PTT : MD&A 1Q/2023

PTT Public Company Limited 1Q2023 1

PTT Public Company Limited 1Q2023 2

Management's Discussion and Analysis (MD&A) and operating result for the first quarter of 2023 ended 31 March 2023

Executive Summary

Unit : Million Baht	1Q2022	4Q2022	1Q2023	%Inc. (Dec.)
YoY	QoQ
Sales Revenue	758,465	797,174	756,690	(0.2%)	(5.1%)
EBITDA	140,912	75,319	104,008	(26.2%)	38.1%
Net Profit	24,792	18,665	27,855	12.4%	49.2%
Earnings per share (Baht/share)	0.87	0.65	0.98	12.6%	50.8%
Average Dubai Price (US$/barrel)	95.6	84.8	80.3	(16.0%)	(5.3%)

In the first quarter of 2023 (1Q2023), Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) of PTT and its subsidiaries was reported at Baht 104,008 million, decreased by Baht 36,904 million or 26.2% from the first quarter of 2021 (1Q2022) at Baht 140,912 million. This was mainly from Petrochemical and Refining business. Refining business's performance decreased primarily due to higher stock loss in this period when PTT Group's stock loss increased approximately by Baht 34,000 million as compared to 1Q2022 inspite of the rise in Market Gross Refining Margin (GRM) from US$ 6.1 per bbl in 1Q2022 to US$ 8.4 per bbl in 1Q2023 supported by higher spread of diesel, aviation and gasoline over crude oil and the increase in sales volume. Moreover, Petrochemical business's performance also decreased from lower sales volume together with lower spreads in most of products. In addition, Gas business's performance decreased mainly from Gas Separation Plant (GSP) business due to lower average selling price in almost all products following the decline in petrochemical referenced prices and lower sales volume as well as higher gas cost according to an increase in gulf gas price. Performance of Transmission pipeline business (TM) also decreased from the adjustment of the gas pipeline tariff rates according to the resolution of the Energy Regulatory Commission (ERC) which has been effective since August 2022. While gross margin of Supply and Marketing (S&M) business increased from higher average selling price of industrial customers which increased higher than the increased in gas cost which is linked to fuel oil referenced price. Exploration and Production business's performance rose from the increase in average sales volume. New Business and Infrastructure business's performance increased from pharmaceutical business and GPSC from SPP power plants supported by the increase in Ft. Net income of PTT and its subsidiaries in 1Q2023 was Baht 27,855 million, increased by Baht 3,063 million or 12.4 % from the 1Q2022 at Baht 24,792 million despite the decline in EBITDA. This was resulted from lower loss on derivatives and higher gain on foreign exchange rate in 1Q2023 in spite of higher finance costs and corporate income taxes. Moreover, in 1Q2023, there were loss recognition of non-recurringitems (PTT's portion) after tax approximately Baht 100 million mainly from non-cashaccounting transactions at the end of concession of Bongkot Project of PTT Exploration and Production Public Company Limited (PTTEP) offset with the discount from production shortfall (Shortfall) of PTT. Meanwhile, in 1Q2022 there were gain recognition of non-recurringitems approximately Baht 900 million mainly from Shortfall of PTT and gain on Ichinoseki Solar Power 1 GK divestment of GPSC.

