Good morning. My name is Voranart, IR Manager. I would like to welcome you to SPRC analyst meeting for the third quarter 2025 performance. Before we begin, I would like to introduce SPRC management team who are presenting the meeting today with me. First, Herbert Matthew Payne II, our CEO.
Good.
Second, Shashank Nanavati , Executive Vice President, Commercial. And Nutsara Somkiatweera, Vice President, Finance and Accounting. And Narongrit Chaiyaras, Vice President, Strategy, Policy, and Development. We will refer to the presentation that available on the SPRC website. Today, the meeting will begin with the key strategy and highlights by Matthew, and followed by the performance analysis by Shashank and Nutsara. And then Narongrit will present for the looking ahead before the Q and A sessions. If you have any question, please click on the raise hand button or send me your question through the chat channel. As a reminder, this virtual meeting is being recorded. At this time, I will now turn the session to our CEO. Please go ahead.
Good morning. Before we begin, on behalf of SPRC, I would like to take a moment to express our deepest condolences on the passing of Her Majesty Queen Sirikit, the Queen Mother. Her lifelong dedication to the Thai people, as well as her enduring legacy of compassion and service, will forever be remembered. We extend our heartfelt sympathies to the royal family and to the people of Thailand during this time of mourning. Okay. Now, please let me take you through our enterprise performance enhancement initiatives, which highlight the key improvements that we are driving at SPRC. I will start with the refinery. For our upcoming turnaround next year, we have successfully prepared the T&I Superior Initiative, which aims to provide the best-in-class CDU downtime, reducing our down days from 30 days to just 24 days.
This initiative aims to achieve the best CDU downtime in our history, reflecting our commitment to continuous improvement. We are also leveraging superior technology and digitalized optimization to maximize productivity throughout the turnaround and inspection event. Additionally, in the event, we are focused on value creation. Our turnaround event also includes projects that create value, such as our light crude processing project, which will increase our capacities. This project will improve our CDU throughput utilization and our margins after the turnaround is completed. On the infrastructure side, we are also progressing our SPM project to ensure safer and more reliable operations. This upgrade of our SPM meets world-class specifications and minimizes environmental risk in the future. Additionally, we have assured global quality standards are achieved, along with smooth on-time process through collaboration with our parent company, our major shareholder, and partners.
These efforts reinforce our ability to deliver safe and efficient operations. With our current level of readiness, we are confident on executing the turnaround activities effectively and efficiently. In addition, we also heard the investor feedback last time regarding our classification of the expenses related to our turnaround and inspection event and associated projects. We have since revisited our accounting practices, and this has led to a reduction in the cost allocation of the event to the OpEx category going forward. Next, I'll turn our attention to our commercial activities. We have completed our formal internal look-back on the acquisition of Star Fuels. The transaction delivered a compelling value proposition with an initial rate of return in the double digits. We are achieving the synergy benefits from value chain integration, enhanced business margins, and this is providing a solid foundation for the long-term performance of SPRC.
Additionally, following the acquisition, we have exceeded our expectations for increasing domestic sales and driving significant OpEx savings through the commercial business, bringing our total commercial cost down to less than $1 per barrel through efficiency improvements and rigorous cost optimization. Looking ahead, we are focused on driving sustainable growth and enhancing margins of our commercial business. I'll now look at our financial highlights before turning it over for further analysis. Through the first three quarters of 2025, SPRC has delivered an adjusted net profit of $73 million. Our operational performance was supported by an enterprise margin of $6.28 a barrel and an additional contribution from our bottom line improvement program of $0.73 a barrel. Our total enterprise sales volumes have increased to over 52 million barrels a day, thanks in large part to our successful partnership with Pure Thai Energy in the retail space.
Through the integration of our refinery and commercial operations, we have achieved over $40 million of enterprise value capture to date this year. The refinery has operated well, with a strong crude throughput utilization at 93% and solid refining margins year to date. On the commercial front, as I mentioned before, we've increased our domestic placement, with our domestic placement now to 94%, up over 4% from last year. With that, I will turn it over to Shashank Nanavati, our EVP of commercial, to discuss our enterprise performance.
