[Non-English content ] Good morning. My name is Chutathip, Assistant IR Manager. I would like to welcome you to SPRC analyst meeting for the second quarter of 2024 performance. Before we begin, I would like to introduce our SPRC management team who are in the meeting with me. Let's start with our CEO, Mr. Robert Dobrik.
[Non-English content ] Good morning, everyone.
Next, Mr. Shashank Nanavati, Executive Vice President Commercial.
Good morning, everyone.
Next, Nutsara Somkiatweera Vice President Finance and Accounting.
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Then Chaowasri Luengratanakorn Vice President Value Chain Optimization.
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Next is Hathairat Thongmak Vice President Strategy Policy and Development
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The last lady is [Non-English content] Acting Investor Relations Manager.
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Today presentation, as usual, we will begin with the key highlights by Khun Rob, and then follow by the performance analysis by Khun Nongnaphat. Then back to Khun Rob again for the looking ahead and Q&A session. If you have the question, please click on the raise hand button or send the question through the chatting channel. As a reminder, this virtual meeting is being recorded. At this time I will now turn over the session to CEO Khun Robert Dobrik. Please go ahead Khun Rob.
Thank you. If you could fast-forward a couple slides. Thank you for taking the time to meet with us today. We're going to provide just, like I said, highlights, move into a performance analysis, and then I'll close off with a bit of a looking ahead view. I'd like to start with our corporate strategy, just to realign and talk a little bit about what we characterize as our performance wheel. Our number one objective, our financial priorities, is really to deliver maximum earnings, shareholder return over the long term. By doing so, by maximizing our enterprise margin, we'll talk a little bit about that today. How are we leveraging our expanded value chain to create more value? How do we maintain efficient costs in everything we do, whether it be running a refinery, running a retail networks, how do we maintain a cost mindset?
Leverage our assets, reliability, utilization. Fully take advantage of the assets we have, whether it be our existing stations, whether it be our refinery. How do we maximize the value from each of these assets? Then finally, is really make the investments today and into tomorrow that will create more value. If we continue to make the right investments at the right time, at the right levels, we're confident we can continue to drive ever-increasing shareholder return, and maximize your returns on your investments. Around our frame is really around what are the key enablers, what are the key foundations, and it starts with operational excellence. Running reliably, safely. Everyone goes home every day. We're a key partner in our communities. We protect the environment in everything we do.
These are our core elements that we want to be a partner of choice, both in the community and with arguably potential future partners in our business. Around that is really leveraging key enablers, whether it be our organizational capability, having the right skills, the right people to drive better outcomes, and making sure everyone has a voice. To arguably leveraging digital. How do we make sure that we tap into our data and we harness our data, not only good, but better than our competitors? Make sure that everything we're doing is with an environmental, social, governance mindset. Ultimately, we're driving leading performance. This is our framework for making sure we set competitive targets. We align the entire organization around those competitive targets, and we really drive towards the outcomes that are going to drive maximum shareholder return.
This is our frame, and I just wanted to once again open up with that to explain a lot of the way we think and the way we're working our business. Go ahead, next slide. If we take a quick snapshot of the second quarter, our ultimate consolidated earnings, EBITDA, was $39 million. Our consolidated net profit was nine. It was a challenging quarter from an enterprise margin perspective. The margins in the, we will talk a little bit more detail later, but the general market environment was materially different than the first quarter, and I think you have seen that across all different companies. But even with that, we tried to offset that with continued focus on our Bottom Line Improvement Program, our BLIP. How do we keep driving for opportunities to drive value through our extended value chain and other means to create more monies?
A signpost of that is our first quarter, our second quarter continuing efforts to drive integration value. When we talk about value, we do not talk about whether refinery or marketing, it is really around how do we create enterprise value with an enterprise mindset. Do not get into who made what. It is really around creating more value, make the pie bigger for the entire enterprise. As we look at the end of the second quarter, we added another $7.1 million onto our first quarter, and ultimately a $15.9 million year-to-date benefit as a result of our integration of these new fuels and marketing business. Our signpost, we will continue, but that means every piece of the puzzle has to be running effectively and our year-to-date sales growth was actually 18%. Or sorry, year-to-date is 21%, roughly 18% through the second quarter.
Really continued seeing some growth in the stations we have and looking for opportunities to grow that as appropriate as we see the value opportunities maturing. Our operational availability was a bit down this past quarter. Partly because of that was because we took advantage of a very low margin environment to do some maintenance work that was surfacing that would be challenging us to run all the way to the shutdown. We leveraged and we efficiently executed a shutdown safely on budget, on time, in the window, during June. That we actually got the, what we characterize headwinds to continue on through the next few quarters and into our shutdown in early 2026. That is a very high level mindset. Just once again, go back next slide. Sorry. It is fine. We look at the challenges. Spoke to a couple of these.
