assembly Area

Pilipinas Shell Petroleum Corporation 5

Corporate Briefing Session

Pakistan Stock Exchange has mandated that a corporate briefing session is conducted for all listed companies, at least once a year

Meeting Agenda

Format

▪ Company Brief

▪ Business performance overview

▪ Financial Details

▪ Q&A

▪ The session will be conducted by the CFO of SPL▪ The session will be for the duration of 1 hour

Pilipinas Shell Petroleum Corporation

SHELL IN PAKISTAN

6


Legal Structure of Shell Pakistan Limited

SPL Board comprises of 11 members Shell Pakistan has completed over 100 years of service

26% share in the 784km White Oil Pipeline

operated by Pak-Arab Pipeline Company

(PAPCO)

Public-listed company with a 76.11% shareholding by Shell Petroleum Company

Limited

WHAT WE DOShell is an integrated energycompany that aims to meet theworld’s growing demand forenergy in ways that areeconomically, environmentallyand socially responsible


Shell Footprint in Pakistan

8

RETAIL FUELS▪ 750+ retail stations across

Pakistan to hep people reach their destinations

▪ 10,000+ service champions serve our customers

▪ 650 retailers operating in 6districts and 26 territories

▪ Shell Pakistan pioneered in first of its kind, New Generation Lube Bay concept, using upgraded technology (oil change) - providing customers an exact fill with no wastage.

• Shell Pakistan developed Integrated Retail Ecosystems on key sites.

AVIATION▪ Presence at 4 airports

across Pakistan

▪ Karachi

▪ Quetta

▪ Sukkur▪ Nawabshah

Including providing aviation gasoline to military and flying schools

▪ Approx. 60+ Aircrafts refueled everyday

▪ Pioneered and introduced Skypad, a mobile platform to transmit real-time refueling data from the apron to Shell systems

RETAIL FUELS

▪ 11 Shell owned depots 1 JV 1 3rd party terminal

▪ Equity holding in PAPCO multi-grade White Oil pipeline

▪ Product sourced from 5refineries in Pakistan and international imports

▪ Supplying Approx. 2.1 bn liters of fuel annually

LUBRICANTS

▪ High quality synthetic oils with patent Pure Plus technology - protect vehicle engine & reduce carbon footprint.

▪ 800+ customers and Customer Assistance Programs

▪ 200+ Stock Keeping Units

▪ State-of-the-art LOBP plant with an annual capacity of 94,780 metric tons


RETAIL •Quality Products & Services•Unparalleledforecourt experience

9

Source OCAC

Launch of Shell V-Power(2016) - our most advanced motor fuel upgraded with latest Dynaflex technology

Highest average premium fuel share for YTD Q3 2019

Main-grade volume up 2% despite the economic slowdown

Increasing footprint, with 8 new sites added for the year to date

RETAIL FUELS

PSO

Source OCAC

Hyundai Nishat Motors has endorsed Shell V-Power as the preferred choice of fuel and recommends Shell Helix products for their vehicles

Premium fuel market share in Pakistan-YTD Sep 2019

SPL - Volume in Millions

MO

GA

S

MO

GA

S

HSDH

SD

29.1

28.9

27.6

6.7

6.5 1.2

SPL PSO TPL APL HASCOL GNO

959 993

507 491

0

200

400

600

800

1000

1200

YTD Sept 2018 YTD Sept 2019

MO

GA

S

MO

GA

S

HSDHSD


Non-Fuels Retailing continues its strong growth trajectory to make life’s journeys better

Alliances added on sites in YTD Sep 201940+Increase in Convenience Retail Income from YTD Sep 201829%

The New Face of SELECT STORESBuilding & Growing ALLIANCES

Winning Promos, Winning Customers, for LUBRICANTS


Goal Zero: No harm and No leaks

ambition

Culture of proactive reporting of

potential hazards

Shell Pakistan Limited is the FIRST OMC to COMPLYto all OGRA regulated standards

A dedicated program for Hauler

Professionalization

Refreshed strategy & structured contract

management

Drivers as “Captains”: New image, Enhanced

care & engagement

Efficiency through batch-loading, IT-based systems & Continuous

Improvement

Training refresh via Gamification and 3D

Simulation

Advanced E-solutions (Onboard cameras, IVMS, Captain App)

The Road Transport Continuous Improvement ProjectProfessional Road Transport Operations serving the Retail Business


Stronglubricant performance amidst difficult market conditions

12

Launch of Helix HX6 Synthetic Motor Oils with protected active cleaning technology

No.1 global supplier of automotive industrial lubricants for 12 years

Shell Lubricants

Shell Lubricants conducted first ofits kind Technology Leadershipconference (Sept 2018) – over200 B2B customers connectedwith Shell technical experts tolearn Shells journey throughevolution of technology

▪ One of the Biggest player in the market with supplies to Original Equipment Manufacturers (OEMs), Power, Cement, Construction sectors etc.