Thanks, Matthew, and good morning, everyone. I wanted to start by talking about the market and the performance that you see in the third quarter. Starting with the GRM chart on the left, you can see the comparison between SPRC's refinery GRM and the Singapore GRM. Throughout the third quarter, SPRC delivered about $5.50 per barrel and has consistently delivered competitive margins over Singapore GRM of roughly $4.20 a barrel. This is supported by our operational efficiency as well as our optimization strategies in domestic placement. The margin actually improved from the previous quarter, as you see in the chart, mainly supported by stronger middle distillate cracks amid a fair amount of supply uncertainty driven by the drone attacks and damages to Russian energy infrastructure, and additional sanctions on Russian oil.
If you shift your attention to the top right chart that talks about the price of crude oil in Dubai and the Murban official selling price. The average price of Dubai crude in the third quarter rose to just over $70 a barrel. That was about $4.50 higher than what it was in the second quarter of 2025. This was driven by strong seasonal demand, ongoing geopolitical tensions in the Middle East, as well as some potential blockade risk around the Strait of Hormuz. In addition, concern over some steep U.S. tariffs on global partners also added to the uncertainty. EU sanctions against Russia oil and some outages in the U.S. Gulf Coast refineries also contributed to supply risk, which were supportive of the crude price going up.
However, as we've seen recently, OPEC+ continues accelerating unwinding their production cuts, which is adding to global supplies, and that will help suppress the price pressure a bit going forward. For Murban specifically, the OSP continued to increase to $2.30 a barrel in the third quarter above Dubai, which reflects its ongoing adjustments that they're making in terms of responding to supply fundamentals and crude dynamics. We expect the Murban OSP to remain slightly elevated, with some strong trading activity and robust Asian demand as we head into the drier months and the high-demand months. However, I think with supply-demand adjustments that we've seen recently, as well as ADNOC's competitive positioning strategy, we expect there to be a bit of a cap on how high that price, the OSP price, can further increase. On the product crack side, the bottom right chart.
Sorry, if you just go back to the Thank you. As I mentioned, the middle distillate crack was one of the big drivers of the stronger GRM in the third quarter, and you'll see that in the chart influenced by ongoing supply constraints from some refinery closures in Europe and slow ramp-up at the Dangote Refinery, as well as some sanctions and lower exports from China and South Korea. Looking ahead, the diesel crack will mainly support refinery margin for the rest of the year. It's one of the primary drivers for the GRM, and that's driven largely by supply uncertainty concerns. Ongoing Russian refinery disruption, ongoing sanctions from the U.S. and the EU, as well as some turnarounds towards the second half of the year, will continue supporting the GRM. If you were to shift to the next chart, talk a little more about SPRC and Thailand.
In the third quarter, SPRC increased our domestic supply share of gasoline and diesel to about 19%. That was supported by optimization of production and throughputs, given the favorable margin environment. This was achieved despite some seasonal challenges that we've seen with lower demand and heavy rainfall throughout the country in the third quarter. Our sales to consumer segment increased to 4.5%, an ongoing increase for the past 12 months. This aligns well with how we have focused on a spot-to-street strategy to optimize our sales channels and maximize our enterprise net back margins. We continue expanding our retail station presence. As you'll see, we're up north of 530 Caltex stations nationwide. A big increase from last year, driven primarily by the partnership from the Pure Thai Energy Group.
In total, our sales portion to business and third parties was up to 14%, and that was supporting our decision to max our production given the strong refining margins in the quarter. If we move to the next chart on the sales performance overview. As mentioned earlier, to capture the favorable margin we saw and maximize refinery utilization, the total enterprise sales volume in Q3 reached almost 18 million barrels. So a very strong quarter of sales for us. The year-to-date domestic sale volume, as Matthew mentioned, was up to 94%, which is a big increase from the year-over-year, but maintaining our strategy so far in 2025.
For retail specifically, on the far right, the upward market trend shows that our strengthening competitive positioning has taken us year-over-year to a higher growth. Year-to-date volume growth is about 8% year-over-year, with a market share of roughly 5.7%. This is driven by network expansion, as I mentioned, of new sites joining the Caltex brand, and most notably the partnership with the Pure Thai Energy Group. With that, I'll pass it over to Khun Nutsara to share more about the financial performance.
Thank you, Khun Shashank, and good morning, everyone. For our financial performance for the quarter of this year, we can see that in the enterprise margin that Khun Nanavati mentioned at the beginning, the margin in this quarter. In price margin, we achieved $6.9 per barrel, and it's significant from the previous quarter. This comprise of inventory value of $5.4 million and commercial margin of $1.9 million. The strong refined product mix was influenced by seasonality on the heightened considering global supply, while commercial margin also gets fed support by inventory profit. So given the increasing crude oil price, gas oil also rise again of $1 per barrel, while there was a stock loss in the previous quarter of $3.4 million. The enterprise margin for nine months of this year, we achieved at 6.3 per barrel, six month, not six per barrel.