PTT Public Company Limited 1Q2023 3

For the 1Q2023, EBITDA of PTT and its subsidiaries was reported at Baht 104,008 million, increased by Baht 28,689 million or 38.1% as compared to Fourth quarter of 2022 (4Q2022) at Baht 75,319 million. This was mainly from Petrochemical and Refining business which Refining business's performance increased due to lower stock loss in this quarter when PTT Group's stock loss was decreased approximately by Baht 11,000 million. In adddition, market GRM rose from US$ 7.9 per bbl in 4Q2022 to US$ 8.4 per bbl in 1Q2023 due to higher spread of gasoline over crude oil as well as lower crude premium. Petrochemical business's performance also increased from higher product spreads of both Olefins and Aromatics despite lower sales volume. International Trading business's performance increased primarily from higher margin per unit of out-outtrading of refined products. Oil and Retail business's performance increased following higher average gross margin per liter, mainly from diesel and gasoline. In addition, New Business and Infrastructure business's performance increased from SPP power plants due to the increase in Ft together with the decrease in natural gas and coal costs. However, Exploration and Production business's performance decreased from lower averge sales volume and average selling price. Gas business's performance also dropped from the lower gross profit of S&M business driven primarily from lower average selling price of industrial customer following the drop in fuel oil referenced price in global market together with higher gas cost due to higher pool gas price. Whereas, gross profit of GSP business improved from lower feed cost following the lower gulf gas price despite the decrease in overall sales volume as a result of lower demand from customers. Net income of PTT and its subsidiaries in 1Q2023 was Baht 27,855 million, increased by Baht 9,190 million or over 49.2% from the 4Q2022 at Baht 18,665 million in accordance to the improved EBITDA coupled with lower loss on derivatives and depreciation and amortization expenses. Moreover, in 1Q2023, there were loss recognition of non-recurringitems (PTT's portion) after tax approximately Baht 100 million as aforementioned which decreased from 4Q2022 which had a loss recognition of non-recurringitems approximately Baht 7,700 million mainly from PTTEP's impairment loss on Mozambique Area 1 Project and the provision for the class action settlement from Montara incident. However, there was a lower FX gain in 1Q2023 as compared to 4Q2022.

As of 31 March 2023, PTT and its subsidiaries had the total assets amounting to Baht 3,416,864 million, increased by Baht 1,232 million or 0.04% from 31 December 2022 which had the total asset amounting to Baht 3,415,632 million mainly from the increase in cash and cash equivalents from PTT Group's operating activities. Property, Plant, and Equipment (PPE) also increased mainly from Thai Oil Public Company Limited (TOP)'s additional construction in progress of Clean Fuel Project (CFP) as well as PTTEP's exploration and evaluation assets of G1/61 Project and G2/61 Project. Whereas the total liabilities were reported at Baht 1,851,237 million, decreased by Baht 30,702 million or 1.6% from 31 December 2022 due to the decrease in other accounts payables together with lower interest-bearingdebt as a result of lower long-termloans and bond. Moreover, the total shareholders' equity as of 31 March 2023 was Baht 1,565,627 million, increased by Baht 31,934 million or 2.1% as a result of the increase in PTT and its subsidiaries'net income in 1Q2023.

PTT Public Company Limited 1Q2023 4

Economic Overview in the First Quarter of 2023

The global economy in 1Q2023 grew at a slower rate from 4Q2022, following a slowdown in major economies, namely the US and Euro Area, as a result of the continuing monetary policy tightening of major central banks in a bit to tame the remaining high inflation, including the Federal Reserves at its May 2023 meeting raised its federal funds rate for the tenth consecutive time since the interest rate adjustment cycle began in March 2022 to a range of 5.00% to 5.25%, together with addition pressure from the troubled financial institutions, following the collapse of Silicon Valley Bank in the US and the liquidity crisis at Credit Suisse Bank in Europe, as well as the ongoing conflict between Russia and Ukraine. Meanwhile, Chinese economy expanded, following the recovery of both private consumption and industrial production activities after lifting the Zero-COVID policy. The International Monetary Fund ( IMF) in April 2023 revised down its global growth forecast for 2023 to 2.8% from its January 2023 forecast of 2.9%.

According to S&P Global's report in April 2023, the world's demand for oil in 1Q2023 averaged of 100.1 million barrels per day (MMBD), which decreased from 4Q2022's average of 100.7 MMBD due to the slowdown of the US and European economies amid high inflation and rising interest rates from several central banks. However, compared to 1Q2022's level of 98.1 MMBD, the world's demand for oil increased due to economic growth, including China's recovery after reopening its country.