Once again, on a macro level, the 2024 challenges and opportunities, fair bit of tears. You can appreciate a lot of noise in the space, whether it be geopolitical, changing demand, margins that are normally seasonal, but actually perhaps a bit of a lower dip in this past quarter. Really just things that we have to work through. Nothing that we have not seen before, nothing we have not positioned ourselves to weather. But just the reality of our business, we will see some cycles. As usual, this is a bit of a lower, on a more micro level within Thailand, it is a bit of a lower Thailand consumption typically during the second quarter, just seasonally. As we said, during this period, we actually took advantage of taking a unit out of our portfolio. The crude was not shut down, the entire plant was not shut down.
So just a very targeted maintenance activity to address a number of identified vulnerabilities to position ourselves to run to the next Turnaround. We also are trying to, as you can appreciate, in a very, very low margin environment, was optimizing our throughputs to actually focus on value, not just running at max rate. Pretty standard efforts. Then continue to optimize our crude diet and freight costs to increase our equity sales. As we perhaps have already announced with the SCT as we received approval early July and have been actually moving VLCCs in since about mid-July. We no longer have an SPM issue with regards to our financials. That is a real positive as we move into the second half of the year. Next slide. Bottom line, once again, I think there is always interest. How is the first period going with regards to this integration?
I think hopefully we have shared to you in the past. We felt we got a fairly competitive price in terms of acquiring the assets, whether it be the land, the Top Line shares, the BAFS shares, as well as the fuels and marketing business. We are maturing, we are leveraging those assets into creating more and more value by really thinking through a total value chain mindset. We are debottlenecking logistics here and there to really extract more value and really looking how to place the maximum value into various sales channels. Not particularly any one, and we will talk quite a bit about retail, but we really are looking at all the different sales channels to optimize value. Each of them carries with it some different types of opportunities, whether it be in fuel products, whether it be in asphalt, whether it be aviation products.
We are constantly looking for ways to really drive maximum value and like I said, pretty excited about the value we have created just even in the first half of the year. I think that closes off on my initial comments, and I think I will turn it over to Khun Nutsara to provide a bit of a performance analysis from the financial perspective. Khun Nutsara.
Okay. Next is the performance analysis. As Khun Rob mentioned about the second quarter highlight, here is the key factor that impact to our performance tool. For the oil price, if you see the chart at the top, we see that at the left-hand side, the oil price move higher in this quarter, second quarter 2024, comparing to the prior quarter and last year. Dubai in second quarter in average, bid of 80, increased from 81 from the prior quarter from the geopolitical tension and OPEC+ production cut extension. That is partially some concern on the U.S. economy that influence to the oil price. For the Singapore product crack, the product crack over Dubai in second quarter dropped around 30% from compared to the prior quarter, but stay close to the same quarter last year.
Gasoline crack over Dubai is in the range of $13 per barrel, significantly dropped about 27% from the prior quarter as the crude price surge, with the downsize of the regional impact from more export from China and also less import from key importer that was Indonesia. For the jet crack spread over Dubai is in the range of $13 per barrel, a decrease about 38% from the prior quarter. It was from the return of the several Russian refineries after the Ukraine attack. High inventory in Europe as a weakened heating oil demand in Northeast Asia and also Korea export more. For the diesel crack is in the range almost $15 per barrel, dropped about 36% from prior quarter. Low demand from the south of China as a fishing ban and the pressure of the regional demand from Thailand that diesel retail price cap increased.
At the right-hand side, the country consumption. This one quite stable at 2.7 billion liters per month. And down there at the right-hand side, Thailand economic indicator, real GDP and inflation gradually increased over the time. This translated to see that return from our consumer and our partner, and ability to grow and invest later. Next slide. The consolidated financial performance. This one compares second quarter 2024 with the prior quarter 2024 first quarter, and the last year, same quarter 2023. The number in the history, prior year numbers based on the consolidated and included fuel business and Top Line shares. The prior year number prepared based on the business combination under the common control for the comparative purpose.
The EBITDA in second quarter and net profit in the second quarter decreased from the prior quarter, mainly from the refining product crack or decline and lower margin, higher OpEx in this quarter. The net profit in this quarter is $9 million. There was an insurance claim in the first quarter 2024 to about $19 million that received and resulted to higher profit in the first quarter. In this second quarter 2024, when comparing to the same quarter prior year, marketing refining margin improved from lower crude premium and stock gain.
For the six-month period, this year, net profit at $120 million comparing to the prior year, six months 2023, mainly highly from the refining margin with net stock gain and higher sales revenue 9% from higher average oil price as mentioned earlier, and insurance claim received early of the year. For 2024, the value chain optimization benefit after the integration was $16 million. At the right-hand side, balance sheet asset. We maintain healthy balance sheet, more liquidity, and low debt. For the debt to equity now, we keep at below 0.3. Next, please. For the refinery financial performance, the left-hand side, the gross refining margin, comparing second quarter with the first quarter this year. The accounting margin is $3.77 per barrel, which compare to the prior quarter, 10.8.