This is also growing 4% year-over-year. In addition to that, SPRC also continue to implement optimization initiatives within the organization, including refinery operations and commercial activities. This is to strengthen business integration and value creation. The company also remains focused on fostering a positive culture across the organization and ensuring that our expenditure are productive and appropriate. Looking at the enterprise OpEx. In third quarter of this year, total enterprise OpEx was $2.6 million, declining from the previous quarter and also below the same quarter of last year. OpEx is impacted company chose to strengthen the operating cost efficiency method that Matthew already mentioned earlier.
Yeah.
We are also pursuing ongoing efforts to enhance cost effectiveness across the organization. The decrease in OpEx reflect in both refinery and commercial area. Apart from that, the T&I OpEx also starting to recognize this year in this quarter. In this quarter, adding approximate $0.40 per barrel on top of the lower operating cost. In comparing nine months of this year to nine months of last year, OpEx also, sorry, OpEx show a slight double trend relating to the ongoing cost efficiency program. Given the upcoming that Matthew also mentioned earlier that there is the concern relating to the cost to the investment community. So we taking this feedback into account, and we have revisited the accounting practice for the recognition of the cover relating to such development and project investment.
As a result, we revised the classification between expense and classification, which is now estimated that approximate one third of the total cost, which we communicate earlier that total cost of the terminal activity in Panama, $120 up to $150 million. So one third of that will be expensed to OpEx, and the remaining of that cost, which is around 70%, will be capitalized to CapEx in the balance sheet. This accounting practice is in compliance with the high accounting standard and also in line with the practice of the industry. Looking at the consolidated EBITDA and consolidated net profit for the third quarter, we have consolidated EBITDA of $88 million, significantly growth quarter-over-quarter and year-over-year.
This was backed by stronger refinery margin and commercial margin together with operating cost reduction. Meanwhile, the consolidated profit, which adjusted with the stock gain and loss, was $47 million, improving year-over-year trend. If excluding the stock gain loss, the adjusted net profit this quarter is at $36 million, which is up year-over-year from the previous period. Comparing for nine months of this year comparing to previous year, SPRC reported EBITDA of $138 million and consolidated net profit of $45 million. Meanwhile, excluding the stock loss in this year from the beginning in our price, the adjusted net profit for the nine months was $73 million, slightly lower than $78 million of last year. This is the year-over-year decline is actually mainly from the one-time interest gain that we received from last year.
So if taking out the interest impact, this year performance is better than previous year. On the next slide on the financial position. In term of the statement of financial position, SPRC reported slightly decrease in total consolidated asset. This is because of the decreasing oil price. In term of the liability also slightly decreased because of the similar impact from the decreasing oil price that impact our payable. We also see the decrease in equity in this quarter because we generate profit and we were able to repay the debt to the bank. On the net interest bearing debt to equity ratio, SPRC maintain healthy balance sheet with debt to equity ratio at 0.3 year, remain relatively low and stable compared.
In term of the dividend payment, our policy is to pay twice a year, and we can see that for it. At end of the year, we declared a dividend of THB 0.5 per share. SPRC reinforced our commitment to deliver a stable and reliable dividend to the shareholders, which is our top financial priority. This is the summary of the financial performance. Then I ask Narongrit to come and report the looking ahead.
Thank you, Khun Nutsara. Good morning, everyone. Today, I would like to talk about the future opportunities. At SPRC, we remain focusing on unlocking future opportunities through two key strategic pillars, which are first, optimizing value chain, and second, profitable growth of marketing business. For the first one, optimizing value chain, we are focusing on strengthening our financial discipline, reserving cash, and prioritizing smart investment that maximize total shareholder value. We also are preparing and are ready for the upcoming 2026 turnaround, which will ensure us a very safe and reliable operations.
Together, with enabling increased processing of lighter crude, we are ensuring project unlock constraints, enabling us to process a higher ratio of light crude. The light crude is our economic crude because of narrowing light or heavy crude price differential and gain benefits from higher gasoline and jet production. This would enhance sustainable run rate and margin. We also are enhancing cost efficiency and operational performance through advanced feedstock and product optimization, including freight cost reduction.