Shell PurePlus Technologyfor Shell Helix Ultra producesbase oil that provides enhancedviscosity, friction and volatilityperformance compared to moreprominently used traditional baseoils.

It helps extend engine life, reducemaintenance costs, reduce oilconsumption, enhance fueleconomy and enable better enginecleanliness.


Shell Lubricants enjoys a wide product portfolio and supplies to a diverse clientele in Pakistan

13

Industrial Grade Lubricant Oils

‘Synthetic Technology’ oilsmake use of both synthetic andmineral base stocks to achieve higherperformance levels than can beformulated from mineral oils alone.

Help keep your engine feelinglike new, and they provide low oilfor less frequent top up.


Lubricants Supply Chain -Business Value Partner

Automated Filling Line - Lubricant Oil Blending Plant

- Filling speed of up to 230 bottles per minute - rotary filling nozzles

- State of the art sensors to conform high class quality standards by: o Rejecting underweight bottles and cartons o Auto bottle label conformance detectiono Auto label misalignment detection

- Palletization of cartons - managed by an ‘AI’ based robot.

- Another robot wraps the entire pallet for onward warehousing.

DISTINGUISHING FEATURES

Annual Capacity of

94,780 Metric Tons


FINANCIALS

15


EXTERNAL ENVIRONMENT

16

Interest Rate

Inflation

11.4%

4.2%

5.2%2017

2018

2019

The FALL of the RUPEE

August May Sept20192018 2019

156148

124

PKR / USD

Increase in Minimum Tax Rate from 0.5% to 0.75% Finance Act 2019 – Turnover Tax Enhanced

SECTOR

PRODUCTIONPetroleum Automobiles Electronics Textile

Food &

BeveragesPharma Iron/Steel Fertilizer

GROWTH

DECLINE*July-May 2019 vs 2018; (source: http://www.sbp.org.pk/ecodata/Productselect.pdf)

-10.78% 6.97%-7.13% -11.20% 18.20% -0.32% -7.04% -6.97%


IMPACT ON SPL OF THE EXTERNAL ENVIRONMENT

17

156

124


YTD Sept 2019 Financial performance vs Last Year

Years 2014 2015 2016 2017 2018

PAT (‘M) (1,067) 911 6,765 3,183 (1,102)

234

64

129

1,938

(877)

1,305

630

92076

311

(1,500)

(1,000)

(500)

-

500

1,000

1,500

2,000

2,500

YTD Q3 2018 Gross margin Operatingexpense

Exchangeloss

Otherexpense

Otherincome

Financecost

Associateincome

Taxation - net YTD Q3 2019

PKR

mill

ion

Pilipinas Shell Petroleum Corporation 19Confidential

Statement of Financial Position

As At September 30, 2019


Statement Of Comprehensive Income

Nine Months Ended September 30, 2019


Statement Of Cash Flows



GOVERNMENT RECEIVABLES

• Sales tax and PDL refunds pertain to Zero rated Exports to Afghanistan

• PDC pending receivable pertain to - Mogas (9 tankers). Complete documentation already provided toMoP

Strategy

Robust lobbying with the Government for the processing and issuance of pending refunds.

PARTICULARS Sept-19 (‘M)Sales Tax 1,306

Petroleum Development Levy 1,380 Price Differential Claim 2,601 Regulatory Duty 44Total 5,331


SPL Contribution to Pakistan

24

6 TCF Schools set up in marginalized communities.

1305Drivers have beenDDC certified

6,241 Truckers provided free eye care in the last 5 years.

Enterprise established through Shell Tameer.

13,000

13Universities Participated

4 hours saved in irrigation per acre of farmland

150m PR Value generated annually

6 Journalist capacity building

2 Off-track awards won

8 km of travel to process grain saved

6 hours of power shortage covered with a solar system

40 minutes saved in preparing a meal in lower cost with lesser wood and better ventilation

Entrepreneurs trained

Access to Energy Make the Future Livewire Road Safety

1000


IFRS 9 – Impact


IFRS 16 – Impact

board audit committee meeting pilipinas shell petroleum … · pilipinas shell petroleum...

Documents