This one lower from the refining product crack and decrease of the net stock gain. Second quarter this year comparing to second quarter last year, the accounting margin increased from last year that we showed a loss from lower freight and crude premium increase in net stock gain too. For the six months this year comparing to six months last year, our accounting margin at $7.39 per barrel, is from sale revenue increase 9%, which impacted by higher oil price, lower freight, and crude premium. At operating expense per barrel, comparing second quarter with the first quarter, operating expense, we spent $2.36 per barrel, which higher than the prior quarter and the last year, which from the timing of the spending, which is the routine activity in the operation. SPRC continue to manage costs, and with the efficiency. That reflects into the six month period 2024.
We spent $2.09 below the last year, $2.24 per barrel. Next slide, please. For the fuel business, after business integration, we continue to optimize and grow value for the entire value chain. Comparing our second quarter this year to the prior quarter, we grow the equity sales volume to the retail and direct sales from 50% to 60%. Sales volume to the domestic at maintain at 90%. The sale volume increase, 7% from the prior year to 7.7 million barrel. Down at the below chart, the same store sales growth year-on-year in double digit was quite high. Growth in second quarter was 18% comparing to 24% in the prior quarter. Mainly this year, the raining season come early and the flooding in some of the area. We try to maximize volume throughput per station too.
The second quarter, six month period, we grow 24% for the volume throughput, and that is around 290,000 l per month comparing to the last year. As of June, we have a number of station at 446, which the market share gradually increased approximately 5.3%. We continue making selective investment and adding value to this network. Next, please. For the operation with sustainability, we continue operate and working create the value with the key stakeholder, drive to lower carbon environment, support the society, and maintain strong governance. As of June six month, we continue to operate with zero recordable spill incident, maintain our high performance in energy efficiency index, and continue handle our zero waste disposal through landfill method.
Almost THB 100 million that we spent to date for the past six months to support the initiatives for the investment for the low carbon environment and support the communities and fishery group, around 90 groups. For the project that we continue working on, the first one, the gas turbine energy loss improvement. We continue to reduce the whole generation fuel consumption and greenhouse gas emission. Install the continuous emission monitoring. Also, the fence line air quality monitoring system, we install the real-time emission tools to monitor. For the station side, we also partner and extend our value to the retail station, apply the solar rooftop. I would pass back to Rob for the next few slide, please.
Thank you, Khun Nutsara. Just to kind of reinforce some of those comments. We're continually looking to how we can be a partner in our communities in a variety of ways and fashions. Not only being out there from a volunteer, but try to create better outcomes in the community and be a steward around our operation. Make sure that our business doesn't impact our environment. So whether it be making sure that we understand our emissions and we appropriately address any issues that we surface. Pretty proud of some of the accomplishments we've made. Now, looking ahead, I guess, as we look to the going forward, kind of breaking it down perhaps a little bit between refinery and our marketing business and our commercial marketing business.
For refinery, we're obviously trying to optimize and run our product mixes each and every day, so we're constantly reevaluating what's the right crudes, what's the right products. We'll continue to do that. But really kind of also is you look for those projects or opportunities to do some, what I characterize more as optimization. We're not seeing or we're not projecting any major capital projects and multi-year investments, multi-hundreds of million dollars of investment at this time. We're trying to be really around leveraging the assets we have, maybe make some minor fine-tune adjustments in the tens of millions of dollars at the upcoming 2026 turnaround, but being very targeted and really applying any dollar we spend from a minimum functional objective mindset.
Make sure every dollar creates sufficient value to warrant the investment and then stop if you don't see the incremental value achieving what we're looking for. Continue to look for synergy opportunities between the refinery operations and our marketing operations. It's early days. The team has really identified a portfolio of opportunities and is kind of prioritizing those. We'll continue to do that going forward. We're also looking at a variety of kind of new ventures, new opportunities with potential partners in the industry. For example, we're looking at things like Bio-Circular, bio-processing with a variety of potential partners. We see that as not a major opportunity to start, but how do we start to be a partner in variety of ways to reduce the collective industry's impact on the environment.
We're excited about some of the early potential, but it's going to be a progressive rather paced growth. But it could be a contributor to our future in the right pace and the right investment level. As we look on a marketing basis, how do we continue to look for a spot-to-street strategy and really around anchoring in the most netback channels. Once again, we talk about, hey, increasing throughput through existing stations. Hey, that's generally a money winner, if we can do that and trade those around our opportunities. Then look for the right ways and the right locations to scale up our retail networks with strong partnerships. Be thoughtful around how much investment we make relative to the returns we're expected to get in any of those type of ventures.
Once again, maybe coming back to the first, how do we increase the volume throughput, really look for some non- We have some opportunities to really develop our non-fuel revenue business to create the environment where people want to come through our retail stations. How do we continue to build on both what we have, but also partnerships as we continue to grow forward, to leverage. Once again, as we know, we do not have to be able to do everything. We just have to know the right people to do it with. It is kind of making sure that our investments are matching our objectives. At the same time, not throwing extra money out there when we have partners who could do some things way better than us. Next slide.