Are you here yet? I'm about to arrive.
Through flexibility and LEAP initiatives. Bottom line, this main plan. In addition, we continue to explore integration opportunities with refinery and petrochemical partners to capture full value chain benefits. Another exciting area is the circular economy, where we aim to capitalize on future demand trends through innovative infrastructure solutions. The second point, profitable growth of marketing business. We are implementing the spot to street strategy. We continue to do that, as Shashank mentioned earlier, in order to optimize sales channels and maximize fuel netback margins. Building a robust retail ecosystem will accelerate domestic growth while reducing cost to serve through streamlined logistics and supply chain efficiencies. Finally, we are expanding product placement and securing new term export opportunities in ASEAN, diversifying revenue streams beyond domestic market. These initiatives position SPRC to deliver sustainable growth and resilience in an evolving energy landscape very well. Go to the next slide.
For the business outlook, in the last quarter of this year, the key focus areas that I would like to share to everyone are two key points, the efficiency and readiness. As we move through the fourth quarter, our key focus will be in three key areas. 1st, we aim to maximize production and driving sales throughput to capture a favorable margin at this moment. The quarter-to-date Singapore gross refining margin, GRM, is very strong, as you have already seen.
This momentum positions us very well to take market opportunities and capture all the values. 2nd, we are unwavering to ongoing cost efficiency, ensuring we maintain competitiveness in a dynamic environment. Every initiative is aimed at sustaining margins while delivering value. Finally, we are prioritizing pre-turnaround preparations to secure operational readiness for the upcoming turnaround. This proactive approach will help us execute flawlessly and minimize disruptions. In summary, together, these actions form a strategy that strengthens performance today while preparing us very well for tomorrow. Thank you.
Thank you all management for the presentations. We are now ready to take your questions. If you have any questions at this time, please click on the Raise Hand buttons, or you can send through the chat channels. Okay, Khomsan, please go ahead.
Can you hear me?
Yes.
Okay. Thanks, first of all, for the management and IR team for the new presentation format, which is a big LEAP from the previous version now that you have made an improvement on the oil retail business. Thanks for the IR team as well. The first question is, perhaps due to the poor connection, I did not get what Nutsara said about the turnaround cost. Can you repeat that? The second question is that, can you add more color on the accounting treatment of this turnaround cost that Matthew mentioned early on? I mean, going forward, are you going to capitalize or reclassify some of those into investment rather than OpEx this time or next turnaround? The third question is for Chaiyaras. Can you add more color on the magic that you used to sort of improve significantly on the EBITDA of Oil Retail?
We want to know that others does not perform as good in the third quarter. The next question would be, can you explain the benefit of the gasoline or light yield enhancements project? I.e., what was the pre and post yield after this, and would that change your crude diet significantly, i.e., you can take Midland or U.S. crude to replace Murban? What is the rationale for that? Is Chevron looking for or long term seeing light crude prices going to come down for some reasons? If this project impact cost in any way?
I think last question, sorry, a number of questions, so I am asking for on behalf of the others as well. In fourth quarter, would you be able to capture the full crack run you have seen recently? Is that going to offset freight spike and Murban which stays strong? On the fourth quarter or in the short term, there is a dislocation of Brent, Dubai, and Murban. Do you think that you would change your crude mix in the short term, or think that the current mix is optimum for SPRC already? Thank you.
Thank you, Khun Khomsan. Let's start with the first question about the T&I OpEx, and I think we could link to the accounting treatment you are asking. Khun Nutsara will give you the answer. Thank you.
Okay. This is taking the feedback from the shareholders regarding the accounting treatment of turnaround projects and also T&I expense. We have revisited our accounting practice, and we also discussed with our auditor whether this is doable or not according to the accounting standard. Finally, in terms of the accounting treatment, we can capitalize more for the expense relating to the turnaround activities.
Meaning that for the turnaround expense that already we partially we charged and also for the incoming activities in first quarter of next year, the total expense that would go to OpEx would be in proportion of around one third of that 140 billion, 150 billion. The remaining of that, which is around 70%, would be capitalized. Whether this is starting from this year and whether continue for the future, yes, we will consistently follow the same pattern starting from this.