Unit: US$/barrel	1Q2022	4Q2022	1Q2023	% Inc. (Dec.)
YoY	QoQ
Average Dubai Crude Oil Price	95.6	84.8	80.3	(16.0%)	(5.3%)
Gasoline Crack Spread	17.8	9.4	18.7	5.1%	98.9%
Diesel Crack Spread	19.5	39.3	25.2	28.6%	(35.9%)
FO Crack Spread (180 - 3.5%S)	(8.3)	(22.5)	(16.3)	(96.4%)	27.6%
GRM-Singapore Crack	8.0	6.3	8.2	2.5%	30.2%

Dubai crude oil price in 1Q2023 was averaged at US$80.3 per barrel, decreased from 4Q2022 at US$84.8 per barrel and decreased from 1Q2022 at US$95.6 per barrel as the market eased concerns that sanctions would tighten the supply, with Russia continuing to export crude oil to non-European buyers steadily. This was compounded by market concerns about the situation of financial institutions in the US and Europe, while non-OPEC oil producers increased production continuously, leading to an excess of supply over demand. Although the OPEC+ group had plans to reduce production to balance supply and demand.

Petroleum product prices at Singapore spot market

• Gasoline crack spread averaged US$18.7 per barrel in 1Q2023, up from US$9.4 per barrel in 4Q2022 and US$17.8 per barrel in 1Q2022 due to the recovery of the Chinese demand and the increasing trend of the blend component that adds octane level to gasoline amidst the transition to summer-grade gasoline in the US and the increasing proportion of the additive naphtha to gasoline blend in Europe.

PTT Public Company Limited 1Q2023 5

• Diesel crack spread averaged US$25.2 per barrel in 1Q2023, down from US$39.3 per barrel in 4Q2022 due to the export of refined oil from Russia entering into Asia that began to have an effect after the imposition of sanctions. Additionally, there were increased contributions from new refineries that pushed down the price differential. However, compared to 1Q2022 at US$19.6 per barrel, the diesel crack spread was higher as the Europe has to sought diesel from the other sources to replace diesel from Russia.
• High-SulfurFuel Oil 3. 5% crack spread ( HSFO) averaged US$-16.3per barrel in 1Q2023, up from US$-22.5per barrel in 4Q2022 due to increased demand for fuel oil from China for electricity and shipping. However, compared to 1Q2022 at US$-8.3per barrel, the high-sulfurfuel oil 3.5% crack spread was lower due to higher export volume from Russia to the regional.

Singapore Gross Refining margin (GRM) during 1Q2023 averaged at US$8.2 per barrel, increased from 6.3 US dollars per barrel in 4Q2022 due to the recovering demand for gasoline, while there was pressure from the increasing production volume. However, compared to 1 Q2 022's average of US$8 .0 per barrel, the GRM was slightly increasing as the low reserve levels of each product.

	Unit : US$/Ton			1Q2022		4Q2022			1Q2023			% Inc. (Dec.)
								YoY		QoQ
	HDPE: CFR SEA	1,330	1,033			1,085		(18.4%)	5.0%
	PP: CFR SEA - Film	1,387	995			1,096		(21.0%)	10.2%
	BZ: FOB Korea	1,073	825			930		(13.3%)	12.7%
	BZ-Naphtha	196	152			241		23.0%	58.6%
	PX: CFR Taiwan		1,087		979			1,034		(4.9%)	5.6%
	PX-Naphtha		210		306			345		64.3%	12.7%
	Naphtha (MOPJ)		877		673			689		(21.4%)	2.4%
	Propane (C3): ARAMCO CP		803		617			700		(12.8%)	13.5%

Petrochemical prices, both olefins and aromatics, in 1Q2023 increased from 4Q2022 due to supporting factors such as the tight supply of naphtha resulting from seasonal maintenance, especially in the Asian region, and high crude oil prices.

• Olefins: High density polyethylene (HDPE) price increased comparing to 4Q2022 due to the demand from infrastructure development in China. Similarly, Polypropylene (PP) price also increased comparing to the previous quarter, partly from the reduction of production capacity of the Propane dehydrogenation (PDH) plant as higher propane prices that made production economic infeasible, especially during February. However, the sluggish global economy, lower-than-expected inventory buildup before Ramadan, and new supplies entering the market, particularly in China, limited the price increases.