In closing, really, once again, our overarching objective is to really maximize shareholder return, and to be a partner in our communities wherever we operate. To do so, once again, just recapping, be reliable, predictable, reliable. I joke with our operations team, it is just be boring. Be boring every day. It is a lot of hard work to do to make sure everyone goes home safely each and every day. But I think we are over 10 years since we have had a day away from work case in SPRC, so we are very proud. But we recognize that is hard work each and every day to be reliable and safe and drive maximum value from our business. We are excited for the second half of the year in terms of a margin environment in that we have resumed our SPM operation as of mid-July.
We have unloaded a number of tankers already between both ourselves and PTT GC. That operation is back in service, and we will look to leverage that headwind, that extra margin environment, as to achieve even better outcomes in the second half of the year. As also the margin environment is improving, I think, per Khun Nutsara 's slides earlier. We are constantly looking at new agreements and optimization in our sales channels.
We are trying to be creative. The team is growing its capacity to come up with opportunities and really trying to get and position ourselves where we maximize placement in country, avoid export. Or if we do export, we have got some very targeted high sales channels opportunities. We know we are constantly evolving our product mix, but it is really thinking through the full crude to customer value chain, and leverage all the talent we have to maximize the value.
Never losing sight of our cost efficiency. We are constantly challenging ourselves to think differently, think more creatively around what we do and how we do it, so that we can continue to be competitive and can have that low cost competitive advantage relative to others in the market. Finally, as I said to you at the beginning, is how do we make sure that our investments are smart? Really that means how do we make sure that there is a reasonable probability of return at the levels that we are really looking for with the long term? We are going to continue to look for opportunities to invest in lower carbon opportunities. Sometimes the market gives you opportunities, sometimes you have to go make them, with both advocacy and create some new markets where they do not exist today. But we are cautiously up.
We know the future is lower carbon, but how do we make sure we invest at the right time, the right pace, so that we don't destroy value for our shareholders. Bottom line, we're one team. We're working as one team, making sure we leverage our full talent to really drive ever reliable, affordable energy to our markets, and continue to be that reliable supplier of products for all of our key stakeholders. With that, I think those are my closing remarks, and maybe we can kick it over to Q&A.
Okay. That concludes our prepared presentation. Now we are ready to take your questions. If you have the question at this time, just click on the Raise Hand button or send the question through the sharing channel. I saw Khun Khomsan. He raising the hand. Khun Khomsan, please turn on your microphone and go ahead.
Thank you for the thorough presentation. I have two questions. The first one is about the dividend that you announced first half. The payout ratio is roughly 40%. Is it correct to assume that second half payout could be somewhere between 60% at least, in order to achieve your stated dividend policy of 50% per year? The second one is for Khun Robert. How did you prepare SPRC about the drafting of the new Energy Act that has been talked about recently? Or it is too sketchy to prepare for it at the time? The last one is that you have been talking about the T&I in 2026. Is it the first half or the back half of 2026 for the T&I? Relating to that is that you have been looking for a number of new projects for quite some time on this one.
Why not SAF wasn't part of them? Is it too expensive to do or still very economic in your view, is not good enough? Thank you.
Thank you. Very diverse questions. Well, thank you. Maybe I'll turn it over maybe to Khun Nutsara to comment just briefly on the dividends, but there's no change in our dividend policy. Khun Nutsara?
Yes. The dividend payout ratio that we announced of 25 satang per share. That's based on the dividend payout of 40% that Khun Khomsan just mentioned. However, for our intention for the dividend policy, we still intend to pay based on the policy of at least 50%. So we will consider in term of the second payment after the year-end result again.
Thanks, Khun Nutsara. Barring any other extraordinary circumstances, we feel pretty optimistic about the second half of the year. Margins are improving. We've got improved margins with the SPM back. No change in our dividend policy. Obviously, the margin environment will dictate a lot of what we can do, but we're pretty optimistic. The new Energy Act. Once again, there's a lot of floating of ideas. We work as an industry to provide some context to how those ideas could arguably impact industry, not only the energy industry, but actually could have a broader knock-on effect to attracting business here in Thailand. Once again, we'll continue to advocate to all the parties and leverage our full suite of advocacy groups to influence policy. We're not positioning anything in the moment.
We think there's an opportunity to really challenge some of the suggestions that have been put out there. Maybe I'll turn it over to maybe Khun Sakchai, just to comment a little briefly around the potential of the draft or the suggested Energy Act. Khun Sakchai?
Yes, Khun Rob. I think the policy itself, as we know from the new, I think the earlier state, I think when they approached us, is a kind of really a conceptual about tolling refinery, about cost plus refinery. Later on, they started to figure it out. It is probably more complexity when they want to execute. I think latest state, I think they try to make it more simplified. I think so far we have not got it really clear on what they plan to do. What we know so far, I think probably the same as you guys got it. Probably they are drafting something, probably try to oppose to the refinery to make some proposal to the parliament soon, probably in the next few months. We will see, KHUN, what is going to happen.