Thank you, Khun Nutsara. We go to-
Thank you. Khun Nutsara, Khunwone, if I could add just one other thing. When it comes to the T&I cost, as Khun Nutsara mentioned, we did take the feedback from last time and reviewed our accounting practices, and we've shifted some OpEx to CapEx as a result of that, and that will be an ongoing practice. Above and beyond that, in our preparation for the T&I that is continuing, as I mentioned, we've really scrutinized the scope, and we have scrutinized the way that we intend to do the work in the turnaround, using some new technologies for scheduling and preparing the work.
In addition to the accounting treatment, we've also just seen the total amount that we intend to spend on the T&I event also decrease. There's one thing that we've shifted some costs from OpEx to CapEx so that these costs won't hit P&L directly. We've also been able to improve our outlook on the performance of the turnaround from an overall cost standpoint, whether it's CapEx or OpEx. We expect that total cost to be lower.
Thank you. We go to the second questions about the more detail, regarding to the commercial margin and outlook demand. Please, Khun Shashank.
Thank you. Thanks for the question. I don't know if I'll call it magic, but I think it was some of the fundamental things we actually have been doing for a while that are perhaps finally starting to show up in the EBITDA and the margins on the commercial businesses. One thing is we mentioned the spot to street strategy, so we've continued to optimize our sales away from the lowest margin sales that we have into some of the highest margin sales, which would include expansion of our retail business. As we continue to push more volume through retail and improve our same store sales, I think we're seeing an overall increase in the margin contribution from commercial.
A second thing I'd point to is we've continued to highlight what we call the synergy values or the enterprise value capture from the integration of the refining and marketing businesses. Some of that is showing up in the EBITDA of the commercial business that you see, where we get more efficient on our logistics. We have tighter integration between the refinery and our marketing. We're able to do better around unplanned events around the refinery. We're able to do better adjusting to changes in demand as well as production. I think some of those things are just showing up in many small ways, adding up to some bigger numbers. The third thing I'd say is we continue to really drive our costs downwards.
Not just in the refinery in terms of OpEx or in the OpEx on the commercial side, but also in our cost to serve the customer. We continue to find ways to drop the cost of bringing our product to the market and getting it to the end customer, wherever that may be. In general, we have done a number of things that overall I think contribute to the results you see on the commercial side, and we do expect that to continue. We do expect that to continue showing up, as you see in the results. Hopefully, we continue adding more margin with all the effort our team is putting in to optimize. But I think it really speaks to, in general, the value of having an integrated refining and marketing business and then optimizing across the entire value chain.
Thank you. Okay. For the third question is about the increased light crude processing project, for the benefit and the crude sourcing information. Matthew, could you please provide the detail? Thank you.
Yes. I will be high level here, but essentially the light crude processing project, you asked about what were the drivers. Before we even look at any specific grade of crude, whether we are talking about Murban or WTI, or Western African light crudes that are on the market. In general, the market trend over the last few years has been that the differential price between heavy crude and light crude has shrank. That lower differential, when you combine that with our refinery configuration, really means that the light crude as a feedstock just has a higher value for us. When the crude prices are as narrow as they are between light and heavy crude, our ability to take that light crude and turn it into more high-value product just delivers a higher margin, a higher value through our refinery.
What you will see going forward is that we will just process more light crude. We have not determined whether or not that light crude will be Murban or whether or not that light crude will be WTI or American, U.S., light type shell, light tidal type of crude or even West African light crude, but the crude slate will be just lighter. Additionally, if you look at our current crude slate, we are already primarily running a pretty light slate. The issue is that on the pretty light slate that we are running, the optimal slate that we are running, we can usually only achieve about 93%-94% crude throughput utilization on that slate without hitting constraints in the refinery.
This project will allow us to run a very similar slate but at a higher crude unit throughput, we will be able to actually approach 100% of our crude unit capacity. That's the key driver on the light crude project. It allows us to run at a higher crude unit throughput utilization at the highest margin that we can, because we can run the crude oils that match our configuration at this given sort of market condition, where the light to heavy crude differentials are low.
Okay. Thank you, Matthew. Please allow me-
If I may.
Sorry.
Sorry.
Please go ahead.
I will just add one thing, I think, just to add onto what Matthew said. I believe one of the many questions was, what is the yield enhancement on the product side? I will just kind of generically again, high level say, we are going to be able to shift yield about 3%-5% of our total yield towards jet and gasoline primarily. We have some options to switch, but essentially making more jet and more gasoline than we would be today.
Thank you. We go to the last question from Wanshan about the outlook for the first quarter. How can we do for the capture the full crack benefit right now and any impact from the freight? Please provide the answer for this.