They probably need to work it out in term of the detail, in term of what they plan to do.
Thanks, Sakchai. Probably, just on the Turnaround, I think we targeted roughly 6-year cycles, with maybe some targeted interventions on specific units of operation. We are targeting roughly a 6-year cycle for major shutdowns. Our next event is now arguably targeted for the first quarter of 2026, subject to further refinement, adjustment as we work through the planning details. That is our rough timeline for when we will take our next major shutdown. Just as you talked about, we constantly look for ideas. We have had some fairly mega projects on the books. We just could not. Even though we do see a very strong margin environment over the coming years, not months, years, on a more sustainable basis. You could think about some major CapEx.
You might be years in the making of your expenditures, and then you may get yourself beyond where the premium margins will allow you to get the recovery on your investment. We are trying to be very conscious on what we invest in, the types of returns we are going to get, and looking for really quick payout type projects in the near term. How do we pivot or position ourselves for energy transition opportunities with the right partners? It does not mean we have to do everything all by ourselves. It is how do we have the right partnerships so we can maximize all the capability that is out there. That is all. Any comments? Any other questions? I actually did not answer your question about SAF. Sorry, let me just close off. I did not really comment around SAF. I think there is a lot of.
Yes, correct. We have the pending question on SAF.
Sorry. I didn't really close off on SAF. But maybe I could turn over to either Khun Sakchai or Khun Shashank to talk a little bit about, it's an emerging market, it's really immature. Sometimes early investors wish they hadn't been early. But there's future there, but it's just how do we have the right partnerships and the right timing to be a part of that future. So maybe Khun Shashank or Sakchai, anyone?
Yeah, sure, Rob. I can just kick it off. I think SAF is an opportunity for us to continue to look at how we can make it and make it economically and also keep our supply kind of paced with the demand from the customers that we're seeing. Frankly, right now the market just isn't quite there from a demand standpoint. The technology and the feedstocks aren't quite there to support any future investment. But we are continuing to evaluate that. We have an opportunity to work with our technology partners and partners in general to understand where the market's going to be. As the opportunity presents itself, we will be evaluating how we can participate.
Okay. So thank you, Khun Shashank and Khun Rob and Khun Nutsara , Khun Sakchai. Next, Khun Amonrat, you're raising your hand, so please unmute your microphone and go ahead.
Yes. May I ask why was FCC shut down again in the third quarter? Was it planned before? What more that SPRC could do on the unit since the shutdown was just in the past 12 months, twice?
Yes, thanks for the question. What we observed, in part perhaps somewhat stimulated by the up and down, but also perhaps some deficiencies in some work we did in 2019 shutdown, was we started to see some hotspots, which means you're seeing some hot gases passing through refractory on certain sections of the equipment. We're starting to get some hotspots, and we are mitigating, managing through that environment. As we projected forward and we saw the extent of the growth of those hotspots, we just didn't see ourselves getting into our next major shutdown in 2026. We targeted, planned the shutdown in the second quarter at the optimal margin environment. The team did a great job at really lining out the plan and then executing the plan efficiently and effectively.
As well as the team did look at some ancillary, some adjacent work we could do to also mitigate future risks. At the same time, we did do some other activities, but the primary focus was around specific elements within the FCC where we were seeing some hotspots, so to speak, some hot gases hitting the external parts of the unit. Once again, I think we addressed it, and we're not seeing any indication of that coming out of the shutdown.
It means there would be no other shutdowns from now until the first quarter of year 2026?
Yeah, as far as the FCC, we are constantly taking units offline to do various maintenance activities and catalyst changeouts and various things. But the FCC itself, we feel reasonably confident that it is going to perform all the way through the next shutdown.
Thank you. Maybe another follow-up question. What kind of level of gasoline crack that you need to trim down the FCC? Or perhaps, maybe Khomsan can provide some outlook or the view on the gasoline market for the second half of the year. Thank you.
Yeah. Can do, Khun.
Thanks, Khun Sakchai.
Yeah. In terms of turn down of the FCC, I think typically our refinery actually see, what you call the optimum throughput to serve the cracker most of the time, because we see quite a high value to upgrade the resid, because our FCC is a resid conversion. Most of the time, I think the crack does not really have a big impact to trim down the FCC. Most of the time, we will see just the crack still support us to keep the FCC running. I think the crack that probably sensitive to us is probably on the diesel and jet. That probably have some impact in terms of how we run the CGU. Because that probably the marginal or the incremental value with this.
When we start to fill up the upgrading unit, I think the last incremental value probably more toward the hydroskimming. Then, I think we need to look at whether it is still econ for us to keep running on the marginal crude value. In terms of the forecast gasoline crack, I think as we know, gasoline is very seasonal. The consumer or the big demand is actually from U.S. during this time. Toward the end of the year, the gasoline crack will get softened toward the end of the year. But I think from the forecast, it is not that low. We still see the level probably quite close to today, maybe slightly softened. I think the wild card that we need to keep an eye on is probably the export from China. They still left quite amount of quota toward the end of the year.
Need to wait and see, Khun, whether they will acquire more crude oil and run for export. That will have some impact to the crack of the gasoline in the market.
Okay. Thank you, Khun Sakchai. I have a question from the chatting channel from Khun Amornporn. Please clearly explain why did the Caltex station drop and the lower same-store sale growth.
Over to you, Khun Shashank.
Yeah. Thanks for the question. Just about the station count, it went down by a couple of stations. That's largely, the broader picture here is we continue to focus on the quality of the stations that we have with the Caltex brand and not necessarily the quantity. In this particular case, we had a couple of stations. One is temporarily closed, one is we chose to close down. But in general, we continue to focus on the quality and increasing our network presence in the country. From a same-store sales growth perspective, you saw a 24% plus same-store sales growth in Q1 with a very strong start to the year. That dropped about 18% in the second quarter. That's primarily, the second quarter compares 2024 second quarter to 2023 second quarter.
The main factor there is the earlier arrival of the monsoons, which impacted consumer demand a bit sooner this year than it did last year. We saw some impact towards the end of June that lowered the same-store sales growth.
Thank you, Khun Shashank. Next, I saw Khun Suwat raising the hand. Khun Suwat, please unmute your microphone and go ahead, Khun.
Thank you, Khun. I have about three questions. First one, I would like to know that after you complete the Turnaround of the operating unit, would we expect that the utilization would be staying at a high level, say about 95%-97%, in the rest of the year, going into next year until you have a shutdown again? Because in the past few quarters, considering that we have a lot of problem about many issues, say that way. I did not see your refinery plan running at such a high utilization for sequentially order. Second, I would like to ask about the strategy of your refinery, because I start to see declining demand for the benzene in Thailand, and that is because of the booming EV sales. In the second quarter onward this year, I believe that the demand could decline further.
What would be the strategy that the company will respond to that? The third one, I would like to also know that you have anything or any strategy to grow or maybe to maintain the margin and the market share of the downstream station that you acquire from your parent's company. Thank you.
Yeah. Maybe, Khun Sakchai, maybe you can take a stab at the first two questions really around our look on unit utilization. Arguably, as we say, we tend to run from a utilization, once again, it is margin driven. But if we see strong margins, we will run towards higher levels. If we sometimes, various units, we may adjust if we do not see the margins. Then the strategy around perhaps, I guess it would be more around gasoline, I guess. I am guessing not so much diesel, but EV penetration. Maybe I will turn it over to Sakchai. I will put up some comments.
Yeah. Thank you, Khun Rob. I think for utilization, Khun Suwat, yeah, I think as you say, we typically keep the upgrading unit run full. When you look at our CDU, our CDU might not full all the time. But I think majority of the time when the margin is good, typically we keep up our upgrading unit, which could be the platformer where we turn the naphtha into gasoline, the FCC where we turn the resid into the lighter product. So we keep those unit full. But I think the CDU is just really the unit that we keep evaluating most of the time to see whether this is still econ, depend on the economy. But in term of the utilization, I think one of the thing to be note, I think, we found out that the lighter crude become more econ today.
The thing that we see is, when we start to run lighter crude, we actually hit what you call, the fill up the upgrading unit, like the diesel and jet fuel, which is the highest product value that we want to make, at full capacity already, without need to maximize the CDU throughput. That is why from time to time, you might see some CDU throughput trimmed down a little bit. That because of the optimization that happened from the crude diet driven to drive some certain unit which maximize the profit to keep that two unit full and then, I think that probably the optimal.
Rather than 96%, 97%, probably you can may see it read over slightly lower than in the past, that we keep both the CDU and the upgrading unit full because of the posture of the refinery and the crude market has been changed. I probably see slightly lower in term of the CDU throughput, but the rest of the upgrading unit, probably we try to keep maximizing. Maybe 95%, 96% is probably more represent going forward rather than the max, because of the optimization that we see. Gasoline, I think we actually need to work on the longer term. I think, Khun Chaowasri, our strategy is working on some of the thing that we are thinking on long term to address the penetration of the EV market. But so far, I think in Thailand, the gasoline demand is probably still keep growing but really slow.
Even first half of this year, I think we see first half is growing, second half, toward the end of second half, it is just maintain. Even though we start to see the more EV coming into the market for Thailand, but the demand of the gasoline in Thailand is still not really a significant change. It is still see quite maintained at the high level at the moment. But agree with you, Khun, in the near future, I think we expect to see, what you call, the challenge from the EV penetration. We need to prepare for the strategy in medium to long term.
Maybe I will segue. I will use that to segue over to Khun Shashank to talk a little bit about the retail side of the business, growth opportunities and timing and different things.