Shashank, I can take a I will take a pass at this. I think the question was, the Q4 margins are very strong, and do we expect to be able to capture full margin? We do expect to have our typical spread where we are capturing a higher margin than the Singapore, than the generic Singapore GRM. Even though it was mentioned that the Murban differential is pretty strong, the Dubai to Dubai to Brent differentials are a little bit wide right now, and there is some strong pricing in the freight market. But through our opportunities for optimizing our raw material slate, we do expect to be able to continue to outperform the Singapore GRM across Q4.
Thank you. Matthew, I have just last one follow-up question. When you mentioned about the utilization rate, post the gasoline project, will it allow you to run at full versus less than 100% that we have seen since the previous turnaround? Is the reason that you was not able to run 100% in the last couple of years, is that because of the demand or these particular issues that you have seen, which is going to be fixed post the gasoline project? Thank you.
When we made the enhancements in the last turnaround, in the 2019 turnaround, we designed for a slightly heavier crude slate. Today we can achieve maximum throughput when we decide to run a slightly heavier crude slate. But that slightly heavier crude slate has not been the most economically optimal for us, given the rest of our configuration. What you will see going forward is even when the economic optimal slate is lighter, we will still be able to achieve 100% of that economic capacity. You will see many more days of us operating at 100% of our crude throughput capacity. Like I said, today, we average somewhere between 90% and 93%. I would expect that to be upwards 98%-100% on average going forward, post this project.
Thank you.
Thank you. Next, Kunamonrat, please ask the questions.
Thank you. First of all, may I extend my appreciation to your change in the disclosure. It really helps this community to understand the company much better. I actually have around four questions. The first one is, about the T&I CapEx and OpEx, how much has been booked in the third quarter, and how much in the fourth quarter, and then in the first quarter for our modeling purpose? Second, actually in the fourth quarter, we have another refinery shutdown, PTTGC, and I understand that you have the byproducts exchange between PTTGC and SPRC. What would be the impact on SPRC production in the fourth quarter?
The third question is on the yield that you mentioned. You can shift to produce more jet and gasoline by about 5%. What is the other products that we should do the reduction in the yield? The last question is on the dividend payout. Since you have the numbers for the nine months, and then you can forecast for the fourth quarter earnings, can I ask how much is the payout ratio that you intend to pay for the full year operation in year 2025? Thank you.
Okay, thank you. Let's start with T&I's CapEx and OpEx that they have been booked in second quarter, third quarter, and how about it is going to be in the rest of six months. Please, Nutsara.
Okay. For example, if we say that the total expense, for example, is 150. What already has been booked as the expense for the first nine months of this year, let us say 1/3 of 150, it is going to be around $50 million. What we already book for the past nine months is already 50% of that amount, and the remaining 50%, we expect that we are going to spend around less than $10 million in fourth quarter of this year and remaining 40 in next year.
Thank you. Maybe Khun Nutsara stay on with us to answer about the dividends.
Okay. We still rephrase our communication earlier that we focusing on the financial priorities and keep the interval steady and the right amount dividend as our commitment to the shareholders. In terms of the number, we do not want to say the exact amount, but we still keep to ensure that the dividend payout is in line with our policy and also in terms of the dividend yield is also competitive to the market.
Thank you. I will move to the impact on the product exchange with PTTGC. Any impact in the fourth quarter that we can expect? I think Matthew and Shashank could provide us for more detail. Thank you.
Yeah. Maybe I can just chime in, and feel free to jump in, Matthew. I think at the highest level, even though we have byproduct and raw material exchange with GC, given that we have the shutdowns on a planned basis, both their shutdown as well as our shutdown, turn around next year. For the most part, the impact is not material to our performance. We have adjusted in a way that allows us to continue operating to the economic optimum, given the situation. I would say it will not be material to our fourth quarter performance. I guess maybe I can address the next one, I think is the question around the jet and gasoline yields increasing, up to 5%. I think the question was, "What may be going down or what is it coming at the expense of?
Right.
I think in general, I think the answer is two things. One is, as Matthew mentioned, we are going to be able to actually hit our higher utilization rates more often, right? Moving to, let us say, 98%+ , and that is going to just increase the number of barrels we are producing, which some of that will go into the high value product like gasoline and jet. We are going to be able to upgrade a little bit of our gas oils into the higher value products as well. But in general, the higher utilization is going to drive the higher yield, which will show up as jet and gasoline.
Thank you. We go to for our next person, Wattana, please ask your questions.
Thank you very much, and congratulations for your impressive performance this quarter, and thanks again for the new disclosure that you have put out this quarter. Let me begin my first question. A little bit of housekeeping on the cost for the turnaround. I just want to reconfirm with Pinut, there won't be any retroactive adjustment on the reversal of OpEx, which you have already been booked since earlier this year. My second question would be on the commercial side. Can I ask how much of the improvement in the commercial margin this quarter came from the impact of jet fuel? There should be some one month lag in terms of jet fuel margin.
Also, how much come from the change in position of the oil funds, in which in the previous quarter, you have to give money back to oil fund rather than take the money out from oil funds. My third question is also on the commercial. Can you share the retail market share you had in third quarter compare with the second and the first quarter for Caltex Plus and PTT stations? Then a little bit more on the dividend. Can we assume that with a better performance that you have in the third quarter and potentially also in the fourth quarter, we should be able to expect higher dividend per share from SPRC, that is, you maintain payout ratio? Thank you.
Thank you, Wattana. So let's recap the first question and the last question together for Nutsara regarding to the T&I's cost, that any impact for the retroactive, and the other one is about the dividends. What do you say?
Okay.
Please, Nutsara.
The first question regarding whether there will be any retroactive adjustment. Yes, out of that, for the expense that already recorded in the first six months, we made some adjustment already in third quarter, and there would be more adjustment in fourth quarter. The number that I provided earlier that the excess that have been booked, after the adjustment for the first nine months is already approximate to $35 million. With total of $50 million that we revised our classification. In fourth quarter that I also explained earlier that we expect the excess together with the accounting adjustment. The excess that going to be in fourth quarter will be in the range of $5 million-$10 million this year. In term of the dividend payment, yes, we still stick with our dividend policy of pay 50% of the adjusted net earnings.
We also still emphasize on our financial priority that we need to pay the steady and reliable dividends. The second priority is for any investment in the growth project. The third priority is if we have excess cash, excess retained earnings, or have the superior performance, we also pay the dividend to the investor.
Thank you. The commercial questions about the margin enhancement and impact from jet and the oil funds, and also about how much of the retail market share by quarter. Khun Shashank, please provide the detail for us. Thank you.
Let me start with the retail market share question, and I just may seek a clarification on the question about the oil fund and margins. On the retail market share, I think, as the chart showed year-over-year, but actually over the quarters, the market share has continued to rise on the retail side for the Caltex stations. Part of that is, as you mentioned, you may reference the Pure Thai partnership. As we've brought on those stations and rebranded them to Caltex, we've seen the volume increase through those stations. We've also seen some same store sales increases from our existing stations that we had.
In general, our market share was closer to 5.4% at the start of the year, and we've driven that to about 5.7% now. We had 5.3%, 5.4%, sorry, 5.4%, excuse me, not 5.1%. 5.4% towards the end of the year, and now it is 5.7% market share on the retail through the third quarter. We will continue working to increase our market share over time. On the second question, or I guess the first question asked regarding the oil fund and margins, could you repeat that question or maybe I missed something on my end?
Yeah. Your competitors also had better margin performance this quarter. Partially, they benefit from the fact that you have to give money back to oil fund in the third quarter rather than receiving the monies from oil fund, and they benefit with some time lag on this in terms of margin. Since you also have jet fuel exposure, normally jet fuel contract would be one month lag versus the actual spot fuel price. I am not sure how much of the margin improvement you got from these two factors in third quarter.
Yeah. Perhaps I can ask for an assist from Khun Nutsara on specific to jet fuel. In general, I think the jet fuel question, there is a lag built into our contracts, obviously, from how the contracts are priced versus the spot movement or pricing. We do sort of mark to a whole month average in our financials at the end of the month. In general, the third quarter was a bit choppy. It was up and down. It was not just in one direction. There was some benefit in the movement of the pricing, for example, on the jet fuel, as you mentioned. That would be in the overall earnings for the commercials. That was part of the story for the commercial earnings. That was a negative impact in Q2, for example.
Our view is over the course of the year, it sort of corrects itself or moves up and down, and then we can evaluate the business net of the stock loss and gain so we really understand how the core business is doing. Oil fund is sort of similar. I do not think there was much benefit on the timing of the oil fund in the third quarter, specifically. In some months, we are paying into the fund, and some months we are getting a bit of a refund given the policy of the government. I do not know, Khun Nutsara, if you have specific information, maybe we would have to provide that offline to the analyst community.