Yeah. Thanks, Rob. In general, our strategy continues to grow more of our market, share more of our sales through strategic site network expansion, and also through same store sales increases. Just to sort of frame the opportunity, we still continue to sell quite a high percentage of our gasoline and diesel outside of the Caltex network, the retail network. We have opportunities to just use our own production that we have and just move between sales channels, if you will, from the wholesale jobber channel into the retail channel. We continue to look at opportunities to invest. I think over time, you'll see us selectively do the investments and announce some investments and grow the network and grow our sales. In future analyst meetings, we'll be able to share some of those results with you.
Thank you.
Thank you, Khun.
Thank you, Khun.
Thank you all, Khun. Next from Khun Naphat. Please go ahead, Khun.
Hi, good morning. I have two questions, follow-up questions. First is on the dividend. I think, earlier, I am not too sure that are we paying out dividend based on only the core operations, meaning that we will be excluding stock gain loss? Also, how much, because I see the stock gain in the first half this year at about $2. In terms of the absolute number to earnings, how much is it coming from the stock gain? That is the first question. Second question is on the scheduled shutdown that you mentioned earlier about the first quarter 2026. How flexible is this for us to move up or move later than first quarter, given the volatility in the GRM? Maybe I add one last question for Shashank.
Because I see the volume in the marketing business, retail business, we increase both the volume and the same-store sales. What exactly that leading us to the volume growth? I understand that we are trying to increase the wholesale volume, but did that already factor into the first half number? Also, in terms of the competition in the retail business, our competitors are trying to improve their retail station, physical, and what would be the key strength for our retail station, Caltex, that will let us continue to increase the volume and also the market share? Thank you.
Picking on those in random order, the shutdown in 2026. There is a certain degree of flexibility to move it a little bit either way. We typically try to organize these shutdowns because you are bringing in thousands of people, obviously. So you are trying to organize these events in and around other people's events too. So we have to work a little bit with industry to make sure that we do not try and trip over each other to source the same labor. So there is some flexibility, but there is also some realities in terms of where you have to work with your partner or other industry partners around timing. So roughly, we feel that that is about the right time to execute the shutdown.
Really it is less about being perfect in timing and really around executing plan, plan, and execute the work so you deliver on schedule, on budget. And bring everything back up safely and reliably. The team is really into the detailed planning phases right now and they will be optimizing durations and et cetera. But they are just really moving into the detailed planning phases as we speak. Maybe I will kick it back to Shashank just to go in random order around the same stations growth and then some of the commentary there. Go ahead, Shashank.
Yeah. Thanks, Rob. Thanks for the question. Just building on my previous points. I think we are quite optimistic about our ability to grow in the retail space. As I mentioned, we continue to optimize our production and how we place that production, and there is an opportunity to move more through our retail network. I think just a two-part answer and sort of further questions. I think the source of the growth we are seeing in the overall volume and the same-store sales is probably a reflection of the fact that we have sort of continued to invest in the Caltex network in terms of network coverage and offering for the consumer throughout the last five years, even during the pandemic. And we will continue to add new stations and build non-fuel offerings around the station to sort of be ready for when the demand comes back.
Now as the demand comes back and recovers in Thailand post pandemic, we are seeing some of that sort of the tailwinds that are supporting the growth. So that is one reason for our continued optimism. We continue to invest in non-fuel partnerships and in site improvements and making the sort of the retail sites look better and giving consumers a better experience. And we are also investing in things like loyalty programs and other offerings that consumers have told us that they value. So when you combine all that with the expansion of the retail network and coverage, there is reason to think that we have continued ability and strength to grow the retail volume.
Thanks, Shashank, and maybe I will just flick it to either Khun Nongnaphat or Khun Nutsara Somkiatweera on what take the dividend question.
Okay. Yes, Khomsan. I will take it. In terms of the dividend calculation for the first half of this year, that is correct that Khun Naphat just mentioned that we have our stock gain of around $2 a barrel. In terms of the dividend calculation, we exclude those stock gain or loss. That $2 convert to U.S. dollar is around 50 million plus, around 56. After tax, it is going to be around 46. That is why our core earning is instead of 120, our core earning is around 70 something. We pay 30 million, that is equivalent to 40, payout ratio of 40%.
Thanks, Khun Nutsara . Look, I think once again, providing return to our shareholders is a priority for us, in the form of dividends and hopefully stock appreciation over time. We will continue to invest where we see truly good investments. Those have to compete to make sure that, because our priority is really around making sure that we continue to give you shareholder returns. Got to balance the near versus the long term. Once again, bottom line, we are looking for optimizing share pricing over time and shareholder return over time.
Okay. Thank you all. Next, Khun Wattana, please unmute your mic and go ahead for the questions.
Thank you very much for the opportunity. I am having three questions. The first one is on the fuel business. Can I ask on the commercial marketing margin? I can see that you are providing this number in the presentation this quarter. The second question is on the Turnaround that you are planning for first quarter of 2026. Do you have some guidance on expenses and CapEx that you are looking to spend this time for the Turnaround? How much you are expecting to book in 2025 before the Turnaround actually happens? My last question would be for Khun Sakchai. How much should we really worry on the Chinese export? You have briefly mentioned that we need to keep an eye on the Chinese export. So far, the Chinese operator have not been fully utilize their quota, and there has been a few Chinese capacity cutting run rate.
I am not sure how much we should look on this going forward.
All right, let us go three, two, one. Sakchai, we will let you do the Chinese market query. Export market.
Yeah. As I said, I think China is probably the country that is really difficult to get the accurate data, I think, to get out. But as we know, I think the gasoline in this region actually is quite short, slightly short, and to balance from time to time. When we start to see China export, I think it is probably trimmed down the crack on the gasoline market. I think the impact to us, I think we produce the gasoline about 25%-30%. Actually, yeah, if they got a lot of export from China, that might maybe toward the end of quarter four or maybe from quarter four onward, I think that might have some impact to the gasoline crack in general. Again, as I mentioned, I think there are few things we can do.
I think as you know, SPRC is the listed upgrading unit. Yeah, typically we always see it is still more benefit for us to keep the unit running, by keep upgrading the resid to turn into white oil product, even though the crack is shrinking a bit. The other thing that we know is the synergy that we have with our partner. Actually, we can manage to ship the feedstock, some of the feedstock across to the other side to process, and then that unit will make more diesel rather than gasoline. That will help us to mitigate some of the impact if that actually happens in the near term.
Yes, Sakchai. I think the other dynamic is arguably long term, is China really want to be in the export market? Is that their preferred position or is it really trying to really think through to meet the domestic market and not create greenhouse gas impacts just to be in an export position? I think at any moment in time you may see noise, but I think in the long term, I don't think that's China's overarching objective is to be an exporter of large volumes of product and then having the carbon intensity impacts within country to try and meet some of their other goals that they've established for themselves.
Yep.
Hey, the other one, or maybe just. Sorry, Sakchai, comment?
No, just as you said, yes, I think that totally support. I think actually, like I mentioned as well.
Okay, sure. In Turnaround, once again, I said the team is in the early optimization phase. We go through the scope phase to really think through what do we want to do? Why do we see value in doing it? The team has actually been able to work their way through really trying to reduce the scope. Almost a 25% reduction in scope just from where they started to where they are as we speak, and we're now working through the details to optimize the various duration elements, which then can bring in even further savings. Maybe just for high level order of magnitude impacts, maybe I'll turn it over to Nutsara, just to give you some ballpark. These are tens of millions or hundreds of millions, but I'll give Nutsara to give you a flavor of what those look like in the 2025, 2026 period.
Khun Nutsara?
Yes. In term of the Turnaround, because we shift from 2025 to 2026, then that we try to optimize our Turnaround cycle. So the expense that going to impact in term of 2025, 2026 year is going to be two years. In term of the amount impact to the P&L is not that big because we scope down to optimize the Turnaround. I think in term of the number, we still not finalize, but it could be in the range of maybe 50%, 60% comparing to the last Turnaround. In term of the capital expenditure , normally in every year, we have around 20 approximate, in term of the capital expenditure, $20 million. For this Turnaround, we probably increase more in term of the some major replacement of the equipment. However, the spending still not material comparing to the earning of the company.
All right. Finally, maybe I'll go to Shashank. If you can remember the question, you get to answer the question.
Thinks about marketing margin, reporting it. Let me take a step. I'll answer that anyway. I think, just in general, the marketing margin versus reporting it kind of in the analyst meetings, it's very much in line with the price structure table that's published by EPPO, sort of the orange table that's on the website. It's very aligned with that and kind of fluctuates along with the Oil Fuel Fund subsidy rate and the MOPS movement, just like the rest of the market. So, I think that's probably the best indication of sort of how the marketing margins are shifting over time, in the retail space.
Okay. Thank you. We are running out of time, so we have Khun Panuwat raising a hand. Khun Panuwat, you will be the last one for today.
Thank you. I would like to ask about the SPM. Can you give us the guidance, like how much should it be positive to your GRM from the SPM resumption? Thank you.
Yeah. Thank you. I think we quoted some figures in the past, roughly, I am going to throw a number out, $1.50 a barrel. That varies quarter- to- quarter based on ship costs. Sometimes some quarters, sometimes fourth quarter, I think, Khun Sakchai, tend to be a bit more of a premium on these types of ships. Maybe I will just turn over to Khun Sakchai to give more of a holistic view and then how we are projecting looking forward. Khun Sakchai.
Yeah. In term of the ship to ship, I think as Khun Rob mentioned, the cost of the ship to ship in the range of $1- $2. But lately, I think we see about $1.50. By taking that ship to ship cost off, I think the Bottom Line of SPRC will get improved by about $1.50. In particular, if you compare in quarter four, I think it used to be $1.80, $1.90 per barrel. Yeah, if you want to look into compare to previous year, it is probably about that level.
Okay. Thank you. I think now we have covered a lot of topics, a lot of great questions, and we are now getting close to. I think we are already past the end of our time. I would like to take a moment here to thank you all for attending and submitting the great list of questions. Thank you very much.