Yes. Regarding the oil fund subsidy, right now we have just only the small amount of the subsidy left for SPAS. But for commercial, we do not have any issue on that.
Thank you. As we have three minutes left, I will make it quick. Khun Nakhar, please ask your question. Thank you.
Okay. Thank you. I have two questions. Maybe first question is just to clarify about the planned turnaround. Because in the presentation that we said we are going to reduce the turnaround from 30 days - 24 days. I wonder if the cost will also come down from reducing the turnaround time. Also about the OpEx and CapEx, on the OpEx part that Pinut mentioned, about $50 million and $25 million already booked for the first nine months this year, and $10 million in Q4. Then the remaining $15 million will be booked in Q1. I think the number is quite low from what I took it first time in the last meeting. Just want to make sure that the number that I take, this is correct.
Also, on this turnaround, because when we reduce the turnaround time and if CapEx, I do not know whether it is going to be reduced. Then the utilization rate after the turnaround will go up from 93% - 98%, 99%. Could I expect the cost per barrel will come down after the turnaround? This is my first question regarding the turnaround. Second question is on the commercial margin. Quite a significant increase in the commercial margin because in the last few quarters, we made only about $1 per barrel on the commercial margin, and now we are getting $1.5.
I know that we have done a lot of cost reduction and initiative programs. I wonder if we can use a $1.5 per barrel commercial margin as a base from now on. Because at $1, a little bit one or - $1 +, we could hardly make profit from the commercial business, but now we at 1.5, we make quite a sizable profit. My question is, $1.5, can we use this as a base going forward for the commercial margin? Thank you.
Thank you, Khun Nakhar . Khun Nutsara will take care on the question number one to three. 1st, about the lower downtime and if it has any impact to the lower cost going forward too, and about the remaining cost to book in the first quarter 2026 to recheck that $15 million is the correct number for your understanding, and the last one about the lower cost per barrel outlook after the turnaround. Please, Nutsara.
If you don't mind, I'll take these in summary, given that we have a short amount of time left. The questions about the turnaround, I think your observations are correct. The duration is shorter, and as I mentioned earlier, we've optimized the total event. The total cost for the total event, depending on whether you're looking at CapEx or OpEx, the total cost for the event is a little bit lower than what we had guided earlier. Our expectations for the total cost of the event has come down. Going forward, we do expect a higher throughput rate, and we don't expect any additions to our fixed costs to achieve that. Our overall unit cost should come down slightly. We're only talking about a 5% or only 3% or so increase in throughput on a percentage basis.
There will be a decrease in overall cost per barrel, but it'll be small because the increase is somewhat small. But we do expect to see that. Your question on the commercial side is the sort of performance that you see from here, what you should consider as a base. In general, I would say the answer is yes. We are continuing to improve the commercial business. We expect the margin for the commercial business to continue to improve over time as we are able to continue to grow our more profitable or our better performing sales channels. We expect the overall margin for the commercial business to continue to trend on an upward trajectory. I think I covered in general the questions that you asked.
Okay. Thank you. May I have
Sorry, just to confirm the number that you asked about the OpEx, that already we charged THB 25 million, and your understanding is correct that we are going to spend around almost THB 10 billion in fourth quarter and remaining of THB 15 billion, that is going to be in first quarter of next year.
Thank you, Nicholas. We have running out of time, so let me take the last question in the chat box. About the lower OpEx in the third quarter, please provide more detail about the cost cutting initiative, and this is going to be dropped in further in the future. Nutsara? Oh, Nutsara.
Okay. Yes, that because we have the cost improvement program and we have many cost saving initiatives. For example, in term of the efficiency, in term of the maintenance, whether we can do the with MFO mindset or not, meaning that with non-functional objective, if that really will not only the maintenance, but every single item in our operating cost will ensure that we are still in the competitive regarding the operating cost. We also, whether it is going to be continued or not. Yes, we keep on going in term of this program, and we expect that our operating cost per barrel, in the future, in fourth quarter or even after your turnaround, we expect that the operating cost per barrel will continue to improve.
Thank you. For now, I believe we covered all the question you have. I want to take a moment here to thank you, all of you, for attending our analyst meeting. Have a nice day. Thank you.